Thursday, 8 May 1986 Madam SPEAKER (Hon. Joan Child) took the chair at 9 a.m., and read prayers. Motion (by Mr Young) agreed to: That the House, at its rising, adjourn until Tuesday, 20 May 1986, unless Madam Speaker fixes an alternative day or hour of meeting. Mr YOUNG(Port Adelaide-Leader of the House)(9.01) —I move: That Government Business take precedence over General Business for this sitting. I think that all honourable members are aware that we have a busy day ahead of us. The fringe benefits tax legislation is already listed on the Notice Paper. I said that we would give sufficient time for the House to debate that legislation. Circumstances now demand that we deal with other legislation today. I am sure that the Opposition understands that both of those matters should take precedence over the General Business item. I apologise to the honourable member whose General Business item was listed for debate today. Mr SINCLAIR(New England-Manager of Opposition Business)(9.02) —It is becoming more and more apparent that this Government is falling apart. It is incredible that on a day when there are matters of major significance to the people of Australia to be considered in this place we have been told that the Government has put a ban on judges from New South Wales. We have been told that the Ministry had to come here early this morning so that it could try to determine resolutions relating to a Bill that is to be introduced without notice into this House later this day. We know that the Government's tax package legislation that is to come before the House today is a dog's breakfast, if ever we have seen one. A decent dog really would not eat it at all. Frankly, on that basis the proposal to give precedence to Government Business is just not acceptable to members of the Opposition. As all honourable members will know, the honourable member for Warringah (Mr MacKellar) has a very significant private member's matter for consideration on the agenda today. It relates to the concern that we on this side of the House have about the adequacy of research and development in Australia and, in particular, about the area of research and development that is undertaken by the Commonwealth Scientific Industrial and Research Organisation. There needs to be an understanding that CSIRO is being hamstrung by Labor. The Government seems to have given up the idea that this prestigious research organisation of international renown which has been able to create so much in the areas of original research over the years is being prejudiced because of Labor's parsimonious attitude towards its survival. A large number of individuals within CSIRO-the research scientists-are despairing of their future. They know that their research projects are prejudiced because the Government cannot get its act together while it is funding some of the regional employment development projects and the idiotic schemes that our Waste Watch Committee has revealed. The Government is denying CSIRO adequate funding. That was the subject of the private member's business which would have been considered in the normal course in the House today. The Opposition believes that a range of important matters needs to be considered. Pages upon pages of notices are listed under General Business, all of which, we know, are little likely to be raised because of the Government's approach. Indeed, at this stage, there are 108 General Business notices. If the Government is going to go about its business of denying the debating opportunity that occurs but once in a sitting fortnight, there will be little chance of our achieving a resolution of those notices unless the Parliament were to sit well beyond its present allocated time. What an incredible situation it is when in a normal three-year bracket there is no chance of all those general business items that members have sought to have listed being considered. In that climate there is no doubt that our consenting to the Government's approach, which is to deny us a chance to debate matters of importance, just would not be acceptable, and on that basis we reject the motion by the Leader of the House (Mr Young) and suggest that he look again at the matter and try to get his act in order. Mr YOUNG(Port Adelaide-Leader of the House)(9.05) —in reply-Madam Speaker, it was not my intention to take up the time of the House but some of the matters raised by the Manager of Opposition Business (Mr Sinclair) do require answering. First of all, the reason I did not wish to take up the time of the House by presenting my arguments for doing what we are doing at the moment is that I would have thought it would be more important to get on to the debate on the matters that are listed for today, which include matters to which the Opposition says it has great opposition. I would have thought members of the Opposition would have wished to use the time to express their views. Certainly many members on this side of the House want to speak in support of those measures because they see us restructuring the tax system to do away with all the rorts that were consolidated in our tax system by virtue of 30 years of conservative government, when the Liberal and National parties watched develop all the rorts and perks of the tax system which allowed those perhaps in the upper bracket of income earners to manipulate the tax system while greater and greater burdens were placed on the shoulders of wage and salary earners. It was not the intention of the Hawke Labor Government, elected in 1983, to see this process continued. We will be going to the next election with the fairest tax system that this country has seen for decades, because there will be substantial tax cuts this year, in September, and in July of next year. So by virtue of the Opposition's behaviour, when we face the election at the end of 1987 it will have been telling the Australian people that it will reinstitute all the lurks-the free lunches, the free cars and everything else that goes to make up all the things that were rotten about the tax system-and do away with the $4 1/2 billion tax cuts that will come into operation from 1 September this year. I would have thought it was more important to spend time debating those matters rather than have the Manager of Opposition Business lecture this Government about the way the House ought to be conducted. Let me say this: This session of the Parliament has been perhaps the most constructive session of Parliament in terms of opportunities for members of this House to speak that we have witnessed for many years. The previous Prime Minister, the right honourable Malcolm Fraser, when he was on this side of the House standing at this dispatch box, took the view that there were no such things as the conventions of the Parliament. There were no notice boards about whether Bills were being introduced, and no notices about whether he wanted to make statements to the House. Not only did he treat the present Opposition's side with complete contempt; he also treated the Opposition at that time with contempt. In fact, it got to the stage where he was treating everybody in Australia with contempt, and they gave him an answer to that in March of 1983. I would have thought that, seeing that the Opposition has been harping all week about having an inquiry into certain matters, it would have facilitated the introduction of the legislation of which we have given notice today. It is not all that unique-it has happened before in Australia-to have legislation introduced and debated in the one sitting and passed off to the Senate because it is necessary to do so. I would have thought that Opposition members would have welcomed the move by the Government, rather than sitting around in their rooms last night, as the newspapers tell us, gurgling in their champagne. What are they celebrating? What was the big celebration that led the Opposition to spend so much money on champagne last night? What was the big celebration? It makes one wonder. The Australian people are entitled to ask: `Why all the champagne in the Opposition rooms?' Perhaps the Opposition had already set up its jury and reached a verdict in relation to the matter. Mr Hawker —On a point of order, Madam Speaker: I know that you are working very hard to lift the standards of this chamber and I suggest that the sorts of comments that the Special Minister of State is making should be ruled out of order. Madam SPEAKER —There is no point of order, but I accept that the standard of behaviour in this place should be lifted. Could I have less noise from the Opposition benches and fewer interjections. Mr YOUNG —I associate champagne with celebration. It is a long time since I had any, but when I did it was always on an occasion of celebration. I just want to know what the Opposition was celebrating last night. Is this the sort of conduct one would expect from people who are asking the Australian people to put them into government at the next election? There was some big celebration last night and I suspect that during the debates that take place later in the day we will hear why the Leader of the National Party brought everyone to his office to celebrate whatever occurred yesterday. It is not like him to unlock his wallet all that often. I understand that my friend, the honourable member for Groom (Mr McVeigh) was not invited-he has not been invited to the Leader's office for about 12 months, not since he got the dump. He does not mind a glass of champagne occasionally but he has a sense of decency about when he has it and for what reason he partakes in such celebrations. Mr Sinclair —He had a birthday yesterday. You ought to congratulate him; he turned 21. Mr YOUNG —He turned 21? I congratulate him, but that will come as a surprise to a lot of people in Toowoomba. Today is an important day in terms of the legislation that will come before the House and, I remind the Opposition, be completed before the day's sitting is finished. As I had made arrangements with the Opposition about the amount of time to be given to the fringe benefits legislation, it may be necessary later in the day to look at the time available again. It depends on the amount of time that is given to debating the special legislation that will be introduced. I will speak to the Manager of Opposition Business in order to ensure that there is adequate time to debate both matters when they come before the House. It is not the Government's intention to curtail debate on these matters which are important, not only to people in this chamber but also to people outside who want to have a proper understanding of the ramifications of both pieces of legislation. We intend to see that adequate time is given today. Dr Harry Edwards —With your indulgence, Madam Speaker-- Madam SPEAKER —The Leader of the House has closed the debate. Did you wish to speak to it? Dr Harry Edwards —Yes. Madam SPEAKER —Well, I am afraid you cannot. The Leader of the House has closed the debate. Dr Harry Edwards —I just wish to explain that I am anxious to support the remarks of the Leader of the National Party (Mr Sinclair). Question put: That the motion (Mr Young's) be agreed to. The House divided. (Madam Speaker-Hon. Joan Child) Ayes . . . . . . . . . . . 72 Noes . . . . . . . . . . . 54 —— Majority . . . . . . . . . 18 —— Baldwin, P.J. Jones, BarryBeddall, D.P. Keating, P. J. Blanchard, C.A. Kelly, R.J. Blewett, N. Kent, L. Brown, John Keogh, L. J. Brown, Robert Klugman, R.E. Brumby, J.M. Lamb, A.H. Charles, D.E. Langmore, J.V. Charlesworth, R.I. Lee, M. Chynoweth, R.L. Lindsay, E.J. Cleeland, P.R. McHugh, J. Cohen, B McLeay, LeoCross, M.D. Maher, M.J. Cunningham, B.T. (Teller) Martin, S.P. Dawkins. J.S. Mayer, H. Dubois, S.G. Mildren, J.B. Duffy, M.J. Milton, P. Duncan, P. Morris, AllanEdwards, Ronald Morris, PeterFatin, W.F. Mountford, J.G. Fitzgibbon, E.J. O'Keefe, N.P. Free, R.V. O'Neil, L.R.T. Gayler, J. Price, L.R.S. Gear, G. Punch, G.F. Gorman, R.N.J. Saunderson, J. Grace, E.L. Scholes, G.G.D. Griffiths, A.G. Scott, J.L. Hand, G.L. Simmons, D.W. Hayden, W.G. Snow, J.H. Holding, A.C. 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. Hodgman, W.M. Aldred, K.J. Jull, D. F. Andrew, J.N. (Teller) Lloyd, B. Beale, J.H. McArthur, F.S. Blunt, C.W. McGauran, P.J. Braithwaite, R.A. MacKeller, M.J.R. Brown, N.A. McVeigh, D.T. Burr, M.A. Macphee, I. M. Cadman, A.G. Miles, C.G. Cameron, Donald Millar, P.C. Cameron, Ewen Moore, J.C. Carlton, J.J. Peacock, A.S. Cobb, M.R. Porter, J.R. Coleman, W.P. Reith, P. K. Connolly, D.M. Robinson, IanCowan, D.B. Shack, P.D. Downer, A.J.G. Sharp, J. Drummond, P.H. Shipton, R.F. Edwards, Harry Sinclair, I. McC. Fischer, Tim Slipper, P.N. Fisher, Peter Smith, W. Goodluck, B.J. Sullivan, K.J. Hall, Steele Tuckey, C.W. Halverson, R.G. Watson, DavidHawker, D.P.M. Webster, A.P. Hicks, N.J.(Teller) White, P.N.D. Hodges, J.C. Wilson, I.B.C. Hurford, C. J. Everingham, P. A. E. Staples, P. R. Nehl, G. B. Beazley, K. C. Ruddock, P. M. Darling, E. E. Fife, W. C. Question so resolved in the affirmative. Debate resumed from 2 May, on motion by Mr Keating: That the Bill be now read a second time. Madam SPEAKER —I understand that it is the wish of the House to debate the Fringe Benefits Tax Assessment Bill 1986 concurrently with the Fringe Benefits Tax Bill 1986, the Fringe Benefits Tax (Application to the Commonwealth) Bill 1986, and the Fringe Benefits Tax (Miscellaneous Provisions) Bill 1986. There being no objection, the Chair will allow that course to be followed. Mr CARLTON(Mackellar)(9.21) —Today at last, after waiting for about eight months, we are debating the fringe benefits tax. This package contains four Bills, 151 pages of legislation and 176 pages of explanatory memorandum. We also have a 56-page booklet, appropriately in the mourning colour of purple, that is to be issued to employers called `Fringe Benefits Tax-a guide for employers'. Make no mistake; this is a new business tax, pure and simple. It is a new tax on business. It is a payroll tax, but unlike State payroll taxes, which are a straightforward levy on payroll-and that is bad enough-this new business tax is levied on the payroll of the employer in a wide variety of excruciating and complicated ways. It is levied on motor cars, low interest loans, waiver of debts, payment of private expenses, residential accommodation, living away from home allowances, free or subsidised board, staff air fares, entertainment for tax exempt bodies and free or discounted goods and free or discounted services. So if one loves one's payroll tax, what a feast one will have on the fringe benefits tax. If one enjoys the paperwork on payroll tax, what fun one will have filling in one's fringe benefits tax return. Let me quote from the 56-page purple booklet that is going to be sent out to 700,000 or 800,000 businesses around Australia over the next two or three weeks. It states: FBT payers will self-assess their liability to FBT annually. That means calculating the taxable value of each fringe benefit provided in a particular year in accordance with the valuation rules explained in following chapters, and applying the appropriate rate of tax to the total. An annual FBT return is to be lodged showing the different categories of fringe benefits provided, their taxable values, and the amount of tax payable. Return forms will be made available. How generous! The tax will be paid every quarter and this, of course, will involve further paperwork. The tax applies to all employees in all locations. It applies to all of their different benefits-there are 11 major categories of benefits and dozens of sub-categories-all their different rates, all their formulae, all their calculations and all their options. Does the Treasurer (Mr Keating) have the slightest idea what effect this new business tax, this new monster, will have on business? It is a big tax; It will raise $625m in a full year according to the Treasurer's estimates and, if the motor industry is correct, it will raise $200m above that. So it is a $600m or $800m tax on business-a new business tax. It is a disastrous measure. It is disastrous for business, for investment, for employment, and it will be disastrous for this Government. Every small business, every farm, every factory, every mine, every shop and office, every work-place across the length and breadth of Australia, will be hit by this plague of paperwork, of complexity, of frustration and of additional cost. This purple booklet will go out to all employers registered with the Australian Taxation Office. It will go out to every small business, every large business, every farm and every mine. Also, all currently exempt employers, religious, charitable and non-profit bodies will in future have to register and pay the tax. The following comment is made at page 8 of the purple booklet: Organisations exempt from income tax and other employers who do not have an income tax number should notify their nearest Tax Office so that a file number can be allocated. Big brother is waiting to hear from you. So all those priests, nuns, brothers, pastors and reverend gentlemen, all those people who run charitable organisations to look after the sick, the poor and the homeless, will now have to go to the Taxation Office and get a file number so that they can pay this tax. I will return to the problems of religious, charitable and non-profit bodies in due course. I hope they will receive better treatment than this Parliament. This enormous package of 151 pages of legislation, 176 pages of explanatory memorandum and 56 pages of guide to employers was dumped contemptuously on this table last Friday afternoon at 4 o'clock by the arrogant Treasurer. He could hardly conceal his contempt for the Parliament and the people of Australia as he put it on the table as honourable members were rushing to catch their planes back to their electorates for the weekend. We had the weekend to look at the legislation, all 300 or 400 pages of it. The shadow Cabinet had to consider it on Monday. We had to take it to the party room on Tuesday, and we have to debate it now-Thursday-under a guillotine imposed by the Government. It has been nearly eight months since this measure was announced in the House in the package on 19 September. Why have we had to wait so long for the legislation? Why do we have so little time to examine it? What has the Treasurer got to hide? The Treasurer treats this Parliament and the people of Australia with arrogance and contempt. He will not even brief the Opposition on the clauses in the legislation. He has denied us the briefings from officers of the Taxation Office which, when we were in office we gave to him. Mr Slipper —Where is he? Mr CARLTON —He is not in the Parliament to debate the matter today. He did not come into the Parliament last night to sum up the negative gearing Bill. He treats the Parliament with total contempt and the electorate in turn will treat him with the contempt he deserves. It seems that Government Ministers and members are starting to realise what his game is. In this morning's Daily Telegraph, in a story headed `MPs on edge as economy fails to pick up', Peter Logue reports: Senior ministers and Labor backbenchers are worried about the direction of the economy, particularly after ALP surveys and an opinion poll result released yesterday. Those concerns were raised at a late night Cabinet meeting on Tuesday during a general discussion on the economy, informed sources said. Leading the criticism of the Treasurer, Mr Keating, was Foreign Affairs Minister and former Whitlam Treasurer, Mr Hayden. The major concern articulated by the ministers was the failure of the promised J-curve effect to materialise in balance of payments figures and the consequential continuing high interest rates. . . . . . . . . . One prominent backbencher said: ``The trouble with Paul Keating is that he is just too good at selling bad arguments and no one has been able to roll him because he's had the polls on side.'' It appears now that the effect of the Government's April 2 decision to scrap the housing interest rate ceiling for new borrowers has hit the electorate. There is concern that new polls over the next month will be much worse. Indeed, this week the polls did show that the Opposition is leading the Government. If an election were held now this Government would rightly be thrown out of office. It would be thrown out of office because of the effects of its economic policies, its high interest rates, its high spending, its high taxes, its subservience to the trade union leadership, the ministerial scandals of the Minister for Trade (Mr Dawkins), the Minister for Sport, Recreation and Tourism (Mr John Brown), criticisms by the left wing Ministers, the Minister for Social Security (Mr Howe) and the Minister for Housing and Construction (Mr West), of their own Cabinet decisions, and the chaos and confusion over the affair surrounding Mr Justice Murphy. Taxation is the issue which has yet to bite with great depth on this Government. Taxation is a major issue. The present polls will be a picnic compared with what will happen when people get their fringe benefits tax booklets and when they find that the miserable tax cuts they have been promised are threatened. We have been threatened by this Government that people will not get their income tax cuts if we deny passage to this horrendous measure. I make it quite clear on behalf of the Liberal and National parties that we will not be bullied on this matter. If this legislation is bad, and it is bad, we will oppose it; we will throw it out. The Government is like the drug addict who wants the bystander to help him rob the chemist shop. We are not prepared to help this Government rob anyone to help it meet the costs of its addiction to high spending of taxpayers' money. We will not be bullied. We will treat legislation on its merits. This package of Bills has no merit. What is the history of this measure? The Government promised the reform of the taxation system. It promised relief for low and middle income earners. During the election campaign in 1983 the Government gave a firm promise that there would be no capital gains tax-a promise which has been repudiated. During the election campaign in 1984 the Government equivocated over its taxation policies. Under pressure, the Prime Minister (Mr Hawke) promised during an interview on a Perth radio station that there would be a taxation summit, hoping to repeat the public relations success of the National Economic Summit Conference. Look where that has led us! There was a big campaign by the Prime Minister and the Treasurer to sell the idea of tax reform. They said: `Let us shift tax away from direct to indirect. Let us make major reductions in the personal income tax rates for low and middle income earners. Support us at the Summit and you will pay less income tax'. All this enthusiasm eventually died in this chamber at the National Taxation Summit after the Prime Minister had gone off to a motel room on the other side of Canberra to receive his instructions from the leaders of the Australian Council of Trade Unions. He had to sneak off from the Tax Summit to receive his instructions. He came back here and pulled the rug from underneath his own Treasurer, which meant the collapse of the so-called Option C and goodbye to the chances of lower taxes for low and middle income earners. Those hopes died here in this chamber because the Prime Minister capitulated to the trade union movement. We are left with the 19 September package. We are left with the rubbish put up by the unions and the Australian Taxation Office. All the old things they were trying to get through when we were in office were dragged up and put into this mess of a package today-all the anti-business, anti-entrepreneurial measures so beloved of the left wing and the trade union leadership. These Bills are a prime example of that. What were the stated objectives of the Government? The Prime Minister said at the National Taxation Summit: A genuine reform of the Australian tax system to promote growth and to ensure that the benefits of that growth are fairly shared and bring lasting relief on personal income taxes to the millions of ordinary Australian taxpayers. Those were the objectives stated by the Prime Minister. We would agree with those objectives. The promise of relief to ordinary taxpayers was sold off to the ACTU in the motel room. When the so-called reforms are in place over the next year we will finish up with 50 per cent of Australian taxpayers paying a top marginal rate of 40c or more in the dollar. Every year another 4 per cent will be added to that total. Mr Slipper —Robbery. Mr CARLTON —As the honourable member for Fisher said, that is robbery. The people have been cheated. They will realise that they have been cheated. What other objectives were stated by the Government? The Prime Minister also said: At this Summit I reaffirm our commitment to the totality of the people's mandate- whatever that is- That, of course, means reaffirming our commitment to the nine principles on which we undertook to base both the process and the program of tax reform. Let me quote just three of those principles here today. The fourth one states: . . . any reform must lead to a simpler system, which therefore all Australians can understand more easily. Is this a simple measure? This measure alone breaches that principle with its 150-page Bill, its 176-page explanatory memorandum and its 56-page guide to employers explaining how they will have to fill in the paperwork for this new business tax and fork out the $600m to be paid. This is only one of the 22 items listed in the Treasurer's statement of 19 September last year. The overall picture before the so-called tax reform to simplify the system was that the Income Tax Assessment Act had about 1,100 pages. Added to that, since we have had Taxation Laws Amendment Bill (No. 2), 56 pages; Taxation Laws Amendment Bill (No. 3), 53 pages; Taxation Laws Amendment Bill (No. 4)-the no- torious entertainment tax Bill-55 pages; the negative gearing legislation, which we had yesterday, 47 pages; the fringe benefits tax legislation, 139 pages-a total of 350 additional pages. So, on top of the 1,100 there has been another 350-an increase of 32 per cent. There have now been 1,450 pages of taxation legislation under this Government's simplifications. To give honourable members some idea of the rubbish we have here, I refer to the definition clause at page 107 of the Bill. The Prime Minister will enjoy this quotation because it explains to the Australian public, for the first time, what is meant by the Prime Minister's favourite phrase `in respect of'. The phrase `in respect of' means, we are told: in relation to the employment of an employee, includes by reason of, by virtue of, or for or in relation directly or indirectly to, that employment. I am sure members of the House will be enlightened by that. I will not go into the description, which runs for about seven or eight lines, of what an `in-house property fringe benefit' means, but employers who provide in-house property fringe benefits will need to read those seven or eight lines and if, after they have read them, they are any the wiser I shall be surprised. That is the simplicity, that is the objective that the Government had. The eighth principle was: . . . any reform must provide the best possible climate for investment growth and employment in Australia. What effect will one have on investment by loading an extra $625m of extra payroll tax on to the economy? I asked the Treasurer the other day in this House how much of the $625m would come from government bodies and therefore would be paid for directly through taxes or additional government charges, and he was unable to answer. I checked last night whether the Treasurer's office had an answer to this question-no. We checked again this morning, and apparently he had to go off to some extraordinary Cabinet or Party meeting for some other purpose-still no answer. The Treasurer does not know how much of this new business tax will be levied on government versus business. How could he have calculated its effects on business? Can he understand its effects on business if he has not even done the simple sum of the split between its effect on business and on government? The ninth principle of the Government was: . . . any reform package must have widespread community support. That is a laugh. Most of the Labor Premiers say that they will not pay this tax. Unions in affected industries, for example, the car industry, will not support it. Employers large and small oppose it. Employees, who are squeezed because of the effects of this tax on their after-tax income, are not supporting it. Indeed, on Tuesday night I was at a motor industry dinner held in Canberra that was addressed by the Premier of South Australia, Mr John Bannon. He said: I had hoped to be able to address you tonight in the knowledge that the Federal Government had accepted the arguments put forward by the automotive industry, unions and various governments to change the proposed fringe benefits tax plans in relation to company cars. Unfortunately, however, I am addressing you in the knowledge that a decision has been taken which will prove detrimental to the car industry and one which will have severe ramifications for my State in particular. This was said by the Labor Premier of South Australia, Mr John Bannon. He continued: I am particularly disappointed that the Federal Government was unable to show the flexibility to change its plans as this was an issue which was not being opposed on purely sectional grounds. Governments, unions and the industry itself had all come to the same conclusion, namely that the fringe benefits tax in its proposed form would have a detrimental effect on the car industry in Australia. The Federal Government had been presented with rational arguments and demonstrable evidence that this was so. What made the Government's decision all the more disappointing was the fact that at no stage were we opposing the principle of tax reform but rather the method by which its was introduced. Indeed, at the Tax Summit in 1984 I acknowledged the desirability of the tax reform being mooted by the Federal Government, but on the strong proviso that such reform should not have an adverse effect on employment in the car industry. So, the Premier of South Australia agrees with the Opposition in this Parliament that the Government has breached its own principles on tax reform. There is no community support for this. There is no serious attempt by the Treasurer to deal with the matter. Premier Bannon got the same cold shoulder that we get from the Treasurer. I am told by people in the Caucus that the Treasurer treats the Caucus with contempt, too. He will have to stop treating the Caucus, the Parliament and the people of Australia with contempt; otherwise, he will be leading the charge out of office of this Government. This new business tax to raise $600m to $800m of revenue is complicated and damaging. Let us look at some of its effects. My colleagues, over the course of today, will be examining the various clauses of the Bill in more detail. They will indicate how it will be damaging within their electorates, to the constituencies that they represent. I hope that Labor members on the other side of the House, particularly those in marginal seats, will listen very carefully to what is said today, because they will realise that Treasurer Keating, the Treasurer of their Government, is digging their political grave with his taxation legislation. Let me look at some of the matters that are raised by the measure. Firstly, there is the question of the rate. Again, there has been cheating in regard to the rate to be levied initially. The 49 per cent tax rate that is otherwise applicable to companies from 1 July 1987 has been brought forward by three months for fringe benefits tax purposes and will apply for the period from 1 April to 30 June 1987, whereas it was originally announced that the fringe benefits tax would be levied at the existing corporate rate of 46 per cent. In other words, business will have its tax rate put up by three percentage points three months early. That goes against the original statement. Secondly, there is the question of the implementation, which, quite frankly, will be a shambles. It will be extremely difficult for employers fully to absorb the contents of this legislation in order to discharge their obligations and liabilities under the fringe benefits tax by the time the first instalment is payable on 28 October this year. Heaven knows, with the advice we have been able to get, we have had extraordinary difficulty in reading this stuff and trying to understand it. How on earth will all of the employers of Australia and their tax advisers-some of them cannot afford to employ tax advisers, if they run farms these days, in particular-be ready to pay this tax by 28 October? The 28-day period after the fringe benefits tax year ends on 31 March, in which the fringe benefits tax returns must be lodged, is unreasonable because three instalments are paid during the year. The legislation is complicated. Undue resources will be required by employers to calculate the fringe benefits tax liability and prepare the fringe benefits tax return in the 28-day timeframe. It is more likely, because of the complexity, that fringe benefits tax returns will be prepared by tax agents. It is totally unreasonable to expect tax agents to prepare and lodge all of their clients' fringe benefits returns in a 28 day period. Let me return to the question of religious and exempt bodies. The original blanket exemption for religious institutions has been substantially narrowed and will now apply only to the provision of benefits to a minister of religion, a full time member of a religious order, or a student at a college conducted solely to train persons to become members of religious orders. We have been barraged by letters from religious and charitable bodies, fearful that the Treasurer would go back on his promise in his statement of 19 September last year to exempt those bodies from the tax. It became clear that he had no intention of exempting them. The lines are drawn so carefully that hardly anybody in these areas is exempt. So, when one raises money through fund raising campaigns for charitable bodies, collecting money from people to do good work in the community through religious, voluntary, non-profit bodies, one should set aside a percentage for Keating's business tax. The fringe benefits tax will hit religious, charitable and non-profit bodies. What a disgrace! Every time the Red Cross knocks on one's door a few cents is set aside for Keating's-- Mr John Brown —You knock them back. Mr CARLTON —The Minister supports the tax. Mr O'Keefe —The emotional rubbish you go on with is unbelievable. Mr CARLTON —The Minister supports the tax. The honourable member supports the tax and he will suffer for supporting the tax. Mr O'Keefe —Emotional junk. Mr CARLTON —Government members opposite use the term `emotional junk' to describe my support for the religious, charitable and non-profit bodies which believe that they should be exempt from this tax. It ought to be known that the honourable member for Burke has committed himself to introducing this tax. The honourable member will know that every time there is a Red Cross doorknock in his electorate a few cents will be set aside for the Keating tax. What will happen to farmers and miners? How are they to work out exactly how the tax applies to accommodation on farms, farm properties, meals for farm workers or the occasional use of farm vehicles? This tax will be an administrative nightmare. When the purple book arrives at every farm house, what will farmers do with it? They will be in big trouble. They will have to go to tax agents, whom they may never have employed previously. The total cost to the mining and farming communities, when it is added up, is hundreds of millions of dollars. It will not just include the cost of the tax; it will also include the additional cost of employing assistants. There will also be frustration and diversion from the farmers' and miners' ordinary work. What about the car industry? On the basis of calculations by the car industry, on the basis of research done be the National Institute of Economic and Industry Research, which is a totally independent body, of research done by the Bannon Government's Department of State Development in South Australia, on research done by the Vehicle Builders Employees' Federation of Australia, on research done by the Federal Department of Industry, Technology and Commerce-and we are reliably told that is supported by the Minister for Industry, Technology and Commerce, Senator Button-10,000 jobs in the car industry are threatened as a result of the fringe benefits tax. On the basis of these research findings the Opposition has calculated that there will be a loss of revenues and taxes to the State and Federal Governments of $301m. The Government says that it will collect $350m from this tax. We believe that by the time the loss of sales tax, fuel tax and duty, the loss of income tax from workers who lose their jobs, the loss of company tax, the cost of unemployment benefits, the loss of State payroll tax, stamp duty and registration fees are added up it will amount to $300m. Yet the Government expects to get only $350m out of the fringe benefits tax from the motor industry in the first place. So a net $50m gain is going to cost 10,000 jobs in the motor industry. The Labor Premier of South Australia, Mr John Bannon, agrees with me. If honourable members opposite who are interjecting wish to say that Mr Bannon comes out with emotional junk, let them say so. We have the support of the South Australian Labor Government in our claim. It is going to hurt. What about the banks? The Treasurer said in his second reading speech that every opportunity for consultation with groups had been provided. That is untrue. The Australian Bankers Association requested meetings with the Treasurer and officers on numerous occasions but was denied the opportunity to discuss this tax. The effect on the banks will be very serious. Something of great concern to banks-there are many concerns but I will mention one specific concern-is the exclusion from the valuations of housing benefits of the restrictive nature of some housing benefits. For example, where a bank employee lives above bank premises in a country town and must act as the caretaker of the bank, such restrictions are specifically excluded from the fringe benefits valuation. In other words, no allowance is made for the fact that that employee has to be the caretaker. The bank has to pay the full fringe benefits tax. In many respects the tax on the banks is retrospective in effect because their arrangements with employees have been in existence for a long time. There are numerous other anomalies and difficulties with this appalling new business tax. They will be taken up successively over the course of the day by members of the Opposition parties, the Liberal and National parties and they will be taken to the electorate. They will be explained as well as we can explain them, given the complexity of the matter; and, of course, all employers will receive their purple booklet telling them in 56 pages, if they can understand in, exactly how complicated it will be for them to fill in their taxation returns and meet this onerous burden. We in the Opposition have a very clear view that rorts should not be allowed in this area; that, if rorts are there, they should be cleaned up; that the principle of the taxation must be maintained; that benefits are taxable in the hands of the person getting the benefit; and that if they are not fair they should be cleaned up. We are totally opposed to this new business tax, this new payroll tax, which will destroy investment and destroy employment. We will vote against it here and we will vote against it in the Senate. We will not be bullied by this Government. We will maintain our determination to oppose it both here and all round the countryside. It is a bad tax. Mr DEPUTY SPEAKER(Mr Leo McLeay) — Order! The honourable member's time has expired. Mr GRIFFITHS(Maribyrnong)(9.51) —The Opposition's hypocrisy on tax reform or, indeed, on any change to our tax regime knows no bounds. I was reminded during the comments of the shadow Treasurer, the honourable member for Mackellar (Mr Carlton), that in 1980, for example, the then Liberal Government, during the course of the 1980 election campaign, embarked on a scurrilous scare campaign to the extent of seeking to frighten people into a view that their houses were going to be taxed. We all remember the scurrilous housing tax campaign of 1980, and I wonder whether the shadow Treasurer would be prepared to disassociate himself from that sort of campaign. We have heard here, from the doom merchants, predictions that 10,000 jobs will be lost in the motor industry. Let me just remind the people of Australia about some of the other predictions of this discredited Opposition. It, of course, predicted that there would be tens of thousands of jobs lost in the restaurant industry. Honourable members on the other side of the House were baying for blood on that particular issue. What has happened? Now that people have had time to reflect, they ought to go back and have a very close look indeed at what the Opposition was putting in this House. The reality, as every Australian now knows, is that that tax has been implemented and there has been no substantive job loss in the restaurant industry. Indeed, the restaurateurs with whom I have discussed the issue have indicated that in many instances, depending on which segment of the market they are in, things have actually improved. In my electorate, for example, there is a hotel, the Ascot Vale Hotel, which puts on a very good business lunch but which also puts on a type of lunch that is more family oriented. The owner of that establishment has indicated that, whilst there was an initial contraction of business for the business lunch component, it was more than compensated for by the fact that families now coming into the restaurant on weekends were able to afford a lower cost meal, the end result being that his business is booming. We can go on and on. There are many scare campaigns. I can also recall the campaigns around the assets test. The Opposition had most pensioners in fear in the lead-up to the last election and it was used as a political ploy. They were all concerned that they were going to lose their pensions. The reality, as all pensioners now know, is that the assets test has had a particularly marginal impact. The numbers of people affected by it are very small. It means, in terms of tax reform in this country, that we might have to insist that millionaires in our society, on the grounds of equity, not receive the pension. I think fundamentally that is the sort of issue that governments ought to confront in times of limited resources, and this Government has done that. The Opposition's approach to tax reform has never been one to embrace a cohesive and sensible approach, not only in terms of redistribution but in terms of broader macro-economic policy objectives. While in office it simply presided over a tax regime that became increasingly subject to institutionalised tax avoidance and evasion. One need only look at the recommendations of the Costigan Royal Commission on the Activities of the Federated Ship Painters and Dockers Union. Mr Costigan should be congratulated by all in this chamber on being responsible in a large part for the genesis of the tax reform package that we are talking about here today. His pioneering work in this area, whilst embarrassing to the then Fraser Government, in many respects laid the groundwork for the type of package now before the House. Of course, one expects the Opposition to come into this chamber, to isolate particular components of any tax reform package and to seek to gain political points by misrepresenting or distorting them. But there is one fundamental on which this House and the people of Australia ought to focus. There is really no choice. If one embraces the view that average pay as you earn taxpayers in this country ought not to continue, as they did under the Fraser Government, to pay an increasingly large part of the tax revenue, to shoulder an increasingly inequitable burden in terms of their contribution to tax revenues, reform is inevitable. There will always be debates about the precise tax regime that one attempts in terms of this sort of reform. But that fundamental reality remains. The choice is a stark one indeed. Either the Opposition accepts that the PAYE taxpayers of this country ought to continue to shoulder an ever increasing burden of tax revenue or it must put before this House alternatives in terms of tax reform that will ensure that the PAYE taxpayers do not have to bear that burden. To date it has done nothing. The suggestions that it made in the lead-up to the last election, and those that have been floated since, would all have a massive impact on the revenue of the Commonwealth. The day before yesterday in this House the Treasurer (Mr Keating) articulated in some detail the cost of the various measures that have been put by the Opposition to date. What the Opposition has to address in this debate, rather than isolating particular components of the fringe benefits package, is where the money will come from for those policies to which it has committed itself. I might add that the cost of the Opposition's measures is in the vicinity of $6 billion. For goodness sake, tax reform is difficult. That is why in the post-war period and substantially in the pre-war period no governments were prepared to embrace any degree of reform; they were worried about the electoral consequences. It is worth reflecting on some of the material that was handed around in the document entitled `Reform of the Australian Taxation System' that was issued by the Treasurer in 1985. The fundamentals have not changed. The basic objective of reducing high marginal tax rates was the centrepiece of the tax reform package. The amounts and timing of additional revenue from the income tax base and its broadening measures were, of course, addressed at the National Taxation Summit. But fundamentally the Government was concerned with the distributional impact of any additional tax reform package. I go back to that distributional factor. If the Opposition is prepared in this House to argue that PAYE income earners should continue to shoulder the burden that they increasingly did under the Fraser Government, let it do so. If the Opposition does not believe that to be an appropriate point to argue, what it should be doing, rather than simply whingeing and knocking proposals, is to put what it considers an appropriate alternative tax reform package. The days of fiddling around at the edges of tax reform have finished. We have embarked on a fundamental reform of the tax system. It behoves members of the Opposition to do the same lest they be categorised accurately in the community as simply whingers and knockers. It is worth reflecting on this reality. The number of taxpayers subject to the current 46 per cent or higher marginal rates was estimated to increase by around 20 per cent to about two and a half million taxpayers in 1985-86. In the absence of any change to the tax regime, that would result in some three million or over half the full time work force in the year 1986-87 going into the highest marginal tax brackets. The proportion of taxpayers in the highest marginal tax brackets under the pre-tax reform package regime was exploding. They are the people who, in the absence of any meaningful reform, are looking to members of the Opposition for what they would suggest. It is worth reflecting that the past practice in Australia of allowing high marginal tax rates to fall on ever increasing numbers of taxpayers-that is the creeping into higher tax brackets-has not been matched by a commensurate increase in tax revenues and the actual progressivity of the income tax system was a farce. It had the appearance of progressivity. Fundamentally it was not and was increasingly becoming quite the opposite. It is worth reflecting that in 1984-85 people earning more than 1.6 times the average weekly earnings accounted for approximately 21 per cent of the total net tax assessed. In 1954-55, by way of comparison, that figure was 54 per cent. So what members of the Opposition are arguing, in the absence of any meaningful tax reform suggestions being put by them, is: What are those who were rich enough in 1954 to legitimately shoulder the highest marginal tax bracket going to do for those people who are earning relatively low levels of income in our community and who are being thrust by the existing regime into those highest marginal tax brackets? I think I have gone on for long enough on the background to the fringe benefits tax proposals. There is one area I would like to focus on very briefly; that is the concessions allowed to employees of the airline industry. I will not go into too much detail because I know time is short, but it is worth just making these few points. I have had many representations on this matter. There is now agreement between the Government, the unions and the industry that results in the following: Firstly, who pays the tax? The companies will pay the tax as proposed, not the employee. Secondly, how is the tax calculated? The fringe benefits tax applies to the arm's length price of an airline ticket. The Government concession accepts that staff travel is not equivalent to commercial travel. So the reality is that nothing in the fringe benefits tax regime will have any impact on employees of the airline industry. What happens is that essentially the status quo has been maintained. I notice my colleague, the shadow Treasurer, the honourable member for Mackellar smiling and looking to the roof. The reality is that if he does not understand the agreement, he is welcome to come around to my office and I will explain it to him at the first opportunity. Mr Carlton —You are certainly better than the Treasurer; he will not respond to anything. Mr GRIFFITHS —I will conclude on this point, and I will not respond to the interjections by the shadow Treasurer. His interjections are often as confused as his substantive contributions to this House. The honourable member for Burke (Mr O'Keefe) will be addressing some of these issues later during today's debate. This honourable member is particularly well informed in this area. Members of the Opposition have never put before this House either whilst in opposition or when they were in government anything that would even approach the concept of meaningful tax reform. Increasingly under their Government-this is indisputable- Mr Cadman —Oh! Mr GRIFFITHS —If my colleague disputes this, I think he is in a very bad way indeed. He ought to get back under the dashboards of cars because there is no doubt-it is unarguable-that under his Government PAYE taxpayers shouldered increasingly large and increasingly higher burdens of providing tax revenue. These reforms will address that one fundamental problem. Mr SHACK(Tangney)(10.05) —I thank the honourable member for Maribyrnong (Mr Griffiths) for the invitation extended to the Opposition to call around to his office and hear his explanation of the legislation. I assume that invitation extends to me and, if so, I will have black tea and no sugar. I warrant that we will be there for a considerable period. The honourable member for Maribyrnong seems to be really serious about advancing the explanation that an impact on a company, an impact on employers, will not also impact on employees, the people who work for that company. That is a very interesting explanation indeed. In his short time in this House the honourable member seems to have made a speciality in monitoring matters aviation. I would tell him that he need only go to any airport and any tarmac in the country and talk to the employees who work at these establishments to understand and learn first hand their very serious concern and reservations about this legislation. It also gives me great pleasure to follow the shadow Treasurer, the honourable member for Mackellar (Mr Carlton), and to repeat, because they bear repeating, some of the opening remarks that he made about the way this Government has treated this legislation, about the way this Government has treated Parliament and, through the Parliament, about the way this Government is treating the people of Australia. This legislation comes eight months after the original announcement last September by the Treasurer (Mr Keating). As the shadow Treasurer said, taken together, these seven Bills which constitute the package amount to 151 pages of legislation. I have one Bill here, the Fringe Benefits Tax Assessment Bill, which alone runs to some 139 pages with something like 167 clauses. If the 151 pages of legislation is not enough to give one an understanding of the legislation, one needs only turn to the 176 pages of explanatory memorandum. If that is not enough, if one still cannot understand the legislation, the Government has helpfully produced and published, and no doubt will be circulating, a 56-page booklet that will help us understand this legislation. This legislation forms an incredibly complex package. Eight months after the Treasurer initially announced the legislation-telephone book size, if one adds together the legislation, the memorandum and the booklet-this Parliament, as representatives of the Australian people in this chamber, have one day of guillotined debate to discuss it. The Government is treating Parliament and the Australian community with outrageous contempt. Quite frankly, I am surprised that we are not debating the legislation on a non-broadcast day. The Government must have slipped up here because that would have been consistent with the way the Government is putting this legislation through. If the legislation had been brought on on a non-broadcast day this debate also would have gone unheard by the Australian community at large. If the community- Mr O'Keefe —We wanted it on a broadcast day. Mr SHACK —The honourable member's turn will come in a minute, and he will stand exposed for his support of this legislation as well. The honourable member should not be so impatient as to interrupt my contribution. The Australian public in the months ahead will come to understand this legislation, because it will impact on almost every Australian worker. To give the House just one little insight, if a person happens to operate a vehicle which has both a commercial and private purpose, a standard item of equipment in that vehicle will not be a spare tyre but a log book in the glove box to enable the owner to keep the hour by hour and day by day records that will be necessary for him to stand under this legislation. It is an incredible and outrageous assault on the Australian taxpayer, and let me say that it is an ill wind that blows no good. As the shadow Treasurer said, this legislation will herald the flight of this Government from office. The Government was nearly done at the last election over so-called tax reform. I am quite confident, even though it is risky making political predictions in a business fraught with uncertainty, that this legislation alone, let alone the plethora of other matters this Government can be attacked on, will see this Government out of office. Because of the outrageous guillotine to which we are all subjected and because of the inordinate number of speakers on both sides of the chamber who wish to make comments on this legislation, we are necessarily restricted in time. I would like to concentrate on one specific area in my shadow ministerial responsibilities of education and youth affairs; that is, specifically how this legislation will affect non-government schools and particularly non-government boarding schools. With the ideological blinkers that those opposite wear, they believe that only the wealthy send their children to non-government or private schools; the wealthy can afford it and, so the logic goes, they can afford the taxation assault on non-government schools. I will detail that in a minute. Let me tell those opposite that the parents who sent their children to non-government schools are not necessarily wealthy, and the parents in the rural areas, who send their children to non-government schools are certainly not wealthy. One has only to speak to the parents of isolated children, parents who live in the many square miles of outback Australia, to understand that for many of them the choice is between education on the farm or property and sending their children to a rural boarding school. One of the ways in which rural boarding schools exist and operate in Australia is by extending to the teachers and staffs of those schools subsidised and concessional accommodation. This is not a perk, a rort or a rip-off; it is one way in which those schools in the far-flung, outback regions of Australia can attract the necessary and qualified staff to deliver fundamental education to rural Australian children. One way of attracting staff is to provide concessional or subsidised accommodation and the associated meals and support that go with it. With the cost of running non-government boarding schools, one of the ways in which suburban and city non-government boarding schools try to meet the costs of their boarding staff, the husbands and wives who look after the children who are sent to the schools and the single men and women who are housemasters and the like at the schools-one of the ways in which they attract those individuals for a very low rate of remuneration-is by giving them subsidised or concessional accommodation. Again, the concessions enjoyed by those staffs is not a perk or a rip-off. This tax, impacting as it will on the schools, will necessarily lead to fee increases for both day pupils and boarding pupils. This is not only an outrageous assault on taxpayers across Australia but an ideologically blinkered, outrageous assault in this one specific area. Anything in today's educational climate, with today's cost pressures, which impacts adversely on the costs of running non-government and boarding schools in the cities and suburbs, but especially in the rural areas, is to be argued against and to be opposed vigorously. I end where I began, recognising that I said I would keep my remarks specific and short. Almost every clause and paragraph of this legislation can be contested. It is a piece of legislation that will lead this Government out of office. In the meantime, it will impact outrageously on so many individuals and families across Australia. One of the specific groups I speak for this morning is that group of parents, especially in rural and outback Australia, who, not for reasons of wealth or privilege, but for reasons of economic necessity, have to send their children to rural-based boarding schools. Because their staffs and teachers enjoy the concessional or subsidised accommodation and other arrangements at the schools-benefits which the schools have to extend to attract the right sort of staff in the first place-those schools will be caught up by and subjected to this piece of legislation. As those schools try to survive-they are not profit-mak- ing organisations-and try to meet their costs year by academic year, the inevitable consequence of this legislation will be that fees will rise. As fees rise, that rise will impact on those families in the depressed rural sections of Australia who have enough trouble as it is now in sending their children to boarding school without additional costs being imposed. As I have said, they do not send their children to boarding school for reasons of privilege but for reasons of economic necessity. If for no other reason, this legislation should be opposed for that reason. If it is not going to be knocked out and thrown out, as it should be, I urge the Government to take off its ideological blinkers and to look at the adverse impact that it will have on non-government schools around Australia, especially those in rural Australia. Mr O'KEEFE(Burke)(10.16) —I support the fringe benefits tax legislation. I have been looking forward to the day that it would be introduced in the House so that I could take the opportunity to dispel the fears of the people of Australia. I acknowledge that today is a broadcast day; I am glad that it is; it gives the opportunity to dispel for all Australians some of the emotive junk that comes from the honourable members on the other side of the House every time that the Government tries to do something to bring some credibility back into the tax system in Australia. Every country must have a fair tax system. If some people are able to opt out of paying their fair share, a snowball effect develops. As more people look for ways of opting out and look for loopholes, the worse the system gets. Let us not forget that that is exactly what happened in Australia during the 1970s. Under the regime of the Government of honourable members opposite, the tax system broke down. This Government has come to office on a platform of tax reform. It was clearly put to the electorate in the November 1984 election run-up that this Government would reform the tax system. The people of Australia supported that proposal. They want the system to be reformed, and it will be reformed, and we have their support. While honourable members opposite continue with their emotive junk, they are simply alienating themselves from the people of Australia. While talking about their emotive junk, I ask: What did honourable members opposite say about the assets test? They urged all pensioners in Australia to put their money under the bed. Honourable members opposite scared pensioners witless. Now they are out in the community talking up the rural depression, causing banks to add loadings on to farmers' loans encouraging the vultures to sit back while rural farm values become further depressed. The more they talk it up, the worse they make it for the very people they purport to represent and they are at it again today. The Tullamarine airport is in my electorate. Thousands of airline industry employees who live in my electorate are vitally concerned about the real nature of this legislation. As did my colleague the honourable member for Maribyrnong (Mr Griffiths) a few minutes earlier, and so that everyone can understand it, I will put the record straight simply and succinctly with regard to the application of the fringe benefits tax to airline travel. The position is simply this: A tax will be applied to concessional travel granted to employees by the airlines. As a result of negotiations with the Treasurer (Mr Keating) and the Government, it has been agreed, firstly, that the tax will be paid by the employer-the airlines. Secondly, it has also been agreed that there will be no cutback in the availability of standby travel opportunities for airline employees. Thirdly, I refer to the other side of the deal: The airline unions have agreed that they will make no increased claims in this area in the future. In other words, they have a package. They are content with it and they are content with the position adopted by the employers. I do no care how much honourable members opposite go out in the community and peddle their junk. Those are the facts, and those are the facts that I want the people in my electorate to understand. I turn now to the motor vehicle tax, because I have a bit of an interest in that. The Ford Motor Co. of Australia Ltd factory in Broadmeadows is also in my electorate. Thousands of people working in the motor vehicle industry are concerned about its future. There is no dispute among workers in the motor vehicle industry that there is a need for fringe benefits tax legislation. There is no dispute that the tax system has been rorted and they, as ordinary workers paying high PAYE tax, are looking for relief. There is no dispute at all. The question that really arises is whether there will be a downturn for the motor vehicle industry and if so what is the cause. Let us look at company cars. The Government is not opposed to people having company cars. We are not opposed to people having salary packages. All we are saying is that if an employee has a company car as a fringe benefit or perk, tax should be paid on that. That does not apply to a car that is used for business purposes only because business mileage is not taxed. Members of the Opposition know that but I have not heard them mention that fact once this morning. There will be no tax at all on business mileage. We are concerned with private mileage that would normally be done by a person using a private vehicle. If an employee has a company car and that car substitutes for private expenditure then tax should be payable. I do not have any problems in supporting that. The tax pay- able is minimised. The more the vehicle is used for work purposes-as in the case of the travelling sales representative or the person who uses the company car for business related matters-the less tax is payable. I have no problems with that. In the fringe benefits tax booklet that we have published there is a clear scale that shows that. So anything that Opposition members say in this debate today that contradicts what I have just said will be a downright lie and honourable members opposite will be exposed for using it. Mr Connolly —On a point of order, Mr Deputy Speaker: I think the honourable member for Burke should rephrase what he just said. What he in fact said was that every remark made by any Opposition member which did not totally agree with his remarks was a downright lie. I do not think that is an acceptable formulation of words at all. Mr DEPUTY SPEAKER(Mr Leo McLeay) —Perhaps the honourable member for Burke might like to say `it is not true'. Mr O'KEEFE —I am quite happy to rephrase it and say that it will not be true. What has just happened is yet another misrepresentation by a member of the Opposition. That happens all the time. I said that anything that was said later in the House today that disclaimed what I had just said about the table in the booklet would be a lie. That is what I said, and the honourable member for Bradfield knows very well that that is what I said. Let us return to the future of the motor vehicle industry. Mr DEPUTY SPEAKER —The honourable member for Burke might be more advised not to use the word `lie'. Perhaps he will rephrase what he said. Mr O'KEEFE —I accept your advice, Mr Deputy Speaker. I will rephrase my words to `it would not be true to say that later in the day'. There will be a downturn in the motor vehicle sales this year when compared with last year. That will be caused by several factors. One factor which is not the cause is the fringe benefits tax. Let us look at some of the key factors. First of all, last year was a record year for the motor vehicle industry as a result of the efforts of this Government in restoring the economy, restoring confidence and encouraging sales in the industry. We reached record levels. That is not disputed by any of the manufacturers. They all know they had a big year last year and there are several reasons why that will not recur this year. The first is that the Government has removed a rort that Opposition members were responsible for-the way in which the investment allowance worked. Last year many companies put in orders before 30 June, even though the deliveries came later, in order to qualify for that investment allowance. Secondly, there have been price rises because of the introduction of unleaded petrol. Thirdly, there are price rises in the system for imported vehicles and components because of the devaluation. The Opposition's efforts in holding an overvalued dollar for as long as it did when it was in office caused imports to have an advantage in Australia. That has been one of the prime reasons why imported vehicles have replaced locally manufactured vehicles. Opposition members know that and they know that it is not true to say that devaluation has not had and will not have a significant effect on the value of motor vehicles. I wish to look at two or three articles which have appeared in the Press this week. In the Melbourne Sun on Tuesday there was a big item headlined `Perks tax ``cause of car firm crash'' '. The firm was a Mazda dealership in Dandenong, Victoria. This firm was dealing in imported vehicles and of course imported vehicle prices have gone through the roof because the devaluation of the dollar has put our local vehicles in a better competitive position. Of course import dealers will feel the crunch. So they should. There was also an article entitled `Cost price squeeze for the motor vehicle industry' which clearly outlined a number of reasons for the downturn. An article in the Age on Tuesday 6 May relates to the Peugeot operation-another imported car. The article says that Peugeot distributors last week cut $5,000 off the price of one of their vehicles in the market-place. Why? Because they want to maintain market share and under the new arrangements if they want to maintain their market share against Australian vehicles, that is the sort of thing they will have to do. I welcome that, I have no problems with that at all. In effect what I am saying is yes, there will be some shake-outs in the motor vehicle industry. We have known that since we came to office. The 1992 motor vehicle plan will cause shake-outs in the industry and those will be to the advantage of locally manufactured products. I make yet another point on the effect of the fringe benefits tax on salary packages. This is something that honourable members opposite will be particularly interested in because they have so much contact with senior business executives. What was the effect on the business sector, particularly in relation to salary packages, when the Government introduced its legislation last Friday? In Friday's Australian Financial Review there were 90 advertisements for senior business positions. Of those 90 only nine specified salary only; the other 81 set out a salary package and 14 of them not only set out a package but specifically nominated a company car as part of the deal. In the attempt to recruit senior executives the business sector out there-with whom honourable members opposite claim to be in touch-has filled a newspaper with advertisements offering salary packages. Obviously that sector is not worried about this tax. Opposition members know as well as I do that every time a package is mentioned a company car is included. My final point about the fringe benefits tax on cars is that this Government is entitled to be suspicious of the political motives of some of those who make decisions in this area. Late last year, on the day the Government announced its intention to move in this area, the Adelaide Steamship Company Limited and Elders IXL Limited moved to cancel their fleet orders. I ask honourable members to reflect on who are the leaders of those companies and how they are affiliated with the Liberal Party of Australia. They could not care less about the effect on workers or ordinary Australians. All they wanted to do was cancel their fleet orders because that would put pressure on the Government. I think that that is despicable. When we talk about knocking off tax deductions for overseas borrowings, those same companies say: `We will go offshore, we will take our business out of Australia'. Those people do not want a fair tax system because they have lived off the rorts for all those years. This Government was elected on a platform of tax reform. It was elected to take the rorts out of the system. It will do so and it will have my full support in doing so. I fully support the legislation. Mr COBB(Parkes)(10.28) —Today we are debating an extra tax that is to be imposed on the people of Australia-the fringe benefits tax which is to apply from 1 July 1986 and which must be paid on non-cash benefits granted to employees. This may seem logical to some who live in the antiseptic world of Canberra, but nevertheless it is an extra tax. Those people who go out into the paddock, out into the real world and look at the damaging practicalities of this will have grave reservations about it. I emphasise that this is an extra tax. In 1986-87 an extra $330m will be collected; in the following year $540m; and in 1988-89 an extra $625m. The employer has to pay the tax. Fringe benefits will not be allowable as a tax deduction. If we divide those amounts by the 800,000 employers in this country we find that they will each be paying an extra $10 or $15 a week. However, as most employers employ only members of their own families, they will have to pay on average an extra $30 or $40 a week. That may not sound a large amount of money but it probably represents 20 per cent of their income. This fringe benefits tax has been structured in line with the typical socialist mentality of making the employer pay so that the employee will not be offended. I think this is ridiculous. The Government has also structured the tax in this way to ensure that it can be collected. The Government knows that the employees would revolt against such a tax if it were imposed on them. However, the attitude of the electorate will become apparent at the time of the next election. The way in which the Government has gone about implementing this tax immediately makes it a bad tax. The tax is inconsistent in that the employee pays tax on the cash part of his income but he does not have to pay the tax directly on the non-cash part. Where is the logic in that? Because this tax has to be paid on the fringe benefits part of the income, it means that, in the course of time, fewer fringe benefits will be granted to workers. That is an unavoidable fact of life. It will mean in effect that the quality of life will drop. We just cannot pluck $500m out of the economy from nowhere and say that this will have no effect on anybody. That $500m will not be there any more. Dr Watson —Not unless you are naive. Mr COBB —That is right. The tax will mean fewer jobs, fewer fringe benefits and higher prices for the consumer. The Government would do better to ask itself why fringe benefits were granted in the first place. There are a number of reasons for this. They are granted because the marginal rates of tax are too high. This Government says that it is bringing down marginal rates from 60c to 49c in the dollar. While that move can be applauded, the fact is that because of inflation, indexation, fiscal drag, bracket creep and all of these other fancy terms, everyone in this country will soon be paying tax of 40c to 49c in the dollar anyhow. So the amount of tax collected will actually go up. Let us wipe the idea that the increase in tax will be offset by tax cuts later in the year. Fringe benefits are used to attract employees to certain jobs-for example, jobs in remote areas-or because the employer cannot afford to pay enough in cash wages. However, all this will now go by the board. Therefore, the fringe benefits tax will be a tax on jobs; it will be a tax on decentralisation; and it will be a tax on the hard workers of this country. Who will be hit by the tax? I know that the Government aims to soak the so-called rich because it does not like success. It wants to drag everyone down to the same level. It is ironic to look at members of the front bench, when they are in this chamber, because it is stacked with millionaires. This tax will not affect them. It is going to hit the middle class. It is going to hit the poor-the ordinary bloke in the street. The small businessman of this country is busting himself working 80 hours a week. He is taking home probably only a couple of hundred dollars a week whereas his employees are probably taking home more. The small businessman is going to be hit with the fringe benefits tax. It is utterly ridiculous! The one little luxury that an employer might have in small business is going to be taken away from him. The rich of this country will get around this tax. The tax will not affect the Packers, the Abeles, the Keatings, et cetera. They will not lose any sleep at night. The average man in the street is the person who will be hit. There will be fewer fringe benefits, and fewer jobs, and the employer will have less money in his pocket. Prices will have to go up to pay for this. The practical effects of implementing this Bill are really horrific. One would think that a terrorist organisation had produced the purple booklet entitled `Fringe Benefits Tax-a guide for employers'. There is a minefield on every page. There are 56 pages of bombshells of detail, complications- Mr Cadman —Whose signature is on it-Gaddafi or Keating? Mr COBB —Goodness knows; it is more socialist diatribe. As we have heard, the tax will be detrimental to the car industry. The people in my electorate will probably be riding bicycles if this tax is introduced. I particularly want to restrict my comments to the effect of the tax on small businessmen and farmers. The Labor Government is trying to smash down anyone in this country who shows any signs of independence, who is not in a trade union and who is not a member of the industrial relations club. It hates initiative, thrift, work, effort, and independence. It wants to bring everyone down so that they comply and show conformity. The Government loves bureaucracy, and egalitarianism. It wants everyone to be dragged down to the one level. It wants everyone to be in a trade union. One has to look only at the Leader of the Australian Labor Party-he is an ex trade union leader, for goodness sake! The fringe benefits tax will apply from 1 July and will have to be paid quarterly. It is quite frightening to see the calculations that are contained in the book, the paper work that is going to be involved and the bureaucracies that will have to spring up. This country will be awash with what I call the three Ps-paper, public servants and poverty-if the fringe benefits tax is introduced. We will have to woodchip every tree in Australia to produce enough paper to supply the forms that will be needed if employers are to comply with what is contained in the booklet. The public servants will love the tax because new bureaucracies will have to spring up, and empires will be created. The tax will result in poverty because it will have to be paid for. Let us not forget that an extra $500m will be involved. This will mean fewer jobs and a lower standard of living. I would like to conclude by directing my comments particularly to the family farmer and the small businessman, a lot of whom have set up proprietary companies. The family car will obviously become a perk. Tax will have to be paid on it. Take the case of a farmer or a small businessman who hires his sons or daughters to work for him. From my reading of the booklet, it appears that the parent of the household will have to pay an accommodation fringe benefits tax on the use of his own house. Have we ever heard anything more ridiculous? When will it stop? This Government would extract lids off coffins and take gold out of teeth if it thought there were a quid in it. Mr Cadman —It tried to with the assets test. Mr COBB —Yes. If one gives an employee a meal, one has to pay a tax of $2 on that meal. This is what will happen even if that meal is given in one's own kitchen. Just think what this tax will do to the shearing industry. The $2 a meal will be an extra cost on farmers. An ex-shearer is on the front bench. Imagine what would have happened if this tax applied when he was working as a shearer. His employers might have thought that he was not worth feeding. He might have starved. Mr Cohen —He would be a lot slimmer. Mr COBB —Yes, it might have had some beneficial effects. But now he is not taking the wool off the sheep but fleecing the taxpayers of Australia. I have never heard anything more ridiculous than taxing farmers $2 a meal. For goodness sake, why do we need subsidised accommodation in this country? The farmers in the remote areas of my electorate cannot afford to pay more than the award wage of approximately $240 a week. The farmers have to give people some sorts of benefits to attract them to work. They do this by, perhaps, subsidising electricity costs, throwing in a bit of petrol or subsidising accommodation. This attracts employment to those areas. It is a decentralisation incentive. The same sort of thing applies in the mining industry. The farmers will now have to pay tax on the accommodation that they give to their employees. The collection of this tax will be subject to an incredibly complicated formula. One would have to be Einstein, use computers or have access to accountants to be able to work it out. I presume that accountants' fees will not be tax deductible. We are told that everything is not going to be tax deductible. All this in non-productive activity. It is the last thing that this country wants. I have to say that the imposition of this tax is a Public Service dream. The farmer often gives his employee food in the form of, say, a sheep or a lamb. How is this sort of thing going to be policed? How will the Government police whether an employee is being given petrol or a car to run around in. Even if an employee runs a cow, for heaven's sake, on the farm-- Mr Cadman —What about growing vegetables? Mr COBB —I am indebted to the honourable member; I had not even thought of that. The owner of the cow will have to pay fringe benefits tax on milk that is given to his employees. The application of this tax will be a nightmare. Both employers and employees will be swamped with a mountain of paperwork that will be associated with the fringe benefits tax. They will have to substantiate claims in regard to payments, the number of kilometres travelled and so on. For heaven's sake, all the records will have to be kept for six years. Even if a farmer lets a retired worker stay on in a cottage on the property, which is not an unusual thing, he will continue to be liable to have to pay tax on the value of that accommodation for his retired worker. Mr Cadman —Disgusting! Mr COBB —It is disgusting. Since this fringe benefits tax was first announced on 19 September last year, it has taken 7 1/2 months for the Government finally to get this legislation into the Parliament. Let there be no doubt that the National Party of Australia and the Liberal Party of Australia are totally opposed to it, the same as we are opposed to the capital gains tax, the assets test and the 3 per cent superannuation deal. All that we have heard from this Government since it has been in power is tax, tax, tax. This country cannot afford it. What we should be doing is not creating extra taxes but cutting government expenditure. That is what the people want. That is what the country wants. We want less government expenditure, not more tax. This Government will pay for this tax at the next election as the coalition Government will be returned to power and we will get some sanity back into economic policies in this nation. Ms JAKOBSEN(Cowan)(10.41) —Quite frankly, I am amazed at the emotive speech by the honourable member for Parkes (Mr Cobb) on the Fringe Benefits Tax Assessment Bill and cognate Bills. I disagree with almost everything he said. I think he has been carried away quite unnecessarily on this issue. I am very pleased to be following the honourable member for Maribyrnong (Mr Griffiths) and the honourable member for Burke (Mr O'Keefe) in this debate. Mr Martin —What about me? Ms JAKOBSEN —And to precede the honourable member for Macarthur. This legislation is aimed at creating more fairness and equity in the Australian taxation system. It represents a major part of the Australian Government's tax reform package. In recent years there has been a marked acceleration in the shift towards the payment by employers of remuneration in the form of fringe benefits. Every honourable member is aware of that shift. Every member of the Australian population is aware of that shift. High marginal tax rates arguably have contributed to this trend, at least in part. Contrary to the comments of the honourable member for Parkes, the question of high marginal tax rates has already been adequately tackled by this Government. In many ways the arrangements involved in the provision of fringe benefits can be equated with tax evasion because the benefits gained are not taxable in the hands of the employee, whereas a money amount in lieu would be taxable. Increasing public awareness of these so-called perks pointed up the unfairness of the tax system and contributed to an undermining of taxpayer morale generally. Therefore, our Government was determined to address this vexed question of fringe benefits. I am very pleased to endorse the contents of these Bills. The types of benefits covered by this legislation include employer-provided motor vehicles, free or low interest loans, residential accommodation, goods and services sold at below cost or provided free by an employer, and expenses paid on behalf of an employee. In each case the tax will be payable on the assessed value of the benefits provided to employees and will be levied on the employer. While some fringe benefits are undoubtedly necessary to a person's job and pursuit of income, and while many have been fought for as part of industrial awards, many more have been granted as non-cash benefits purely for the purpose of avoiding taxation. These are the benefits which this Bill tackles. This tax is accepted in the wider community. It is correctly seen as necessary to clean up the tax system and to assist in improving its equity. Few groups of people are able to get access to fringe benefits as it is a measure utilised mainly by employers to assist higher income earners to avoid paying tax at a higher marginal rate. Therefore, it is evident that this legislation will help to reduce the tax burden which has been placed unevenly and unfairly on ordinary pay as you earn taxpayers for many years past. Previous governments were unwilling to take on this issue, to the long term detriment of thousands of low and middle income earners who have never been party to lurks and perks of the kind covered in this legislation. The fringe benefits tax will apply from 1 July 1986. It will be payable by employers in quarterly instalments. The employers will assess their own fringe benefit tax liability. An annual return will be filled in by them and sent back to the Australian Taxation Office. What could be fairer than that? I take the comments of the honourable member for Parkes into account when I say that I truly feel that most employers would much prefer to assess their own tax liability in this regard than to have the Taxation Office do it for them. The technical aspects of evaluation and assessment have been covered by the Treasurer (Mr Keating) and an information booklet has been compiled to assist employers with this task. That was also mentioned by the honour- able member for Burke. Mr Cadman —Some booklet! Ms JAKOBSEN —It is an excellent booklet. I ask the honourable member whether he has read it? Mr McArthur —Have you read it? Ms JAKOBSEN —I have read it, yes. Mr McArthur —Can you understand it? Ms JAKOBSEN —Yes, I can understand it. Fringe benefits tax will not apply to benefits associated with contributions to superannuation funds and employee share acquisition plans, which are covered already by income tax laws. Staff canteens also are generally excluded. Child care facilities and recreation facilities on an employer's premises will not be taxable under this legislation. The honourable member for Burke already has adequately covered the arguments in respect of employer-provided motor vehicles. I endorse his remarks entirely. A taxable fringe benefit on housing generally arises where an employee is provided with accommodation at his or her normal place of residence. However, if such housing is located in a designated remote area, concessional valuation rules apply in most cases. Like some other members of this House, I have lived in a remote area and been provided with employer accommodation or company accommodation as it is often called. The provision of such accommodation is welcomed by workers and employees and is necessary because no privately owned accommodation is available in such areas. These cases have to be treated sensitively. I believe the Government has taken all the relevant factors into account in drawing up this legislation by consulting with employer, union and other interested groups. This is not a tax on jobs, as suggested by honourable members opposite. It is an honest attempt to tidy up the tax system and to equalise the tax burden in Australia. This legislation is necessary and fair, as I have just said. It has the support of the majority of Australians. It is long overdue. The tax reform proposals of this Government have been overwhelmingly accepted. This fringe benefits tax is an essential component of that reform. Without this sort of tax the addressing of higher marginal tax rates may not have been possible. I totally support the concept of this tax. I compliment the Treasurer on his commitment to it and commend the Bills to the House. Mr McARTHUR(Corangamite)(10.47) —I support the honourable member for Parkes (Mr Cobb) in his very strong speech to the House on the Fringe Benefits Tax Assessment Bill and cognate Bills in which he indicated the difficulties facing the Parliament and the Australian public in regard to this legislation. The fringe benefit tax legislation has finally emerged after the National Taxation Summit Conference of 1985 and the statement of 19 September 1985. Now, on 8 May, the legislation is finally before us for debate. Up till this time we have been acting in a de facto manner. It is interesting to observe that the quarantining of farm losses has been removed from those proposals. The Minister for Primary Industry (Mr Kerin) was bold enough to suggest that the Government had forgone $65m when in fact the legislation was not even in place. I remind the Australian public and members of this House that at the Tax Summit the Prime Minister (Mr Hawke) enumerated nine principles of taxation. I would like to record the three principles on which he was particularly keen. He said; . . . any reform must lead to a simpler system, which therefore all Australians can understand more easily. I wonder how they can understand this legislation. In the Prime Minister's next point he stated: . . . any reform must provide the best possible climate for investment, growth and employment in Australia. In his third point he stated: . . . any reform package must have widespread community support- He certainly has not got that. Let us look at the Medicare arrangements about which he made similar remarks. He said that the system must be fairer, cheaper and easy to understand. We have seen the results of the effect of that legislation on the Medicare system. There has been a $100m blowout in the Budget. There are 28,000 Victorians waiting to get into hospitals. We can see the particular difficulties which have resulted from the Medicare system. The fringe benefits tax will affect employment opportunities. We have seen the cost in employment opportunities already with 580,000 Australians unemployed. The cost of wages, together with the on-cost of consumer price index increases, the 17 1/2 per cent loading, long service leave, termination pay and workers compensation all add about 50c on-cost to every dollar paid in wages. We have now two further threats. We have a 3 per cent superannuation claim in the productivity case which, we can see, the Confederation of Australian Industry is adamantly against and which threatens jobs. And, secondly, we now have before the House the fringe benefits tax. In the final analysis, this will impose a further cost on labour. The Government will get some revenue, but certainly there will be fewer job opportunities. The Prime Minister suggested that there ought to be a simple system which Australians can understand. How can they understand this legislation, which comprises a 175 page explanatory memorandum, a Bill which contains 139 pages and a tax guide which contains 56 pages? Some members opposite have not even read that guide, because, even if they did read it, they would not be able to understand it. The Treasurer (Mr Keating) has indicated that there will be a revenue gain of an extra $330m in 1986-87, $540m in 1987-88 and $625m in 1988-89. I refer to those figures in the context of the total 1984-85 Budget receipts of $56.9 billion. Yet the Treasurer is seeking a revenue gain of $330m in the forthcoming year. Let us look at the small contribution made by this tax. The key provisions are quarterly payments by the employers, a rate of 46c in the dollar and an administrative nightmare. With regard to the quarterly payments, accountants will have to sort out the arrangements. They will have to work out who will make the payments, what are the procedures required and how the arrangements will be organised in the future, once they have worked it out in the first year of operation. I am quite amazed by the record keeping requirements, the booklet entitled `Fringe Benefits Tax-a guide for employers' states that the records must be written in English. What a surprise it is that they must be written in English-in Australia! The guide states: 2.11 record-keeping requirements . . . The records must be written in the English language or, if not in written form (e.g. on computer), be in a form which is readily accessible and can be converted into English. The records must be kept for 7 years. That is quite a surprise for those of us who live in Australia and who consider English to be our language. I spoke to one respected accountant who suggested that one needs to take along one's accountant in the back of the car in order to keep the records straight. The general objection that I am finding is that the administrative hassle will be too much for the farmers, the miners and the small businessmen of Australia. Let us look at the principle involved. Generally speaking, tax is levied on those who receive the benefit or income. The Government has now applied this tax on employers because there would be too much political cost to the Government if it were imposed on employees. Also, it wants ease of collection. This will impose yet another burden on employers. Let us look at cars. There are two approaches. One is a statutory formula which is very hard to understand and the other is an actual costing arrangement. Between them, the employer and employee can go to great lengths to log the claims and costs so that they can work out the final tax arrangements. The problems outlined on page 7 of the explanatory memorandum regarding this proposal will have a major effect on the car industry. I quote from that document: After a car has been owned or leased for four years, the amount against which the relevant percentage is applied will be reduced to two-thirds of the original cost price, or market value if leased. Obviously, people will use their cars longer and use cars that have less horse power. How can we log the data between private and business use? The impact on the car industry in the Geelong area will be quite dramatic. I have here a copy of a letter sent by Mr Bill Dix, Managing Director of Ford Australia, to the employees of the car plant in Geelong. In relation to the company car tax, he stated: It is a matter that should concern all employees because if the new tax provisions as currently proposed are implemented, they will have a most serious impact on our industry. Expressed simply we expect the tax will: When combined with other economic effects reduce the 1986 vehicle market by 90 thousand units; Through the impact on the fleet market-a major portion of our business-cause an initial loss of almost 35 thousand 6 cylinder sales in 1986 with a continuing loss of 25 thousand units in subsequent years. Cause major disruption to the Government's passenger vehicle manufacturing plant-around which our investment and planning is based. Reduce employment in the vehicle manufacturing sector by 3 thousand with an overall loss of some 10 thousand jobs. Reduce productivity and stall Australia's efforts to become internationally competitive. I turn briefly to some of the other provisions in the legislation. In regard to housing fringe benefits, how will we identify the rental value in rural areas? Who will pay-the farmers or the miners? Who will assess what the rent is? How will we attract people to more remote parts? Clause 31 concerns the living away from home allowance. The bureaucrats suggest that it costs $42 a week to feed an adult at home. How do they make that judgment? They also suggest that it will cost $80 to feed oneself when one is living away from home. How do they come up with that remarkable observation? In regard to property fringe benefits, goods consumed on the premises are okay. I draw honourable members' attention to the paragraph in the fringe benefits tax booklet. It states that no tax will be applied on a daily ration of beer consumed by brewery employees at work. The tax guide booklet suggests that that is okay. Mr Hawker —What about milk? Mr McARTHUR —I am not sure what will happen in regard to milk. Obviously, the Government is happy to get its excise. But not may other Australian workers have the option of consuming beer at their place of work. I suggest that the fringe benefits tax, as applied to the States, local government and the Commonwealth, has not been thought through. Because of the administrative effort involved and the fact that they are being asked to provide more services at the local level and receive less revenue, local government authorities and the States are very concerned that they must pay this tax. This legislation is complicated and lengthy. It has yet to be interpreted. It is confused and it will generate little revenue. The car industry is in trouble. Australians remain overtaxed. Expenditure has not been restrained. The tax reform myth has been exploded today Mr MARTIN(Macarthur)(10.56) —The Fringe Benefits Tax Assessment Bill 1986 and cognate Bills, of course, are further evidence of this Government's commitment to the reform of the tax system. Quite clearly, members on this side of the House recognise that that is long overdue. It is quite clear that in the past honourable members opposite did nothing to see that the tax evasion and avoidance industry that has grown in this country was stifled. The need to improve the fairness of the system for the majority of Australians has clearly been demonstrated. Public confidence in the integrity of the tax system has been eroded. This has caused something of a disproportionate shouldering of the revenue burden by honest citizens in this country. That is a situation that this Government can no longer tolerate. The end result of these measures, of course, is to produce a much fairer system. If we turn specifically to the Bills that are before us today-that is, the fringe benefits tax proposals-we can see that over a period there has been a very strong movement towards the renumeration of employees, especialy those on high incomes, by way of a fringe benefits package. Not so long ago, when one looked at the Saturday edition of the Sydney Morning Herald, the Daily Telegraph or whatever, one would see advertisements for senior management executives and for people on substantial incomes. If one looked fairly carefully at the advertisements, one would see that the job involved a package composed of a salary which, having regard to the qualifications required for the position that was being advertised, in actual monetary terms, was not particularly high. One would think: `That is not too good. I wonder why it will attract people'. One then read the advertisement further and saw that, along with the salary, there was a car, educational expenses for children, and a trip overseas every year. Virtually a block of flats and half of Tasmania was being offered as part of the proposal. Of course, that has meant that the tax burden that has once again fallen on the average Australian pay as you earn taxpayer was being reinforced. The lower income being offered meant that the return to the Government of a fair share of taxation benefits totally disappeared, hence, one of the major reasons for the imposition of a fringe benefits tax. It is interesting that a number of comments have been made about various parts of the fringe benefits tax. In particular, a great deal of attention has centred on the motor vehicle industry. During the debate this morning, comparisons have been made between motor vehicle dealers operations, the fact that many people will lose jobs and that vehicle sales will go down. In recent times various estimates have been put forward to the effect that sales are down by 27 per cent at present, or that the figures are down by 22 percent on the 1985 figures. The inference to be drawn is that that has been a direct result of the fringe benefits tax. That is patently nonsense because the tax has not yet started. The Treasurer (Mr Keating) has clearly indicated-it has been verified by those in the industry-that there has been a variety of changes, such as the effect of the depreciation of the dollar on the price of imported vehicles and the fact that non-leaded fuel has been introduced in this country, which has meant that all cars are being tuned so that that form of fuel can be used by them. This has meant that many people purchased vehicles at a rapid rate prior to the last couple of months. Of course, very substantially high figures in the motor vehicle industry have now tended to trend downwards, as a natural result. I implore honourable members opposite who are taking a different view here to get out and talk amongst their own people and see what effect there has been in the industry itself; it might be somewhat enlightening. I have done that and, indeed, can speak with some authority on this because my father for quite a number of years was in fact a motor vehicle principal dealer in Wollongong. It is the sort of industry that fluctuates and goes through periods, as does the housing industry. At various times it goes through a high period and at various other times through a low period. Sales on a monthly basis are the ones that count. What we have seen in recent times is that those monthly figures have trended downwards from extremely high points- Mr Lee —Record heights. Mr MARTIN —Record heights, as the honourable member for Dobell states. It is quite important to get that particular position straight. The honourable member for Corangamite (Mr McArthur) and the honourable member for Parkes (Mr Cobb) were talking about the problems in saying that they were totally opposed to the fringe benefits tax. I am afraid that the honourable member for Parkes should just refer to the statement by the Leader of the Opposition (Mr Howard) on this because I do not think he is so gung-ho about it as he would have us believe. I refer particularly to an article in the Australian Financial Review of 21 April reporting on the Leader of the Opposition's attempt to take over Queensland again and bring it back to the Liberal Party. Under the heading ``Fringe tax is wrong in principle: Howard'', it states: The Leader of the Federal Opposition, Mr Howard, yesterday refused to commit a coalition government to repealing the fringe benefit tax. Yet, the honourable member for Parkes has stood up in this House this morning and said that the National Party-Liberal Party coalition is totally opposed to it. He should speak to the Leader of the Opposition about that. Mr Lee —What does the honourable member for Mackellar say on this? Mr MARTIN —As the honourable member for Dobell asks, what does the honourable member for Mackellar say about this? Again, I would like to compare some of those comments. Under the heading `Mass job losses predicted over car fringe benefits tax bungle' in the Adelaide Advertiser of 9 April, it is stated that job losses have been estimated at something like 10,000 because of the fringe benefits tax. It stated that the shadow Treasurer, Mr Carlton, said that an industry study he had obtained exposed a massive bungle on the tax, yet one finds that the view put by Senator Messner and other people does not quite fit in. Their estimates range between 25,000 and 35,000 job losses, with a loss of production and so on; the figures are all over the place, as they are on the other side. Quite clearly, it demonstrates that honourable members opposite still have no policy on what they are to do about this. In fact, the Leader of the Opposition's comments on his grand tour through Queensland were reported thus: Speaking over the weekend in north Queensland, Mr Howard said the Opposition was looking at a number of different approaches to taxes to encourage incentive. What we come up with might make it unnecessary to repeal the tax. Not only is Mr Howard saying that those opposite are not against it; he is saying that they may not repeal it if they ever get into government. He is saying, of course, as usual: `We will wait and see when we formulate our policy'. This might be down the track somewhere, like all the rest of the policies of this Opposition of no policies. Those opposite say that they will look at it at some stage in the future. They might again take the goodies, but they will not have the nasties. To try to get over that problem again they will add to the Budget deficit, and on and on it goes. I wonder whether honourable members opposite really do speak for those they purport to represent. Again on 7 April there is an article under the heading `Business will accept cost of Government's tax on fringe benefits' in the Australian Financial Review. I wonder whether honourable members opposite have spoken to the people they purport to represent to see whether that is in fact the view they are reflecting in this chamber. They are out of touch. The article goes on to state: A survey of Australia's top companies shows business is prepared to accept the cost of the Federal Government's fringe benefits tax. The survey of Australia's top 500 most profitable companies . . . found that more than half the companies estimated that the tax would add less than 9 per cent to their overall employment costs. They are prepared to accept it. Honourable members should go and talk to these people and see what it is about. I come back again to the whole question of the fringe benefits or car tax about which people are talking. Some mention was made by the honourable member for Corangamite about Mr Dix and Ford and the problems down there. I refer him to a very in-depth and interesting editorial in the Sydney Morning Herald on 1 May this year under the heading: `Keating must be tough on car tax'. A very good exposition was given as to why the Ford Motor Co. of Australia Ltd and General Motors-Holden Ltd are so gung-ho about this tax. They are concerned about loss of sales of big cars, suggesting that people will go into smaller cars and therefore their market will be eroded. The editorial states: Mr Keating has rocks in his head if he lets Ford and General Motors wriggle even half way out of the fringe benefits tax. According to the two car makers, Mr Keating's efforts to tax businessmen on their company cars threatens to undermine Senator Button's efforts to rationalise the Australian car industry. It goes on to say in the editorial, which I fully endorse, that the industry has exaggerated the impact of the tax. It goes on to state: Ford and GMH claim that Mr Keating's tax will induce companies and their executives to switch to smaller, cheaper cars. That would be a disaster for Ford and GMH which depend on the Falcon and Commodore to meet their local-content obligations under the car plan. They want to replace Mr Keating's fringe benefits tax, which does not discriminate between models, with a three-step tax that would make small cars less attractive to company car buyers. It goes on to say that there would be no effect and that the effect on the car industry plan is, in fact, negligible. I and, I am sure many honourable members-including the honourable member for Mackellar-have received letters from various Ford dealerships such as Tynan Motors Pty Ltd, Petrie Ford and the Clifton Toyota-Fury group, which is into Ford, Mitsubishi, bob cats, engineering and all sorts of things. They have been writing to all members imploring the Government not to proceed with this tax and saying what effect it has had, that it has caused unemployment, that it has been a disaster, and that they have had to put off people. It is interesting that they are saying that it is the fringe benefits tax that has caused them to do that when it has not even started. Do not talk nonsense! Let us get it straight: What we are talking about here is an industry which, I intimated previously, actually goes through a cyclical phase of highs and lows. When one gets a letter such as the letter from Tynan Motors, signed by Mr Tynan, the principal- Mr Lee —A Liberal councillor on the Sutherland Shire Council. Mr MARTIN —A Liberal councillor on the Sutherland Shire Council, I have been informed by the honourable member for Dobell. He says: I would personally expect little sympathy as your policies show scant regard for the Australian small business community. It goes on and on. These companies write to honourable members looking for sympathy and include that sort of nonsense. Quite clearly, it has been demonstrated that the fringe benefits tax will make the system far more equitable and far more efficient. I commend the Treasurer for introducing it. I say to honourable members opposite that the fact that it has taken some months to get into the House is nothing like the time it has taken for honourable members on this side to wait with bated breath to see whatever policies honourable members opposite will bring here so that we can debate them. Mr REITH(Flinders)(11.09) —People listening today could be forgiven for thinking that they had tuned into an episode of Blue Hills because Labor's tax reform proposal has been one of the longest and most drawn-out sagas of recent years. This fringe benefits tax was first suggested nearly 12 months ago. It has been in the pipeline for so long that one might well ask why it is that, after nearly 12 months, the Government rushes it into the House this day and gives us barely four or five hours to discuss it. The Bill was introduced only last Friday. There are about 150 pages in the Bill. The explanatory document contains 176 pages and the guidelines 56 pages. The Government talks about simplicity of taxation reforms. The joke is that the guidelines for employers includes in its first page a list of amendments to the very guidelines brought out by the Government. Frankly, I am sick and tired of the process whereby the Government spends months putting the legislation together, rules by decree in the meantime and then expects members of parliament to master this incredibly complex and bureaucratic system in just a couple of days before it slams the Bills through the House in a few hours. The Government did the same thing to veterans in May 1985 and then it made such a mess of it that we had to be hauled back to Canberra for a special one-day sitting. Then it repeated the performance with the Bill of Rights. We had one day for debate on the Bill of Rights in the House of Representatives. The Government was in a screaming hurry to rush it through and yet months later it is letting the Bill of Rights drag on in the Senate. This is no way to introduce legislation. The Government should not treat the Parliament with such contempt. I register my strong protest at the gagging of debate. Before dealing with the Fringe Benefits Tax Assessment Bill, I want to make it quite clear that the Liberal-National coalition parties are opposed to these new taxes and will be voting against them. We want less taxes, not more taxes. Labor's so-called tax reform originated in the December 1984 election when it went to the electorate without a tax policy. Honourable members will remember that when the Prime Minister (Mr Hawke) was asked on a Perth radio station by an interviewer about a summit he grabbed it with both hands and that became his policy. In stark contrast, we had a good policy for income splitting, child care rebates and, importantly, a cut-back in government expenditure. So the Government went off and prepared its draft White Paper and the Treasurer (Mr Keating) went round the country flogging his consumption tax. He said that he was no shrinking violet and he would give politics away if we did not all agree with him. He would not back off at the first whiff of grapeshot. We all know what happened to the Treasurer. The Prime Minister stepped in at the last moment just like his good old Australian Council of Trade Unions days when he would drop in at the end of a strike. He put out the fires when he did a sordid deal with the trade unions in a motel room at the end of the Tax Summit. He came out with his riding instructions from Messrs Crean and Kelty to scrap the consumption tax, but to proceed with the anti-business taxes, including the capital gains tax. Do honourable members remember that one? The Government said: `There will be no capital gains tax'. Of course, we have now got that. He came out with a proposal to scrap the entertainment expenses which would throw thousands of people in the restaurant industry on to the scrap heap. We now have the fringe benefits tax proposal before us today. The Summit was a farce. What I think annoyed the people most was that instead of talking about new taxes they should have been talking about cutting back government spending and cutting back taxes. Labor governments always like to forget one simple economic rule-if more is spent, tax has to be increased. If tax is increased, with all other things remaining constant, private savings must be decreased. The consequence of decreasing private savings is inevitably an increase in borrowings either at home or abroad, or an increase in foreign capital. In economics that is as simple as two plus two equals four. There are also some pretty simple principles that have been broken in this proposal. The first one, which has already been mentioned, is the principle which the Government put forward as an important principle; that the proposals be simple and that people can understand them. That has gone out the window. Our system is based on the principle that income tax is paid by the recipient of the income. In this proposal it is all the wrong way around because the employer is being slugged. I suppose the reasons are obvious. The Government knows that voters do not like extra taxes, so this is an attempt to avoid the political consequences of a new tax. The other reason is that Labor is anti-business and just refuses, as the honourable member for Macarthur (Mr Martin) did just a moment ago in this House, to see the damage it is doing to business with this tax. I am sorry that the honourable member for Macarthur has disappeared after making his contribution. The fringe benefits tax is like payroll tax-it is a penalty on employers and a discouragement to job creation. That really ought to concern the Government. It claims to be a good economic manager. The Treasurer got a prize for being the world's best Treasurer. What the Government does not tell us that the bloke who won the award the year before was the Treasurer of Mexico. What a bloke to follow. We all know where Mexico is going. Many of the jobs created under Labor-this is another thing the Government does not tell us-have been created by the Government's make-work schemes. Quite frankly, it is all a mirage. Anybody can employ people to be clowns or to dig holes in the sand, but it is no joke when the Government borrows money to pay the salaries and the long suffering taxpayer has to repay the loan with high interest rates. As an aside, let us not forget that the high borrowings are a major cause of high interest rates which are killing off businesses throughout this country and the proposals not only discourage new employment, but are also losing jobs. The massive 26 1/2 per cent drop in total passenger vehicle sales for the first four months of 1986 is being felt in my electorate and in neighbouring areas. The results of a telephone survey tell the sad story that in the end the working man will pay for the fringe benefits tax and he will be paying the highest price of all; he will pay with his job. Of course, the Labor blokes are the politics of envy. They say: `Oh, this is just going to get the tall poppies, the managing directors who might have a Mercedes Benz'. You might get those blokes as well, but the reality is that the baby is going to go out with the bath water. I want to draw to the attention of honourable members some of the comments coming from my electorate and neighbouring areas. The comment from Cranbourne is: If this fringe benefits tax comes in there will be 30 per cent less dealers in Melbourne. We are down 50 per cent on sales and will be reducing our staff in order to survive. The comment from Frankston is: We have already reduced staff by five, which is a reduction of 15 per cent. The comment from Mornington is: We are operating with two staff less than normal and I am not going to replace them. The comment from Hastings was much the same: I will have no choice but to lay off two staff. If that is not enough for honourable members on the other side, perhaps they should have read the newspaper last week. The Sun ran an article which told us that the third largest Mazda dealership in Victoria in Dandenong went into receivership two weeks ago. I rang the managing director and had a chat to him about it. I asked him what were the factors contributing to the company going into receivership. He gave me three factors: Firstly, Labor's deliberate policy of high interest rates. Secondly, Labor's economic mismanagement which has led to a big drop in the value of the Australian dollar and a consequent increase in the price of imported motor vehicles. Thirdly, and most relevant for today, a general downturn in the motor vehicle industry caused by the anticipated devastating effects of Labor's fringe benefits tax proposal. I spoke to the managing director of Stewart Webster Pty Ltd, an excellent firm, I might add, in Frankston and a big Ford dealer. His comments are very interesting. He said to me: I have little doubt that my company which employs around 80 people will reduce that number by some 25-30. Already this year with the threat of the proposed legislation our business volume is down some 30 per cent. This naturally takes business from the black ink to the red and the only alternative is a continued reduction of costs. So much for the honourable member for Macarthur saying: `This proposal has not come in yet, therefore, how can it have any effect'? The effect is out that and it is being felt by ordinary Australians as they lose their jobs as a result of this proposal. The comments of Stewart Webster and others are being reflected throughout the neighbouring electorate of Dunkley in south-east Melbourne and my electorate of Flinders. There are 24 new franchise car dealers in the electorate of Dunkley. I am sorry that the honourable member for Dunkley (Mr Chynoweth) is not in the House today showing some interest in the prospects of people losing their jobs in his electorate. They are all experiencing a downturn of around 25 per cent in sales volume. The average number of employees per dealership, I am told, ranges from 35 to 45 employees and each dealership will have to lay off between five and eight persons. In Dunkley alone and only in new car dealers this will mean a loss of approximately 120 and 192 jobs. This does not include all the second hand car dealers or the businesses which supply parts to the motor vehicle industry. There is no doubt that hundreds will lose their jobs in the electorate of Dunkley. In my electorate of Flinders there are 15 smaller franchise dealers and the job losses there will be no less than between two and four jobs per dealership. There are approximately 30 to 60 jobs. The total job losses in Flinders will also reach into the hundreds. This is in an area which I share with the honourable member for Dunkley which has got the third highest unemployment level in Australia. So much for Labor's concern for the ordinary working Australia. So much for its concern about employment in this country. Frankly, this proposal is a disaster for businesses, both big and small throughout Australia. It is a bureaucratic nightmare and continues Labor's attack on business. It is about time that Labor changed economic direction, put some incentive back into private enterprise and got off people's backs. I will be proud to vote against this proposal with my coalition colleagues. This proposal will throw many hard-working Australians on to the dole queues. It is about time that the Australian Labor Party woke up to itself. Mr DUNCAN(Makin)(11.20) —I support the Fringe Benefits Tax Assessment Bill. I was fascinated to hear the honourable member for Flinders (Mr Reith) refer to the plight of a Mazda dealer in his electorate, and the litany of complaints that that particular dealer made in relation to this Government. For my part, I want to make it very clear to the House and to the people of this country that I support the car industry in this country which builds motor vehicles here. I think that one of the best things that has happened in my view since this Government came to power is the fact that devaluation of the Australian dollar has meant that Australian manufacturers can once again compete on the world market. Many people have not caught up with the fact that, although the devaluation has been 20 to 30 per cent in relation to the United States dollar, the Australian dollar is in fact about 50 to 60 per cent in relation to the Japanese yen. The effect of this is that Australia's motor vehicle industry, our home grown industry, our industry that makes motor vehicles in this country, is now very much more competitive with the imported product than it was prior to this Government coming to power. As I say, I am very pleased about that. I realise that that will cause some readjustments on the way through. One of those readjustments will be that less imported cars will be bought and less imported cars will be sold; nonetheless, the effect will be an overwhelming advantage for the people of this country who are employed in this country in the motor vehicle manufacturing plants of the nation. I think that that will more than offset any effects from the fringe benefits tax. A lot of the debate that has gone on so far has been a good deal of speculation about what might or might not happen. The doomsayers on the other side of the House-and I suppose it is inevitable for members of the Opposition to be doomsayers-have been predicting doom and gloom and a horrendous future for this country. I do not see it like that at all. I think that this legislation is worthwhile and long overdue. When the Government announced its intention to reform the taxation system, a task for which those opposite did not offer any constructive support, we promised that we would produce a system which would be more equitable, fairer and more just than the one which preceded it. I believe that that is just what we are achieving through this legislation. That objective has been largely achieved now. I do not claim that every aspect of the package is ideal, but the system which we will have when the whole of the legislative package passes the Parliament represents a very great improvement than the one which is currently in place. One of the things that we were faced with was the incredible amount of tax avoidance and evasion which had been allowed to flourish virtually unchecked by the Fraser Government. Of course, we know that those benefiting most from these practices were the friends of those opposite. We have seen the Opposition continue to attack and oppose any meaningful assault on the tax avoidance and evasion industries and, likewise, on any meaningful attempts at taxation reform. It has been unable to offer real reforms which would improve the equity and fairness of the system to catch the avoiders and evaders who rob ordinary Australians, real reforms that in any way amount to more than tinkering with an inadequate and increasingly discredited system. The measures introduced in this part of the package, dealt with in this series of Bills will significantly improve the equity of the taxation system. Let me say at the outset that I strongly support the principles on which this legislation is based. There is no doubt that there can be no equity without bringing fringe benefits into the taxation system. There is no rational way of describing fringe benefits as other than income. Their proliferation over the past few years is a good testimony to this. As the tax system has become less and less fair, as ordinary taxpayers have been made to bear the brunt of the taxation burden while the rich avoid and evade their proper contributions to the running costs of the country, the use of fringe benefits to minimise taxable income has become far more common. However, the system still favours the well-to-do. It still promotes inequity and unfairness, and continues to allow those who can afford to pay their way and who should pay their way, to get away without paying their fair share of the taxation bill. Anyone who has a vision of a fairer and a better Australia must support the principles on which this Bill is based. Why should workers who go to the pub for a few drinks after work to relax with their friends pay 50c in the dollar taxation on every drink of beer they have while business executives can go out for lunch, have their wine in pleasant surroundings, and get a 50c in the dollar tax rebate for doing so? Why should the ordinary worker, travelling to and from work, whether by public transport or by private car, be unable to claim the cost of that transport, while those fortunate enough to be in possession of a company owned or leased vehicle receive a tax free benefit. Why should the average Australian not be able to claim a taxation deduction on the educational expenses of his or her child while there are those for whom expensive school fees are provided as a fringe benefit, enabling them to receive extra tax free income, and their children to attend schools which give them advantages other kids do not have? Mr Deputy Speaker, you and the House will know that I, along with my South Australian parliamentary colleagues, and the South Australian Government, sought to have the provisions regarding the fringe benefits tax on cars altered. However we did not seek to change the content of the provisions. As I have already said, I strongly support the principles on which this legislation is based. I strongly support the provisions which it introduces. What we were seeking to do was to delay and not to scrap the immediate operation of the measures as they applied to cars. I believe that, in the light of information which has been given to us by both the South Australian Government and by the car manufacturers, a phasing in period would not have been unreasonable. It was a phasing in of the provisions of this legislation as they affected the car industry that we were seeking, not their abolition. We did this because of estimates that there would be a loss of sales resulting from an immediate application of the measures. These ranged from a Treasury estimate of between 10,000 and 15,000 units through to estimated losses by the Ford Motor Co. of Australia Limited and General Motors-Holden's Limited of 40,000 units per annum. This, I might say, is out of total sales of approximately 600,000 units. I must say that I have always thought that the highest estimate was too high and was an attempt to pressure the Government into abandoning the measure entirely. However, the more realistic estimates did suggest that a phasing-in period would be useful to overcome any consumer resistance which might initially arise until the practice of the measures had been clarified. I understand, and it is interesting to note, that Mitsubishi Australia Ltd for example, estimated that the losses of sales would be approximatley only 15,000 to 20,000 units per year-far less than that claimed by the major manufacturers. There is also a major factor which will ameliorate any possible difficulties which might face Australian car manufacturers initially: While the Australian dollar, as I mentioned, underwent a devaluation of about 30 per cent against the United States dollar, the devaluation against the Japanese yen, which has remained very strong-too strong in the opinion of most currency analysts-has been almost 60 per cent. This will inevitably lead to much weaker demand for imported Japanese cars-and of course Japanese cars form the lion's share of imported cars in this country-resulting in a transfer of demand to locally produced units. In my view, The Government must be congratulated for biting the bullet with regard to taxation reform. Honourable members opposite have been nothing short of dishonest in their approach to any reforms and particularly to any measures such as those proposed in this legislation which will make the taxation system far more equitable and much fairer. Mr ADERMANN(Fairfax)(11.29) —This complicated, confusing, selective and retrogressive legislation has been brought into this Parliament under false pretences. The Government, proclaiming its trite and nonsensical cry that it is a measure to catch tax avoiders, is in fact not gleaning avoided tax at all. In truth, it is imposing a savage and pernicious new tax of considerable proportions which will have most undesirable consequences and repercussions. This Government, having promised that it would bring in magnanimous tax cuts, which it now hints will be in fact less than promised, has, since the statement of the Treasurer (Mr Keating), set about imposing a whole range of new taxes which in total are now reaching horrendous proportions. To the long list of excise increases, the abrogation of promises to pass on fuel price parity reductions, the assets test, the capital gains tax, removal of negative gearing and other measures, we now have a fringe benefits tax. If and when the alleged tax cuts are legislated for, with the distinct possibility that they will be much depreciated and with the effect of the escalation in inflation, the Australian taxpayer will discover that they are or shortly will be completely negated. Although the income tax reductions will have largely dissipated, these new and vicious taxes will not only remain but also escalate. To this Government tax reform does not mean that the Australian taxpayer will have any reduction in the taxes reaped by this Government. Far from it, he will be paying considerably more. Tax reform in practice, when all the sums are done, becomes an increase in taxation and an increased harvest for this Government, already the highest taxing government in Australia's history. I suppose that both in qualification and experience I am able to claim some authority to express a worthwhile opinion in the area of accounting and taxation practice. In examining this legislation, reading it and re-reading it, I am bound to say that it is amongst the most incomprehensible and confusing legislation that I have ever encountered. It will prove an administrative nightmare. Further, the documentation, verification and preparation of the returns required-the quarterly statements-will add a tremendous burden and cost to employers and create a nightmare for accountants. In the area of taxation, our Income Tax Assessment Act has become so convoluted and complicated that it is long overdue for revision and rewriting. We now add to it legislation like this. This legislation, like the Income Tax Assessment Act, has become a mass of traps. We hear endlessly about alleged tax avoiders but more and more, because of the convolution and complication of our legislation in the area of taxation, ordinary taxpayers are making understandable, genuine and unintentional mistakes in the preparation of their returns. With the severity of the penalties imposed, this is a matter of concern. I have no sympathy with avoiders who get caught and are heavily penalised, but more and more I find that it is the God-fearing, honest taxpayer who, by making a simple error, is falling foul of these penalties. This legislation now makes the situation worse and creates a new set of hazards for taxpayers and tax agents. Let us take, for instance, the section of the legislation which appertains to motor vehicles. It provides for two options. The first option-the statutory formula option-involves a mathematical formula of some complexity which, whilst being a delightfully simple calculation for the tax assessor, may in fact be the most costly in terms of tax payable for the employer. This method will apply unless the taxpayer specifically chooses the alternative option. However, the second option, which in my view, except for the complications that I will outline, would be the most favourable in the case of heavy business use, is rendered most difficult in practice. It involves the most detailed keeping of log books, receipts, papers and documents which, surely everyone knows, are almost impossible to obtain and maintain in the busy everyday world. It involves the employer in obtaining these records by a specific date and entering into a mountain of forms and returns when the employer is already struggling under a heavy burden of costs, the Government imposes a new bundle and if he is late with his lodgment or makes some error, he is liable to incur the full range of fearsome penalties under the Income Tax Assessment Act. He has little option; his options are Hobson's choice or Buckley's choice. Much the same confusion and problem arises with virtually every ingredient of this tax legislation. The Government, in an endeavour to prevent scrutiny of legislation which it knows is shoddy and indefensible, has guillotined the debate. We are precluded from doing what this Parliament should have the capacity to do-discuss the Bill clause by clause. If this course were taken I could readily show that not only in relation to motor vehicles, but also in relation to accommodation, living away from home, entertainment and the rest, we have inequity and confusion. The Government may curtail an opportunity to speak in this House, but it cannot and will not prevent us from exposing the legislation outside this Parliament so that it is fully understood by business and industry. The Government has not yet begun to feel the wrath and the weight of public condemnation that this legislation will bring down upon its head. Having been denied the time to analyse in detail the deficiencies of the Bill, I turn to its disastrous consequences. The car building industry has already vocally made the Government aware of the heavy cost in sales and unemployment that will result from this legislation. The Government which made so much milage of its subsidy support and encouragement of the Australian vehicle building industry now stands exposed as the enemy and demolisher of that industry. On this aspect of the Bill alone its passage through the Senate, apparently, is far from certain. When we look at the tax on subsidised accommodation, we see how little the Government understands or cares about development and industry in Australia. The only way in which we can mine and export our minerals in remote and difficult geographical areas is by providing expensive infrastructure and providing attractive and subsidised accommodation so that workers and their families will be prepared to go there and work. Indeed, not only in mining but also in the pastoral and agricultural industry and in services provided in remote areas, subsidised accommodation is vital. In this legislation, in one great sweep, the Government has dealt a discriminatory, vicious and disastrous blow to employers in remote areas who are battling to provide the great bulk of Australia's export income. Instead of giving support and encouragement when our balance of trade deficits are so shocking, the Government chooses deliberately to bring about legislation which is a further penalty and a further disincentive. In its mad scramble to wring out more and more tax dollars from the reeling taxpayer, the Government has lost all touch with reality. Australia's airlines will be faced with an additional tax bill in excess of $11m-Qantas Airways Ltd, $6m; Ansett Airlines of Australia and Trans Australia Airlines, each $2m; and East West Airlines Ltd, about $600,000. The airlines have expressed the hope that fares will not have to increase to meet the tax and that it can be met out of profits. But, if not immediately, certainly in the near future it will be a substantial factor in increased fares. Indeed, this will not apply only to air fares. As business generally has to accommodate the extra imposts of fringe benefit taxation, it is certain that prices will have to increase over a whole range of products. Certainly the rural sector, reeling under the harsh treatment of this anti-rural Government and falling prices, will not be able in many instances to cope with this new tax. The Government should know the situation in the country where employee or share farmer accommodation just has to be provided and, in addition, certain other provisions, such as electricity and food, must form part of the package if the farmer is to find farm hands. Now, of course, the primary producer is being hit again and he has no capacity to increase his prices. Nor is the situation met or adequately covered under the remote area provisions. Let us see what a typical businessman faces at the hands of this Government. He has to prepare his accounts and complete his normal income tax returns. He has to prepare on time and lodge each month his sales tax returns. He has to be the local branch of the Australian Taxation Office as the calculator, collector and remitter of pay as you earn instalments for each employee. He has to compile and forward workers compensation returns. In all probability he has to provide, at great inconvenience, returns of various kinds for the Australian Statistician. Now he has the formidable task of collecting documents and lodging quarterly fringe benefit returns. When we add to this his company returns and other paperwork he might have to lodge, we wonder when he can attend to his business and produce anything. Business is being suffocated under taxation, regulation and paperwork for this Government. The cost of all these bureaucratic demands is massive. Where is the incentive to produce, to expand and to provide employment? Is it any wonder that Australian business and industry are in a state of desperation and despair? Mr Hicks —Strangled by red tape. Mr ADERMANN —Yes, strangled by red tape. On top of that, to hear Government speaker after Government speaker proclaiming inanely that this is all designed to catch tax cheats is an added insult. They know, we know and the Government knows that that is not the case. A brand new milking cow has been added to the herd to produce more revenue for the Government-nothing more, nothing less. I oppose this legislation. It destroys incentive. It is completely regressive and, like payroll tax, the fringe benefits tax is an iniquitous tax which bears no relation to profitability. It is a heavy tax on business, whether it be profitable or not. Even a business in a loss situation will not escape this tax. How the Government can justify that escapes all comprehension. How the Government can fail to understand that this will cost jobs boggles the mind. How the Government can have the effrontery to call this tax reform must certainly confound us all. Together with the assets test, which is nothing more than persecution of pensioners and the elderly, and the capital gains tax, this tax will be absolutely opposed and shortly, when the people of Australia dismiss this Government, these inequitable taxation propositions must be reversed and abolished. I will not cease while ever I am in this Parliament to pursue that objective. Mr LAMB(Streeton)(11.41) —Listening to the honourable member for Fairfax (Mr Adermann) I think we got a fair summary of the Opposition's case in opposing the fringe benefits tax legislation. I do not know whether it is deliberate or sheer ignorance or perhaps selective myopia on tax matters on the part of the Opposition that it has misunderstood the whole role and purpose of this tax. It will certainly mean a lower tax for some people. Those people who have been paying too great a burden because of tax avoidance will now have a lesser load, because those who were avoiding it will have to meet their fair share of tax. This legislation will increase tax on others-the tax cheats and the tax avoiders. Let us not hear the same old tired story that total tax is to increase. This tax is not a milch cow, as mentioned by the honourable member for Fairfax. It is a measure to restore equity into the tax system. The honourable member for Fairfax said that the income tax laws are convoluted and complicated. All I can say is: Whose fault is that? For the majority of the time since the Second World War the parties of honourable members opposite have been in government. Their people made the law more convoluted and more complicated and they still have not come to grips with and dealt with the basic defects of the income tax law. This legislation does not amend the income tax laws; it proposes a separate tax. I will say more about that later. The line from the honourable member for Fairfax that really got to me was this one: `I have no sympathy for tax avoiders who get caught'. That is what he said. The natural corollary to that statement must be that he has admiration for those who, over the years, have got away with it. This Government will bring about an end to the rorts. There will be no admiration for the tax cheats, the tax dodgers and the tax avoiders. We will bring down legislation that will make them pay their fair burden of tax as do the honest people, for whom this Government certainly has admiration. The Fringe Benefits Tax Assessment Bill and cognate Bills are part of a package designed to reform the Australian taxation system which, under the previous Government, became totally distorted and inequitable-far better words than `convoluted and complicated' used by the previous speaker. This legislation is part of a package which will root out tax avoidance and evasion practices. It is part of a package which will attack a tax system in which the public confidence has been seriously eroded and which caused a heavier tax load to be borne by honest and lower paid taxpayers. It will restore revenue, the loss of which also deprived the community of essential and important public programs in the government sector. The attack on tax avoidance has allowed the Government actually to ease the marginal rates of tax on taxpayers, which in turn will discourage tax evasion as taxpayers regain confidence in the tax system and do not resort to lurks to avoid what they consider are excess marginal rates of tax. This Government is doing something about that. More importantly, the principles upon which the fringe benefits tax is based are the principles of equity in the tax system. The two basic and cardinal principles of taxation are those of horizontal equity and vertical equity. The principle of horizontal equity requires that taxpayers with the same net taxable income bear the same tax burden. With all the packages that have been offered with agreement and collusion between the employers and the employees, people with the same effective income have not been bearing the same tax burden. In other words, horizontal equity went out the window under the Opposition. Vertical equity requires that a taxpayer who receives more taxable income than another taxpayer pay more tax than that other person. We find that the higher income earners-those who are more likely to receive the remuneration packages involving a small percentage of taxable income and a large percentage of, until now, tax-free fringe benefits; those people at the higher level of the corporate structure who are going up the ladder of success-are the people who have been paying the least tax and that those on lower incomes have had to bear the burden of paying the highest rates of income tax. In other words, under the Opposition when it was in government the basic principle of vertical equity went out the window as well. These Bills deal head on with a major ruse used by some taxpayers to avoid paying their fair share of tax. As I have said, there was often deliberate collusion to cheat the community out of revenue which should have been extracted from those people. It was collusion against the citizens of this nation so that essential programs relating to child care, education, transport and so on could not be put into place. When I was, in an earlier period, a member of a previous government we attempted to take head on the matter of taxing fringe benefits. I want to quote very briefly an extract from the 1974-75 Budget Speech of the then Treasurer, Frank Crean. Speaking about fringe benefits, he said: In practice, it has proved difficult to enforce general provisions of the income tax law on the value of some benefits given to employees in addition to their remuneration. Accordingly, amendments to ensure that certain fringe benefits are properly subject to income tax are proposed to apply as from the 1974-75 income year. Deductions will cease to be allowable for expenditures on club dues, yachts and other boats, etc. That is the sort of thing we are debating here today. Mr Crean went on: The minimum assessable value to a taxpayer of the use of a motor vehicle provided by his employer will be determined under a formula to be prescribed in the law. I supported then in this House those attempts to introduce a fringe benefits tax as part of the income tax law. I stand willingly behind this Government in strong support of the new approach to the taxation of fringe benefits. When the Opposition was in government it knew about these lurks. As the honourable member for Fairfax said, he had no sympathy for those who were caught, but obviously the collusion to cheat the nation of the properly assessable income tax base went beyond the employer and the employee and extended to the previous Government. That Government had no courage to tackle the problem. It threw it in the too hard basket. What has been happening is that the employer, instead of paying a salary sufficient to pay for all these benefits, appeared to be the good guy. The employer, at the expense of honest taxpayers, was appearing to be a beneficiary to his employees, to be paying special regard to his employees, by supplying entertainment allowances, motor cars, free travel, subsidised interest rates and housing. Not once was it ever admitted by the good guys, in collusion with the Opposition when in government, and not once did it ever cause them any guilt, that those benefits were provided not because of the generosity of the employer but largely at the expense of the honest taxpayers-the lower income earners in this country. Now the rort is over. I expect that that will bring some relief to some employees. It has been said to me on more than one occasion that some of them feel locked into their jobs and feel that, if they were to stand up to the boss and express an opinion or even if they wished to change jobs, rather than being able to claim a total portable income they would lose their fringe benefits because they might not be available from another employer. They might lose their cars or have to renegotiate their home loans. With all these benefits they felt shackled to their jobs. In the end they would deny their progress up the corporate ladder or the ladder of success and they would not change their jobs. I expect there will be some relief amongst employees as a result of this new approach where the employer is taxed and the fringe benefits are changed in their mix. I think we will find that this will be readily accepted, not only as a matter of tax equity, but also as a matter of practicality and choice for the employer. This Government has decided that the fringe benefits tax will be imposed on the employer on the taxable value of the fringe benefit. The honourable member for Fairfax (Mr Adermann) said that this would be an accountant's nightmare. That is not so. It will be a very simple operation. Mr Connolly —Have you read this book? Mr LAMB —I have read the book as the honourable member for Bradfield knows full well. I have studied it carefully and I suggest the motive behind his question is that he wants me to explain what is in it. I will do so because he certainly seems not to have read it. After calculating the effective value of the fringe benefit to the employees, the employer will add these up throughout the company structure, multiply the total by 46c in the dollar in the first instance and 49c later and pay it on a quarterly basis. The point is that it was administratively impossible under section 26c of the Income Tax Assessment Act to calculate the value of a fringe benefit to the employee. That is where previous efforts by Labor governments foundered and that is where any efforts to amend the Income Tax Assessment Act would have foundered. In this case we are able to make it administratively simple. Perhaps it is a second best approach, but it is a sensible alternative which will restore equity to the tax base and overcome the problem of amending the Income Tax Assessment Act. I conclude with one comment about the motor car industry. Unfortunately in 1975 the Labor Government had to repeal the fringe benefits provision on motor cars. It was said at the time that this was done to assist the motor car industry. The Hon. Frank Stewart, who was Minister at the time, made that point in his speech when he presented the measure to the House. However, looking back we find that this did nothing to mitigate the major factors that impact on the motor car industry. In this sense we are talking about macroeconomic activity, the competition from imports and so on. That position is unchanged today. Let us not have bleating from the Opposition that this fringe benefits tax has caused the decline from the ultra high peak figures of car sales. Opposition members must look beyond that and realise what the true effects are. Let us not have that sort of bleating. The fringe benefits tax will restore equity to the income tax base. I stood behind it in 1974-75, I have much pleasure in standing behind those principles today and the Government's efforts with this Bill. Mr CONNOLLY(Bradfield)(11.54) —Has anyone ever heard of a Labor Government reducing tax? If a Labor government gives with one hand it always takes away with the other. The Fringe Benefits Tax Assessment Bill, which we are debating today, is one of the most complex pieces of taxation law ever introduced into this Parliament. It is 150 pages of convoluted information which may be understood by some tax experts and accountants, but which will be an absolute disaster for the thousands of employers, big and small, across Australia who, under this law, will be held accountable for ensuring that all the fringe benefits, so-called, given to their employees will be taxable under this legislation. The Bill has missed nothing. It covers the provision of motor cars, interest free or low interest loans, the waiver of debts, the payment of private expenses, free or subsidised residential accommodation, excessive living away from home allowances, free or subsidised board, concessional airline fares, entertainment for tax exempt bodies, free or discounted goods or other property, free or discounted services and other specified benefits. All this will come into effect on 1 July 1986. From that day onwards employers will be expected on a quarterly basis to provide substantial information to the Australian Taxation Office within a period of 28 days. Should they fail they will be liable to the consequences under the Act. We have been told by numerous speakers on the Government side that in this debate the Opposition merely talks `emotive junk'. We have been told that Australia must have a fair taxation system and that there must be equity in that system. We were told by the last speaker, the honourable member for Streeton (Mr Lamb), that the `rort is over'. Is it a rort that the average farmer in Australia, on an income-according to the Bureau of Agricultural Economics-of around $6,700 a year, gives to his employees free meat and vegetables, or the use of the farm car on occasions? Those same employees of that farmer will in many cases probably earn more than their employer, but often they live in difficult conditions far away from towns and cities where most Australians live. Those people are now being told that because they have those relatively simple benefits of service and a small indication of the regard that the employer may have for them, they are `rorting' the system-the word that Government speakers have used. I hope that they will be able to account for that because there are thousands of Australian workers-in fact I would go as far as to say the vast majority of the employed population of this land-who, one way or another, are rorting the system, according to this Government. If one works for a factory it has always been traditional that one should have access to the product of one's work at a discount. Under the proposal contained in this legislation that discount will be taken into account for tax purposes. It will not be levied on the employee but it will be levied on the employer. The Minister for Sport, Recreation and Tourism (Mr John Brown), who is at the table, should know this, because he ran a butcher's shop. I have not the slightest doubt that in his business of selling meat he probably offered his employees the facility of being able to buy cheaper meat. Mr John Brown —I am a very generous person. They will still get it and I will pay the tax. Mr CONNOLLY —I am delighted to know the Minister is generous and I hope he will be willing to pay his additional tax as a result. The fact is that there are many employers, especially in the rural sector today, who do not have excess money. They are fighting to keep their families on the land. But this Government says to them: `That does not matter; if you are giving free meat to your employees or any other facility whatsoever, of course that is taxable and you will pay for it'. It is extraordinary that this Hawke Labor Government in its convoluted political logic-that looks after the interests of us all, so we are told, that runs policies on the basis of compassion, concern and that glorious word consensus-ignores the fact that the vast majority of the work force will be affected by this Bill. It tells us that some people are involved in rorts-the people who drive around in Mercedes cars, the people who have facilities supplied to them by their employers often to help them to do their jobs better. They are all rorting the system. As my colleague the honourable member for Mackellar (Mr Carlton) has demonstrated, the losses to the car industry alone, because of the effects of this new tax, are estimated to be at least 7,000 jobs. Clearly the statistics available to members and others already show a steady reduction in company car sales. Let there be no doubt about it, we are not talking about a simple rearrangement of the tax laws, we are talking about a brand new tax. It is a tax which will affect directly or indirectly virtually every member of the entire working population of Australia. The Treasurer has told us that revenue gains from the new tax will be $330m in 1986-87, $540m in 1987-88 and $625m in 1988-89. As the honourable member for Mackellar has pointed out, in the area of the car industry alone, whereas the Government believed it would obtain a tax advantage of some $350m, it has been anticipated by the industry, the Premier of South Australia, various other research organisations and the Department of Industry and Commerce itself that in fact the net revenue gain will be lucky to reach $49m. We know, and the Government should know, that the car industry is one of the cornerstones of Australia's manufacturing industry. Any change in the balance of tax must, therefore, cause serious impacts on production and sales as well as employment. It is not just employment in the manufacture of vehicles-it is employment in the provision of spare parts; it is employment in sales; and it is employment in the support industries which are so dependent on the car industry. We already know that in many cases there has been a reduction of sales of up to 25 per cent. Yet, apparently this Government prefers to ignore that fact. When the honourable member for Streeton was making his observations, I noted that every employer in Australia very soon will be receiving a purple booklet called `Fringe Benefits Tax-a guide for employers'. It is 56 pages of highly complex matter. The extraordinary thing is that we are told by the previous speaker, and by some of his other colleagues, that the Commissioner of Taxation was not able to apply the law as it stood. The honourable member knows, and all honourable members of this House ought to know, that the law as it stood provided that all benefits, direct or indirect, could be considered as part of taxable income. But the onus rested on the Commissioner of Taxation to determine if and when he would apply that tax. If the Commissioner now says to the Government, as he apparently has, `it is all too complicated, I cannot do it, you have to change the law', it makes us question very seriously the administrative basis upon which this Government has been prepared to make decisions of this nature. We have been told by this Government of its intention to reduce regulation. It even established a regulation review unit. That unit came out with a report early this year which showed that last January at least 16,430 public servants were engaged in regulating business. Of course, that also includes the regulation of taxation. The Confederation of Australian Industry has estimated that government regulation is employing approximately 54,500 people in the private sector. Quite obviously the Government does support this growth industry. It appears to be the only growth industry that we have in the entire country. If those figures are to be accepted-and I do accept them; they are from legitimate and appropriate sources-it is quite clear that the Government is prepared, yet again, to increase the administrative load on the private sector, the very people whose income generating capacity is at the basis of this Government's capacity to run a range of programs in the social welfare and other areas which it regards as necessary to its commitment to the Australian electorate. The fact of the matter is that time is running out. There is a limit to how long any government can continually take from those whose role it is to produce, in a desperate effort to give to those who, for whatever reason, are not necessarily able to do so and maybe in need. There is not the slightest doubt that complex legislation such as this will make it so much more difficult for the private sector to be able to put its resources into useful productive activity rather than having to spend more time in that constant daily paper war which has now been forced upon it by governments, both State and Federal, through policies such as this. Why do employers have to do the job of government in collecting pay as you earn tax, sales tax, pay roll tax, et cetera? Has this Government ever suggested that it is going to give a discount on taxation to employers because of the massive subsidy they are in fact giving to the public sector at both the Federal and State levels? Of course not. There is the constant belief that one can wring from the private sector more tax irrespective of profitability and productivity and institute more administrative costs of this nature. Fringe benefits have been brought in over the years because the marginal rates of tax are too high. There has been no incentive to work. As I said, the majority of employees will be ultimately paying higher marginal rates of tax as a result of the government's tax package and what we are seeing going through the House today. The Government does not have the slightest reason to be satisfied with its achievement. It is merely saddling the private sector yet again with a range of administrative requirements which will be so much more difficult to carry. As I said, has anyone ever heard of a Labor government reducing tax? Labor governments may play with the system but ultimately the level of tax on us all goes up and never down. Mrs KELLY(Canberra)(12.06) —Firstly I would like to take up a number of points raised by my colleague the honourable member for Bradfield (Mr Connolly). The honourable member criticised the Government for introducing this tax package on the grounds that the private sector would have to reduce its useful productive activity. I submit to members of the House that until the introduction of this tax reform package, of which the fringe benefits tax is a part, the private sector was spending an enormous amount of its time and resources trying to work out ways of avoiding paying tax. It was absolutely disgraceful that the resources of this country should have gone into looking at ways in which tax could be avoided. We would have seen a much more booming Australian economy today if all of that activity had been directed towards creative and effective work. The honourable member for Bradfield failed to point out that the reason the Government has introduced this fringe benefits tax is not just for equity reasons, which I will talk about later, but to reform the marginal tax rates. It was absolutely ridiculous and unfair that certain members of the community were able to get the benefit of fringe benefits while others were not. The honourable member said that people were using fringe benefits simply because the marginal tax rates were too high. How can we bring marginal tax rates down unless we look at the eroded tax basis? We cannot get the money out of thin air. That is where the Opposition is failing totally in this debate. It is important that government supporters listen to the relevant points raised by the Opposition. But how can we accept those points when the Opposition's whole basis is one of rejecting the fringe benefits tax, changing the marginal tax rates and spending more money on its airy-fairy proposals. The Opposition is being absolutely irresponsible. The electorate is going to ask all honourable members opposite: Where is the money going to come from? One just cannot stand up in this House, and on the one hand, say `oppose the fringe benefits tax, oppose this tax, oppose that tax', and then, on the other hand, say `we still believe that you have to change marginal tax rates, we still believe you have to have tax deductibility for child care and we still believe that you can spend more and more money'. The Opposition has to learn that, basically, this money is not going to come out of thin air. The Government had to go through the exercise of learning that. It was a sad experience at times for us when we were in government before. But we have learned that. We are economically responsible, and that is the basis for this legislation. The Opposition would lead us to believe that the Government is unique in introducing a tax such as the one now before the House, that we were the first people in the world who had ever thought about it. It is illuminating to consider the tax reform exercise in the international setting. The perspective addressed in a recent paper by a noted British tax economist, John Kay, sets it in this international perspective. He compared the recommendations of tax reform inquiries in the United States of America, Canada, the United Kingdom, New Zealand, Ireland and Australia. Kay finds the reports to be strikingly similar in the broad thrust of their recommendations. He illustrates this by focusing on several main areas, including choice of tax base, treatment of fringe benefits and rate structures. I will not go into all of those at the moment, except to refer to the fringe benefits, which is the basis of this legislation. In relation to fringe benefits Kay observed: . . . there is no subject on which there is such clear agreement- There have been lots of inquiries into taxation. Even we have had our fair share of such inquiries over the years. All of the inquiries which have been undertaken show that there is no subject on which there is such clear agreement as the subject of fringe benefits taxation. All of these inquiries have argued strongly for the more effective taxation of this form of income. That is not to say that the recommendations of these inquiries have been adopted by all the respective governments. Taxation of fringe benefits, both overseas and in Australia, has proved to be administratively difficult and politically sensitive. I am not arguing that that is not the case. It is difficult for a government to bring in such a tax. As all of us will admit, it is administratively difficult. However, it is important that we recognise that everyone who is serious about tax reforms believes that this is the only way to go. Australia is not the only country to have made major moves in this direction. Recently New Zealand has taken decisive action. Its employer tax on non-cash benefits, which has applied since 1984, has served in large measure as the model for what Australia has decided to do. There we have it. There is world-wide agreement from tax experts that this tax is important for any government seriously looking at tax reform. That is what we as a government have been addressing since we were re-elected. That is the mandate we had when we were re-elected by the people of this country. I think it is appalling that with the mandate we have from the people of this country there is still talk of blocking this legislation in the Senate. I think that is an absolute disgrace to the democracy we have in this country. Fringe benefits are exploding. They are having a very damaging effect on revenue, marginal tax rates and horizontal and vertical equity and efficiency. That is why we have had to proceed with a tax on fringe benefits. As I said, no government wants to bring in legislation such as this which is administratively difficult unless it has to do it. We have not got a choice. Mr Hawker —Yes, there is. Mrs KELLY —We have not got a choice. If we want to return to the people in this country a truly reformed system of taxation and if we want to reform their marginal tax rates, we do not have a choice. Where else will we get the money from? That is the question the Opposition is not prepared to address. Until the Opposition is prepared to address that, we really cannot take the comments and contributions of honourable members opposite seriously. The extent and the range of fringe benefits have grown significantly in Australia in recent years. The available data indicates also that individuals higher up the income scale have received a wide range of fringe benefits and enjoy them at more generous levels. The honourable member for Bradfield in his speech said that all Australian wage and salary earners-the entire working population-will suffer because of this fringe benefits tax. If I went out the front door of Parliament House and did a survey amongst people outside or surveyed people in the public gallery and asked them whether they thought they were going to suffer because of the fringe benefits tax, I bet that we would not find 100 per cent of those people returning a yes to that question. I think that we would find that in fact the great majority have not been benefiting from fringe benefits. What has happened as a result is that such people have been paying more marginal tax. They have not been able to indulge in fringe benefits. For example, 68 per cent of my constituents who are in the work force are public servants. They have not been able to indulge in fringe benefits. What have they been doing instead? They have had to pay high marginal tax rates. That is why this reform is necessary. It is necessary if we are going to restore any sense of equity to the tax system. Once we establish that as our argument it is a question not of whether one taxes such people, but how one goes about it. The situation has got completely out of hand. Cash salaries have become a smaller and smaller component of the remuneration package. No honourable member in this House, even from the Opposition, could deny that fact. In the private sector virtually no wage or salary package over $30,000 was being negotiated without a motor vehicle being thrown in. Usually, lots of other things went with it. The effects of these fringe benefits have become serious to the point of being intolerable for our tax system. The personal income tax base has been totally eroded at an accelerated rate. That is the other problem. The situation was not just bad; it is getting worse. It has been getting worse every month, every year. Who pays for it? The poor old wage and salary earner has to dish it out once again. That situation cannot continue. That component was forcing marginal tax rates up. All that was left was for people to pay more and more tax-a 60 per cent marginal tax rate on 1.5 times average weekly earnings. We could not let that sort of situation continue. It was inefficient. It led to an over-consumption of tax free perks, such as the provision of cars, entertainment expenses, low interest rates and paid holidays. Most of all, that situation was grossly unfair. Tax free perks were not equally available to all-as I said, especially to my constituents. More generally, the blatant non-taxation of perks and their unequal availability had the insidious effect of reducing respect for our tax system and bringing our tax laws into disrepute. The honourable member for Bradfield argued that we had the legislation anyway so why could we not just insist on the current legislation being enforced. However, the Australian history of this has been absolutely miserable. The Whitlam Government had a humiliating backdown on the subject of motor vehicles in 1974. The current Leader of the Opposition (Mr Howard) had an even more humiliating backdown in regard to miners' housing in 1981. More generally around the world the history of attempting to tax fringe benefits in employees' hands has been a very miserable one. Therefore, the tax is being levied on the employer. Some people have argued that it is inequitable to tax the employer since the benefit is received by the employee. While there is something in that argument, it must be recognised that the rapid growth in fringe benefits as part of remuneration packages has involved benefits to employers as well as to employees, at the expense of other taxpayers. Obviously, it is not possible to determine exactly how this benefit has been divided between the employers and the employees. However, to the extent that employers have benefited from lower gross labour costs, there is a case for them to bear a proportion of this tax. I believe that the legislation before the House will do a great deal to impair the eroded tax base-the inequitable situation that has existed in this country till today and that has been getting worse every day. This has to be seen as part of a tax reform package to bring about a fairer, more equitable tax system which will result from changing the marginal tax base. I recommend this legislation to the House. Mr HAWKER(Wannon)(12.18) —Prior to the National Taxation Summit Conference the Prime Minister (Mr Hawke) announced the nine principles to be followed in any tax reform measures. The fourth of these principles stated: . . . any reform must lead to a simpler system, which therefore all Australians can understand more easily- The eighth principle announced by the Prime Minister stated: . . . any reform must provide the best possible climate for investment, growth and employment in Australia. In relation to these two principles, as well as any other sensible taxation principles, the Fringe Benefits Tax Assessment Bill and cognate Bills are a failure. Firstly, in regard to the principle that taxation legislation should be simpler and more easily understood, let us look at the Fringe Benefits Tax Assessment Bill. The Bill itself consists of 139 pages. When we look at the explanatory memorandum put out by the Treasurer (Mr Keating) to accompany the Bill we see that it is 176 pages long. We see that the little tax- ation guide for employers is 56 pages long-56 pages which are extremely complex and very difficult to understand without careful study. Certainly, by any measure, this is not a simple tax. Certainly, it is not easily understood. I would like to emphasise the point to which the honourable member for Canberra (Mrs Kelly) alluded, which is that the fringe benefits tax is a tax on employers. It represents a very significant precedent. It is a very interesting principle. This Government believes that one person should be responsible for another person's tax. I wonder how long it will be before the bosses of this Government in the Australian Council of Trade Unions suggest to the Government: `If you are going to start handing over some of our taxes for the employers to pay, why don't you give them the lot and in future, when we look for a pay rise, it will be purely on the basis of what the amount is after tax? Any taxes that you want to levy will be the problem of the employers'. I suggest that, having regard to that principle, the fringe benefits tax is a failure. When we talk about what should be simple and what is not, let us look at what it will cost employers to comply with the tax. In regard to record keeping, anyone who looks at the complex formula and suggestion of how someone will keep log books for cars will see that it is not simple; it is complicated. It is difficult to understand and I am sure it will be very difficult to comply with. We then look at the problems that will be caused by the cost to businesses of complying with it. I spoke to a fairly senior accountant about this. He suggested to me that an average business could be looking at at least an extra 10 per cent in accountancy fees in order to comply with this legislation. Worse still, businesses are faced with this very complex bit of legislation coming into effect in about seven weeks' time. On any measure of simplicity, this new tax has failed. The other principle that I mentioned and that the Prime Minister was so keen to talk about was the creation of the best climate for investment, growth and employment. Again, I suggest that the fringe benefits tax has failed. An additional tax will be levied on employers. Employers will sink into a mire of paperwork in trying to comply with a very complex bit of legislation. If that will not discourage employment, I would like to know what will. So, on that measure talked about by the Prime Minister the tax has also failed. I also remind honourable members that all of this extra effort in complying with this tax is unproductive effort. It will contribute nothing to the betterment of this nation. I suggest to honourable members that, in regard to those two criteria that the Prime Minister put forward before the Tax Summit, this tax legislation is a failure. I also ask honourable members to consider why we really need this tax. Why is the Government so keen to bring in this tax? The reason is that it feels that people are getting around the tax system by way of fringe benefits. I draw the attention of honourable members to section 26 of the Income Tax Assessment Act, which states: The assessable income of a taxpayer shall include- . . . . (e) the value to the taxpayer of all allowances, gratuities, compensations, benefits, bonuses and premiums allowed, given or granted to him in respect of, or for or in relation directly or indirectly to, any employment of or services rendered by him, whether so allowed, given or granted in money, goods, land, meals, sustenance, the use of premises or quarters or otherwise . . . That spells out very clearly that already in the Act it is quite clear that, where those benefits are considered to be part of the remuneration of an employee, they are taxable. It is in the Act. What has happened? It is quite clear that over some years, starting, I suggest, at about the time of the Whitlam Government, fringe benefits became an accepted form of remuneration on which tax would not be paid. This question arises: Why has this been allowed to happen? Obviously, it has been allowed to happen because successive governments have not insisted on the law being properly applied. It is quite clear that, had this law been properly applied, this tax legislation that is being debated today would not be necessary. I ask the Government: If it already has in place a law to tax fringe benefits, why is it not being applied? The answer is quite simple. If the Government were serious about this, it would be applying the law as it exists today. But the Government has seen an easy way out by putting the onus back on employers, by putting the responsibility back on employers, by making employers additional tax collectors. It is an easy way out. Obviously, the Government believes that by doing this, rather than doing the job that it was elected to do and enforcing the law as it exists today, it will hurt the employer. It is interesting to look at the question of enforcing the law. During an inquiry held earlier this year by the House of Representatives Standing Committee on Expenditure, the Director of Public Prosecutions was questioned to see what was his response on the question of enforcing the laws. This question was put to him by one of the members of the Committee: Some people have said that the only reason you can now operate and users of the bottom of the harbour schemes can be prosecuted is that the law was changed. Mr Temby's answer is very illuminating. He said: That is simply wrong. The charges which have been laid- this is referring to the bottom of the harbour schemes- are charges which were always available. If there were any charges under the new legislation- what is called the uncollected company tax legislation- they are few. In other words, the Director of Public Prosecutions is saying: `Of course, under the law, tax evasion is a crime and under the Crimes Act we can enforce the law anyway, without having new legislation'. This legislation, comprising 139 pages, is extremely complicated. It puts on one person the responsibility to pay another person's tax. I suggest to honourable members that this is a bad tax. It is something that is unnecessary. If the Government were doing its job in the first place it would not even need to introduce it. Some aspects of the fringe benefits tax, in regard to its effect on the Public Service, are remarkable. The Government has suggested that this tax will have to be imposed on all employers. Obviously, the Public Service is seen as an employer. But, when one looks at it, the Public Service effectively will be exempt. What the Government will do is to create two classes of employers. Business will have to find the money for this tax, but in regard to the Public Service there will be a bit of paper shuffling. While employers will be faced with the unpalatable choice of either reducing employment or reducing investment, or coming to some arrangement with their employees as to how they will change their tax package, in the case of the Public Service, of course, this will not be necessary. We will have two classes of employers. All that the Public Service will have to do is take money out of one pocket and put it in another. No doubt, each department will go to the Treasury and say: `We will have to pay you the fringe benefits tax, so will you give us more money?' It is a great show, is it not? The department will get another allocation from the Treasurer in order to pay it back to the Treasury. I guess this will create a few unproductive jobs. It will require a lot of paperwork. Apart from that, it will not cost the Public Service anything. I wonder what will be the effect on the State governments and, of course, local government. Will this Government increase the allocation of funds to State governments to cover the cost of the fringe benefits tax? Will it increase the allocation to local government to cover the cost of complying with this tax? These are the sorts of questions that the Government should be looking at. In regard to Commonwealth public servants-I am not sure about others-there will be a privileged group of employees to whom fringe benefits will remain available. Obviously, they will not be available to others. As time is limited, I say in conclusion that the fringe benefits tax is a bad tax. It is an unnecessary tax. There is already provision in section 26 (e) of the Income Tax Assessment Act. This legislation creates a very dangerous principle because it imposes a tax on employers for a benefit that is enjoyed by employees. One person will be paying another person's tax. It will be incredibly complicated and extremely difficult to comply with and employers will find the bookkeeping very complex. Obviously, it will lead to a diversion of productive resources into a very unproductive area. I am pleased to say without any hesitation that I will oppose this tax and oppose it on every occasion. I think that the views of the Opposition are quite clear. We are totally opposed to this tax and we will vote against it here and in the other place. Mr BALDWIN(Sydney)(12.30) —This set of measures is part of the Government's overall tax reform package, the central element of which is to seek to repair and to broaden the personal income tax base. The fact is that there is not the slightest doubt that as a consequence of, amongst other things, the abuse of fringe benefits the personal income tax base has been substantially eroded in recent years. I will not go over the various statistics set out comprehensively in the White Paper; they need no repetition. Early in the piece I would like to refer to the previous speaker's contribution that the existing section 26 (e) of the Income Tax Assessment Act is sufficient legislative basis for the taxing of fringe benefits. There is a certain inconsistency in that argument. On the one hand, he is bemoaning the enormous costs and compliance problems involved in the tax laws that are proposed, and, on the other hand, he is saying that the existing laws ought to be rigorously enforced. This particular option was canvassed in the White Paper and the fact is that it is simply not a practical option for a variety of reasons. Perhaps I could quote from the White Paper, which states: The income tax law provides for the taxing of other fringe benefits under a general comprehensive provision (section 26 (e)) that requires the value to the taxpayer of all allowances, gratuities, benefits or bonuses (whether received in cash or in kind) related to employment to be included in assessable income. Despite the comprehensive coverage of section 26 (e), the taxation of benefits which do not take the form of outright cash payments (and of some which do) poses practical difficulties. For non-cash benefits, there is a difficult question in each case, for taxpayer and tax administrator alike, of determining the value to the taxpayer of the benefit provided. These difficulties have led to almost universal non-inclusion by employees of fringe benefits received in kind; effective policing of non-compliance in this area would require a heavy investment of resources. In practice, therefore, many of the benefits that ought properly to be subjected to tax escape taxation in part or in whole. Because section 26 (e) is concerned with benefits granted to employees, there are also difficulties in bringing to tax the value of fringe benefits which are formally conferred on family members of the employee (eg an airline ticket provided to the spouse of an employee). It is fairly obvious that there are major difficulties in enforcing the existing law. The recommendation section of the White Paper, dealing with this matter, concludes: To quote Canada's Carter Commission, it would need `an army of assessors and a battery of courts' to apply the existing law effectively. An alternative approach is therefore called for. The argument of the previous speaker that the existing law is adequate is both internally inconsistent and simply wrong and fails to take account of well-documented deficiencies in the existing law. That has, of course, all been part of the general debate which he has apparently seen fit to ignore. The measures we are talking about here are those whose fiscal impact is very substantial. It is amongst the largest fiscal impacts of any of the measures to be introduced in the Government's tax reform package. I will cite the relevant figures of the revenue expected to be gained from the introduction of these Bills: $330m for 1986-7; $540m for 1987-8; and $625m for 1988-89. That gives us an indication of the haemorrhaging of revenue that has taken place as a result of the abuse of fringe benefits. That gives an indication of the extra revenue we expect to gain by closing off those abused mechanisms. The measures are justified on a variety of grounds relating to both equity and efficiency considerations. It is a well-known fact that in recent times there has been an increasing tendency for remuneration packages to executives, particularly highly paid ones, to include a very substantial component of non-cash fringe benefits and cash fringe benefits in the case of allowances. The fact is that a number of surveys have indicated that predominantly the benefits of that arrangement or situation go to the higher income people to a disproportionate degree. That fact is documented in appendix 8A of the White Paper which sets out a series of tables showing clearly that the higher one goes up the income scale the greater the value of the fringe benefits received and the greater the proportion of the total remuneration package that consists of non-cash fringe benefits. That general point is confirmed in the most recent Chandler and MacLeod salary package survey reported in the Australian Financial Review of 18 November 1985. That survey was based on a seven-part categorisation of executive salary packages ranging from grade 1, which covers people in the age range from 21 to 25 years in the first five years of business management, right up to the top level, grade 7, which refers to chief executives of large corpor-ations. Apart from confirming the general point that the higher one goes the bigger the relative and absolute benefit from fringe benefits, it shows how the value of the same type of fringe benefit varies markedly as one moves up the salary scale. In other words, not only does one gain access to additional types of fringe benefits as one moves up, but the value of these fringe benefits becomes enlarged. In the case of cars, which is a very widespread benefit, the Chandler and MacLeod survey says: In terms of effect on the real incomes of Australian executives and the cost of fringe benefits for Australian companies, the proposed changes in taxation arrangements applying to company cars are the most significant portion of the entire set of measures. The whole area of company cars is a tremendously significant part of the fringe benefit problem and clearly one that had to be addressed. It is worth making that point in the context of current pressures to dilute the Government's proposals. I believe that the impact on the car industry is overstated. Part of the argument is distorted by a focus on aggregate sales figures or aggregate registration figures which, of course, take account of both locally manufactured cars and imports. We can expect to see, as the devaluation starts to bite, that any adverse tendency will be significantly offset by the benefits flowing from the devaluation. To get back to what I was saying earlier, the average cost of a car benefit ranges from $6,272 a year for grade 3-which is the middle level executive-through to $16,293 for grade 6 and $16,926 for grade 7, which roughly corresponds to the chief executive of a major company. I cite those figures to illustrate the point that the same type of fringe benefit, a car, is a significantly greater addition to effective income for somebody at the top end than for somebody down at the bottom. That underlines the regressive impact of the non-taxation of fringe benefits and underlines the beneficial effects, at least from where I stand politically, on income distribution of including those things within the tax base. In theory it would be better to tax fringe benefits in the hands of individual employees at their respective marginal rate. The extent to which we do not do that means some deviation from an ideal incidence of the tax in terms of its distribution. Of course, as we know, there are tremendous practical difficulties in going down that track. The requirement for each employee to comply with the law is a very major difficulty. It is a considerably greater difficulty than if the tax is levied at the company level rather than at the individual level. Consequently, what we have got here is a second best solution to the problem of fringe benefits in one sense, but one that, because of overwhelming administrative and compliance problems, is really the only possible way to go. To turn to efficiency considerations, it is a well-known economic argument that we try to avoid a tax system that distorts people's consumption choices. At the moment we have a tax system that effectively exempts consumption of some goods and services from tax. Consequently, we have a distortion of people's priorities. That that is a bad thing and has a bad effect on overall welfare is a well-known economic argument. Clearly, to the extent that this legislation fixes that up, it is justified on efficiency grounds. That is the sort of point that any genuine free marketeer would readily accept. We have a collection of people in the Opposition who are quite capable of asserting the most utterly preposterous and inconsistent set of policies under the guise of an economic policy. Members of the Opposition want to get rid of this fringe benefits tax and continue to have the large marginal rate of cuts, and avoid a whole range of expenditure cuts that the Government is forced into. The internal inconsistency and absurdity of that needs no elaboration. I want to go on to one further point in the area of efficiency. It is an interesting aspect that emerges from the Chandler and MacLeod survey that I referred to above. According to the report of this survey, large companies frequently fail to take proper account of the total cost of their remuneration packages under the existing arrangement. I will quote from the survey: What you find in smaller organisations is that there is a greater awareness of the need to look at total remuneration- That is a quote from one consultant involved in the Chandler and MacLeod salary package survey. He went on to say: In the large organisations it's my observation that there's a policy on salary, a policy on cars, a policy on superannuation, not a drawing together of the total cost. To the extent that these measures that have been introduced force a more accurate accounting of the cost of employing managerial staff, I think we can expect to see some efficiency gain. The time we have agreed to has elapsed. I will conclude by saying that these measures need to be seen in the context of the total package. Obviously it is imposing a larger tax burden in one sense but at the same time we are seeing very large cuts in marginal tax rates and the introduction of the imputation system of company tax which effectively gives a major benefit to companies. There is some degree of ambiguity about just where the incidence of this tax will lie. I was going to quote from the White Paper, but there is no time to do so. We really do not know to what extent companies have been successful in shifting the burden of the tax forward on to employees. So we really do not know in a fundamental sense where the ultimate burden of this tax will lie. I believe that on balance it will certainly have an equitable and desirable effect on the tax system. Mr BRAITHWAITE(Dawson)(12.43) —The Fringe Benefits Tax Assessment Bill before the House actually rewrites the meanings and terms of every dictionary available in the English language and certainly overturns every canon of common British and taxation law that we have come to expect in Australia since Federation. When I say it rewrites the meaning of certain words in the Oxford and other dictionaries, this is because the National Taxation Summit and the tax reformation set out as their clear objective to make our taxation system fairer, more equitable, more certain, clearer and to have some integrity. I suggest that anybody who picks up this Bill, which is 140 pages, and picks up the booklet entitled `Fringe Benefits Tax-guide for employers' will see that they define more clearly frustration, complication, inequity, the unfairness of the system, the muddled way in which it is being done and the fact that it has no integrity whatsoever. Mr Hunt —Do you understand it? Mr BRAITHWAITE —I would like to have the Treasurer (Mr Keating) on the floor of the chamber during the Committee stage to debate this Bill page by page and clause by clause to find out whether the Treasurer, who is the author and organiser of this Bill, understands the complications of it. Mr Hodges —He wanted to simplify the tax. Mr BRAITHWAITE —He wanted to simplify it. Any honourable member who reads this Bill and the clause on car fringe benefits will come to the formula of A, B, C over D. There are also statutory fractions. How can anybody indicate to this House and to the people of Australia that we have had tax reform? What we have had is a tax swindle in its worst case. What we have here is a brand new and additional tax. Reforming the tax system was not meant to be part of the great cry at the last election that we should make it less complicated, fair and more equitable. What we have here is a direct opposite. At this stage, much as we know about the fringe benefits tax, we know less about the capital gains tax, which is the other object of the exercise yet to come to this House. In its own way I believe that it will be very similar to the capital gains tax. It will not be subject to interpretation. I believe it will be a gold mine for accountants, tax agents and advisers around the country. It will become a matter of complaint once we get to the self-assessment stage, where these things are going to drag on for years and years before being resolved. Worse than that, I believe that it is a bottomless pit of unnecessary legislation and misery that will create greater uncertainty in the business place. I am just not sure whether small business can overcome this burden, which will fall mainly upon it and upon the rural industry of Australia. Firstly, the tax is a new one. Secondly, it takes the unprecedented step of taxing an employer on an employee's benefit. As anybody would realise, payroll tax, which is a labour cost or tax, is passed down the line and eventually comes out at the other end as an additional charge to the consumer. So this tax, in its own way, in some cases will be another charge upon the consumer. I can imagine that, if the Government, local government and statutory authorities are to pay the proposed tax, it will mean that there will be an additional government charge at the end of the line. For instance, as a very simple analogy, the proposed tax on airline staff travel benefits is calculated to amount to millions of dollars annually. I can imagine this being the first ground advanced to the Independent Air Fares Committee as a reason for increasing air fares across Australia, so again it will be the consumer who will pay the tax. Mr Cowan —It will be passed back to the consumer. Mr BRAITHWAITE —It will go back to the consumer in so many cases. There are two alternatives. The first is that of passing it back to consumers. Mr Charles —They are paying it now. Mr BRAITHWAITE —Yes, they are paying it now. It is interesting to note that they have not yet had the benefit of the effect of import parity pricing changes insofar as fares are concerned. It will be said that it has been done now. Of course it is going to do that. This is an uncalculated and great cost that will be imposed right across Australia. It sets a precedent in that an employer is to be charged and that charge will fall back eventually on to the consumer. The other alternative is that small business and rural industries will shed labour or go out of business, give up the fight, give way to big business, and we will have Australia in the grip again of the big companies, not the normal, traditional constituency of the small business enterprise, the family farm, or the family business-getting in there and trying to earn something. What is proposed will bring with it related costs; there is no doubt about that. As I say, its complications will be borne by accountants within firms, or special pay clerks who are trying to calculate on a monthly or a quarterly basis what the cost to the business will be. That itself will impose another cost. So, all round, I can see nothing to recommend this type of taxation to the people of Australia. Certainly, when we look back at its origins we can quite distinctly recall the Treasurer saying that he was thinking of a fringe benefit that would be taxable to the employee. Within 24 hours, Mr Dolan of the Australian Council of Trade Unions, having realised that this could mean more tax for him and his colleagues in the ACTU and the union movement and said that it was not on. On the third day, the Treasurer came back and said that the tax would be paid by the employers; that the Government would follow New Zealand in this. One could have hoped that the Government would look at the New Zealand experience to find out exactly where that country stands at the moment, as far as the implications of such a tax is concerned. I believe that that experience would be such as to suggest that no government would want to pursue a parallel course. The general effect, of course, is a further complication, the production of 139 extra pages of legislation outside the Fringe Benefits Tax Assessment Bill itself, because it could not be fitted inside it. As previous Opposition speakers have said, the proposals are convoluted and simply produce a further tangled web. Its effect on business will be to impose an added cost for record keeping. Its effect will be labour shedding in certain instances. There will be two standards of employment-those which applied before the fringe benefits tax was imposed and those which will apply after it has been imposed, as employers try to cash up a whole package of employment remuneration instead of the fringe benefits of the past. I am not saying that the fringe benefit situation should not have been looked at but, as has been said repeatedly in this House, at the moment the law covers the situation adequately. In fact, I quite well remember an endeavour being made to apply that law with respect to the housing of miners in the Bowen Basin. That was of particular relevance to me. It affected subsidised housing provided not only in the Bowen Basin, but in all those other industries that supply it. So, when it is said that the new law is going to set aside the difficulties of the old, I would remind the Government of the current situation under the proposal to end tax deductibility for business entertainment. As I recall, about 16 pages of the legislation were devoted to denying such a deduction and, as was indicated in the Australian of this morning, thousands of jobs have been lost as a result in the small business restaurant area. Fortunately these have been taken up by larger enterprises, such as hotels, resort developments and casinos. So the effect is already there. What we suggested when it was proposed that business entertainment should not be tax deductible, was that all legitimate expenses should be allowable but that those that were not should be denied. Our proposal could have been encompassed in half a page of legislation and could have been implemented without any problems, without any of the excesses that will be created by the implementation of these proposed taxes. I would like to deal specifically with the two areas of airline benefits. First, I believe that the tax will be passed on down the line and become another consumer tax. So far as housing fringe benefits are concerned, we have been through this exercise but special arrangements are being made at this stage again to devalue the actual effect. What this means is that there will be another tax on the employment sector of Australia. A lot of these people are traders. I cannot imagine any industry that supplies, as part of its employee package, housing benefits that is not an export industry. The message that is clearly being given in this House today is that the economic recovery of Australia will depend eventually on how we trade, yet this Government in so many ways, week after week, imposes yet another cost, another burden on our exporting industries-to the extent that they cannot be competitive. I wonder whether the Minister for Trade (Mr Dawkins), the Minister for Industry, Technology and Commerce (Senator Button), the Minister for Primary Industry (Mr Kerin) and all of the other Ministers concerned have taken that into consideration in agreeing at the Cabinet table to the proposed legislation. Also, I believe, it should be realised that this Bill was presented to the House only last Friday. There has not been time for proper public scrutiny and interpretation. It is being rushed through this House under threat of imposition of the guillotine. Instead, as I have indicated, it would have been an interesting exercise to put the Bill clause by clause to the Treasurer and ask him to explain how it was not complicated, how it was equitable, how it was fair, how it would be understood, how it would not indeed have the great implications that we fear for it. For that reason one cannot entertain having a detailed debate. All one can do is to condemn the method of and reason for its implementation, and to suggest that there is every reason that not only the Opposition, but also Government members, ought to recognise the problems that lie ahead and vote with us against this legislation. Mr CHARLES(Isaacs)(12.53) —The legislation before the House is part of an overall package of Bills that has come before the House. Some were brought down yesterday, some today and there will be more in a few weeks time, to present the overall package of taxation Bills that this Government is putting before the people of Australia. We have heard in the last few days, and again just now from the honourable member for Dawson (Mr Braithwaite), the arguments about equity. I cannot understand how he comes to present his case about who is paying for what, and his statement that the cost is going to be passed down the line. Surely that will occur to some extent, but I remind the honourable member that in its first full year, 1987-88, the fringe benefits tax, when it is up and running, is expected to yield in excess of $500m. I ask him: Who is paying for that now? Who is subsidising it now? Someone is subsidising that figure. I put it to the House that it is the people of Australia and, generally, those who can afford it least who are subsidising that $500m now. That is what this whole fringe benefits area is all about. Massive amounts of money will be recouped. Severall billion dollars worth of fringe benefits and other elements are affected by this revolutionary package of taxation Bills, the most radical that this country has seen, notwithstanding the fact that the Treasurer (Mr Keating)-and I must admit that I supported him-initially proposed another tax that did not quite make it to this House. Notwithstanding that, Mr Deputy Speaker, the Bills before us are quite significant and extend across a range of fringe benefits that needed to be looked at. The Parliament is now addressing them and I put it to the House and to the people of Australia: Why should one of two people in different industries, people whose work value would be equated as being roughly equal, under the old system be substantially better off than is the other who must accept a set wage, without other benefits? The latter, who receives, say, $40,000, must pay tax on that sum, as he should. However, the other person receives $30,000, on which he pays tax, but also has his children's education paid, his housing expenses and all sorts of other costs met and consequently is better off. He is being subsidised by the people who can least afford it, people who earn in the bottom half of the taxation scale. But in the equity arguments that the honourable member for Dawson put forward yesterday and today-coincidentally I have followed him in both debates-he favours the old system, stating that the proposed system is `a bit too hard.' Of course the honourable member wants the old system. It is his mates that are ripping the system off to the extent of billions of dollars a year. I admit that some of the employees, and the Australian Council of Trade Unions, did not like some of what has been proposed, but so be it. No one, whether an employer, the ACTU or anyone else, can hide behind the fringe benefits veil. In fact, some unions have realised that they have gone down the wrong track over the past 20 years in having all sorts of deals that are now being unravelled. Discussions are occurring because of fringe benefit perks and lurks that have been going on, rather than pay the up-front wage that I knew and grew up with. It was what you were worth and what you were paid, and what you paid tax on. In fact, we would prob- ably not have to go through half of this taxation revolution if everyone in this country paid a fair share of tax on what he or she earned. The Australian Bureau of Statistics in August 1984 brought out some interesting figures. One concerned the percentage of employees who receive fringe benefit; by income ranges. It is interesting to note that, in respect of housing benefits, the payment of holiday and medical expenses and the provision of low-interest finance, from 7.1 per cent to 9.5 per cent of people earning around $26,000-the figure would be in excess of $30,000 now-receive such benefits. Interestingly enough, down at the other end of the scale, of people earning around $200 a week, 0.2 per cent enjoy low-interest finance, 2 per cent receive medical benefits, 1.3 per cent have assistance with holiday expenses and 3.4 per cent receive housing benefits. We have all come across people, whether they be employers, employees, industrialists or farmers-such as I encountered recently-who have skited about what a dreadful thing it was that last year they had to pay tax for the first time in 10 years or so. That is why we are here. We are trying to get a fair system under which everyone will pay a fair share of tax. I see in this House members of parliament, clerks at the table and the Hansard reporter and am prompted to ask: What avenues do they have for receiving fringe benefits? They must pay tax on what they earn. I must investigate it further but I do not think that the clerk at the table enjoys the payment of holiday expenses, low-interest loans and all those sorts of things. Of course he does not. Mr Barry Jones —He derives intellectual stimulation! Mr CHARLES —But a price cannot be put on intellectual stimulation, can it? The Bills before the House are far reaching. There will be some teething problems and sorting out of them. That has already been done in some cases, for instance, in regard to the airline industry, in respect of which we have seen a statement put out by the ACTU, the airline industry unions, Ansett Airlines of Australia, Trans Australia Airlines and Qantas, to the effect that: For employees, existing entitlements to staff travel concessions will remain unchanged. That statement was made after they were presented with the final draft of the proposed legislation. So we are able to sit down, talk it through and come to sensible solutions right across the board. I agree with the honourable member for Sydney (Mr Baldwin) when he says he believes that the car industry reaction was a little over the hill. There is going to be some diminution in the car industry trade. That is expected. Certain figures have been put on that. Interestingly enough, one or two of the car manufacturers agree, or very nearly agree, as to what the extent of that decline will be. They agree with the Government. Others put the figure at a substantially higher level. It will be interesting to see. I heard the honourable member for Sydney talking about the depreciation. Ford and General Motors-Holden's Ltd, for example, will I believe pick up a more significant part of the car industry trade as the depreciation bites and the imported cars continue to rise in price. Their price is now quite prohibitive, because of the economic circumstances prevailing. Those companies will lift their share of the market. The tax will to an extent have an effect; there must be a readjustment, but I believe that that adjustment will not be as significant as some people are trying to make out. It is a pity that there has not been more rational debate across the chamber by way of seeking fairness and equity, rather than from day one going back to what happened 12 or 18 months ago. All we have seen are crocodile tears from people screaming about one thing or another-if not the fringe benefits the proposed retail tax, if not that then something else. People are, even now, concerned about the lowering of the tax scale levels-though that is an adjustment to make up for a lot of the fringe benefits legislation that is before the House. As I mentioned at the start, you cannot just look at one piece of this legislation and say: `Look, that is totally unfair'. You must look at the whole of the legislation that the Government has put, is putting and will be putting to the Parliament as a package. It all interweaves. One balances the other. For all those reasons, Mr Deputy Speaker, I fully support the Treasurer's and Government's moves in introducing this legislation, and fully commend it to all honourable members. Mr HODGES(Petrie)(1.04) —Mr Deputy Speaker, the basic principle underlying this tax, that employers should pay the taxation on fringe benefits provided to employees, is very wrong. I do not support payment in kind, that is, of goods and services or non-cash benefits, in lieu of salary. However, employees ought to be paying the tax, not employers. If the Government encouraged the payment of wages on a strictly cash basis, thus reducing the incidence of perks that has built up over many, many years, I would be inclined to encourage and support that move. But there is nothing in this legislation or that has been said by this Treasurer (Mr Keating) over the past 12 months to suggest that this is going to happen. I venture to suggest to the House that high-powered executives will continue to be paid perks at company expense while some middle or low-income ranking employees will probably face retrenchment. And I say to the honourable member for Isaacs (Mr Charles), who preceded me in this debate, that we will see employees retrenched in this country because employers will not be able to foot the bill for all of their employees. Really, in effect, what we have here represents massive payouts by employers for existing staff structures. We saw what happened back in the late seventies when the now Leader of the Opposition (Mr Howard), the former Treasurer, realising that there was a problem in that fringe benefits were being paid and not being taxed, went to the central Queensland coal mines area to pursue that matter. He was physically abused. Of course, it was the union thugs, the union chiefs acting on behalf of their members, who caused that ruckus. Now we find that, in order to get the same result while maintaining industrial peace, the Treasurer has decided that he will tax the employers rather than the employees. It is a case of the cunning Keating taxing employers when really the taxation should be imposed on employees. On that particular occasion it was a case of the employees having their cake and eating it too. We have now got a situation where they will still have their cake and eat it too, but the employers will pay the tax for them. It is rather curious, Mr Deputy Speaker, that when unions go to bat for their unionist members and gain fringe benefits for them, those benefits are not taxable because they have been received under awards determined by industrial tribunals. But if an employer decides that he is going to give a fringe benefit to an employee, that benefit is taxable. So the employer pays for the fringe benefit and also for the tax on top of that. If the industrial tribunal determines a fringe benefit, it is not taxable, but the employer of course has still to pay the fringe benefit. What we have here is really one rule for some, and another rule for others. So much for the Treasurer's attempts at achieving consistency and equality. He is achieving neither. Let us, Mr Deputy Speaker, look at some of the problems that have been created over the past three years by this Hawke socialist Government. We have now a fringe benefits tax-one which, as the honourable member for Dawson (Mr Braithwaite) has said, is enshrined in about 140 pages of legislation and a 56-page booklet instructing employers as to what to do to institute a fringe benefit tax. We have union superannuation on the horizon. Deals are being entered into at the moment by unionists who are exercising industrial muscle over employers. That is to be paid for, I remind this nation, by the employers again, with no employee contribution being made. Again the union thugs have got their own way. That is the scene that this Government has set-massive union power in league with the Australian Council of Trade Unions, a government that really does not care about the average Australian but indeed is encouraging more union power. We have a current account deficit of $70 billion-$70 billion dollars in total debts owing, and a deficit on the part of this nation that is running at about $1m a month. We have a Medicare blowout with a levy that is accounting for about 25 per cent of the total payout. We have unemployment, about which we hear so much rhetoric from this Government, running at 8 per cent or 600,000, and we have 20 per cent youth unemployment. We have social welfare fraud running rampant and a weak Minister for Social Security (Mr Howe) who institutes an amnesty. Petrol prices are higher than they ought to be-another broken promise by this Hawke Government, which said that import parity pricing would be adhered to, yet has produced only a partial reduction in the price of petrol. So Australian motorists are paying to the back teeth for that. We have just had the abolition of negative gearing. The capital gains tax represents another broken promise of the Hawke Government. The Prime Minister (Mr Hawke) had stated himself in unequivocal terms that there would be no capital gains tax. We have an increase in home lending rates and interest rates generally. Rents are being pushed higher for the disadvantaged, the needy, veterans, pensioners-people that the Government does not really care about-as a result of the introduction of a capital gains tax and the ending of negative gearing. So it is a government that really does not care for average Australians, a government that has been encouraging union power. I think it is time that the average Australian woke up to what was really happening between the Government and the unions. Let me turn to the Treasurer's second reading speech, because he talks in that about removing a serious gap in the income tax law and ensuring that all forms of remuneration paid to employees bear a fair measure of tax. He says that for this purpose the fringe benefits tax is pitched at all employers, both taxable and exempt. He then goes on to outline what this fringe benefits tax covers. He talks about its including employer-provided motor vehicles, free of low-interest loans, residential accommodation, board and excessive living away from home allowances-do not ask me who is to define the word `excessive'-and expenses paid on behalf of employees. But then he goes on to talk about exclusions. When he first introduced this measure back in September there were really going to be no exclusions at all. But, of course, a certain number of people have got to him in the last eight months-I remind the House that it has taken that time for the Government to get this legislation before us and it is now sought to pass it in less than 24 hours. Let us now look at some of the exclusions. Generally excluded, says the Treasurer, are staff canteens and free or discounted use of commuter transport systems by employees. He says that there will be no tax on the use of child care and recreational facilities on an employer's premises. What he is saying in effect is this: Some have to pay and some get off scot-free. Where is the fairness in that? Some have to buy goods and services from their after-tax income, yet others get the goods free. This is quite contradictory and I would suggest to the Treasurer that he ought to have gone the whole hog, instead of being quite selective, as he has been. Then he goes on in the second reading speech further to say that there have been further exemptions not announced earlier. He lists them. One relates to low interest loans granted to veterans under the Defence Service Homes Act, another to live-in accommodation of employees who care for disabled people or disadvantaged children, et cetera. So I would suggest to the House, Mr Deputy Speaker, that despite the fact that in the early stages there were to be no exemptions, the Treasurer has now weakened to provide for certain exemptions and lists them. Thus, his original statement has been shot to pieces. The Treasurer of this nation just cannot tell the truth; he just cannot be trusted. I move on to the motor car industry because up to 30,000 or 35,000 jobs will be lost in that industry. It is my view that governments-of whatever political persuasion-ought not to make drastic changes to policy. In so doing, they cause great disruption to business and industry. It takes many decades to have certain situations established and that is the case with the car manufacturing industry. Machinery and equipment are installed; buildings are put up; workers are employed. In other words, assets and people are involved and it is morally wrong for any government to change the game rules overnight. That is what has happened in this particular instance. Even the honourable member for Makin (Mr Duncan) in South Australia wanted a phased in fringe benefits tax approach, but of course that was rejected by the Government. Fleet sales are relied upon very heavily by the motor manufacturing industry. It has been estimated that up to one-half or even two-thirds of total car sales are in this category. Fleet sales dropped 20 per cent in the first three months of this year, due to cutbacks by companies because of the proposed fringe benefits tax. This Government, with one stroke of the pen, changes established practices, practices that have taken decades to develop. It is causing chaos in industry and throwing many, many workers out of jobs. I just want to conclude by addressing some comments to the fringe benefits tax as it applies to churches, charities and other non-profitable organisations. I believe that this aspect of the fringe benefits tax is the most dastardly of all. It is a cold and calculated tax on churches, charitable and non-profit organisations in this country. This Hawke socialist Government is the first in Australia's history to tax non-profitable, charitable organisations. It is the first Government in the history of this nation to tax churches for their welfare work, as distinct from their clergy or pastoral work. I repeat that this is the first Government in Australia's history to do that. One fairly substantial charity in Queensland alone has estimated that the fringe benefits tax will cost it $60,000 annually. Religion and charitable bodies are set up to assist governments at all levels, local, State and Federal. They deliver services to the aged, to the needy, to the disadvantaged, yet the Government has seen fit to tax them. I wonder how members of the Government feel when they go out and face people from the Smith Family, the Salvation Army and the St Vincent de Paul Society, to name a few. I wonder what they are thinking when they face those people, who work in a dedicated fashion to provide services that assist governments at all levels. They ought to hang their heads in shame-taxing religious and charitable organisations as they do under this fringe benefits tax. Finally, Mr Deputy Speaker, we have now two tax years. This Hawke socialist Government, the biggest taxing government in Australia's history, has created two tax years. We have only ever had one tax year. That is the normal tax year from 1 July to 30 June. But now we are to have a fringe benefits tax year that will extend from 1 April to 31 March-a self-assessment system, with responsibility again on employers to lodge an annual return. The amount is to be calculated by the employer and paid in three instalments. This is a massive extra imposition on employers and I would suggest that it is going to cost this Government and this nation greatly because the unemployment that will be created will only be manifested in the months and years to come. I am sure that the Government will rue the day that it ever introduced a fringe benefits tax. Mr PRICE(Chifley)(1.18) —I am very pleased to speak on this legislation and must say that I am very disappointed at the continued hypocrisy, double-talk and deceit of the Opposition. We ought to remind the people of Australia, when the honourable member for Petrie (Mr Hodges) suggests that this Government is not concerned about the average Australian, that we inherited a situation after 30 years of government by present members of the Opposition in which tax evasion and tax avoidance was reaping $7,000m annually. That deficit was being paid by the ordinary Australian-the most in- equitable system that one could imagine. Mr White —It was all finished by the time Labor got back. You have done nothing; it was all over. Mr PRICE —Of course we have. We have pulled in $4,500m under the measures that we have taken so far and the Opposition has squirmed and squealed and screamed all the way. It has never supported us. We ought to go back to the White Paper and just see what was happening to the taxation system when Opposition members were in government. Over a period of 30 years they were able to produce changes whereby the marginal rate of tax for those on average earnings increased from 19 per cent to 46 per cent, while the average rate rose from 10 to 25 per cent. Some 2.1 million taxpayers, equivalent to around 39 per cent of all full time employed persons, now face a marginal tax rate of 46 per cent or more, compared with approximately one per cent 30 years ago. The top marginal rate, 60 per cent, now cuts in at only 1.6 times average yearly earnings, whereas in 1954-55 the top rate, 66.7 per cent, cut in at income levels approximately 18 times average yearly earnings. The present-day equivalent of the 1954-55 income level at which the top marginal rate applied would be about $400,000 compared with the $35,000 figure at which it now commences. Whereas income tax assessed on individuals earning more than 1.6 times average yearly earnings, now $35,000, accounted for over half of the total tax attributable to individuals in 1954-55, the comparable upper income range now accounts for only 20 per cent. The real problem for taxpayers has been the way in which the present Opposition, when in government, allowed the system to break down, to be rorted and evaded to the extent that people opted out of it. It has taken the courage of this Government to have something done about it. The Opposition has shown itself to be a champion of privilege, a champion of inequity and a champion of inequality. I turn now to fringe benefits. According to the White Paper, the tax loss because of fringe benefits, the ending of which the Opposition would like us to forgo, is estimated at some $700m. The loss in relation to car fringe benefits has been estimated to be $280m. The revenue to be gained under this Bill is estimated to be $330m in 1986-87, $540m in 1987-88 and $625m in 1988-89. The Opposition is quite happy to support proposals to reduce the marginal rate of taxation but is not prepared to support one measure that will increase revenue. If Opposition members were in government they would be quite happy to blow out the Budget deficit by some $10 billion dollars, a huge amount, which would no doubt destroy all the gains that had been so painfully won by this Government. A lot has been made of the fact that the employers will be picking up the tax on fringe benefits. How did fringe benefits come to dominate so much of the salary packages that currently exist? Was it a concerted movement by those bogymen, the thugs that the honourable member for Petrie talked about, in the ranks of the Opposition? I do not know of any union affiliated with the Australian Council of Trade Unions that is responsible for managing directors, general managers, sales managers and a whole raft of people who have been granted, by the companies I believe, these fringe benefits. I find no difficulty in accepting the fact that we ought to be all fairly assessed. If the Opposition can demonstrate a case under which every working Australian could get a fair share of fringe benefits, perhaps we ought to leave them in place. But clearly fringe benefits have been the province of a limited few. Mr Hodges —The employees should pay it. Mr PRICE —What I am trying to say to the honourable member for Petrie, and perhaps he has not understood me, is that I believe that the incentive to give people fringe benefits did not come from the employees; they came from the employers. Mr White —You are joking. Mr PRICE —The honourable member should go look at the advertisements. Who puts the advertisements in the paper offering these fringe benefits? Is it the trade unions? Mr Hodges —What about the industrial tribunals? Mr PRICE —It is absolutely ludicrous to suggest that the ACTU or the unions affiliated with it have negotiated an extensive range of salary packages for managing directors, general managers, sales managers and a whole raft of people who currently enjoy fringe benefits but are not covered by affiliated unions. I think that is absolute hypocrisy. Since we are talking about hypocrisy, and I have heard the honourable member for Petrie before talking about the ramps and rorts that he alleges exist in regard to social security, I ask: Is the Opposition prepared to support an ID card, which will be another level of attack on evasion, another level of attack on the loss of revenue to the Government? Mr Hodges —You cannot agree on that. Mr PRICE —I certainly agree. I want to make it quite clear to the honourable member for Petrie that I fully support having an ID card. Mr Reith —What about Senator Bolkus? Mr PRICE —I remind the honourable member that the Opposition has opposed it, has participated in the majority report in relation to the ID card. I want to say that we have heard a lot of trite nonsense from honourable members opposite on taxation measures, but have they, in a bipartisan way, joined the Government in raising the level of debate and understanding about the current problems of the taxation system? Did they willingly go along to the Taxation Summit and say: `We are the Opposition; we believe that we ought to have a constructive debate about taxation. We may disagree with the Government on minor points of view.'? Did they go there and try, in a bipartisan way, to add to the taxation debate? Of course they did not. Mr Reith —Then why are you now gagging debate? Mr PRICE —The problem of honourable members opposite is that they seek to protect the entrenched privileges of tax avoiders and evaders. The Australian people are beginning to understand just how hypocritical honourable members opposite are in relation to taxation matters. The Government has had to go through the pain of introducing measures such as the fringe benefits tax at, of course, the price of significantly reducing marginal rates. If honourable members opposite want to talk about incentives or about motivation, the clearest evidence that can be found is that the high marginal rates that we currently suffer-entrenched by them in the system-do act as a disincentive; that there will be a profound change in the taxation system as from 1 September 1986, when the tax-free threshold will be increased, the top marginal rates will come down from 60 per cent to 55 per cent and other changes will flow through. That will make a profound difference to the community. I want to finish with this point because I think it is a very important one. Opposition members interjecting- Mr PRICE —I will try to ignore the clowns opposite. I want to end on what I think it a very important point. Should industries, whether they be car, entertainment or whatever, be propped up by what is clearly, on all the evidence, a situation of people avoiding and evading taxation? I want to see a dynamic small business sector. I want to see a stronger industrial sector for Australia. I would hope that honourable members opposite would share my outlook on that matter, but I do not want to see business continued when a clear equity case can be made out that it is happening as a result of tax avoidance and evasion. Therefore, I commend these Bills. I tell the Australian people and this House that this is but a part of the overall taxation package that this Government has had the courage to introduce. Clearly we will be introducing more measures and, in particular, in September of this year, the taxpayer will see the first benefits of the reduction in marginal rates. This Party is committed to bringing those rates down even further. Dr HARRY EDWARDS(Berowra)(1.29) —The honourable member for Chifley (Mr Price), who has just resumed his seat, protests, as my colleagues have pointed out, the desirability of constructive discussion, yet his Government gags this debate. I think that point needs to be made. I will come back presently to the charges of hypocrisy and the like that he levelled at us. But in rising to speak in this debate, I will rehearse a number of preliminary points that have already been made but cannot, I believe, be stressed too often. The first of these is that it is past time that this legislation was brought into this Parliament and debated and finalised. It is nearly eight months now since the so-called reform package was brought into the House by the Treasurer (Mr Keating). In the case of the important issue of negative gearing that we debated yesterday, it is 10 months since the relevant announcement was made. In the meantime, confusion and uncertainty have reigned and in the business context this has had very adverse implications for new investment decisions. It is one factor, indeed, in bringing about what the President of the Australian Council of Trade Unions, no less, has called the abysmal state of private investment. The second point, Mr Deputy Speaker, is that for all that this package is presented as the greatest tax reform program of the century, it certainly does not meet what was set down by the Prime Minister (Mr Hawke) as being one of the key requirements of tax reform. I refer to the fourth of the nine principles enunciated by the Prime Minister, namely: `Any reform must lead to a simpler system which therefore all Australians can understand more fully . . .'. Mr Reith —The KISS principle: `Keep it simple, stupid'. Dr HARRY EDWARDS —The KISS principle, as my colleague says. In fact, the complexity of the legislation that we have had so far in implementing this package defies description. It has long been recognised that the tax Act, which comprised 1,100 pages prior to the present exercise, was extraordinarily complex and tortuous. This Bill relating to fringe benefits has some 139 pages. There were 47 pages in the Taxation Laws Amendment Bill of yesterday. There have been other pieces of legislation, and the total since the exercise began-being of the order of 350 pages-brings the text of that legislation up to 1,450 pages. Some simplicity! A third point which it is necessary to stress is that while the Treasurer (Mr Keating) and the Government constantly emphasise, that what has been presented is a package and must be accepted as a whole, there is in fact no merit in that contention. It is not a package in the meaningful sense of a group of related and interdependent measures, having a coherent sense of purpose and direction. In particular, it is not a package in the sense that one of the end objectives of the exercise-tax cuts stemming from meaningful change in the structure of the marginal rates of tax-is crucially dependent on the acceptance of each and every measure. That is not so and the Opposition reserves the right to consider each of the components on its merits. Indeed the Opposition, Mr Deputy Speaker, has been threatened that if the present fringe benefits tax measure is modified to reduce the yield, or is rejected by the Parliament, the Government will not proceed with the tax cuts. Now that it is phoney, a deceptive threat. The whole array of the tax reform revenue measures is to provide a net $705m only of the $2,000m cost of the proposed tax cuts of 1 September next. This fringe benefits tax itself is projected to yield $320m in 1986-87, or only 16 per cent of the total cost of the tax cuts. So, I say that it is phoney to suggest that that will or should prevent the cuts. Of course, the Government would dearly like any excuse to back off from these tax cuts. Quite apart from the simple fact that hanging on to existing revenue is easier than cutting expenditure, in order to get the deficit down, there is the perhaps more complex way of arguing that in the prevailing economic situation, where the nation is already living beyond its means with a yawning balance of payments deficit amounting to $30m being spent overseas `on tick' every day, tax cuts are the precise opposite of what economic logic requires. At all events I turn, Mr Deputy Speaker, to the fringe benefits tax itself, the subject of these present Bills. I assert that the Opposition-as has been clear from the many speeches by my colleagues here today-is clearly opposed to the tax in the form here proposed. I emphasise the words `in the form here proposed'. I would like to set out, as simply as I can, the essence of the Opposition's position. We have here a tax on the fringe benefits of employees-but it is being levied on the employer. As such, it adds up to a significant additional tax imposed on business-a de facto payroll tax which would reduce profitability, impair competitiveness, and lessen the incentive to invest and generate employment. Mr Reith —That is the crunch point. Dr HARRY EDWARDS —As my colleague says, that is the crunch point. I say to honour- able members opposite that this tax will cost jobs. There are other aspects of the tax that are deleterious but that is the primary basis on which we oppose this tax. That is not even to mention the fallout effects on activity and jobs in other industries, such as occurs in relation to the car industry. It may then be said: `But is there not merit in the argument that the widespread and increasing resort to non-wage salary fringe benefits in order to avoid higher marginal rates of tax is eroding the tax base, a trend which cannot be permitted to continue?' The answer is, first, that the tax should be levied on the income earner, as in the United Kingdom and Canada, not on the employer. Why we should emulate the cop-out in this regard of New Zealand, which has put the tax on the employer? The answer, of course is: `Because the ACTU dictates it; that is why'. But this is a tax on fringe benefits received in lieu of income, and should be paid by the employee. Incidentally, I would mention that the Government's draft White Paper, when it turns to this issue, states quite categorically: The best approach in principle would be to impose the tax on the employee. I make a second point in response to the query as to the merit of the argument of doing something about fringe benefits, that the root cause of the escalation in fringe benefits are the too high, exploitative, almost immoral marginal tax rates that currently prevail. I refer to the 46 plus one, 47 per cent really with the Medicare levy, and 48 plus one, or 49 per cent rates that apply to incomes greater than $19,500, which means that about 40 per cent of Australians are in the position where nearly half of any additional income they earn, or any increase in their incomes, goes in tax. I refer even more, of course, to the 60-rather the 61 rate-that comes into play at an income level of $35,000, or just 1.6 times average earnings. Genuine tax reform must be directed to that basic cause of fringe benefits, not to the imposition of a savage anti-business, anti-employment tax on fringe benefits such as we have before us. The honourable member for Chifley referred to the facts of the situation and I do not dispute them. They are the cumulative effect of the actions, or inaction, of successive governments. As the White Paper brought out, taxpayers on quite moderate income levels are exposed to these high marginal rates that we are talking about. It was pointed out that in 1954-55 only one per cent of taxpayers faced a marginal rate equal to or greater than 46 per cent. Currently 40 per cent of taxpayers face it. In 1954-55, the top marginal rate, then 66 per cent, began at an average income that was approximately 18 times average weekly earnings, which would be equivalent to an income of about $400,000 today whereas, as I just said, the top marginal rate currently comes in at $35,000, which is only 1.6 times average earnings. It is these marginal rates which adversely affect incentives and hence efficiency and growth and, of course, enormously encourage people to take steps to avoid or evade paying tax. That is conceded. Therefore, we need to make a major effort in respect of marginal tax rates. It is correct that this package of measures is directed to that end. The difficulty is that when the Treasurer wanted to do something really substantial at the Tax Summit last year he failed in his efforts. Consequently, we end up with this and associated measures as a rag bag of legislation-doctrinaire-socialist, `soak-the-rich' in thrust-although, as my colleague the honourable member for Moncrieff (Mrs Sullivan) pointed out last night, the ultimate effect in most cases is to hit the poor. The measures are anti-growth, anti-enterprise and anti-business in effect, and when all is done we get a proposed new structure of marginal rates, not due to be finally implemented until 1987, which still leaves very much to be desired. In fact, I draw the attention of Government supporters to the point that those taxpayers earning less than $19,500, less than $400 a week, are to receive a reduction of only one percentage point in the rates applicable-the 25 per cent rate is to be reduced to 24 and the 30 per cent rate to 29, and I suggest that they should reflect on that. Certainly more significant reductions for higher income groups are proposed, but the whole structure is still a long way short of good enough-if they are ever to be implemented. I conclude on the note if they are ever implemented. That becomes increasingly doubtful every day, with the continuing yawning gap in the balance of payments to which I referred earlier, and the roadblocks for this Government on the way to sound policy in the fiscal and wages areas as alternatives to the policy of crippling, sustained high interest rates such as have afflicted us and continue to do so. Mr LEE(Dobell)(1.42) —I have great pleasure in supporting the Fringe Benefits Tax Assessment Bill, which has been introduced by the Treasurer (Mr Keating), the world's greatest Treasurer. I believe that as a result of this Bill, along with others such as that concerned with capital gains, and the alterations made to the Income Tax Assessment Act, the Government can be very proud of the reforms in taxation which it will have on the books by July 1987. Its full tax reform package will then have been legislated and be up and running. This tax reform package is not about increasing tax, as has been suggested by the Opposition. The Opposition parties, perhaps because during their years in government we saw nothing but higher and higher taxes, believe that any change to the tax system must result in average wage and salary earners paying more tax. Under this Government, the average PAYE taxpayer will be getting a better deal. The fringe benefits tax certainly will result in employers paying additional moneys by way of tax. But this whole tax package is revenue neutral, a buzz word which has been used quite a lot recently. Quite simply, it means that every dollar which this Government will be raising through the fringe benefits tax, the capital gains tax, or any other measure which is part of our tax reform package, will be handed back to PAYE taxpayers in the form of income tax cuts. I will go into further detail on those tax cuts later in my speech. As the honourable member for Chifley (Mr Price) mentioned in his excellent contribution earlier today-it is good to see him in the chamber at the moment-the Australian taxation system was haemorrhaging at all levels of the income tax base, but particularly in the higher income levels. The average tax rate paid by individuals, increased from 10 per cent in 1954 to 22 per cent at the moment. That is the average rate, not the marginal rate. In fact, if we examine the contribution of income tax paid by individuals we find-it will be no surprise to honourable members-that the individuals in the highest brackets are making a smaller and smaller contribution to the total income tax payments made by individuals. In 1954, 53 per cent of all income tax paid by individuals was paid by people earning more than 1.6 times average weekly earnings. According to the last figures that I have, those for 1985, only 22 per cent of total individual income tax contributions is paid by people who earn more than 1.6 times average weekly earnings. So, whereas we would expect that people would be pushed into higher and higher brackets, that those in the top bracket would be making higher contributions, the figures show that those in high income brackets are making a smaller contribution to income tax as the years go by. That is why I think that this Government is to be congratulated upon bringing down measures such as this fringe benefits tax. The fringe benefits tax is expected to raise $330m in this coming financial year and in 1987-88 will raise $540m. As has been explained previously, that means that all of those hundreds of millions of dollars will be available to be ploughed in to tax cuts to the ordinary PAYE taxpayer. When the supporters of the Liberal and National parties say that they oppose a capital gains tax and a fringe benefits tax, the simple question I put to them time and time again, and they refused to answer it is: How do they intend to pay for the income tax cuts, or the increases in pensions, which we are delivering to income taxpayers and pensioners? Without a fringe benefits tax and the levying of a capital gains tax one cannot hope to deliver those income tax cuts and increases in pensions that we will certainly deliver later this year and on 1 July 1987. The fringe benefits tax is to be imposed on employers, so that an employer who provides a tax-free fringe benefit to an employee will be responsible for paying to the Commonwealth a tax on that fringe benefit. I was amazed to hear the honourable member for Petrie (Mr Hodges) interject, when the honourable member for Chifley was speaking, that the employee, not the employer, should pay the fringe benefits tax. I would be interested if the honourable member for Flinders (Mr Reith) would indicate by interjection whether he supports the honourable member for Petrie when he says that employees should pay the fringe benefits tax. Mr Reith —It is a political cop-out. Mr LEE —The honourable member for Flinders is condemned by his silence. He was very loud in this chamber earlier today, but he obviously does not support the interjection made by the honourable member for Petrie that employees should pay the fringe benefits tax. This Government has come to the conclusion that the employer should be responsible for paying the tax on fringe benefits because the employer has the power to decide how large a portion of an employee's income package shall be provided in the form of tax-free fringe benefits. The principle of the Bill is that all forms of remuneration paid to employees should bear a fair and reasonable measure of tax. I would have hoped that everyone in this chamber would support that principle. I would like to draw to the attention of the House some research which was done, I believe, in connection with the preparation of the draft White Paper issued in June 1985 by the Treasurer entitled `Reform of the Australian Taxation System'. That very interesting research concerned the level of fringe benefits currently being paid. I seek leave to have these four tables incorporated in Hansard, Mr Deputy Speaker. They have been shown to the shadow Minister at the table. Mr DEPUTY SPEAKER(Mr Rocher) —Is leave granted? There being no objection, leave is granted subject to the normal ruling of the Speaker in this connection. The tables read as follows- Table 1 NUMBER OF EMPLOYEES IN RECEIPT OF FRINGE BENEFITS Type of benefit Number Proportion of all employees '000 per cent Goods and services... 1147 21.4 Telephone... 496 9.3 Transport... 469 8.7 Entertainment allowance... 272 5.1 Housing... 221 4.1 Holiday expenses... 208 3.9 Medical... 192 3.6 Low-interest finance... 148 2.8 Union dues... 135 2.5 Electricity... 131 2.4 Club dues... 97 1.8 Shares... 87 1.6 Source: ABS, Employment Benefits, Australia, August 1984 (6334.0) Table 2 INCREASE IN NUMBER OF EMPLOYEES RECEIVING FRINGE BENEFITS BETWEEN AUGUST 1983 AND AUGUST 1984 Type of benefit Per cent Goods and services... 25.5 Telephone... 11.8 Transport... 7.3 Entertainment allowance... 18.1 Housing... 7.7 Holiday expenses... 14.5 Medical... 11.1 Low-interest finance... 10.5 Union dues... 25.9 Electricity... 5.5 Club dues... 14.9 Shares... 4.8 Source: ABS, Employment Benefits, Australia, August 1984 (6334.0) Table 3 PERCENTAGE OF EMPLOYEES RECEIVING FRINGE BENEFITS BY INCOME RANGES (a) Type of benefit Under $200 $200-360 $360-520 Over $520 per cent per cent per cent per cent Goods and services... 22.2 22.5 19.3 18.2 Telephone... 5.4 6.1 14.4 25.1 Transport... 4.0 7.0 13.6 19.7 Entertainment allowance... 1.6 2.9 9.3 16.4 Housing... 3.4 3.2 4.9 9.5 Holiday expenses... 1.3 3.8 5.5 8.0 Medical... 2.0 2.9 4.6 8.9 Low-interest finance... 0.2 2.4 4.2 7.1 Union dues... 1.1 1.9 3.6 7.1 Electricity... 2.9 2.0 2.4 4.1 Club fees... 0.5 1.0 2.8 6.7 Shares... 0.4 1.2 2.6 4.2 Source: ABS, Employment Benefits, Australia, August 1984 (6334.0) Table 4 COMPONENTS OF EXECUTIVES' SALARY PACKAGES (a) Chief executive Officer Marketing executive Sales executive Data processing executive $ $ $ $ Total remuneration of which:... 85 530 59 367 48 063 42 692 Basic salary... 64 677 40 949 38 283 36 515 Bonus/commission... 5 208 2 583 1 793 275 Vehicle... 9 843 5 648 5 476 3 888 Non-accountable allowance... 2 835 1 525 1 040 516 Club subscriptions... 386 180 192 105 Professional society subscriptions... 207 169 116 144 Hostess allowance... 692 391 348 . . Low-interest housing loan... 974 597 357 975 Low-interest personal loan... 68 34 120 44 Medical expenses... 186 117 168 60 Telephone expenses... 364 174 170 170 Home maintenance... 90 . . . . . . Source: Compiled from data from Price Waterhouse and Associates Pty Ltd. ``Top 5 Plus'' Executives Compensation Report, December 1984, as quoted in Taxation Reform Draft White Paper June, 1985. Mr LEE —I thank the House. The first three tables were prepared by the Australian Bureau of Statistics. The first indicates the number of employees who receive fringe benefits and divides those benefits into different categories. Some 5.1 per cent of the survey group received entertainment allowances; 3.9 per cent received holiday expenses-tax-free income in the form of payments from the employer to help them with the cost of their holidays; and 1.8 per cent of employees received a tax-free fringe benefit in the form of club dues. If 1.8 per cent of employees are receiving a tax-free fringe benefit in the form of free membership of a club, on my figures that means that 98.2 per cent of Australian employees out there do not have their club memberships paid by their employers. What those of us on this side of the House are saying is that it is unfair for a small minority of the upper income groups to be able to receive these benefits, tax free, when the great majority of ordinary PAYE taxpayers do not. In fact table 2 indicates that there has been an alarming increase in a proportion of salaries paid in the form of fringe benefits. There was an 18 per cent increase in tax-free benefits paid as entertainment allowances and an almost 15 per cent increase in the level of fringe benefits paid in the form of club dues. The third table indicates the level of fringe benefits received by four different income groups within the community. As would be expected, low earners receive very little in the form of fringe benefits while the upper income groups receive the biggest benefits. The fourth table was compiled from data supplied by Price Waterhouse and Associates. It shows the level of income benefit received by people such as chief executive officers, marketing executives and sales executives in the form of tax-free fringe benefits. I am very interested in the attitude of the Leader of the Opposition (Mr Howard) to the fringe benefits tax which is currently before the House. We have had members of the Liberal and National parties bleating, complaining and moaning and groaning about the fringe benefits tax, but what is the attitude of their leader? Mr Reith —Here come some selected quotes. Mr LEE —As the honourable member for Macarthur (Mr Martin) explained to the House earlier today, when the Leader of the Opposition was on a tour of north Queensland several weeks ago he was put on the spot and was asked to give a guarantee that he would repeal the fringe benefits tax legislation. He refused to give a commitment to do so. So no matter what the honourable member for Parkes (Mr Cobb) believes, no matter what the honourable member for Flinders interjects, we have it on record that the Leader of the Opposition has refused to give a commitment that he will repeal the fringe benefits tax. If the current Leader of the Opposition is deposed by the honourable member for Kooyong (Mr Peacock), the honourable member for Goldstein (Mr Macphee), who is at the table at the moment, or, dare we think it, the honourable member for Flinders, can we expect that some future Leader of the Opposition would agree to repeal the fringe benefits tax? If so, we go back to the original question: Our fringe benefits tax will raise $540m in 1987-88. That will fund income tax cuts. If Opposition supporters would repeal the fringe benefits tax, does that mean that they would increase income taxes? They would not be able to fund the income tax cuts that we will deliver on 1 September of this year and 1 July of next year. Mr COWAN(Lyne)(1.53) —I make it very clear from the beginning that the Opposition is not opposed to the principle of imposing a fringe benefits tax but believes that only legitimate aspects should be the subject of such taxation. I want to make that very clear because it would appear that Government supporters are claiming that we do not want a fringe benefits tax under any conditions. It was explained earlier today in the debate that industrial awards are not to be affected by this fringe benefits legislation. The people who will be affected are those who have employees who virtually do not come within the orbit of the unions and the Australian Council of Trade Unions. I believe it is very important to remember that. Might I also correct the claim expressed here earlier that the Liberal and National parties when in government did nothing to attend to tax avoidance. I would invite honourable members to have a look at Hansard and the legislation that has been passed. They will find that considerable and very constructive legislation was introduced in the 1982 to early 1983 period, legislation that did a great deal to combat tax avoidance. I do not want to address many of the details of the legislation before the Parliament. All I want to say is that the introduction of these tax reform measures by the Treasurer (Mr Keating) has caused further confusion to many, including the average Australian. Particularly concerned are the businessman and the farmer, and industry generally. Greatly concerned must be those accountants and tax and legal people who must advise their clients on the future planning of their assets and businesses generally. If the Government were to act responsibly it would undertake a complete review of our tax system-not the type of review that was carried out by the Treasurer at a tax summit that was influenced by the ACTU. The ACTU and the Prime Minister (Mr Hawke) finally had their say as to the future direction of taxation in this country of ours. The level of taxation is rising. The honourable member for Dobell (Mr Lee) has given certain figures. He is not altogether correct as to those, because the brackets involved have changed. Although there is to be a general reduction in personal taxation, the average Australian should examine the effect when people move into higher wage brackets. They will find that a great number, I understand in the vicinity of some 700,000 will be paying extra income tax. So the Government can afford to relieve, in theory, certain sections of the taxpayers of Australia. If we want to relieve taxation in this country of ours we should consider what the Minister for Primary Industry (Mr Kerin) said only the other day-that taxation on petrol has increased by $2.3 billion. I was in the United States of America the other day and saw petrol being sold to the motorist for 82c a gallon, or less than 18c per litre. Also motor vehicles there are approximately half the price that they are here. Based on this fact, when we consider industry's cost of production in America as compared with that of Australia, we see the problem that we have today in this country. I draw attention to a couple of matters that will be seriously affected by the legislation before the Parliament. We have said many a time that this nation is dependent upon the farmer. I want to reiterate that. He has not had a very good go in recent times from the point of view of markets, from the point of view of seasons or from the point of view of the policy of the government of the day. It is of no use saying that many of the issues that are involved in the legislation before the House will not affect the farmer or the businessman. I draw attention to the farmer who is employing a share-farmer. The farmer may lease the property to him. He may be a general employee who is working on the property. We have all made such agreements with employees in the past and if we have been responsible people they have been happy and satisfied with them for the everyday, every week, every year working of a property or a business. It will mean under the legislation that the employer will have to pay tax on the house that he is giving as part of his deal to that person working on his property. Furthermore, the farmer will have to pay tax on those concessions that he is being given by way of milk, beef, power, gas or other type of concession. Every Australian should know that. No member of the Government can deny the inequities that are being handed out under this legislation to those responsible people who are engaged on farms and in small business today. During the debate some honourable members have spoken of the car industry. A manufacturer living within my electorate, Brylite of Taree, wrote to me this morning. He employs 200 people and manufactures a component for General Motors. He will be affected because more than 25,000 fewer vehicles have been sold in the last three months for the fleets that are used by businessmen. The effect will be passed down within the community from the manufacturer to the businessman. Everybody is going to be affected. Why does this Government always do things that affects the working man adversely? The whole of Australia ought to know that it has the highest taxing government that the country has ever experienced. Furthermore, the Government is condemning to unemployment those who it purports to represent. I do not want it to represent the people within my electorate because I believe that they are being sold out. We talk about the decentralisation of industry. We talk about competitiveness with other countries around the world. Madam SPEAKER —Order! It being 2 p.m., the debate is interrupted in accordance with sessional order 101. The debate may be resumed at a later hour. The honourable member for Lyne will have leave to continue his speech when the debate is resumed. Mr SINCLAIR —I address my question to the Prime Minister. In order that Parliament can exercise its judgment on whether or not there has been proved misbehaviour sufficient to justify the removal of a High Court judge under the Constitution and finally to put to rest increasing public disquiet on the issue, will the Prime Minister assure the House that the terms of reference of the Parliamentary Commission of Inquiry Bill will facilitate scrutiny by the Commission of all matters covered by the two volumes of the Stewart Royal Commission report, the Age tapes themselves, the opinion by senior counsel, Ian Callinan, QC, and his junior as counsel to the Director of Public Prosecutions relating to further possible charges against Mr Justice Murphy, allegations against the judge made in the National Times and such matters that may have arisen in the trial of Mr Justice Murphy as may be deemed by the Commission to be relevant, apart from the specific charge on which the jury found him innocent? If not, why not? Mr HAWKE —I thank the Leader of the National Party for his question. The Parliamentary Commission of Inquiry Bill will be before the House later this afternoon. It will be quite clear from the legislation and the exposition on it by my colleague the Attorney-General as to the precise coverage that will be allowed. Let me make this point which I think is most relevant to the quite proper question by the Leader of the National Party: I think all members of the House will appreciate that in the preparation of this legislation the Government by definition has had to cover totally new ground. As distinct from the appetite in some quarters on the other side of the House for a political witch hunt, what the Government has properly had in its mind are these things-and may I say, it is a consideration which I am sure is shared by the overwhelming majority of this country: We have had consideration for the interests and rights of this Parliament; we have had a concern for the institution of the High Court; we have also had a concern, which I would hope others on the other side of the House would not forget, for the proper interests and rights of Mr Justice Murphy and of others who could be involved in the inquiry. To take proper account of all those legitimate interests we have, in the time available, had drafted legislation which we believe will meet those interests. I do make this point, which I am sure will be made in greater detail by my colleague, the Attorney-General: We have had properly to have account, and I think the right honourable gentleman who asked the question would understand this, at one and the same time of ensuring that the Commission has every opportunity to consider those matters which are appropriate to a section 72 consideration and at the same time ensure the well-established principle, which I know the right honourable gentleman would share, autrefois acquit-once dealt with on a particular matter and acquitted there should not be a retrial on that issue. We have had to take account of both those considerations-that is, that the function and purpose of operating in regard to a section 72 requirement should be taken into account and that we should not have a retrial on a particular issue on which a decision has been taken. I think in good faith we have taken account of all the interests to which I alluded, and we have taken account of those two considerations. Therefore, I am sure that having taken those things assiduously and conscientiously into account, the right honourable gentleman will see, when the Bill is presented and the exposition of the Attorney-General is before the House, that we have succeeded. Mr BRUMBY —My question is directed to the Prime Minister. Do the latest labour force statistics confirm that the Government's commitment to generating jobs is being sustained? Mr N.A. Brown —No, they do not. What nonsense! Mr HAWKE —The understanding of the House is assisted by the intervention of the Deputy Leader of the Liberal Party, who said: `What nonsense'. We will deal with him in a moment. I thank the honourable member for his question. I would hope that, irrespective of party affiliations, the statistics that have been released today in regard to the labour force would be welcome and a matter of joy to all Australians whatever one's political persuasion. The statistics for April indicate continued strong employment growth. Total employment in seasonally adjusted terms increased by 60,700 in April. So all honourable members will appreciate that since the low point of April 1983, the point reached after the battering this economy was given by honourable members opposite when in government, the total rise in employment is 669,400 in the three years April 1983 to April 1986. We hear at times from this beleaguered Opposition the observation that the Government has not delivered. The Opposition does not like hearing about delivery on our promise of half a million jobs, because we have delivered 670,000 jobs. The strength of that employment growth is emphasised by an increase of 132,300 jobs since December 1985, which I know the House will appreciate comprises 73,600 full time employees and 58,700 part time employees. Since the end of the financial year 1984-85 employment has grown by 4.5 per cent. In the 12 months April 1985 to April 1986 employment increased by 358,000 in original terms. I think honourable members will be pleased to know that that is the largest April to April increase since the commencement of monthly surveys in 1978. It is also interesting to note that the participation rate has risen to a record level of 62.4 per cent compared with 61.9 per cent in March. Mr N.A. Brown —Like youth unemployment-600,000 unemployed. Madam SPEAKER —Order! Mr HAWKE —Do not worry about him, Madam Speaker-no one else does. Because the participation rates increased to a new record level, the actual unemployment level was not changed but stayed steady at 7.9 per cent. I think, as I say, that those figures will give comfort to everyone in the community, except the myopic and miserable-minded interjector on the other side. Honourable members may recall that yesterday, on a related issue, I was asked about the statement of Mr Fitzgibbon in the area of wage fixing, which I suppose in a sense is related to this employment matter. I recalled from the recesses of my memory that Mr Fitzgibbon had had something to say on this issue in terms of whether there was any comfort for the Opposition. I know that all honourable members will be throbbing with interest just to have the details of what Mr Fitzgibbon had to say. He referred to Mr Howard's quoted observation that there was comfort for Mr Howard and the Opposition in what Mr Fitzgibbon had to say. I quote from the Age of 27 March, in these terms: Mr Fitzgibbon denied Mr Howard's claim yesterday. ``It is absolute nonsense to say that,'' he said. ``I have nothing but contempt for the Opposition's policy because it is designed to produce conflict in this country, which we need like a hole in the head.'' That is a hole in the head which the Opposition will never be able to deliver because the people of Australia will not trust it. Mr SPENDER —My question is addressed to the Prime Minister. First, is it correct that he has given an undertaking to Senator Chipp that no New South Wales judges will be appointed to the commission of inquiry into the alleged conduct of Mr Justice Murphy? Secondly, will he assure the House that there will be genuine consultation with the Opposition about the judges to be selected? Mr HAWKE —No, it is not true to say that I have given Senator Chipp an undertaking that none will be selected. I did have discussions, in consultation with others, with Senator Chipp and there was a discussion about the possible range of selection. The observation was made that, for reasons which I think the honourable gentleman would understand and without any adverse implications for anyone there, there were difficulties in regard to New South Wales which would not exist elsewhere. Mr Sinclair —Why? Mr Howard —Why? There are only difficulties with the Labor Party in New South Wales. Mr HAWKE —I am pleased to see that the honourable gentleman is attempting to listen to the answer. I give the House the assurance that there was nothing said to the effect that there would be a ban upon judges from New South Wales. I have made that observation, but there was no ban. As to the second part of the honourable gentleman's question, I believe that the final selection of these judges is predominantly the responsibility of the Government-I do not think he would dispute that-but I do not see any reason why the Attorney-General at an appropriate time may not have some discussion in those terms, accepting that we have the final responsibility in the matter. Mr Spender —And before the determination as to who they are to be? Mr HAWKE —The honourable gentleman can be spoken to before the final determination, yes. If what he has had to say on this matter generally is any indication of the sort of help we can expect, I do not expect him to be of much help in this respect. Mr JENKINS —Is the Minister for Employment and Industrial Relations aware of proposals to scrap the prices and incomes accord and substitute a policy of supposed labour market flexibility? Will he advise the House what would be the likely effects of such policies on the level of wages, industrial disputation and economic growth? Mr WILLIS —I am aware that the Opposition, all the time this Government has been in office, has been criticising the accord, despite the results that it has been achieving, and calling for it to be scrapped. This is part of the policy to be revealed in a few days time. Let me remind the House that the accord had its rationale in the need for this country to have a wages policy which was compatible with substantial and prolonged economic and employment growth, something which had patently not been achieved by the previous Government. It was on that basis that the accord was developed by the present Government and the trade union movement to try to have an agreed wages policy which would be fair to wage and salary earners but which would achieve that highly desirable economic outcome. The accord has been eminently successful. The Prime Minister revealed just today the latest employment figures, which show a staggering growth in employment over the last year. Honourable members will be interested to note that growth in employment in the three years that we have been in office has been just on double the increase in employment achieved by the Fraser Government in less than half the time that that Government was in office. We have achieved resounding success in respect of employment. Real unit labour costs are back to the level of the late 1960s and early 1970s, the profitability of industry has been restored, inflation went down to 5 per cent until the devaluation intervened, industrial disputes are at their lowest level for 17 years in terms of time lost, and international competitiveness is at the highest level for many years. We can see that we have had many economic successes stemming from the accord. The accord has also been demonstrated to be flexible or adaptable in the sense that it has been able to adjust to the need for some change in wages policy, particularly in relation to the devaluation. I remind the House that if we had not had the accord and there had been a devaluation of the order that have had, the alternative policy for squeezing the inflation impost from the devaluation out of the economy would have been to recess the economy severely and to increase unemployment so that the increased inflation was not reflected in wage increases. That is the alternative policy without the accord. Without the accord, we would certainly not be looking at the employment outcomes that we are looking at at present. In this situation, we have an Opposition which is about to produce an industrial relations policy that, we are told, will say that the accord is a nonsense and which will seek to have instead a policy of wage flexibility-something that honourable members opposite keep rabbiting on about. The key question that must be asked is how the Opposition, in the absence of the prices and incomes accord, would be able to control wages if it were by some fluke to get back into government. What policies would it have to ensure that the total wage outcome was compatible with prolonged and sustained economic and employment growth? Mr Sinclair —Come on; wind up-three minutes. Madam SPEAKER —Order! Mr WILLIS —The answer is that the Opposition would have no such policy. Mr Sinclair —It is 3 1/2 minutes now. Mr WILLIS —It has no policy in any way to control wage growth in this country and it is not likely to develop such a policy. It is not likely to develop such a policy because-- Mr Sinclair —Come on; make a statement if you want to. Mr WILLIS —Madam Speaker, will you please ask the right honourable gentleman opposite to stop shouting? Madam SPEAKER —The Minister can continue his answer. Mr WILLIS —As I was saying, despite the constant barrage of interjections, which obviously shows that honourable members opposite do not like what I am saying-- Mr Sinclair —You are now up to four minutes. Madam SPEAKER —Order! The Leader of the National Party will cease interjecting. I remind the House that there is no time limit for Ministers' answers. I have pointed this out once before. Ministers are expected to keep their answers to a reasonable time. If the House would like to limit the time in which Ministers have to speak, the way is open to it through the Procedures Committee. Mr Sinclair —Madam Speaker, I take a point of order. Our Standing Orders provide an opportunity for ministerial statements to be made and, as the Minister for Local Government and Administrative Services constantly reminded the previous Government, the procedure for answering questions on notice is not designed to replace that alternative. I suggest to the Minister, who has been speaking for 4 1/2 minutes, that it would be appropriate for him to answer the question and not to use Question Time as an opportunity to make a ministerial statement. Madam SPEAKER —Order! There is no point of order. Mr WILLIS —As I was saying before I was rudely interrupted, the policy of simply saying that one would lean on the Australian Conciliation and Arbitration Commission to prevent it from awarding wages increases is no substance for an overall wages policy. What is to stop unions going outside the Commission, as they did in 1981, and seeking wage increases directly from employers? It was that policy in 1981 which led to a spectacular wages blow-out, which in turn led to an increase in inflation and thereby to a substantial increase in unemployment. Mr Sinclair —Wind up. Madam SPEAKER —Order! Mr WILLIS —And it led to the end of the Fraser Government. The wages policy is absolutely crucial-- Mr Sinclair —Come on; wind up. Madam SPEAKER —I warn the Leader of the National Party. Mr Sinclair —I am still timing him. Madam SPEAKER —I warn the Leader of the National Party. Mr WILLIS —A credible wages policy is absolutely crucial to a credible economic policy. A party which has no credible wages policy is not, of course, a credible alternative government. A policy that simply says that the Opposition would have flexibility built into the system is no substitute for having some control over the macro-wages outcome. Indeed, circumstances of having no such controls but having flexibility-that is, enabling small business for a start and bigger business later to opt out and achieve wage increases by voluntary agreements-is simply another way in which unions would be able to break out of whatever centralised system is operating and achieve even higher levels of wage increases. The crucial question that has to be asked when the Opposition reveals its long awaited industrial relations policy on Sunday is: What would be the Opposition's wages policy if it were to get into government? How would it control wages? How would it ensure that there was not a wages blow-out? How would it ensure that it would not take this country back to the stagflation in which it left this country in 1983, when we had double digit inflation and double digit unemployment? Mr PETER FISHER —My question is addressed to the Minister for Primary Industry. In view of the clear findings by and recommendations of Professor Lazenby, when will the Government implement plant variety rights in Australia and provide our agricultural industries and plant breeders with the potential to improve their productivity and competitive edge? Mr KERIN —This matter is under consideration and the announcement will be made. There is no way that we could introduce legislation in this session of Parliament, should we chose to or decide to, but we will make a decision as soon as possible. Dr THEOPHANOUS —Has the Treasurer seen the pretentiously titled `Foundations for Government' speech given by the Leader of the Opposition at the National Press Club today? What effects would these changes in policy have on Australia's economic performance? Mr KEATING —I have seen the speech, and it is a little lalapalooza. Wait until honourable members focus on this little lot to see where the foundation stones for the future will be laid. It is the most hollow, vacuous speech one could ever imagine from a leader of a major party. It was a much-heralded speech which was supposed to tell us where the Liberal Party of Australia was going, set down the principles, lay out the agenda and set the way forward. We find that it is the most empty, rhetoric-filled address one could ever imagine in one's life. For instance, I start with this basic assumption in the speech: With our great natural resources and the ability and diversity of our population, Australia's relative living standards should be increasing-not decreasing. No recognition has been given to the fact that we now have the worst terms of the trade in the world that we have ever had. Opposition members interjecting- Madam SPEAKER —Order! I warn the honourable member for Barker. Mr KEATING —There is no recognition of the fact that the world will not pay for these great natural resources; it does not want them. We are back to the old resources boom rhetoric of the late 1970s-`Dig up another mound of rocks and the world will be our oyster'. Do honourable members remember the days when members of the previous Government were clocking up the number of projects and telling us about our resources? The fact is that now wool prices are down, wheat prices are down, iron ore prices are down, coking coal prices are down and oil prices are down. But the Leader of the Opposition says: `No, we will have an increase in living standards because we have all those resources'. That is the reality of his speech. He goes on to say: The slowdown in economic activity which will intensify as the months go by is a direct result of the needlessly high interest rate policy . . . pursued by the Treasurer. In other words, the current account does not matter. The Opposition is saying: `We will overstress the economy with 5 per cent or 6 per cent economic growth. We will let imports just burst out. We will hock ourselves to the rest of the world to the tune of $1 billion to $1 1/2 billion a month'. Liberal Party policy will not facilitate the fact that we have a major current account problem which was left by the coalition, and a disastrous decline in the pattern of world trade. Basically, the Leader of the Opposition is trapped in the late 1970s, with a project here and a project there and more economic growth and higher living standards-the great nirvana of the resources boom. The Leader of the Opposition then got back onto wages. If ever there was an economic Bourbon who has learned nothing and forgotten nothing on the question of wages, it is the Leader of the Opposition. He even had the indecency to refer to his last Press Club speech where he said that the great challenge and the great fight of the decade would be on the wages front. What do we find that he proposes? He would take us back to the Australian Conciliation and Arbitration Commission, but there would be voluntary agreements concerning work conditions and arrangements, provided there is a minimum hourly rate. In other words, we would have centralised wages with flexibility upwards. We would go back to the wages explosion of the late 1970s. We would be right back where we were in 1983, with massive unemployment and massive inflation. One cannot believe that a modern party facing the realities of this world could produce this drivel. The Leader of the Opposition went on to say that he will not have a shopping list. He said: I do not intend to set out a long shopping list of political goodies . . . those days are gone. The Leader of the Opposition went on to say on page 4 of his speech that he would introduce income splitting. He said that the Opposition would go back to giving tax rebates for child care and tax incentives for employee share acquisition schemes. Then he nominated a savings figure of $4.3 billion, which he said would facilitate all these tax cuts. He went back to the Fraser formula to nominate $4.3 billion, but when questioned at the Press Club on the specifics of the $4.3 billion expenditure cuts, he said: `Don't ask me specific questions, you will get that when the policies dribble out'. What is this so-called foundation stone, the direction forward, the way forward-call it what you like? The Opposition says: `The world will save us again. We will find another mound of rocks to sell to somebody but we do not need to run a decent wages policy. We will go back to the Arbitration Commission with a minimum wage and flexibility upwards by voluntary agreements. We do not need to worry about fiscal policy. We can have a greater freedom of choice for families with regard to tax'. In other words, the Opposition proposes going back to the Howard principle of voluntary taxation of `Pay tax if you feel like it'. The Leader of the Opposition is trapped in a time warp. He is trapped in 1978. With his views on wages, tax, external policy, wherever one looks, this is a man who has learned nothing in the years since 1978 when he was caught in the tax debate when the world had left us behind and when the mineral resources boom blew out. The speech he made today was one he could quite easily have made as Treasurer in 1978. In waiting for something to turn up from the Liberal Party which had some semblance of facing the facts and some semblance of facing reality, we have the greatest load of drivel that I have ever seen from a modern Leader of the Opposition trying to address the fundamentals of the Australian economy. All I can say is that if the Press lets him get away with that, he should wait for the rebound when they read his speech closely and carefully and analyse the facts. What the Leader of the Opposition proposed today is really not a solution to anything, but a whole lot of rhetoric and humbug which is a disgrace to the Parliament and to his own Party. Mr KATTER —My question is addressed to the Minister for Arts, Heritage and Environment. Madam Speaker, with your indulgence, I preface my question very briefly by holding up this small fossil which is 15 million years old. I would be happy to show it to individual members-for a small fee, of course. Madam Speaker, I most certainly will take this fossil around to your office. Will the Minister advise the House of the significance of the Riversleigh fossil site? Will the Minister and the Government consider additional assistance for this world shattering, historic project? Mr COHEN —I thank the honourable member for his question. I am sure we are all aware of his long interest in fossils. Honourable members may be aware that recent Press articles have featured the unique fossil find at the Riversleigh site which is claimed to be under threat from foreign fossil collectors and from lack of Government funding. The site is of major international significance and has been described as one of the most important in the world, if not the most important. What makes the site so different is that the fossils occur in different rocks of different ages. We have recognised this valuable find as an important part of our heritage and we have assisted research accordingly. I have approved funding for $60,000 in National Estate grants and my colleague, the Minister for Science, has approved funding through the Australian research grant scheme which has provided $61,000 this year and will continue provision until 1991. My colleague, the Minister for Defence, has provided helicopters for the transport of fossil material from the field and I have recently written to him seeking more assistance in that area. In relation to the removal of fossils from the site by overseas collectors, I should point out that regardless of how the specimens are obtained, taking them out of Australia is prohibited under the Customs Act and also under the Protection of Movable Cultural Heritage Bill which was passed by this House a week or so ago. I do not think that the nation has yet realised the importance of this site in the electorate of the honourable member for Kennedy. I believe it has been described as the Rosetta Stone of palaeontology and I can assure the House that the Government will continue its interest and give every support that it can to this very important site. Mr CROSS —My question is addressed to the Minister for Primary Industry. Is he aware of recent reports in the media that Mr Warburton, Opposition Leader in Queensland, is critical of both the Queensland and Commonwealth governments for the lack of progress in arriving at a final package of assistance for the Queensland sugar industry? Is the Minister also aware of recent media reports that the Queensland Premier has finally agreed to the latest proposals, but has said that the Commonwealth is holding a gun at his head? What is the state of play between the two governments on price support, farm debt reconstruction and mill adjustment assistance? Mr KERIN —I thank the honourable member for his question. Yes, I am aware of the reports in the newspapers of the comments that Mr Warburton has made. Like everyone else, he has had an absolute gutful of the mental meanderings, procrastinations and abuse of the Premier of Queensland on this topic. I must say that Neville Warburton and the Queensland Labor Party have been most assiduous in putting forward to the Commonwealth Government various plans to try to help this industry and to try to break the road block. I do not have a clue what is in the Queensland Premier's mind at any one particular time or what he will say from one day to the next. A lot of figures are being bandied around and this always confuses people, but the Queensland Premier is not very numerate. Recently he was interviewed and he said that he had eight tractors at home on his different properties and three of them used $1,000 worth of fuel every week. He then went on to say `One thousand dollars for three tractors-that is $6,000 a week'. He is very good. Mr Beddall —He is the Treasurer, too. Mr KERIN —Yes, he is the Treasurer also-well, National Party Treasurer. The trouble is that he uses statistics in a most incredible way. Apparently at one stage he said that the Commonwealth Government was taking $700m in taxes out of an industry worth $800m. Somebody chipped him about that so he upped the ante again and said that we were taking $800m in taxes from that industry. His assistance for the sugar industry has gone up from $10m to $15m to $61m to $81m to $170m. Every time he is interviewed he jumps up the figure. He said that $5,000 goes to Lindeman Island but the figure is only $4,000. He uses statistics as if they were Halley's Comet. The comet is 130 million kilometres away, it is 20 million kilometres across, it is five billion years old and it is pretty hard to see anything tangible. This is a serious matter. Mr Coleman —Are you trying to help Joh? Mr KERIN —God yes, I am trying to help the sugar industry. I defy anyone to help when a bloke like Joh is in charge of the Government up there-unfortunately. The Cabinet took a decision in September 1985 to put $150m up front. That was on the table and it went and that involved the Queensland and New South Wales governments putting in additional money. This much vaunted $240 a tonne would have been possible. The counter offer from Queensland was that, up front, we should put up $174m, it should put up $26m, but then the Queensland Government raced off and claimed it was worth $170m. When one is dealing with figures and the concepts involved in this assistance package one must realise that the problem has been that the Queensland Premier keeps cutting off his Minister at the knees, as I have said before. We then took another Cabinet decision on the basis of a further discussion with the Queensland Minister for Primary Industries which involved $27m being put in by the Queensland Government-an improvement in real money. As long as that was regarded as some form of price support, we were willing to come in with $54m on price support and $46m for adjustment for debt reconstruction and for mills. Opposition members-Shame! Mr KERIN —Opposition members say `Shame' but they should listen to the figures-$150m for 6,000 producers. If one multiplies that by every farmer in Australia it amounts to $4.35 billion. Honourable members opposite cannot tell me that that is ungenerous. That and the rest of the assistance package involved a 75 per cent interest subsidy. Honourable members opposite are crazy. Further discussions I had with the Under Secretary of the Treasury, Mr Hielscher, and the Deputy Secretary of my Department last Thursday centred on the last discussions I had with Mr Turner, the Queensland Minister for Primary Industries, and involved altogether in terms of loans and moneys, a total of $306m, that is, with the Commonwealth putting $100m up front. We do not know the exact figure but the trouble is that Queensland demands that we simply hand the money over. This is not the bushranger government. We have proper Cabinet processes, a Public Accounts Committee and an Expenditure Committee. We have proper accountability. We will not hand over money to Joh to give to his mates so that they can put money into the Bjelke-Petersen fund. That is just nonsense. I have tried to give the House the logic of price support, but we will not be held out to dry by the Queensland Government. The Premier sets the rules and we are prepared to play by them. His logic is that he is not prepared to put money into price support because it will set a precedent. Yet he thinks it is all right for us to set a precedent by putting in so much money for price support, as long as he can then have the privilege forever and a day of kicking us to death because we are not putting in enough. Let us look at the $240 per tonne. Mr McGauran —Come on. Wind up. Mr KERIN —No, I am not going to wind up; it is a good question. Let us look at the $240 per tonne. We are prepared to go in at $230 per tonne, which is $10 a tonne above what the two governments, the millers and the growers agreed to in the Savage Committee report. The 1984 poll gave the industry $234.65 per tonne and we will underpin that industry so that the growers will get only 41c a tonne less for their cane. One cannot say that that is not generous. That is underpinning the industry. Honourable members opposite may remember that when they were in government there were various underwriting schemes and the whole idea of these is to put a base under an industry when there is a collapse on the international markets in order to keep private sector finance and confidence in the industry. There are also mill negotiations going on. Again, we are prepared to be involved in those as long as there is proper consultation. Again, we are not prepared just to hand money across. The honourable member for Leichhardt and the honourable member for Herbert have been most assiduous in getting to me their views on the question of mill amalgamations in the far north. However, I have not heard from the honourable member for Kennedy at all. The problem with mill amalgamations is that even though the plan looks reasonably feasible to me, the Queensland Government has not bothered to have any consultation at all with the growers. That is why that plan is foundering. That is why we need a proper consultative committee if we intend to do anything about mill amalgamation or mill rationalisation. If the Queensland Premier, out of his crazy old spleen, decides to sabotage this plan, all I can say is the Commonwealth will continue to act responsibly and will proceed to do as much as possible for the sugar industry. Mr HOWARD —I ask the Prime Minister: Has there been any communication between his Government or his office and the New South Wales Premier or any part of the New South Wales Government or any adviser to that Government regarding the terms of reference for the judicial inquiry relating to Mr Justice Murphy? Mr HAWKE —As I understand the question to relate to communication between my Government and the Premier of New South Wales or his office about the terms of reference, the answer is no. Mr Howard —No. Or the Government of New South Wales or any adviser to the Government of New South Wales. Mr HAWKE —Not to my knowledge. Mr LANGMORE —My question, which I address to the Minister for Local Government and Administrative Services, relates to the article in yesterday's Canberra Times about the Cameron offices. I ask the Minister: Is the report that there are 177 water leakages in the offices correct? Are these leakages jeopardising the personal safety of occupants, as one expert commented? What plans has the Minister's Department made for stopping the leaks and for preventing further structural damage to the offices? How much will this repair work cost? Who is responsible for this costly failure and does the Government have any redress for the damage that has resulted from apparently poor design? Mr UREN —The Department of Housing and Construction has advised that there are 177 water leaks in the Cameron building. Regrettably, the building leaks like a sieve and I have no doubt that the publishers John Fairfax and Sons Ltd will take note of that comment. As regards to the blame, a number of governments have been involved. Certainly, planning and construction was commenced under the Gorton Government and then under the McMahon Government. The building was under construction during the time of the Whitlam Government and was completed under the Fraser Government. So the building has a long history. There has been evidence that the water has come into contact with electrical equipment in the building. The Department of Housing and Construction has investigated the matter and action has been taken to remove any elements of risk. My Department was concerned about the situation and, as a result, it commissioned the Department of Housing and Construction to report on the remedial action that should be implemented to overcome the present water leakage problem. As a result, the National Capital Development Commission, in consultation with the Department of Housing and Construction, has sponsored a three-year program of remedial works that will include rectifying the structural damage. Funds have been made available and work will commence early in the next financial year. The present estimated cost of the works is $8.92m. I cannot identify at present the origin of the water leaks and the structural problem in the Cameron offices. However, my Department has been seeking the advice of both the Department of Housing and Construction and the National Capital Development Commission to overcome these problems. Mr HAWKER —Can the Prime Minister inform the House as to what steps his Government is taking to make absolutely certain that no foodstuffs, particularly dairy products, can be imported into Australia which could be contaminated by radioactive fallout from the Chernobyl nuclear power plant disaster? Mr HAWKE —All I can say, in answer to the honourable member's question, is that I have not had brought to my attention that there is a problem or a potential problem in this matter. I recognise the seriousness of the question. I will refer it to the relevant Minister and department. If there is anything I can convey to the honourable member, I will. Mr FREE —Arising out of the previous question, I would like to put a question to the Minister representing the Minister for Resources and Energy. Is the Minister in a position to provide further information about the Chernobyl nuclear reactor accident, apart from the material available in the media? When might we expect a comprehensive release of detailed information about radiation and fallout? Is the fallout spreading throughout Europe likely to have any impact in the Southern Hemisphere? Mr BARRY JONES —The quality of information so far is extremely poor. We are essentially dependent on information from the Union of Soviet Socialist Republics and very little has been provided officially. Much of the media reporting is incapable of being checked and it may be some years before the precise situation is clarified. The Soviet Deputy Prime Minister has now admitted that the local experts did not make a correct assessment of the accident and that its scope was underestimated at first. While the evacuation itself was reported to have taken only three hours, it was 36 hours before evacuation of the 40,000 people in the 30-kilometre zone around the plant commenced. Admitted deaths remain at two, not due to radiation but 204 people are reported to have been hospitalised suffering from radiation exposure. Specialised treatment is said to have been given to 100 in Moscow, 18 having received heavy radiation doses. The Russian authorities are continuing to say that the accident originated with a chemical explosion and fire in an engine room. In a recent Press release, the accident was said to have occurred during a planned shutdown while the reactor was operating at less than 10 per cent of capacity. It may be many years before we know the full situation. I draw the House's attention to the last major nuclear accident in the USSR of which we are fully aware, and that was the accident in the city of Kyshtym in the Central Urals, about 1,400 kilometres due east of Moscow. It is impossible to be certain what precisely caused the nuclear catastrophe but it was probably cause by the faulty handling of radioactive waste. That was at the end of 1957 or the beginning of 1958. After nearly 30 years we still do not know the full impact of it except for the fact that a number of villages in the area were evacuated, the top soil was bulldozed over and the area was fenced off and declared out of bounds. We note from scientific studies that there was a significant impact on the ecology of the area-that soil, plants, animals and birds were all affected. There appears to have been massive loss of life: The figure has been quoted at around 10,000 and possibly more. But it is impossible to confirm, except by making a demographic comparison of censuses before and after the accident which suggests very heavy loss of life. The honourable member asked whether the accident was likely to have any impact on the Southern Hemisphere. At this stage there is no evidence to suggest that the plume of radioactivity from the accident has reached the upper atmosphere. The spread of radioactivity appears to be confined to surface wind systems and it would be 12 to 18 months before any significant movement of contamination from the accident crossed the equatorial belt. Honourable members will be aware that the wind systems in the Northern Hemisphere and the Southern Hemisphere are largely separate: Not much weather passes through the equatorial belt. In the meantime, the radioactive contamination will be reduced by natural decay and washout and it is not expected that readily detectable levels will reach Australia. I should perhaps conclude by mentioning that the Director-General of the International Atomic Energy Agency, Dr Hans Blix, is now in Moscow having direct consul- tation with Soviet authorities on the Chernobyl accident. The Australian Government has asked him to provide information on a number of detailed matters. I hope that in the course of the next sitting period we will be able to provide more specific information. Mr HAWKE —Madam Speaker, given the importance of the question asked by the honourable member for Wannon, I briefly seek your indulgence to provide information which has just been given to me by my colleague the Minister for Health. This information indicates that last week, as a precautionary measure, the Department of Health asked the Australian Customs Service to hold all food consignments which left the potentially affected countries on or after 25 April. The Food Importers Association has been advised of this action. Following assurances received from one country, Denmark, the Department has telexed Customs to remove Denmark from the list of potentially affected countries. Further clarification of the nature and extent of the potential effect of food imports is being sought from the Federal Department of Trade and the governments of the countries concerned, through Australian missions overseas. Should it prove necessary, the Department will establish a mechanism for monitoring these particular food imports with the Customs Service, the Australian Government Analyst and the Australian Radiation Laboratory. As the Department gets further information, those controls will be adjusted if necessary. Madam SPEAKER —On 18 March 1986, I reported to the House certain matters relating to the provision of smallwares for the new Parliament House. I advise the House that the Joint Standing Committee on the New Parliament House, at its meeting of 21 February 1986, decided on an open tendering system, conforming to Government purchasing policy in relation to the procurement of smallwares. The Department of Local Government and Administrative Services has been providing advice on appropriate tender procedures and has made an officer available to assist with the acquisition. I am pleased now to advise the House that the Joint House Department will, as the first stage of the tendering process, be advertising in the national Press on 10 and 17 May 1986 and in the June issue catering magazines seeking expressions of interest from prospective suppliers of smallwares. The evaluation of responses will enable the determination of a short list of prospective suppliers for tender purposes. Madam SPEAKER —I am pleased to advise the House that the Australia Act proclamation signed by Her Majesty Queen Elizabeth II on Sunday, 2 March 1986 and the pen used during the ceremony will be placed on permanent display in King's Hall. The signing of the proclamation of the Australia Act reflected Australia's status as an independent and sovereign nation and was an historic occasion. Display of the document and pen in King's Hall will complement the display of the table, document and pen associated with Her Majesty Queen Victoria's assent to the Australian Commonwealth Bill in 1901, which is already on display in King's Hall. The Prime Minister has proposed to the President and me that a display of important constitutional documents be mounted in the new Parliament House in the Bicentenary year. We have responded to the Prime Minister supporting that proposal. Mr PETER FISHER(Mallee) —Madam Speaker, I seek your indulgence to raise a point of clarification concerning the practices of the House. Last Thursday evening guests of mine, two young athletes from the Australian Institute of Sport, dressed in uniforms consisting of jumpers, but without jackets, were quite correctly, under the understood rules of this House, asked to leave the Speaker's Gallery. You will be aware that this morning three members of this Parliament were dressed in jumpers without jackets. Madam Speaker, can you clarify what the rules of dress are for members and for guests in the Speaker's Gallery and whether these standards differ? Madam SPEAKER —I reply to the honour- able member by saying that I have had a couple of approaches made to me concerning the dress. I would prefer, if the honourable member does not mind, to take that matter on board and to report back to him later. Mr GRIFFITHS(Maribyrnong) —Madam Speaker, I seek leave of the House both to table and to have incorporated in Hansard a document providing a list of the names of members and senators who were signatories to a petition presented to and rejected by the Embassy of the Government of the Union of Soviet Socialist Republics. Further, I seek leave to allow those members who may not have had the opportunity of signing the petition to have their names associated with it. I also seek leave to make a short statement. Madam SPEAKER —I will take them one at a time. Is leave granted for the tabling and the incorporation of the document in Hansard? There being no objection, leave is granted. The document read as follows-- We, the undersigned Parliamentary representatives of the Australian people, call on the Government of the Union of Soviet Socialist Republics to permit the Jewish Community within the U.S.S.R. freedom to practice their religion free of persecution and discrimination, and freedom to be reunited with their families and People in Israel. SENATORS Terry Aulich, Tas., ALP Michael Baume, NSW, LP The Hon. Peter Baume, NSW, LP John Black, Qld, ALP David Brownhill, NSW, NPA The Hon. John Button (Leader of the Government in the Senate & Minister for Industry, Technology & Commerce), Vic, ALP The Hon. Sir John Carrick, KCMG, NSW, LP The Hon. Frederick Chaney (Leader of the Opposition in the Senate), WA, LP The Hon. Donald Chipp (Leader of the Australian Democrats), Vic, AD Stanley Collard (Leader of the National Party of Australia in the Senate), Qld, NPA Noel Crichton-Browne, WA, LP The Hon. Dame Margaret Guilfoyle, Vic, LP The Hon. Don Grimes, Minister for Community Services, Tas., ALP Janine Haines, SA, AD David Hamer, DSC (Deputy President & Chairman of Committees), Vic, LP Robert Hill, SA, LP Bernard Kilgariff (Opposition Whip), NT, LP James McKiernan, WA, ALP Michael Macklin, Qld, AD Colin Mason, NSW, AD Tony Messner, SA, LP John Morris, NSW, ALP Warwick Parer, Qld, LP Christopher Puplick, NSW, LP Robert Ray, Vic, ALP Margaret Reid, ACT, LP Edward Robertson, NT, ALP Norman Sanders, Tas, AD James Short, Vic, LP Kerry Sibraa, NSW, ALP John Siddons, Vic, AD Baden Teague, SA, LP Josephine Vallentine, WA, Ind Amanda Vanstone, SA, LP David Vigor, SA, AD Shirley Walters, Tas, LP John Watson, Tas, LP MEMBERS, HOUSE OF REPRESENTATIVES Kenneth Aldred, Vic, LP John Andrew, SA, LP Peter Baldwin, NSW, ALP Gordon Bilney, SA, ALP Cecil Blanchard, WA, ALP Charles Blunt, NSW, NP The Hon. Lionel Bowen, Deputy Prime Minister (Attorney-General), NSW, ALP Raymond Braithwaite, Qld, NP The Hon. Neil Brown, QC, Deputy Leader of the Opposition, Vic, LP John Brumby, Vic, ALP Maxwell Burr, Tas, LP Alan Cadman, NSW, LP Donald Cameron, Qld, LP Ian Cameron, Qld, NP Graeme Campbell, WA, ALP The Hon. James Carlton, NSW, LP David Charles, Vic, ALP Dr Richard Charlesworth, WA, ALP Robert Chynoweth, Vic, ALP Peter Cleeland, Vic, ALP Michael Cobb, NSW, NP The Hon. Barry Cohen, Minister for Arts, Heritage and Environment, NSW, ALP Peter Coleman, NSW, LP Bruce Cowan, NSW, NP The Hon. James Dobie, NSW, LP Alexander Downer, SA, LP The Hon. Peter Duncan, SA, ALP Dr Harry Edwards, NSW, LP Ronald Edwards, WA, ALP The Hon. Paul Everingham, NT, LP The Hon. Wallace Fife, NSW, LP Timothy Fischer, NSW, NP Eric Fitzgibbon, NSW, ALP Edward Grace, NSW, ALP Alan Griffiths, Vic, ALP Noel Hicks, NSW, NP The Hon. Michael Hodgman, QC, Tas, LP The Hon. Clyde Holding, Minister for Aboriginal Affairs, Vic, ALP Colin Hollis, NSW, ALP Benjamin Humphreys, Qld, ALP The Hon. Ralph Hunt, Deputy Leader of the National Party, NSW, NP Ralph Jacobi, SA, ALP David Jull, Qld, LP Roslyn Kelly, ACT, ALP Leonard Keogh, Qld, ALP Anthony Lamb, Vic, ALP John Langmore, ACT, ALP Michael Lee, NSW, ALP Bruce Lloyd, Vic, NP Jeannette McHugh, NSW, ALP The Hon. Michael MacKellar, NSW, LP The Hon. Thomas McVeigh, Qld, NP The Hon. Ian Macphee, Vic, LP Michael Maher, NSW, ALP Stephen Martin, NSW, ALP Helen Mayer, Vic, ALP John Mildren, Vic, ALP Chris Miles, Tas, LP Clarence Millar, Qld, NP Allan Morris, NSW, ALP Lloyd O'Neil, SA, ALP The Hon. Andrew Peacock, Vic, LP James Porter, SA, LP Roger Price, NSW, ALP Gary Punch, NSW, ALP The Hon. Ian Robinson, NSW, NP Allan Rocher, WA, LP Philip Ruddock, NSW, LP John Scott, SA, ALP Peter Shack, WA, LP Roger Shipton, Vic, LP David Simmons, NSW, ALP The Rt. Hon. Ian Sinclair, Leader of the National Party, NSW, NP Peter Slipper, Qld, NP James Snow, NSW, ALP John Spender, NSW, LP Peter Staples, Vic, ALP Kathryn Sullivan, Qld, LP Robert Tickner, NSW, ALP David Watson, Qld, LP Alasdair Webster, NSW, LP Peter White, MC, Qld, LP Keith Wright, Qld, ALP Madam SPEAKER —Are you also seeking leave to make a short statement? Mr GRIFFITHS —Madam Speaker, I also seek leave to allow those honourable members who have not had an opportunity to sign the petition to have the opportunity of associating their names with it now. Madam SPEAKER —You do not need leave to do that. Any member who wants to sign the petition obviously can sign it after it has been tabled if he so desires. Is leave granted for the honourable member to make a short statement? There being no objection, leave is granted. Mr GRIFFITHS —On Monday, 5 May I attended the Embassy of the Union of Soviet Socialist Republic in Canberra with two Senate colleagues, Senator Macklin and Senator Hill. We attempted at that meeting to present to the Soviet Ambassador a petition signed by more than half the members of the House of Representatives and a very large number of senators protesting about the treatment of Soviet Jewry. I will articulate briefly the wording of the petition. It states: We, the undersigned Parliamentary representatives of the Australian people, call on the Government of the Union of Soviet Socialist Republics to permit the Jewish Community within the U.S.S.R. freedom to practice their religion free of persecution and discrimination, and freedom to be reunited with their families and People in Israel. I know I have the leave of the House, so I will keep my comments very short and will not attempt in any substantive way to go into the issues. However, I want to make the following points: Currently, there are some 1.8 million Jews in Russia. That figure was provided by the Soviet Census Bureau. There have been consistent reports of human rights violations against Jews, notwithstanding their Government's commitment, or alleged commitment, to international human rights conventions to which the USSR is a signatory, together with guarantees under the Soviet Constitution and various pieces of legislation. In our discussion with officers of the Embassy we indicated that there were some 400,000 Jews currently seeking to be reunited with family members in the state of Israel. The response we had from the Embassy was that that constituted `lies'. When the officer of the Embassy was asked to indicate how many people were seeking to go to Israel from Russia, he indicated that he did not know those figures. There are no Jewish schools in the Soviet Union, nor are Jewish organisations permitted. There are no books in the Hebrew language and there are virtually no books published on Jewish history, culture and so on. I conclude on that point. I thank the House for making leave available. I commend to those honourable members who have not associated their names with the petition that they take the opportunity of doing so. Dr KLUGMAN(Prospect) —I seek leave to make a very short statement as to why I and, for all I know, other members of Parliament-I can only speak for myself-refused to sign the statement. Leave granted. Dr KLUGMAN —The reason for my not signing the statement was mainly the last part of the statement, which said: . . . freedom to be reunited with their families and People in Israel. I do not think that is relevant or appropriate. I think that, if people want to leave the Soviet Union, or any other country, they ought to be entitled to leave. Such a petition should not depend on their going to a particular country. My views on the Soviet Union are fairly well known. I feel strongly that there is an implication that only certain people should be entitled to leave the Soviet Union to go to a particular country. It is my view that anybody ought to be able to leave the Soviet Union to go to any country which is prepared to accept them. Mr HOLDING(Melbourne Ports-Minister for Aboriginal Affairs) —Pursuant to section 31 of the Australian Institute of Aboriginal Studies Act 1964, I present the Australian Institute of Aboriginal Studies annual report for 1984-85. Mr HODGMAN(Denison) —Madam Speaker, I seek leave to make a personal explanation. Madam SPEAKER —Does the honourable member claim to have been misrepresented? Mr HODGMAN —I do. Madam SPEAKER —Please proceed. Mr HODGMAN —In the Senate on 5 May, Hansard, page 2328, the frenetic Minister for Finance, Senator Walsh, claimed that I had asserted that there would be 80,000 jobs lost in the restaurant industry as the result of the fringe benefits tax. Senator Walsh's claim is false. The truth is that I said that the abolition of entertainment expenses would cost the Australian restaurant industry at least 10,000 jobs-not 80,000-in 1985-86. I seek leave to table my Press statement of 7 October 1985 to prove that point. Leave granted. Mr HODGMAN —The reference to 80,000 jobs was a reference to the total loss of employment under the Hawke-Keating tax package across Australia. That figure has now been reviewed upwards to 92,500 jobs- Madam SPEAKER —Order! The honourable member has made his personal explanation. He will now resume his seat. Mr HODGMAN —There is only one more sentence. That figure has now been reviewed upwards to 92,500 jobs which will be lost throughout Australia as a result of the Hawke-Keating tax package. Mr HALVERSON(Casey) —Madam Speaker, I seek leave to make a personal explanation. Madam SPEAKER —Does the honourable member claim to have been misrepresented? Mr HALVERSON —I do. Madam SPEAKER —Please proceed. Mr HALVERSON —Last night in this place the honourable member for Streeton (Mr Lamb) gravely misrepresented me by accusing me of writing a letter as part of what he claimed to be a scare campaign, a deliberately deceitful campaign bearing little resemblance to the facts of the situation. He accused me of misrepresen- tation, selective quoting and making misleading statements. All of the scurrilous, mischievous and emotive allegations made by the honourable member for Streeton are completely false. The issues raised in the letter referred to-- Mr DEPUTY SPEAKER(Mr Leo McLeay) —Could the honourable member show where he has been misrepresented? Madam Speaker has explained quite clearly that honourable members must say where they were misrepresented, and not then proceed to attack somebody else. Mr HALVERSON —I was misrepresented in this place last night. Mr DEPUTY SPEAKER —The honourable member was making an attack on another member under the guise of a-- Mr HALVERSON —I am about to amplify my comments. Mr DEPUTY SPEAKER —You may proceed. Mr HALVERSON —The issues raised in the letter referred to by the honourable member for Streeton are confirmed in writing by the Minister for Health (Dr Blewett) in a letter to the honourable member for Moreton (Mr Donald Cameron), in which he stated that a recommendation by the Industries Assistance Commission that pensioners be charged for prescriptions was contained in a draft report which has since been the subject of public hearings by the Industries Assistance Commission in Sydney and Melbourne, and that the final report by the IAC is expected to be released shortly. Mr Cunningham —Mr Deputy Speaker, on a point of order: I ask you to rule that this is not a personal explanation. He is debating the issue that was put before the Parliament. Mr DEPUTY SPEAKER —The honourable member for McMillan is not assisting the Chair. The honourable member for Casey has been asked to come to the point where he was misrepresented. I think he has said that he has correspondence from the Minister which showed it. I ask him to bring his explanation to a conclusion. Mr HALVERSON —I am at that point, Mr Deputy Speaker. The report is expected to be released shortly. The Government will then consider the report before deciding on what action it will take. The Minister's letter shows quite clearly that the recommendation referred to in my letter was made by the IAC and will be considered by the Government. Mr DONALD CAMERON(Moreton) —Mr Deputy Speaker, I rise on a matter of misrepresentation of me in the Senate. It follows-- Mr DEPUTY SPEAKER —Does the honourable member claim to have been misrepresented? Mr DONALD CAMERON —Grievously so, in the Senate by that same frenetic Minister, Senator Walsh. The Brisbane Courier-Mail on Tuesday reported me as saying that the Government's new fringe benefits tax would cause a charity with which I am closely associated to be up for a penalty of $1,500. Yesterday, in the Senate, Senator Walsh said: . . . there is no way that a fringe benefits tax of anything like $1,500 would be applied to the vehicle in question. I say that I am absolutely right. Later on, during the debate on the fringe benefits tax legislation, I will elucidate further. Mr DEPUTY SPEAKER —Order! The honourable member has made his explanation. Mr PETER MORRIS(Shortland-Minister for Transport) —In accordance with section 10 of the Inter-State Commission Act, I present the Commission's report into Cost Recovery Arrangements for Interstate Land Transport. I seek leave to make a short statement in connection with the report. Leave granted. Mr PETER MORRIS —This comprehensive and well prepared report represents a further major step by this Government in the implementation of the first truly cohesive national approach to Australian transport. For far too long transport policies and practices have been fragmented. Australia can no longer afford that fragmentation and we have shown we are prepared to develop and implement the steps necessary to improve the efficiency of Australian transport. Shortly after coming to government we acted to re-establish the Inter-State Commission, a body created by the Australian Constitution but dormant for virtually all of Australia's history. It was appropriate that the first national reference I gave to the Inter-State Commission was to address cost recovery in land transport. In undertaking this inquiry the Commission was asked to build on a number of initiatives taken by the Government including: The national road freight industry inquiry, which produced the May report, and the interstate road transport legislation that flowed from the recommendations of that report; the introduction of the Australian land transport program which meant that all Federal road programs were funded through a set share of fuel excise. The Inter-State Commission was asked to attempt a task that would tax the wisdom of Solomon-to establish the relative cost recovery levels of interstate road and rail passenger and freight operations. Using that assessment, the Commission was then asked to recommend appropriate charges to apply under the interstate road transport legislation. In examining these issues, the Commission had to address in great detail the whole area of costs and charges applicable to both road and rail operations, their economics and legal constraints and obligations. This is consistent with the Government's even-handed approach to rail and road. We recognise the need to place both forms of transport on an equal, competitive footing. The Inter-State Commission found that long distance interstate road hauliers perform 30 per cent of total road tonne kilometres, that 13 per cent of road employment is in interstate operations and 10,000 vehicles are exclusively engaged in interstate operations. The ISC also found that Government rail systems carried some seven million tonnes, performing over 11,000 million tonne-kilometres and carried 700,000 passengers in their interstate operations. I might add that for the information of the House the relative shares of interstate freight, as shown by the Australian Bureau of Statistics for 1983-84, are that road transport carried 16.2 per cent of total interstate freight and rail carried 15.8 per cent. Further, the ISC found that interstate rail and road freight and passenger operations fail to cover all costs. Revenue from interstate road freight operations ranges from about 70 per cent to 94 per cent of costs but interstate rail freight recovers only 66 per cent of its fully distributed costs. The cost recovery level for rail passenger operations is even lower at 37 per cent. Whichever method the Inter-State Commission used, it found the cost recovery figures for our inter-state railways were well below the result for road, although the figures for Westrail and Australian National on their interstate operations are encouraging, the former in fact covering its fully distributed costs. I am pleased to note on the positive side, that the Inter-State Commission did acknowledge that the railways have recently made considerable progress in developing a far more commercial approach. In this regard, the Federal Government's revitalisation of Australian National to make it more commercial and the formation of the National Freight Group to market rail freight services on a national basis were seen by the Commission as positive measures. The Commission experienced considerable difficulty in arriving at a single reliable figure for road cost recovery, and has recommended further research in this area. However, taking these factors into account, the Commission has nevertheless recommended an interstate road transport charging framework which should be administratively simple, but which also maintains that the equity between rail and road which I mentioned earlier is a fundamental principle of our approach to cost recovery. (Quorum formed) It is interesting to note that this morning the Leader of the National Party (Mr Sinclair) was complaining of inadequate time to debate issues and here we have the Opposition Whip wasting time on quorums. The House will recall that the Interstate Road Transport Acts, passed by the Parliament last year, for the first time provide a new system of registration charges for interstate trucks which to date have been able to avoid such charges by the States due to section 92 of the Constitution. The charges anticipated by the May report were on a sliding scale for trucks to a maximum of $1,400 per year for the largest 38-tonne rig. The charges assessed by the Commission are substantially lower than those seen as being appropriate by the May report. I seek leave to incorporate in Hansard a table of the recommended charges. Leave granted. The document read as follows- Class of vehicle Registration charge Annual imputed distance Charge per km $ (km)(a) (cents)(b) 1. Motor cars, utility trucks, panel vans, station wagons, small two-axle rigid trucks, buses up to a GVM of 4 tonnes (that is, the unladen mass plus the maximum legal carrying capacity)... 75 16 000 0.47 2. All trailers, howsoever described... 75 119 000 0.06 3. Rigid vehicles, two axles, of a GVM of more than 4 tonnes... 150 31 000 0.48 4. Rigid vehicles, three or more axles... 350 52 000 0.67 5. Prime movers, two axles, licensed to haul one trailer... 350 86 000 0.41 6. Prime movers, three or more axles, licensed to haul one trailer... 600 128 000 0.47 7. Prime movers licensed to haul more than one trailer and up to four trailers: 2 trailers... 700 147 000 0.48 3 trailers... 800 147 000 0.54 4 trailers... 900 147 000 0.61 8. Buses, two axles, over 4 tonnes GVM... 200 175 000 0.11 9. Buses, three axles... 400 350 000 0.11 (a) Figures rounded to nearest thousand kilometres. (b) Figures rounded to two decimal places. Source: Compiled by the Inter-State Commission. Mr PETER MORRIS —Under these charges the typical 38-tonne interstate rig would pay an annual charge of $675-less than half the figure envisaged by May. As noted by the Commission's report, its recommendations are a first step and further investigations will be required. The Inter-State Commission has extensively assessed the Federal registration scheme and its legislative base against section 92 of the Constitution. It is of the view that `the level of charges recommended in this report do not infringe section 92'. The Commission's recommendations also have implications for the Government's fast track package. It is appropriate that I reiterate the contents of that package. For the Federal Government it involved the introduction of the Federal registration scheme, the proceeds of which would be returned to the States for interstate highway maintenance, and the establishment of the Australian Road Transport Advisory Committee. For the States it involved: Removal of out-of-State fees; improved consumer protection arrangements for the road transport industry; progress towards removal of speed limit differentials between heavy and other vehicles; the introduction of graduated driver licensing; and achieving improved cost recovery by railways in their interstate operation. It was agreed by the Australian Transport Advisory Council that these measures would be implemented as a package and a target date of 1 July was identified for implementation. It was also agreed that progress would be monitored in the period leading up to 1 July and I made it clear to my State colleagues that if they had not achieved substantial progress I would not be proceeding to bring into operation the Federal registration scheme. The Federal Government has ready for implementation its registration scheme and has established ARTAC. On the other hand, except for New South Wales, there is no expectation that the States will have achieved substantial progress in respect to the measures within their control by 1 July. Accordingly, I have advised my State colleagues that it is not appropriate for the Federal registration scheme to come into effect on 1 July. As a number of the States must make legislative changes to achieve progress on the steps within their responsibility, I have proposed that we agree on a revised implementation date of 1 January 1987. I have also advised the States of what I will accept as substantial progress by that date. With respect to speed limits, a number of States have expressed some concern at moving immediately to 100 kilometres per hour for trucks and buses. Consequently, I have proposed a staged approach involving a speed limit of at least 90 kph being introduced by 1 January 1987 with the impact of this higher speed limit to be monitored by the Federal Office of Road Safety for 12 months. Extension to 100 kph would be considered in the light of those results. All States are to have graduated driver licences in place by 1 January 1987. Under this scheme progression through the range of heavy vehicles will only be permitted having regard to age, training and experience. The relative cost recovery performance of road and rail transport is one of the fundamental issues considered by the ISC in this inquiry. I note that the Commission advised it `was able to obtain an insight into management and accounting methods which it believes went beyond any previous co-ordinated study'. As this inquiry is the first ever of its kind the ISC's assessment of railway's financial performance now establishes a clearly independent benchmark against which future progress can be measured. In this regard the Commission noted `the railway systems stress that their level of cost recovery and commercial competitiveness in relation to interstate freight operations is improving markedly, and further progress is expected'. I will be pursuing with relevant States the need to maintain this progress and expect that the Inter-State Commission will conduct similar inquiries in the future to provide an independent assessment of how successful that progress has been. The level of registration charges for trucks would be adjusted in accordance with that assessment. With respect to consumer protection the recommendations of the May report have been substantially implemented by the amendments to the Federal Trade Practices Act which should be in operation before 1 January 1987. Only New South Wales and Victoria apply out of State fees and both States are committed to removing these fees by 1 January 1987. In arriving at this package I have taken careful account of the views of the Australian Road Transport Advisory Committee and I would note that the package I have described above is in accordance with the recommendations made to me by ARTAC. The implementation of the fast track package has been difficult and I am sure the road transport industry shares my disappointment in the delay that has occurred in regard to the implementation of this package of May report recommendations. In accordance with the commitments I have always maintained to the road transport industry I could not in these circumstances consider implementing the Federal registration scheme on the original target date of 1 July 1986. (Quorum formed) There is important legislation before this House. There are two members of the Liberal Party of Australia to participate in the debate. Quite clearly the members of the Opposition have no response to the legislation before the House. They do not want to debate it. They continue to waste the time of this House by calling quorums. It does the honourable member for Wakefield (Mr Andrew) little credit to participate in this time wasting exercise. Mr Andrew —Mr Deputy Speaker, I raise a point of order. I do not consider that I acted in any way improperly by calling a quorum. Mr DEPUTY SPEAKER(Mr Leo McLeay) —Order! There is no point of order. Mr PETER MORRIS —This delay does however mean that this landmark report by the Inter-State Commission can be taken fully into account in determining the details of the arrangements, notably the level of Federal registration charges. Now that the report has been tabled I will be discussing it with my State colleagues at the next meeting of the Australian Transport Advisory Council to be held in Alice Springs on 27 June. Consistent with the Government's established practice of full consultation with all interested parties before decisions are made I will also be discussing the ISC report with industry. I would also be pleased to receive comments from individuals on the report and its implications for the road transport industry. To fit in with the timetable, such comments should be provided by 31 July this year. Regulations for the implementation of the fast track package will not be introduced until this consultative process can be completed. Mr Deputy Speaker, the Inter-State Commission report on rail and road cost recovery is a professional and thorough document. It complements the work of the May inquiry into inter-state road transport and provides essential findings for the implementation of the `fast track' package. I commend the report to the House. Mr LLOYD(Murray) —by leave-I begin by commending the Minister for Transport (Mr Peter Morris) for his presentation of this report to Parliament and for doing so in an expeditious manner and his courtesy in providing me with a copy of his speech and the report. I must confess I have not read the full report. I also commend the members of this Inter-State Commission for presenting the report within the original time scale. It is a massive report, hence my comment that I have not read it in the two hours I have had access to it. It obviously provides a very valuable data and resource base for rail and road freight. However, I am puzzled and continue to be puzzled why the Bureau of Transport Economics is not a suitable organisation to conduct this sort of inquiry without the need for the Inter-State Commission. The report vindicates the position taken by the Opposition when the interstate road transport legislation was debated in Parliament in the spring session last year. At that time, speaking on behalf of the Opposition, I was critical of government haste to pass the legislation. This was for two particular reasons: First, that the Inter-State Commission did have the responsibility to inquire and report by the end of April. There was a feeling that such an investigation would produce something significant which would require alteration to original concepts. That indeed has occurred. Secondly, I had contacted the States and they were in no great hurry to pass the necessary complementary legislation. After all, the legislation is supposed to be for their benefit more than at the Commonwealth level. That is also indicated in the Minister's comments. Of all the States in Australia New South Wales is the only State to even introduce the legislation, and it did so in the dying hours of the session in the New South Wales Parliament last week. The States were very much aware that they should introduce complementary legislation before 1 July this year. During the debate in this House we proposed to withdraw and redraft the legislation, for the Government to consult with the industry more and reintroduce the legislation after the report of the Inter-State Commission. The Senate would refer it to a committee to allow better exposure to industry argument and also, of course, allow more time. The failure of the Australian Democrats to support this position caused the Bill to be passed at that time. This report very much confirms the logic of our argument at that time. We also called on the Government to look again at the inclusion of the second part of the legislation; that is, those aspects beyond what the Minister calls the fast track package or section which covers the more regulatory and mandatory positions of safety operator, licensing and monitoring devices. The road transport organisations and operators will be relieved and pleased to hear that the Inter-State Commission because of its finding of only 66 per cent cost recovery for rail freight has recommended the reduction in the cost of the 38 tonne maximum weight rig for registration purposes to under half the original of $1,400 down to $675. The 66 per cent recovery reveals the terrible state of some of our State railways. It also vindicates the view of some road transport organisation officials who were confident that the inquiry would recommend a reduction rather than an increase in the registration fee. The Government now has a renewed opportunity to sell the proposal to the road freight transport organisations and people of Australia because the industry has turned against the proposal since that legislation passed through this House. The industry has done so because of a fear of the cost; that is, that there will be no quid pro quo in freight charges from the railways in relation to the $1,400 additional cost that many operators would have to face. The Minister now has the opportunity to say that is not so, in the short term at least, and can go out and argue on that basis. There was also the fear that it really was the sly start of reintroducing road tax again to this nation based on the distance registration alternative. There was also fear and concern over new bureaucracies checking every movement of truck operators through licensing arrangements and monitoring devices; in other words, setting up a big brother establishment. Because the States are the main beneficiaries of this type of legislation, they have a responsibility to indicate to the road freight organisations and operators what their agendas are on these aspects of monitoring devices and licensing, et cetera; they will really implement these provisions. If they believe in these aspects they have the responsibility to go out and sell them to those organisations and operators. I was interested to hear the progress on some of the other aspects of the Minister's fast track package. I acknowledge the progress he has made in moving to a 90 kilometre per hour uniform speed limit for trucks around Australia. I will watch with interest, along with the Minister and others, just how that works out and also note some other progress that he has made in obtaining greater uniformity. January 1 is now the new date set by the Minister. Time will tell whether that can be met, but it certainly is a more realistic date than 1 July. I note that the Minister has again stated that he will not implement his registration arrangements until there is substantial State compliance and more industry consultation. Both I and the industry will be watching that procedure. I commend the action of the Minister in recognising his parliamentary and public accountability responsibility in regard to this report. The Clerk —Petitions have been lodged for presentation as follows and copies will be referred to the appropriate Ministers: To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The petition of the undersigned citizens of Australia respectfully sheweth that persistent rumour suggest that the Hawke Government intends to reduce Government expenditure by contracting or eliminating programs for war veterans and war widows. Your petitioners humbly pray that the Hawke Government honour its commitment and that of previous Governments to ex-servicemen and women by: Ensure no additional cut-backs will be made to the portfolio of Veterans' Affairs. Review the previous cut-backs in such areas as the travel allowances, dental scheme and repatriation pharmaceutical benefits scheme. Proceed with abolishing more stringent conditions applying to the granting of the TPI pension. by Mr Halverson. To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The humble petition of the undersigned citizens of Richmond electorate respectfully showeth that: Persistent rumour suggest that the Hawke Government intends to reduce Government expenditure by contracting or eliminating programs for war veterans and war widows. Your petitioners humbly pray that the House of Representatives, in Parliament assembled, urge the Government to: Honour its commitment and that of previous Governments to ex-servicemen and women by: Ensuring no additional cut-backs will be made to the portfolio of Veterans' Affairs. Reviewing the previous cut-backs in such areas as the travel allowances, dental scheme and repatriation pharmaceutical benefits scheme. Proceed with abolishing more stringent conditions applying to the granting of the TPI pension. And your petitioners, as in duty bound, will ever pray. by Mr Blunt. To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The humble petition of the undersigned citizens of Australia sheweth 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 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 be changed only with the approval of the Nation as expressed in a Referendum''. And your petitioners, as in duty bound, will ever pray. by Mr Ewen Cameron and Mr Shipton. To the Honourable the Speaker and Members of the House of Representatives assembled in Parliament. The petition of certain citizens of Australia draws to the attention of the House of Representatives their concern at any change to the Australian Flag without first holding a Referendum to assess the opinion of the citizens of Australia. Your petitioners therefore pray that no changes be made to the Australian Flag without reference to the citizens of Australia in the form of a Referendum. by Dr Harry Edwards. To the Honourable the Speaker and the 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 Ms McHugh and Mr Tickner. To the Right 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: 1. We are completely satisfied with the design of the existing Australian national flag. 2. We are aware it properly reflects the immutable characteristics of Australia, namely: The Union Jack-itself the creation of 3 Christian crosses-represents the nation's historical origin, and the source of its language and law. The Southern Cross on an azure blue background signifying its place in space. The large star depicting the advent of Feder- ation in 1901. 3. We know the flag has been a source of inspiration to generations of Australians in peace and war. 4. We recall that millions of native-born Australians and newcomers to these shores from other parts of the world have become united under its proud symbolism. 5. We are certain that any change to the flag will produce division in the Australian community. Your petitioners therefore humbly 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 Blunt. To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The petition of certain citizens of the Federal Division of Fisher in Queensland respectfully showeth: 1. They are completely satisfied with the design of the existing Australian National Flag. 2. They are aware it properly reflects the immutable characteristics of Australia, namely: (a) The Union Jack, itself the creation of three Christian Crosses, represents the Nation's historical origin and the source of its language and law; (b) The Southern Cross on an azure blue background signifying its geographical location on this planet Earth; (c) The large star depicting the advent of Federation in 1901. 3. They know the Flag has been a source of inspiration to generations of Australians in peace and war. 4. They recall that millions of native-born Australians and newcomers to these shores from other parts of the world have become united under its proud symbolism. 5. They are certain that any change to the Flag will produce division in the Australian community. Your petitioners therefore pray that your honourable House will: Propose and pass a motion that ``the existing Australian national flag remains sacrosanct from change''. And your petitioners as in duty bound will every pray. by Mr Slipper. To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The petition of the undersigned respectfully showeth that the Bill of Rights is not supported by the people of Australia, and calls on the Government to: Delay proclamation of the Bill until all matters of contention are settled by national referenda, and that: (1) Matters of States rights, property rights, rights of the newborn, the right not to belong to unions, among other issues, have not been submitted to the people of Australia to decide, and that; (2) No Australian Bill of Rights should depend on any foreign convention for its basis in Australian law. And your petitioners as in duty bound will ever pray. by Mr Cadman. 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 citizens of Australia shows: That the people of New Zealand and the New Zealand Government have given an example to the world in their efforts to achieve a nuclear free South Pacific, and such decision being endorsed by the people at a general election. Your petitioners therefore pray that the Australian Government support the principled stand taken by the New Zealand Government and urges it to condemn any efforts by the U.S. Government to impose economic or other sanctions on New Zealand in retaliation for their stand on nuclear vessels. We further urge the Australian Government to urgently implement its policy to promote the development of zones of peace and nuclear free zones in the Indian and Pacific Oceans. by Mr Kent. To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The petition of the certain citizens of Australia draws the attention of the House to the fact that the lack of a Medicare Office in Wyong is seriously inconveniencing the residents of Wyong Shire. Your petitioners therefore request that a Medicare office is established in Wyong as soon as possible. And your petitioners as in duty bound will ever pray. by Mr Lee. To the Honourable the Speaker and the Members of the House of Representatives in Parliament assembled. The humble petition of certain electors of Australia respectfully sheweth: That the Bill of Rights Bill, the Human Rights and Equal Opportunity Commission Bill, the Human Rights and Equal Opportunity Commission Amendment Bill and the Human Rights and Equal Opportunity Commission (Transitional Provisions and Consequential Amendments) Bill, if passed by the Parliament, will undermine human and civil rights in Australia; will attack the institution of the family in our country, and will destroy States Rights and the federal nature of our Commonwealth. Your petitioners humbly pray that: The Parliament rejects these Bills; abolishes the Human Rights and Equal Opportunity Commission and moves to withdraw ratification of the International Covenant on Civil and Political Rights. And your petitioners, as in duty bound, will ever pray. by Mr Nehl. 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 per cent 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. And your petitioners as in duty bound will ever pray. by Mr Punch. 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 the 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 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. 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 in Parliament assembled. And, to the Australian Government. This petition of concerned Australian citizens respectfully points out that a comprehensive ban on all nuclear weapons tests in all environments for all time would be a vital first step towards: inhibiting the addition of more and more sophisticated and destabilising nuclear weapons to the world's arsenals; arresting the extension of the arms race to outer 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 weapons 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 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 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,Mr Gorman,Mr Grace and Mr Price. To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The humble petition of the undersigned citizens of Richmond electorate respectfully showeth that: The Hawke Labor Government's productivity-superannuation accord with the ACTU and its support of the superannuation claims of the trade union movement will create an imbalance in industrial power and distort the future development of the Australian economy. Your petitioners humbly pray that the House of Representatives, in Parliament assembled, urge the Government to: Reject the superannuation claim of the trade union movement, and allow superannuation to develop without trade union domination. And your petitioners as in duty bound will ever pray. by Mr Blunt. To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The humble petition of the undersigned citizens of Cowper electorate respectfully showeth that: The Hawke Labor Government's productivity-superannuation accord with the ACTU and its support of the superannuation claims of the trade union movement will create an imbalance in industrial power and distort the future development of the Australian economy. Your petitioners humbly pray that the House of Representatives, in Parliament assembled, urge the Government to: Reject the superannuation claim of the trade union movement, and allow superannuation to develop without trade union domination. And your petitioners as in duty bound will ever pray. by Mr Nehl. To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The humble petition of the undersigned citizens of Page electorate respectfully showeth that: The Hawke Labor Government's productivity-superannuation accord with the ACTU and its support of the superannuation claims of the trade union movement will create an imbalance in industrial power and distort the future development of the Australian economy. Your petitioners humbly pray that the House of Representatives, in Parliament assembled, urge the Government to: Reject the superannuation claim of the trade union movement, and allow superannuation to develop without trade union domination. 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 humble petition of the undersigned citizens of Richmond 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 Blunt. To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The humble petition of the undersigned citizens of Cowper 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 Nehl. 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 humble petition of the undersigned citizens of the Federal Division of Fisher in Queensland respectfully showeth: That the proposed Australian Bill of Rights Bill will endanger the Federal system of Australia, the State and Federal criminal justice systems, the State and Federal Police Forces, the State and Federal education systems, the independence of the churches and religious associations, marriage and the family, children, the unborn, the handicapped, the aged and the infirm, employer and employee relationships and Australian society generally. Your petitioners, therefore, humbly pray that the House of Representatives, in Parliament assembled, urge the Government to: Repeal the Bill of Rights legislation forthwith. 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 Richmond electorate respectfully requests that: The world's resources be redirected to the relief of human suffering, starvation, poverty and disease. Your petitioners humbly pray that the House of Representatives, in Parliament assembled, urge the Government to: Stop spending taxpayers money on self promotion through high cost high profile but superficial policy on nuclear disarmament and make a genuine bipartisan commitment to positive and practical policies designed to achieve progressive world-wide nuclear disarmament. And your petitioners as in duty bound will ever pray. by Mr Blunt. Petition to the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The humble petition of the undersigned citizens of South Australia showeth that we hereby object to the impending closure of ``Lincoln Court Shopping Centre'' Post Office, known as ``Pooraka East''. If this proposal were implemented, it would greatly inconvenience the people who have used this facility since it first opened. There is very close to the Post Office, a small village consisting of approximately 80 elderly citizens who will be deprived of this facility. Currently the South Australia Housing Trust and private developers are building new housing estates within the catchment area of the Post Office and these new residents will also be greatly inconvenienced. We feel that there has not been enough consideration given to the fact that ``This is a neighbourhood shopping centre'' and as such a Post Office is an integral part of same. Combined with the above loss, we are faced with the loss of the Commonwealth Bank if the Post Office were to go, as one is an integral part of the other. This petition is to seek re-consideration of the closure. And your petitioners, as in duty bound, will humbly pray. by Mr Duncan. To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The petition of certain citizens of the Mallee electorate 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 Peter Fisher. To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The humble petition of the undersigned electors of the Division of Macarthur respectfully showeth that: 1. There are not enough lines in or out of the exchange to handle the amount of subscribers. 2. The exchange was brought to this area from somewhere else as a temporary measure quite some years ago, with a promise of a new one when needed. 3. The state of the cable work along the roadsides is a disgrace, where in a number of places wires are sitting up out of the ground with plastic wrapped around the joints, or in some cases wires are run along the tops of fences through paddocks. 4. The phones can be out of order for at least four or five days before they are repaired. 5. There are too many wrong number connections which are not the fault of the person dialling and calls dropping out in the middle of conversations. Your petitioners humbly pray that the House of Representatives in Parliament assembled urge the Government to establish a larger and more modern exchange in this area and not to keep saying it will be done in the future. by Mr Martin. To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The humble petition of the undersigned citizens of Queensland respectfully showeth that: The proposed capital gains tax penalises small business, discourages long-term investment, hinders capital formation and will freeze existing investment patterns and limits the investors' ability to adjust to changed market conditions. Your petitioners humbly pray that the House of Representatives, in Parliament assembled, urge the Government to: Immediately abandon its ill-considered capital gains tax proposal. And your petitioners as in duty bound will ever pray. by Mr Slipper. To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The petition of certain citizens of Queensland respectfully showeth: that the actions of trade unions have gone beyond their traditional goals of protecting workers conditions and rates of pay and have reached the point where they are seriously affecting the economic health of the nation and the people. Your Petitioners therefore humbly pray: 1. That all Governments throughout Australia acknowledge and protect the Right of Work on behalf of all Australians. 2. That the total sovereignty of individual governments be recognised as a fundamental requirement of a workable, balanced Federal system of government. 3. That all necessary steps be taken to protect the citizens of Australia from any inducement, compulsion, threat or intimidation to join any trade union. 4. That there should be no preference in employment for people who are members of trade unions. 5. That the supremacy of elected governments over the sectional interests of trade unions be recognised, and 6. That the provision of essential services be maintained, free from industrial disruption. And your petitioners as in duty bound will ever pray. by Mr Slipper. To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The petition of certain citizens of the Federal Division of Fisher in Queensland respectfully showeth: that the actions of trade unions have gone beyond their traditional goals of protecting workers conditions and rates of pay and have reached the point where they are seriously affecting the economic health of the nation and the people. Your Petitioners therefore humbly pray: 1. That all Governments throughout Australia acknowledge and protect the Right to Work on behalf of all Australians. 2. That the total sovereignty of individual governments be recognised as a fundamental requirement of a workable, balanced Federal system of government. 3. That all necessary steps be taken to protect the citizens of Australia from any inducement, compulsion, threat or intimidation to join any trade union. 4. That there should be no preference in employment for people who are members of trade unions. 5. That the supremacy of elected governments over the sectional interests of trade unions be recognised, and 6. That the provision of essential services be maintained, free from industrial disruption. And your petitioners as in duty bound will ever pray. by Mr Slipper. To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The petition of certain citizens of the Federal Division of Fisher in Queensland respectfully showeth: that the 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 Fisher respectfully showeth: That we deplore the discriminatory tax proposals as outlined in the Government's ``White Paper'' and the Government's preferred option on proposed new and widened tax proposals as so outlined, namely: Capital Gains tax Hidden Death tax described as ``Capital Gains tax after death'' Gift Tax Increased Company tax Employer taxes on employees' employment benefits. All such taxes will discriminate against and inhibit progress, growth and employment throughout the nation. They will attack hardworking people who have built up their assets; they will discourage thrift; they will inhibit development; they will treat unfairly all who plan for the future; they will cause trouble and expense in arriving at the value of their assets; they will discourage industry and punish achievement. We ask that the tax proposals be rejected. And your petitioners, as in duty bound, will ever pray. by Mr Slipper. To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The humble petition of the undersigned citizens of the electorate of Fisher respectfully showeth that: Whereas the present Government of the Commonwealth of Australia has purported to present the Title Deeds to Ayers Rock in Central Australia, in reality the joint property of the people of the Commonwealth to an Aboriginal Land Council on 26 October 1985, Whereas opinion polls and statements of representative groups, Members of Parliament and respected individuals show clearly that the Commonwealth Government had no mandate from the citizens of the Commonwealth to act in such a disgraceful manner, Whereas the present Government claims to be totally opposed to apartheid (separate development) in South Africa but purported to hand over Ayers Rock to an Aboriginal Council in support of a policy of apartheid (separate development) which has been shown to be detrimental to the Aboriginal people of Australia, Whereas it is pursuing this policy, making it a crime for most white and many Aboriginals to enter, without permit, large areas of the Commonwealth designated apartheid (i.e., set aside for separate development), contrary to our democratic traditions and experience of freedom of movement for citizens of all racial origins within Australia, Whereas Australian citizens have no present means available to them to prevent this violation of their natural rights to unfettered common ownership of, and access to, a treasured natural asset. Your petitioners humbly pray that the House of Representatives, in Parliament assembled, urge the Government to: Seek means available for the protection of the people's interests to reverse this outrage and preserve the democratic traditions of Australia. 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. Mr DEPUTY SPEAKER(Mr Leo McLeay) —Madam Speaker has received a letter from the honourable member for Goldstein (Mr Macphee) proposing that a definite matter of public importance be submitted to the House for discussion, namely: The confusion, lack of clear direction and delays associated with the Government's policies on regional commercial television. 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 MACPHEE(Goldstein)(3.35) —The Government's policy on regional television is a shambles, and the total absence from the chamber at the moment of members of the Labor Party is evidence of that. In a speech in Sydney on 2 February 1984, the Minister for Communications, Mr Duffy, who has now entered the chamber, stated: It is almost 11 months since Labor came to power and I was appointed Communications Minister. In looking back on those 11 months it is my strong belief that in keeping with the Government's objectives in communications we have made several noteworthy and progressive decisions . . . Firstly, of course, we have implemented the supplementary licence scheme and have already received numerous inquiries from broadcasters and others. That was said by the Minister for Communications on 2 February 1984. It is over two years since the Minister uttered those words. One is led to ask just how many supplementary television licences have been issued since then? The answer is none. Mr Hawker —How many? Mr MACPHEE —None-not one. Yet the Minister for Communications listed the supplementary licence scheme as the most important of his Government's communications decisions. The supplementary licence scheme was designed by the Fraser Government to provide more choice in commercial programming for people in regional Australia in respect of both radio and television. The scheme was aimed at allowing existing operators an additional broadcasting or television licence if it could be shown that a new independent television or radio service was not economically viable. If a new service was viable, the Minister could call for new applicants to provide the additional service. Under the Hawke Government this sensible policy of the Fraser Government has been given lip service, but it has been implemented so as to negate the policy itself and to beg alternatives. This from a government that has written into its own platform and endorsed at the 1984 national conference of the Labor Party the following words in respect of communications policy: Consequently, a Labor Government will . . . streamline and simplify the broadcasting planning process to remove delays in providing television and radio services. What hollow words they are to the millions of Australians living outside the capital cities who have been promised additional commercial television and radio services but who have received nothing at all. Mr Hodgman —They have been betrayed. Mr MACPHEE —Totally betrayed. The whole process of providing decent broadcasting services has been bogged down, and many entrepreneurs have lost hundreds of thousands of dollars waiting fruitlessly for Government action. In fact, since the formal beginning of the supplementary licence scheme the Australian Broadcasting Tribunal has been involved with only one regional television supplementary licensing application, that is, the hearing currently being conducted in Canberra. How can that record be equated, to quote the ALP's National Conference, to the streamlining and simplifying of the broadcasting planning process. On 16 April 1984, the Minister for Communications said: There is a need for licencees to get their applications in early, otherwise a log jam in handling them will develop and frustration will set in. So the Government is looking for early applications and is keen to ensure that these are processed and new services are established quickly. This Minister and his Government are condemned by their failure to meet their own stated objectives. The whole sorry saga of the ill-fated supplementary licence scheme is typical of the approach of this Government to vital communications matters. It is haphazard and ill-conceived, despite the number of inquiries and investigations that have been held. There is no overall framework or philosophy but, rather, a series of inquiries and committees looking into a variety of areas with the net result being paralysis by analysis. As Myles Wright so correctly points out with respect to all the inquiries initiated by the Labor Government: They have all had one thing in common: They were designed to overcome a policy vacuum, but were confined to narrow areas without discussing policy as a whole. With the rapid development of technology in the communications field, one would have thought that the Government would have a well-defined policy on how the technology can be adopted to suit the thoroughly researched policies that one would expect from a competent government. Again, this is not the case with this Government. The people of regional Australia were not consulted with respect to the equalisation of commercial services which the Minister sees as one way of improving the inadequate number of broadcasting services in this country. When the satellite went up and it was realised that it would have surplus capacity, a hasty new policy was conceived-equalisation without consultation. In an article in the Age of 26 November last year, the Australian Consumers Association was reported to have claimed: . . . that Federal Government's policy of introducing three commercial television channels throughout Australia showed it was out of touch with country people. The Association based its claim on three surveys conducted over the past three years. The article said that these surveys: . . . showed that country people preferred programs with local content. The Association said that the three channel plan would probably lead to fewer local and rural programs. This fear that localism will suffer under the Government's equalisation plan is not confined to groups such as the Australian Consumers Association. Indeed, the Government's main supporter and ally, the Australian Council of Trade Unions, has also expressed grave concern at the Hawke Government's equalisation plans, saying that neither the aggregation nor the multi-channelled services alternatives can meet the objectives embraced by the Australian Labor Party and the ACTU with respect to the media. The ACTU, in a submission to the Forward Development Unit of the Department of Communications last year, stated that it was worried about the impact of equalisation on localism, concentration of media ownership and Australian production and employment. The ACTU argued in the submission that the extra costs which are associated with equalisation will not be met by additional revenue from larger markets and, as a consequence, regional channels will have to reduce programming costs. This reduction in costs is most likely to be achieved by more networking and cutbacks in high cost productions such as Australian drama. Moreover, regional stations will be forced to chop their high cost local programs, thus effectively destroying localism-one of the stated objectives of the Government. The ACTU was also highly critical of how the development of policy on regional television had occurred under the Labor Government. The submission from the ACTU to the Department of Communications quotes the Minister as having said in October 1985: Diversity would not be achieved for regional viewers merely by introducing more services if it resulted in a loss of localism. In other words, there would be more quiz programs, more soap operas, more police drama, but less localism. Mr Howard —More of A Country Practice. Mr MACPHEE —On every channel-Dallas on every channel, Sale of the Century on every channel. In April 1985, the Minister said that the equalisation policy was a long term policy; but only three weeks later, on 25 May, he changed his mind to say that equalisation had the `highest priority' and that it should be completed within three years. The ACTU and regional viewers will have been amazed to see these abrupt changes in policy and direction, particularly when the Minister proudly stated in February 1984: Ad hockery is not part of this Government's approach to communication development in all its forms. Ad hockery is the characteristic of this Government. That is not all that was said by the Hawke Government's closest ally, the ACTU. The unions also complained of a lack of consultation, calling the Forward Development Unit inquiry into equalisation a one-way process. If the ACTU is not consulted by this Government, what hope do other public interest groups-organisations of regional viewers, for example-have? Mr Hunt —Country people. Mr MACPHEE —What hope do country people-the people for whom we are divining the services that so far have not been delivered-have of being consulted? This condemnation by the ACTU is a very serious indictment of a government which prides itself on consultation. Just what is the Government doing in terms of regional television policy? Even the Prime Minister (Mr Hawke) and the Minister for Communications cannot agree on the way of implementing equalisation, and the last group to be consulted comprises those who are the most affected-the viewers of regional Australia. We know that the Cabinet had to meet on a Sunday just before Christmas when the Minister and the Prime Minister battled out their respective viewpoints and that the Treasurer (Mr Keating) was brought into the act, as a result of which nothing has happened to resolve the conflict between them. Let us look briefly at the five major objectives of broadcasting policy outlined by the Minister for Communications in September last year, and let us see what the Government's performance is. These objectives are: First, to maximise diversity of choice in radio and television services; secondly, to maintain the viability of the broadcasting system; thirdly, to encourage an Australian look for television and radio by the maintenance of an appropriate Australian content level and the fostering of an Australian production industry; fourthly, to provide broadcasting services relevant and responsive to local needs; and, fifthly, to discourage concentration of media ownership and control of stations. The implementation of the Government's proposed policies for regional television will, in all likelihood, result in the worst possible outcome-the Minister will fail to meet all of his proclaimed objectives for broadcasting policy. In terms of discouraging the concentration of media ownership, the Government's proposed equalisation scheme for regional television stations will have the opposite effect, whether equalisation is pursued by the multi-channelled services option or aggregation, or a combination of the two. Under the multi-channelled services option, regionals face additional costs for buildings, transmission facilities, studios and extra administrative costs. Many will also need to install satellite receiving equipment. As a consequence of these extra costs, the small regionals may go to the wall. Similarly, with aggregation, the regional operators face increased costs. Because they would be operating over a much larger market area they would need more sales outlets as well as more news teams in more than one centre. New and costly transmitters and translators would also need to be installed. Equalisation will lead to a much greater supply of advertising time, but it is unlikely that the demand for advertising will increase at anywhere near the same rate in many of these aggregated markets. As a result of that, profits will fall and the smaller regionals will go out of business. If that happens, the Government's policy of equalisation will lead to fewer regional operators-perhaps as few as eight or 10-which means that the concentration of media ownership in Australia will be worsened and not reduced. Another Government objective in terms of broadcasting policy is the provision of services which are responsive to local needs. The simple fact is that, if the markets are aggregated, they will need to be very large indeed to be economically viable. The larger the markets are, the more disruption to existing regional operators will occur, and it is likely that localism will receive scant attention. With the additional costs associated with the multi-channelled services option, regional licensees may be tempted to opt for cheaper networking programs from Melbourne and Sydney and, again, localism will receive scant attention. On current trends, concentration of ownership may lead to more Australian programs having their origin not in Sydney and Melbourne but in Los Angeles. One can only contemplate with horror the economic, cultural and strategic costs of that. So, a third government objective will be defeated. Equalisation will, if pursued according to the stated plans of the Minister, lead to a reduction in the number of regional operators, because it will not be viable for them to continue operating via either the MCS option or the aggregation option. Viability will be good for the big boys, but not for the small ones. There may be more choice under equalisation, but the danger may well be that there will be more television channels simply offering the same fare. If equalisation leads to severe profit reduction for the regional operators and they consequently buy a high proportion of network programs by satellite, choice may not be maximised in terms of television services. There may be more channels to choose from, but that does not necessarily mean a better real choice of programs. There will certainly be more repeated programs in regional Australia than is now the case. The final objective relates to Australian content and the fostering of an Australian production industry. At present it is the large networks that have the dominant position in the television industry as a result of the control they have over the buying, production and sale of programs which the regionals rely on for their operation. The small amount of local production that the regionals currently undertake may well disappear if they face a cost squeeze as a result of these policies. There may be a fostering of Australian content, but it will almost certainly originate in Sydney and in Melbourne. So, the score card now is nought out of five for the Minister. Mr DEPUTY SPEAKER(Mr Leo McLeay) — Order! The honourable member's time has expired. Mr DUFFY(Holt-Minister for Communications)(3.51) —In dealing with the matters raised by the honourable member for Goldstein (Mr Macphee) I start by going back to have a look at where we were in 1983 when the Hawke Labor Government came to power. I well recall that in those days people in the television and the broadcasting industry generally came to my office and the first thing they did was basically make a plea to me to do something. The honourable member for Goldstein talked about a `paralysis by analysis' and called upon Myles Wright as the luminary responsible for that quote. When one analyses what happened particularly during the last two or three years of the Fraser Government, there was a total paralysis in the broadcasting area. When we came to government there was total uncertainty as to the future structure of Aussat-basically a television distribution satellite-its legislative framework, if any, and its relationship, particularly with Telecom Australia, and the other essential telecommunications authorities. There was uncertainty as to the power, if any, of the Government to influence decisions particularly on transponder allocation. I remind the honourable member for Goldstein of that, because he indicated in his speech that there was some concern about the power of the so-called networks. By that I mean channels 7, 9 and 10, which are loosely called the networks. We made a decision that the Government would not be allocating transponder space on the satellite. It is a pity that the honourable member's party did not do that when it was in office, but it was not done. Aussat made that recommendation on the basis of its commercial judgment, and the decision was taken very quickly by the Hawke Government. All of these issues that I have outlined in relation to the uncertainty of Aussat have been settled. Legislation has been passed and Aussat is up and away. With all of the difficulties that could have arisen in relation to the technical aspects of Aussat, it was a delight to all including, I think, even honourable members opposite that the operation was as successful as it was. When we talk about regional Australia, let us not forget the remote areas and the remote commercial television services. It is interesting that when the Hawke Labor Government came to power, as I have indicated, there was total uncertainty regarding Aussat. In particular, no concept had been developed by the previous Government on the delivery of commercial services to remote areas of Australia-nothing at all. Time and time again in this House we have heard interjections from the Deputy Leader of the Liberal Party of Australia, the honourable member for Menzies (Mr N.A. Brown), and also from the Leader of the National Party of Australia, the right honourable member for New England (Mr Sinclair), to the effect that the previous Government was going to develop a homestead and community broadcasting satellite service mark 2 concept for remote areas of Australia. That is absolute nonsense. When we came to office there was no evidence that members of the previous Government had any idea of where they were going in relation to providing television to remote areas of Australia. There was a vague concept which, as I said, they referred to as HACBSS 2, but they had no idea what it was about. One of the reasons was that they did not have the guts to say to the networks that that program would be developed on a regional basis and not through channels 7, 9 and 10 on a national beam throughout this country. Honourable members opposite should not talk to me about their courage. When it came to the media in this country, honourable members opposite were the greatest collection of wimps of any government probably in the history of this nation. They were petrified of making a decision which would have provided services through existing retail networks for fear of the pressures from the major capital networks, and they should not forget that. The Liberal-National Party Government stands condemned for that attitude as far as I am concerned, and there is plenty of evidence on that. We acted on all those matters such as the ownership of Aussat; we set up the proper legislative framework; and we took action to go ahead for the advanced technology-B-MAC-for the delivery of both television and radio. As I indicated it was necessary to examine the two solutions-that offered by the networks and by the regional stations. The former which comprised Sydney and Melbourne commercial television stations wanted to use 30-watt transponders in a national beam. This was not the favoured solution of the Australian Broadcasting Tribunal, for various reasons, not the least being that it would extend the influence of the Sydney and Melbourne stations. That is a point which the honourable member for Goldstein made today. I take that as a sincere indication on his part that it is not something about which he is overkeen. I would like to see him carry his party on that issue. There is no evidence that that party has any courage on that issue whatsoever. The ABT supported the regional solution put forward by Regional Television Australia Pty Ltd. I shall move on to Regional Television Australia in a moment. The proposal that it put was for a single channel for programming licences to each satellite, footprint or region. In effect, it was a commercial HACBSS, prepared as a service to remote areas, and this was the option which this Government decided to adopt. That decision was announced on 10 October 1984. The Australian Broadcasting Corporation HACBSS reached its final stages on 26 January 1986, which, appropriately, of course, was Australia Day, and some remote commercial television services, known as RCTS-that is as opposed to the ABC service-will be on air during 1986. By the end of 1987 even the most isolated Australian will have access to basic radio and television for the first time in the history of this country. When we came into office honourable members opposite had no idea where they were going in that area-none whatsoever. The one thing that they did know was that they would have the most craven capitulation to the networks on this issue and they would have had national beam programs throughout this country. Yet, the honourable member for Goldstein had the gall to come in here and talk about localism. What absolute rubbish! I move to commercial television. Sure the points the honourable member made in relation to supplementary licences are to some degree correct. When we came to power the position was that the supplementary licence scheme, which had been mooted by the Fraser Government, was in place and we confirmed that on 30 November 1983. As a matter of fact, as outlined previously by the honourable member for Goldstein, I announced the commitment of the Government to implement the supplementary licence scheme. The major purpose of the scheme was to provide a greater degree of commercial programming choice to people living outside the mainland State capital cities which would not support an independent commercial radio or television station. Under the scheme an organisation eligible for a commercial licence could apply for a supplementary licence. However, a supplementary licence would not be granted if, after thorough investigation by the Australian Broadcasting Tribunal, a determination were made that an extra independent commercial service, the first and preferred option, was commercially viable and in the public interest. Is the honourable member for Goldstein pretending that a change has not taken place in the attitudes of the Government, the Opposition and the industry towards the supplementary licence scheme? The enthusiasm for the supplementary licence scheme dissipated very quickly. The honourable member is well aware of it and so should any other honourable member on the Opposition side who has taken any interest in this matter. In fact, there were well known problems in relation to the hearing procedures. There were going to be tremendous delays in the hearings on the supplementary licence scheme. We did what we could. When we came to government, the Australian Broadcasting Tribunal was not even fully manned. It had significant shortcomings in its powers and procedures. What did we do? We brought the Tribunal up to strength, with good additional appointments and appointed people who would do their job well. That is something the previous Government probably would never have got around to. We addressed the Administrative Review Council reports on the Tribunal's procedures. We accepted the largest part of its recommendations and introduced legislation to put the recommendations into effect. The so-called uniform inquiry procedures will go a long way to streamlining the Tribunal's procedures for more efficiency. We moved quickly to close loopholes that appeared in the substantive powers of the Tribunal opened up by the Saatchi and Saatchi and the Herald and Weekly Times Ltd challenge. How do those actions contrast with those of the previous Government which, in all its actions, cut back the Tribunal's powers? It cut back the Tribunal's powers, and I refer particularly to the infamous 1981 amendments. So much for that aspect of the matter. Nevertheless, there were problems down the track of the supplementary licence scheme. The industry accepted that. It was not as if that was something we just decided ourselves. There was a doubt about whether it would work, so we had to start again. The honourable member for Goldstein should understand the complexity of regional television. The regional television industry in this country is fragmented into 36 service areas, each with one commercial service, serving populations ranging from 600,000 in Newcastle to 23,000 in Mount Isa. This is an industry which has huge employment but covers tremendously disparate groups. As I pointed out, Newcastle has 604,000 people which is about 4.1 per cent of the audience population of this country. Wollongong has 338,000 people, which is 2.3 per cent of the audience, and Canberra, CTC7, has 300,000 or 2.1 per cent. Then we have Ballarat, BTV6, with 296,000 people or 2 per cent and Lismore, RTN8, with 293,000. It is worth noting that there is only one regional station with more than 3 per cent of the audience, and that is Newcastle. Only four stations have a 2 per cent audience share or more. The population served by the regional television stations-about 35 per cent of Australians-includes areas with a share of less than 2 per cent and ranges from 245,000 down to 23,900 or 0.2 per cent. Therefore, one is looking at an industry in which one station serves 4 per cent of the population at one end of the scale, and five stations serve 0.2 per cent at the other-Geraldton, Albany, Riverland, Broken Hill and Mount Isa. The regional stations serve the 35 per cent of Australians who do not enjoy the same variety of programs as city people. In Melbourne, Sydney, Adelaide and Brisbane there are three commercial services plus the Australian Broadcasting Corporation and the Special Broadcasting Service. Perth has two commercial stations plus the ABC and the SBS. The vast majority of the regional stations have only one commercial station plus the ABC. There are some exceptions such as Canberra, Newcastle, Wollongong and Cooma, where SBS is available. On 23 May 1985, I announced that equalisation was the major priority of this Government. I want to make the point quite clearly-it was quite clearly made then because it was expressed as a major hope of this Government-that it is not possible to achieve equalisation, aggregation and competition in regional areas immediately and simultaneously. Obviously equalisation will not occur immediately all over Australia but it was announced and it remains the Government's major priority, and by 1990 it will be achieved. That is what I said would happen and that is what will happen. The honourable member for Goldstein talked a lot about consultation and about the Australian Council of Trade Unions. The ACTU was consulted about the future direction for commercial television, and it put in a submission. Honourable members opposite tell us all the time that we react to everything the ACTU says. Well, I was not all that impressed with what the ACTU said on this issue, and so be it. The fact that the ACTU put in a submission did not send me into a flat spin and make me throw everything else overboard. If I did that one can imagine the screaming and yelling from the Opposition benches-quite justifiably. The ACTU's submission was closely examined and to say the least it was disappointing. Therefore it was rejected. When one looks at the facts and what people say about inquiries, one must accept that at no time in Australia was this issue properly addressed until `Future Directions for Commercial Television' was released by the Department of Communications in June 1985. That was an excellent study. The then Secretary to the Department, Mr R. B. Lansdown, in a letter addressed to me, said: The report marks a milestone in the Department's administration of Australian broadcasting in that it seeks to approach broadcasting issues from a long term point of view. One can say that again. Until this report was issued the options had never been laid out by any government in this nation since television was introduced in 1956. The other day the honourable member for Goldstein asked me where we were going in this matter, and I told him that I hoped to make an announcement about the future of regional television in a month. Today I can say confidently that I will be able to do a little better in meeting that commitment. In fact the announcement will be made inside a month. Mr DEPUTY SPEAKER(Mr Keogh) — Order! The Minister's time has expired. Bill presented by Dr Blewett, and read a first time. Dr BLEWETT(Bonython-Minister for Health)(4.06) —I move: That the Bill be now read a second time. The purpose of this Bill is to amend several Acts-the Health Insurance Act 1973, the Health Insurance Commission Act 1973, the National Health Act 1953, the States Grants (Nurse Education Transfer Assistance) Act 1985 and the Tuberculosis Act 1948. The major amendments proposed by this Bill are contained in Part II relating to the provision of pathology services. These amendments are designed to improve arrangements for the payment of Medicare benefits for pathology services. As a result of findings by the Joint Parliamentary Committee of Public Accounts in its report No. 236 on Medical Fraud and Overservicing-Pathology, there has been serious public concern about improper practices in the pathology industry. The amendments in Part II of this Bill are designed to introduce significant new controls over the provision of pathology services and thus greatly reduce the capacity for fraud or overservicing in the pathology industry. The Parliamentary Public Accounts Committee raised a number of particular areas of concern about the provision of pathology services. The Committee said, in part, that: The Medicare Benefit Schedule was too complex and it encouraged pathologists to perform more tests than were necessary; payment was too high for many tests made simple by the introduction of modern laboratory equipment; the prospect of large profits had attracted entrepreneurial pathology; pathology groups were providing `inducements' to doctors to order more services than were necessary; pathology groups were encouraging doctors to order unnecessary tests by other means-such as providing request form pads which set out combinations of tests which the laboratories were able to perform automatically; many laboratories were routinely adding to their incomes by performing additional tests not ordered by referring doctors; doctors were found to have financial interests in laboratories which performed their tests. The amendments in Part II of the Bill before the House today are designed to meet these concerns and represent the results of an extensive review by my Department and the Health Insurance Commission of the existing arrangements covering the provision of pathology services. Statistics available to my Department show that the number and cost of pathology services have risen sharply in recent years. An estimated 15 per cent of total Commonwealth spending on Medicare benefits is on pathology. In 1984-85 claims processed for Medicare benefits payments totalled $346m out of a total outlay of $2,280m. Between 1979 and 1985 there was a 69 per cent increase in pathology services as services rose from $13m to $22m over this period. The Government has therefore decided to introduce a package of measures which will affect the provision of pathology services under the current Medicare benefit arrangements. There are at least two fees for most services in the pathology section of the Medicare benefits schedule. The circumstances in which the service is performed by an approved pathology practitioner outside a public hospital determines whether the higher or lower fee applies: The higher fee SP or specialist pathology applies when the service is performed by a specialist pathologist; and the lower fee OP or other pathology-that is, 75 per cent of the specialist fee-otherwise applies. It also applies where a specialist pathologist decides that additional tests are necessary without consulting the referring doctor, and in a number of other circumstances. A lower fee HP or hospital pathology-generally about 50 per cent of the specialist fee-applies to a small number, 18, of very common tests performed in public laboratories for private patients in public hospitals. Therefore, for those 18 tests there are three levels of fees. However, there has been a substantial shift to patient billing at the specialist rate of benefit in recent years. The Public Accounts Committee noted that the top 25 pathology groups bill virtually all their pathology at the specialist rate, the percentage varying for those groups between 94.6 per cent and 99.9 per cent. In addition, during the period 1982-83 to 1984-85 the number of services billed at the specialist rate increased by 41.9 per cent while during the same period the number of services billed at the OP or other pathology and HP or hospital pathology rates fell by 18.2 per cent and 29.1 per cent respectively. But the fact is the increasing volume of services being billed at the highest rate is not being matched by an increasing professional input by specialist pathologists. In fact, the Public Accounts Committee pointed out: The great majority of tests being paid at the highest (specialist) level of benefit are not-and do not have to be-done by a specialist pathologist but are being carried out by medical scientists/technologists. This can amount to payment of an unwarranted premium in some cases and further encourage overservicing. Virtually all the pathology performed by the top 25 groups is done at the highest (specialist) rate, which is 33 per cent higher than the rate chargeable where a medical practitioner other than a specialist pathologist is employed. The Committee added that there was data showing that at the time they were contacted by a PAC member, few of the top 25 pathology groups in Australia had many full time specialist pathologists on staff. Part time specialist pathologists were associated with 60 per cent of them. Thus, the specialist fees for those 18 pathology items appear too high, because the professional premium is far more than can be justified by the specialist's professional input. There is also evidence that the fees for the 18 tests, for which there is currently an HP rate, are too high. The costs for some laboratories involved in undertaking these tests is covered by the HP fee, which is currently only 50 per cent of the specialist rate. This means that there is an excessive profit component where they are billed at the specialist rate. In addition, by international comparison, the current specialist rates for these 18 tests are unreasonably high. When one examines the New Zealand fees for pathology tests, they are considerably less than the Australian fees-sometimes less than 50 per cent of their Australian equivalent. After allowing for the difference in currency valuation, the New Zealand fees fall to an even smaller percentage of the Australian fees. Mr Porter —What about our standard of living? What a farce! This is just ridiculous. Dr BLEWETT —The honourable member should just listen. The Government has therefore decided it will reduce the SP rate to the current OP rate for those 18 items-that is, to the 75 per cent rate. In addition, the new OP rate will be 75 per cent of the new SP rate. The HP rate will disappear and services previously charged at this level will now be charged at the new OP rate. The 18 tests involved are generally: High volume and mainly automated; highly profitable because fees have not been adjusted downwards because of more productive technology; generally involve minimum specialist input; and the proposal would maintain the specialist premium but at a lower level and save an estimated $47m per annum while involving a 12 per cent in HP fees-approximately $1m-for public hospital pathology services. The proposal outlined will have the effect of: Reducing fees for a small number of commonly performed automated tests; having the greatest impact on laboratories that concentrate on tests with high profits; removing a significant financial incentive to excessive servicing and other abuses; and simplifying the schedule by reducing the number of rates for the 18 tests from three to two. It is also proposed to remove Part 7-pathology-from the existing Medicare benefits schedule and establish a separate new schedule for pathology items. The items to be covered in this new schedule are those contained in Schedule 1 to this Bill. It is intended that the schedule will come into operation on 1 August 1986. The Bill also provides for the establishment of a Pathology Services Advisory Committee to oversight movements within the new schedule. The proposed Committee will consist of seven members: The Chairperson, a Deputy President of the Australian Conciliation and Arbitration Commission, three members appointed by the Minister for Health after consultation with the medical profession and three other members. The functions of the Committee are to review pathology items and fee levels, to consider related matters and make recommendations to the Minister for Health on such matters. The Minister may determine principles to be applied in the performance of the Committee's functions. This decision by the Government means that from 1 August 1986 pathology items will no longer be subject to medical fee inquiries, which has been the case for a number of years. In making this decision, the Government considers that the method of updating pathology fees through fee inquiries is inappropriate and fails to take into account productivity changes in the delivery of pathology services. In addition, the Medicare benefits schedule as currently structured is inflexible, both in responding to new technology and the deletion of obsolete tests with regard to pathology services. The functions of the proposed Committee will allow a more rapid and flexible approach to a wide range of fee-related matters, including relativity of schedule items, the value of items and additions to and deletions from the pathology schedule, than is the case under the current arrangements. In conjunction with the reduction in certain pathology fees as already outlined, clause 10 of the Bill provides that the number of self-determined tests that pathologists will be allowed to perform is to be limited. These tests will be determined by the Minister for Health in consultation with the Royal College of Pathologists of Australasia. The Royal College of Pathologists supports this measure as the College believes that currently self-determined tests could be a source of abuse by some laboratories. The self-determined tests agreed to between the Minister and the College will continue to attract Medicare benefits at the OP or other pathology benefit rate. In addition, the Public Accounts Committee commented that certain minor procedures, such as the collection of blood for pathology testing, should not attract separate Medicare benefits when they are performed in association with a consultation. It was considered that a separate item provided inappropriate financial incentives which led to the ordering of unnecessary or excessive pathology tests. For these reasons the Government has decided to remove item 955, which deals with venepuncture and the collection of blood for forwarding to a pathologist from the Medicare benefits schedule. The recent increase in fees for general practitioner attendance items also supports this approach. Current legislation provides that request forms held by pathologists are to be produced within 14 days of a request. The Bill provides that, in future, request forms held by pathologists will be required to be produced to officers of the Health Insurance Commission by the end of the day following the making of such a request. A further proposal contained in the Bill is that request forms issued by the pathology laboratories for use by referring doctors are to be approved by the Health Insurance Commission. It is not intended to impose an `approved form' on laboratories but continued approval of forms by the Commission will ensure that any encouragement to medical practitioners to order inappropriate tests should be removed. This proposal should not place undue administrative burdens on the pathologist, given that laboratories will continue to be required to keep such requests for 18 months. Advice has been received by my Department that difficulties in the interpretation of section 129aa of the Health Insurance Act have contributed to the lack of success in bringing prosecutions against persons believed to have induced practitioners to order inappropriate tests. The amendments made by clause 47 of the Bill are designed to clarify the provision and also to render it a more effective deterrent to the practice of splitting the amounts of Medicare benefit payable in respect of pathology services between the pathology practitioner rendering the services and the practitioner requesting them. In recognising that medical practitioners are often encouraged to request more tests than may be required by the tactics of large laboratories and that practitioners are not always aware of costs of tests or the complex details of laboratory practice, the Government has decided to provide $100,000 per annum for each of the next three financial years to promote an education program directed primarily at medical interns and practitioners. The main aim of the program is to encourage the more appropriate use of pathology services by practitioners. The program would include, for example, assistance to the Royal College of Pathologists and the Royal College of General Practitioners in the development and distribution of educational material to medical practitioners in the community and teaching-seminar programs for medical interns. Under the existing arrangements for the payment of Medicare benefits for pathology services, benefits are paid only where the services are performed by an approved pathology practitioner who is approved for such purposes by my Department. In response to criticism of the administration of this scheme by the Public Accounts Committee, the Government has decided to revamp completely the existing scheme to greatly improve its effectiveness. The main criticisms of the existing scheme by the Public Accounts Committee were that any person or organisation could apply and be approved as an approved pathology practitioner and there is no requirement that tests be performed in an accredited laboratory. In addition, there is often a nexus between the requesting doctor and laboratories which raises the possibility of overservicing. The Committee was also concerned that provisions of the scheme, particularly the current undertaking signed by the practitioner, were not being enforced and was generally of the view that the scheme is open ended and lacks an effective review mechanism. The Bill proposes to change the existing scheme so that only medical practitioners, and the currently approved small number of medical laboratory scientists, will be eligible for approved pathology practitioner status. Approvals will be subject to annual review. Only natural persons can be approved pathology practitioners, a new scheme is introduced for approval of pathology companies, and there is to be greater emphasis upon closer personal supervision by the approved pathology practitioner of the pathology services rendered. Both approved pathology practitioners and approved pathology authorities will be required to sign undertakings. Breaches of these undertakings can be referred by the Minister to the Medicare participation review committees for investigation and determination. These committees will also be able to investigate cases of excessive pathology servicing either by the practitioner or authority or the initiating practitioner. Approved pathology practitioners will be permitted to enter contractual arrangements with service laboratories where they do not wish to own, operate or manage their own laboratory. The conditions which apply to approved pathology authorities will also apply to these arrangements. The Bill also introduces a system of accreditation of pathology laboratories. Services rendered by or on behalf of approved pathology practitioners are to be rendered in an accredited pathology laboratory, being services of a kind for which the laboratory is accredited, and under his direct supervision. Under the existing approved pathology practitioner scheme, tests are often performed in laboratories not operated by such a practitioner, and approved pathology practitioners often lend their name to bills for services which are not adequately supervised. These practices will cease under the new arrangements. The Minister for Health will have power to refuse applications for approved pathology practitioner or approved pathology authority status and there will be a right of appeal to the Administrative Appeals Tribunal where an application is refused. The proposed new arrangements outlined should, when implemented, meet the difficulties identified by the Public Accounts Committee and provide better control over the operations of pathology laboratories, companies and pathologists. The Government has given careful consideration to the implementation of arrangements for the accreditation of pathology laboratories throughout Australia. While all States, through meetings of health Ministers, support the concept of national accreditation, to date only two States, New South Wales and Victoria, have legislation to implement such a program. By accrediting laboratories the quality of health services should be assured and as the States have traditionally accepted responsibility for quality assurance the Commonwealth believes that accreditation of pathology laboratories is a State responsibility. However, in order to complete the package of changes I have outlined above, the Government has decided that it will operate laboratory accreditation arrangements for those States which do not have legislation currently in place. For those States with legislation-New South Wales and Victoria-the Commonwealth will accept laboratories accredited under the legislation for the payment of medicare benefits for services performed. Automatic acceptance by the Commonwealth of accreditation under State legislation will depend on States adopting the National Pathology Accreditation Advisory Council's guidelines and the minimum standards. However, it is expected that these States will comply with these guidelines. Under the proposal: Only those pathology services performed in laboratories which are accredited under State legislation or accredited by the Minister for Health will attract Medicare benefits; the inspecting authority is expected to be the National Association of Testing Authorities in conjunction with the Royal College of Pathologists of Australasia; provisional accreditation will be provided for all laboratories from the date the legislation is proclaimed. Full accreditation must be applied for through the National Association of Testing Authorities prior to seeking approved pathology practitioner or approved pathology authority status and be obtained within the following two year period; and while the Commonwealth will collect a fee for an application in those States where pathology accreditation does not exist, the charges associated with inspection of premises in States with legislation will be paid by the laboratory direct to the inspecting agency. The chief effects of these accreditation proposals should be to: Remove backyard laboratories which currently provide poor quality services; ensure uniform minimum acceptable standards throughout Australia; and be welcomed by the profession. Substantially, these proposals will provide greater control and supervision over quality and standards for pathology services. There are also a number of minor amendments made by the Bill including amendments to bring health legislation into line with the provisions of the Sex Discrimination Act 1984. I mention, in particular, the amendment of the definition of dependant in the National Health Act to extend it to de facto spouses. Amongst other amendments, Part III of the Bill amends the Health Insurance Commission Act 1973 to permit moneys held by the Commission, and not immediately required for its Medibank Private functions, to be invested by the Commission or a person or body representing the Commission; and Part V of the Bill amends the States Grants (Nurse Education Transfer Assistance) Act 1985 by raising aggregate amount limits to provide for cost supplementation arrangements determined by the Commonwealth Government and to provide for development grants as part of the transfer assistance offered to the States. Financial Impact Statement When implemented, the new approved pathology practitioner scheme and related measures will provide savings to the Government of approximately $60m in a full year. Forty-seven million dollars will arise directly from reduced fees for some pathology items in the Medicare Benefits Schedule; up to $10m from the more restrictive arrangements for self-determined tests; and $2,700,000 from the removal of item 955 from the Schedule. Figures supplied by the Department of Social Security indicate that the amendment to the definition of dependant in the National Health Act would result in increased expenditure of approximately $700,000 in the 1986-87 financial year. The amendments to the aggregate amount limits in the States Grants (Nurse Education Transfer Assistance) Act will result in increased expenditure of up to $2,761,000 in 1986-87. Finally, I should mention that because printing deadlines prevented their incorporation in the Bill before the House today I foreshadow that I will be moving a small number of amendments of a minor or technical drafting nature. I commend the Bill to the House. I present the explanatory memorandum to the Bill. Debate (on motion by Mr Porter) adjourned. Bill presented by Mr Barry Jones, and read a first time. Mr BARRY JONES(Lalor-Minister for Science and Minister Assisting the Minister for Industry, Technology and Commerce)(4.29) —I move: That the Bill be now read a second time. This Bill proposes new arrangements for the introduction and implementation of bounty assistance whenever such assistance is proposed following the Government's consideration of appropriate Industries Assistance Commission reports. At present, bounty assistance to industry can only be introduced by way of an Act of this Parliament. The Government believes that an inordinate amount of time is spent by the Parliament in considering legislation to implement this form of industries assistance which is essentially non-contentious. We consider that the introduction of bounty assistance would be more efficiently made through a ministerial notification process, which on the one hand would preserve and ensure parliamentary scrutiny by a general disallowance right, and, on the other, would not infringe on Parliament's sitting time and to the same degree as the current procedure requiring numerous Bills and amending Bills. To this end Part 2 of the Bill proposes that bounty schemes be implemented by bounty notices, declared in writing by the Minister for Industry, Technology and Commerce and published in the Commonwealth of Australia Gazette. Such schemes would of course only be introduced following the receipt of an appropriate Industries Assistance Commission report on the particular industry or industries concerned. This is for the reason that the Minister is required to comply with section 23 of the Industries Assistance Commission Act 1973 which prohibits ministerial action related to the provision of industries assistance without a current report on the industry from the Commission. The new procedure proposed by this Bill should not be interpreted as a diminution of the importance of this type of assistance-in fact quite to the contrary. The Government has attached and will continue to attach considerable importance to bounties as one of the key elements in its industries assistance policy of providing direct support to industry against import competition. A most important feature of the new arrangements is the ability of the Parliament to disallow ministerial bounty notices. That procedure, which is set out in clause 10, is the same as the disallowance procedure applicable to regulations. I mentioned earlier that the introduction of ministerial notices, in conjunction with the disallowance procedure, is designed to save valuable parliamentary time without derogating from parliament's opportunity to scrutinise each notice and, if considered necessary, to reject a particular measure. It is appropriate at this point for me to provide some historical facts in relation to bounties. The first bounty legislation was introduced in 1907 by Act No. 12 of 1907 and provided for bounty assistance on the production in Australia of a variety of agricultural products and fish. Since that time a considerable number of schemes have been introduced, covering a wide range of Australian industry, generally, I am pleased to say, with the bipartisan support of the Parliament. There are 18 bounty schemes currently in operation, the most recent being that for metal working machines and robots effective from 1 July 1985. Almost invariably each parliamentary sitting deals with about three or four pieces of bounty legislation, with the majority operating retrospectively. It is this retrospective operation which has concerned the Government for some time because the bounty assistance cannot be given to industry until the legislation has the royal assent. The new arrangements, proposed by this Bill, are designed to eliminate the need for retrospective operation of bounties. Indeed, the arrangements will probably overcome the anomalous situation which exists at present whereby a manufacturer or importer can enjoy the benefit of a change in tariff rates almost instantly, while an intended bounty recipient might be denied the benefit of bounty assistance for some months. This is because tariff changes, which are linked to the bounty, can be effected by Gazette notification whereas bounties can only be effected by an Act of the Parliament. A similar Gazette notification procedure for bounties will enable their immediate introduction following the Government's consideration of the relevant Industries Assistance Commission report. I am sure that industry will welcome this Bill for that reason alone. Let me illustrate the current time lag, and the benefit to industry which should result as a result of the proposed notice procedure on this Bill, referring again to the Government's assistance measures for metal working machines and robots. The legislation to implement that matter was introduced into the Parliament on 11 September 1985 and received the royal assent on 22 November 1985. Because it operated from 1 July 1985 there was a delay of nearly six months before the bounty could be paid and the Australian producers accorded the benefit from the assistance intended for them. In the absence of this Bill such delays will no doubt continue because of the complexity of some bounty legislation and the bi-annual nature of parliamentary sessions. Under the arrangements proposed by this Bill a bounty notice for metal working machines and robots could have been gazetted in late June 1985 immediately following the Government's decision, with bounty payments starting at least five months sooner than would have been possible under existing arrangements. I now turn to the other important elements in the Bill. Parts 3, 4 and 5 will standardise the administrative provisions for all bounty schemes-a vast improvement on the current plethora of provisions which have evolved in the different schemes over the past 15 years. This standardisation is expected to result in better administration of bounties-an important consideration in today's Public Service environment, where the Government is intent on achieving the best possible use of expensive resources. Further, clause 8 of the Bill will provide the necessary flexibility to amend schemes introduced under this Bill so as to deal with changing technological or economic circumstances. These provisions, which do not apply to schemes now on foot, will allow a scheme to be modified by regulation in very limited circumstances so as to enable, for example, an extension of the scheme for up to six months, a variation in the rates of bounty payable, the range of goods eligible for bounty. The Government is of the view that such a facility is essential if bounty schemes are to remain relevant in the face of changing economic or technological developments which could not have been reasonably foreseen at the time of introduction of the original scheme. The difficulty in applying the books bounty legislation, dating from 1969, to today's printing industry, which has undergone vast technological change, is a good case in point. The proposed amendment procedure for bounty schemes, by regulation, will of course preserve the Parliament's ability to scrutinise any proposed changes through the disallowance mechanism applying to regulations. Amendments to schemes on foot at this moment will need to be made by appropriate amending legislation in the usual way. Because of the significance of bounties as an element of the Government's industries assistance policies, a joint management review of bounty administration was undertaken in 1984 by an experienced team led by a senior partner in the consultancy firm of Arthur Young Ser- vices. Many of the provisions of parts 3 and 4 of the Bill respond to the recommendations made by that consultancy firm and will enable the Australian Customs Service to build on the improvements in bounty administration already achieved. The Government believes the measures contained in this Bill, which will standardise the administrative procedures for bounty schemes and make their implementation and variation much more relevant to today's circumstances, will benefit not only industry, but also the administrators of bounty schemes and the Parliament itself. Financial Impact Statement The Bill does not in itself involve any outlays by the Commonwealth. However, bounty schemes established under the Bill will involve outlays, the extent of which will vary from scheme to scheme. For established schemes, estimates of expenditure will be given in the Budget Papers in the usual way. For new schemes, financial details will be provided at the time of announcement by the Government of the establishment of the scheme. I present the explanatory memorandum on this Bill and commend the Bill to the House. Debate (on motion by Mr Shack) adjourned. Debate resumed. Mr DEPUTY SPEAKER(Mr Keogh) —I remind the House that it has been agreed that a general debate be allowed covering this Bill and orders of the day Nos 2 to 4. Mr MAHER(Lowe)(4.38) —I am delighted to have a chance to contribute to the debate, which is essentially a debate on fringe benefits tax. This legislation is of great moment because it will, for the first time, help to present an honest, fair system of taxation in our nation. The legislation will apply to all employers and will require that benefits that are given to an employee in lieu of direct financial contributions will be taxable. When I was in the United Kingdom many years ago people to whom I talked-accountants and lawyers-were surprised that in Australia people could avoid paying taxes by having access to a company car, perhaps by having their club membership fees paid-by having all sorts of fringe benefits which avoided tax. People in London, particularly, were astonished. The only means of avoiding tax in the United Kingdom at that time was by means of the luncheon vouchers. These were available to staff and employees and were seen as a recognised form of tax avoidance-a small perk for people who were employees. In this nation very large amounts of tax have been avoided by the use of fringe benefits. These facts were made known to the nation at large at the National Taxation Summit which was held as promised by this Government following the last election. The Tax Summit had before it plans to present a broadly based consumption tax to the Australian people. As we all know, this was rejected by the Summit and by the Australian people and particularly by the pensioners who did not believe that they would be adequately compensated for a broadly based tax. The Government's response to the rejection of the broadly based tax was to introduce a tax on all the means available in the community for avoiding income tax and for getting around the system. This whole package of legislation debated in this House today and yesterday-it will be debated in the future-is a revenue-neutral scheme which will plug up all the avenues, all the holes, that people can get through and use to get around the tax legislation. This collection of revenue will allow very substantial tax cuts to be made for not only individual taxpayers but also companies. It will really be a watershed in the collection of tax in our nation. Today when the House is debating a tax on fringe benefits and yesterday when it was debating negative gearing mark an historic occasion. The Treasurer (Mr Keating) in his second reading speech detailed some of the areas that the tax will not apply to. It will not apply to superannuation funds or to employee share acquisition plans. The Treasurer pointed out that the income tax law already deals with these. It will generally exclude meals available in staff canteens and free or discounted use of computer transport systems by employees. There will be no tax on the use of child care facilities or recreational facilities at an employer's premises. As a practical matter there will usually not be any tax on goods consumed at work nor on the first $200 in value in a year of free or discounted goods or services provided to an employee, including discounted air fares to airline and travel agent employees. There will be no tax on low interest loans granted to veterans under the Defence Service Homes Act and, consistent with our international obligations, on benefits provided to employees by organisations that are immune from income tax by virtue of the International Organisations (Privileges and Immunities) Act, the Consular Privileges and Immunities Act or the Diplomatic Privileges and Immunities Act or under international agreements. Exemptions also relate to live-in accommodation for employees who care for disabled people or disadvantaged children or other persons in a home, a unit or a hostel operated by a government body, a religious body or other non-profit organisations. Exemptions from the fringe benefits tax have also been given to religious institutions. These benefits apply to the clergy and members of religious orders. The tax on fringe benefits relates particularly to motor vehicles. Everyone in Australia knows that for years and years many people about to be offered a rise were approached by their employer who said: `Do you want a rise or would you rather have a company car?' This is a way of avoiding paying direct tax. This provision of a vehicle partly for business and partly for private use has been seen as a way of getting around the tax law in Australia. The provision of a motor vehicle to an employee may continue, but the employee must account for the private use of the vehicle, otherwise a schedule will apply which will deem a certain amount of private use. If a vehicle is genuinely being used by an employee for business, the employer will not have to pay tax, but there will be the necessity to keep a log book to record movements of the vehicle. This legislation will be of great significance not only to the rest of the community but even to members of parliament because we are given a substantial electorate allowance to run a motor vehicle. We will have to opt either to keep a log book of all the mileage of the vehicle or for the second alternative, which is to take a standard, set mileage allowance arbitrated by the Commissioner of Taxation. What honourable members will do, I do not know, but I would think that most members of parliament, particularly those whose electorates are not in the centre of a big city, will use their motor vehicles substantially to attend functions-not to go to and from their offices, which is not a deductible expense-and to go around their electorates visiting schools and hospitals and perhaps attending functions in various towns. This is a fair piece of legislation because it applies to everyone. It is to apply to members of this Parliament for the first time since federation. Members have always had electorate allowances, judges have expense allowances and many officers of state have allowances paid to them. They will all be taxed. It is a very fair and thorough system. The whole nation will have to face the fact that in any scheme which attempts to avoid tax or which attempts to get around the tax system by giving a direct benefit to an employee the employer will have to pay tax. It applies to State and Federal governments and to local governments. The Government, I feel, has been extremely courageous in bringing in this legislation. As I said in another debate, the Whitlam Government proposed a similar reform but there was not in our nation at that time the climate to recognise that tax reform was long overdue, that there was something unfair in the tax on the community and that there was a need to root out tax avoidance. We must congratulate the Victorian Government on its McCabe-Lafranchi inquiry which showed the first clear evidence of the incidence of bottom of the harbour tax evasion whereby people, as the Treasurer colourfully says, made tax paying an option. The Australian electorate, particularly those on the pay as you earn tax system, came to appreciate that many in the community were not paying tax as they should and were getting into schemes of avoidance of all shapes and sizes. In the House now we have this very important and really momentous legislation which for the first time will tax the fringe benefits that have been available to employees, benefits of all shapes and sizes and magnitude, but particularly company cars made available for private use. I feel that out of this whole exercise the ordinary citizen will see that it pays to be honest, that public confidence will no longer be eroded in relation to the collection of tax and that people will believe that at long last there is integrity in the tax system. I commend the Treasurer for bringing this legislation forward. Dr WATSON(Forde)(4.49) —I rise to speak on the bevy of Bills referred to as the fringe benefits tax Bills and I join the honourable member for Mackellar (Mr Carlton) and other colleagues on this side of the House in strongly opposing them. I should begin by referring to a statement on page 2 of the second reading speech of the Treasurer (Mr Keating) where he stated: . . . the whole thrust of the tax reform package-was about improving equity and not about increasing Government revenue. On the contrary, the whole thrust of this Government since it has been elected has been to increase revenues and taxation. One has to refer only to the Budget Papers to notice that in the three years that this Treasurer has brought down Budgets he has brought down record tax receipts in absolute terms and, in the last two years, record tax receipts as a percentage of gross domestic product. Not since the war years have we seen this kind of tax grab by the central government. It is not only in the Budget Papers; it is also in other papers, such as one produced by the Australian Family Association. In a document late last year it said: In broad terms, by 1987-88 families will be losing approximately $1,077m a year. They will be losing this because of the non-indexation of the dependant rebates, non-indexation of family allowances and the abolition of concessional expenditure rebate. The tax burden on the family will thus increase by 37 per cent between 1984-85 and 1987-88 and they will be paying an extra $34.47 per week in tax by 1987-88. Professors Porter and Parish, in a recent Centre for Independent Studies forum paper, commented on the fiscal drag problem that has been facing Australian taxpayers. In the years between 1981 and 1984 the highest marginal tax rate has been cutting in at a lower amount. Instead of being at three times average weekly earnings, it is now down to about two times average weekly earnings. Similarly, Professor Porter and a group of colleagues from the Centre for Policy Studies at Monash University, in a recent paper, stated: In 1987-88, when the new 24-29-40-49 rate scale is fully in operation, around half of all taxpayers will face marginal rates of 40 per cent or more. Unless further action is taken, this percentage will increase thereafter by around 4 per cent of taxpayers annually. Further reform of the income tax rate scale will be needed by the late 1980s. Far from being a reform package which will benefit Australians, this reform package will end up increasing government revenues and taxes. If there is any benefit at all from the reduction in the marginal rates that I just referred to, it will be a benefit which is already being paid for by fiscal drag. In other words, Australians moving into higher tax brackets will be financing the tax reforms. Be that as it may, I would like to turn now to the question of exactly what the economic effect of this fringe benefits tax will be. The Treasurer (Mr Keating) and a number of Government members, starting off with the lead speaker this morning, the honourable member for Maribyrnong (Mr Griffiths), who was followed by the honourable member for Burke (Mr O'Keefe), have suggested that the economic effect of this tax will be on employers. In fact, on page 4 of the second reading speech, the Treasurer says: Fringe benefits tax will be imposed on employers on the taxable value of fringe benefits that they provide to their employees. The implication of the Treasurer, Simon Crean and the Australian Council of Trade Unions and the thing that this Government would like the general Australian population to believe are that the employer will be paying the tax and employees do not necessarily need to worry. The average Australian does need to worry. Just because the employers will pay the tax to the Government it does not necessarily mean that they are the ones on which the tax falls. We are all familiar with the pay as you earn system. There is no doubt that the employer withholds the tax from the employee and transmits it to the Government. But the incidence of taxation clearly falls on the employee. He is the one that is really paying the tax. I venture to say-I will examine a number of situations-that the incidence of this tax, the actual effect of this tax, will not fall on the employer but, in fact, will be transferred to the average Australian, to consumers and to employees. Let me take two examples. I will deal with them seriatum. First, let me take the position of a monopoly in the Australian economy. What is a monopoly? There are a lot of them. They start off with Federal government, State government and local government departments and instrumentalities. The airline industry in Australia acts as a virtual monopoly. There are the statutory authorities, such as Telecom Australia, in the Federal area, the electricity boards and water boards in the State area, and garbage collection agencies in the local government area. In departments there are such things as the transfer of mortgages whereby a person pays transfer fees and perhaps the payment of fines to police departments. Each of these areas has virtually a monopoly position in the Australian economy. Each can virtually set its own prices for its goods and each sets these prices based on the cost of delivering the services. Can honourable members imagine these government departments and authorities that are in a monopoly position absorbing the fringe benefits tax they have to pay? No way. Who will absorb it? What they will do is raise their prices. Who will end up paying the tax? It will not be the departments, the monopolies or the statutory authorities; it will be the consumers of their goods and services. Every housewife who buys electricity to do the washing and cooking, every farmer and small businessman who relies on Telecom Australia, Australia Post, electricity boards and water boards will be paying these extra costs. As these costs go into prices they will affect the consumer price index, which will in turn affect the wage rates and international competitiveness of Australia. Although the Government is trying to suggest that the employer will pay up, in actual fact it is quite clear that in these situations the people who will end up paying the tax are the average Australians. Let us take a second situation. Rather than a monopoly, let us go to a situation in which there are lots of small businesses, one we might term a competitive situation, particularly these enterprises which are competing not only against other firms in Australia but also against firms and organisations overseas. Let us look at what may happen to those organisations. The Government would like us to believe that these fringe benefit taxes will be paid by the employer. How will they be paid? They will be paid by reduced profits. They will be paid by the shareholders of firms or the owners of firms. Anyone who believes that the profits of firms can be reduced and still get the same investment from the shareholders in the future is completely wrong. The first thing that will happen if employers do have to absorb that in their costs is that the shareholders and the owners of those firms will have to meet the cost and they will be discouraged from investing in the future. What will happen if we get lower investment? We will have lower production in Australia and if we have less production we will have less employment. One of the results, even though it may be only a small result, will be that firms in competitive areas which have to absorb lower profits will invest less in the future and reduce their employment over time. The people who will pay for it are the youth of this country. They are already paying a high price with record youth unemployment. This will raise the costs of doing business in Australia, which will lead in the longer run to some marginal increases in the youth unemployment of this nation. So in a competitive firm one result will be an increase in youth unemployment. Let us say, for example, that a firm can pass on the cost of the fringe benefits tax to the employees. Some small businesses in my electorate have already said they cannot afford to absorb this tax and the employees will have to absorb it. Very simply, this means a reduction in their standard of living. When we talk about the car manufacturing industry and bigger cars being swapped for smaller cars, what that means for the Australian population is a reduction in their standard of living. There is no way of hiding that. We are simply not given time to examine all the details that should be examined in legislation that is as important as this. Because the Government has decided to guillotine discussion on these Bills and push them through this House, we are not given time to examine all the defects of the Bills and the real imposts that they will impose on the Australian population. But let me say quite categorically that the Treasurer and his colleagues have been deliberately misleading the population. They are trying to lead the population into assuming that employers will end up paying the costs of this legislation, and not the average person. I assure the population-trade unionists, small businessmen and housewives and so on-that they will be paying for it. They will be paying for these taxes in higher prices, higher unemployment and lower living standards. Mr RONALD EDWARDS(Stirling)(5.01) —I think that we should get the setting of this legislation in place. We are talking about four items. My good friend and colleague the honourable member for Capricornia (Mr Wright) will also be contributing to the debate, and I look forward to hearing his comments. We are dealing in a cognate basis with the Fringe Benefits Tax Assessment Bill, the Fringe Benefits Tax Bill, the Fringe Benefits Tax (Application to the Commonwealth) Bill, and the Fringe Benefits Tax (Miscellaneous Provisions) Bill. We should put those Bills into a setting. That setting is that this Government has been committed to a series of reforms since it come into office in March 1983. The first major reform was the establishment of an economic path, in which the centrepiece was the prices and incomes accord. Along with that, went the commitment by us, as a government, to do something on the wages side, by setting a proper wages system, and to do something on the tax side, to which I shall return shortly. So we had this economic accord, developed through the summit, and it has been central to our whole strategy in terms of achieving economic recovery. In this debate we could spend a lot of time talking about the merits of that, but the debate is not intended for that; it is substantially about tax on fringe benefits. Nevertheless, one ought to say that the crucial thing about this Government is that it got a series of steps in terms of economic management. The first one was the summit in 1983. That set about giving direction to the economy, and we have seen substantial economic growth and a remarkable recovery in a number of sectors, particularly housing. We have also seen great growth in employment. We had the figures before the House today. We are looking at 670,000 new jobs. That is the economic setting. I turn now to the question of the financial system. We set about deregulating the financial system to do something to modernise the financial operations of this economy. That was important because we believed that it could be made a competitive and effective economy. Financial deregulation has been pursued. The third candle in this candelabra of reform has been the question of tax reform. This major debate took much of the energies and efforts of 1985. It was not without its controversy. It culminated in the economic summit. The elements of that reform are being worked through in this place. Today we are talking about one of the major elements-the fringe benefits tax area. But it is important that people who are listening to this debate understand that the other part that is co-extensive with a fringe benefits tax is a major reduction in marginal tax rates for pay as you earn income earners. When we talk about a fringe benefits tax, we are also talking about reductions in marginal tax rates. So, with respect to the overall setting of this discussion about imposing taxes on non-cash fringe benefits, we are also talking about the capacity, in economic terms, to generate funds to enable us to give tax cuts in the other areas. There has been substantial canvassing of those matters concerning tax cuts. The first phase of those cuts is to occur in September of this year, and we are looking at a series of tax cuts-the 60c rate to be brought back to 55c, the 48c rate to 46c, the 46c rate to 43c, the 30c rate to 29c, and the 25c rate to 24c. That is the first stage of it. It is important that we identify that this is the first part of this major overall review. Seen in international terms, this taxation reform is a substantial reform. So I now address the question: Why should we be directing attention in this Parliament to the question of fringe benefits? What is our preoccupation with fringe benefits? (Quorum formed) As the Opposition called that quorum in the middle of this debate on taxation, it is interesting to note that it is represented by only two members in this chamber. Mr Wright —This is disgraceful. They are not interested in it. Where are they? Mr RONALD EDWARDS —It is extraordinary. It shows Opposition members' inability to grapple with the real issue of tax reform in Australia. They were unable to grapple with it when in government. We saw then the development of a major growth industry-tax evasion and avoidance. Opposition members were incapable of dealing with tax reform when in government and have shown themselves equally incapable of dealing with the issue now that it is before the country. They are not willing to participate in the national tax debate. They prefer to take a stand away from the debate and simply snipe at people who try to make constructive reform, which this Government is doing. It is pathetic of the Opposition to come limping into this place as though it has something to offer when, in fact, when the crunch comes, Opposition members are not even in the chamber. I thank my colleagues on the Government benches because they are demonstrating their commitment to tax reform, to proper economic management, and to the conduct of a proper economy-which is something that is very far removed from the experience of those opposite. I was saying: Why are we proposing a fringe benefits tax? The substantial reason is that, due to the neglect and mismanagement of the Liberal and National parties when in government, they succeeded in allowing the tax system to become abused and skewed enormously. People were taking their benefits in non-cash forms and were not facing up to the reality that proper packages for people should be paid in the form of cash. So we got that enormous distortion in the tax system. To the discredit of the former Government, it never sought to repair that distortion, so there were people on what ought to have been healthy managers' salaries being given a series of other lures to get them into their positions in employment. That is not the way to conduct an economy; it is a false way. As I said at the outset, the important thing to recognise is that we set about introducing economic reform, and we set about reform of the tax system as well as reform of the financial system, and the Liberal Party is noted for its years of neglect and abuse, and protection of the tax dodgers. The community still understands that. It is interesting that all we are getting from the people opposite, both in this debate and in terms of their conduct in the other place, is obstructionism. They are not prepared to participate in the national tax debate. Their concern is somehow to protect their friends in the tax dodging industry. It is typical of their performance when they were in office. Why is it that, although in 1978 the Taxation Commissioner drew to the attention of the then Treasurer, the honourable member for Bennelong (Mr Howard), the fact that tax avoidance and evasion was rife and the system was being abused, the then Treasurer never acted upon it? It is interesting that, when the present honourable member for Goldstein (Mr Macphee) delivered a speech in Perth in 1978 on the then Treasurer's behalf, he referred to these artificial contrivances. The people who were in government at that time knew very well that these schemes were rife. What did they do about them? They did nothing. As my friend the honourable member for Rankin (Mr Beddall) said in a speech yesterday, there was an open-house situation. The then Government was in complete ignorance of how to go about reforming the tax system and ensuring that it brought equity into the system. What happened? The people bearing the burden of tax in this country have been the ordinary pay as you earn taxpayers. Mr Jacobi —It was optional for the rich. Mr RONALD EDWARDS —That is right. As my friend says, it was optional for the rich, but the pay as you earn taxpayer was caught. The Liberal and National parties, when they were in government, did nothing about it. If honourable members opposite think people have lost their anger about that, they are mistaken. People in the community still believe that the Liberal and National parties are most interested in protecting tax dodgers such as Brian Maher. They are not interested in doing anything substantial about tax reform, and they can make no contribution to a major debate in this place. They cannot make a contribution in terms of wages policy or economic policy and when it comes to tax policy all we hear are the bleatings and obstructionism-the bleatings because they do not have a policy and the obstructionism because they are out to protect the same old crew of tax dodgers. Honourable members opposite ought to understand that that is well understood in the community. My colleague the honourable member for Capricornia, who will follow me in this debate, will draw the attention of the community to the fact that the same old debate is being worked through. The Opposition is protecting the same people. People are saying to us, because we are a respectable, decent government: `Let us get ahead with tax reform; let us get some sensible equity back into the system; let us reduce these marginal tax rates; let us get the tax system working in terms of a modern economy'. Interestingly, the scope of the tax reform is very far-reaching. In introducing this fringe benefits tax measure we are saying: `If people are worth having on staff, pay them the salaries you believe they deserve'. We are also saying: `We will go about reducing the marginal tax rates on those salaries so that people can more equitably meet their commitments'. That has been our view since the National Taxation Summit. I say in summary that anyone on the other side of the House who pretends that he is putting forward a cohesive tax policy is mistaken and is misleading the community. Honourable members opposite tried to mislead the community when they were in government and they were found out. The Australian community is still angry and still wary of them, because they are seen as members of the party that protects tax dodgers. This Government is about implementing meaningful tax reform. These Bills are part of that process. they go a long way towards providing a revenue base to give substantial tax cuts to pay as you earn taxpayers. I am sure that not only Government members but also the community will support these Bills wholeheartedly. Mr DONALD CAMERON(Moreton)(5.13) —One could well say to the electors of the honourable member for Stirling (Mr Ronald Edwards), who preceded me, that when they see him driving off in a big, white Commonwealth car they are entitled to stand on the footpaths and yell out `Tax cheat', `Dodger' and such things, because that is what he is saying about people who have a legitimate use of company cars. There are company representatives who are issued with a car simply so that they can go to work. They finish their working days probably miles away from their offices and well after the hour to which many people work. The car is provided to allow them to get around their territories, to do their work, and to drive home at night. Dr Charlesworth —And they can claim it. Mr DONALD CAMERON —I am glad the honourable member is listening. I will give him a couple of lessons. I would like to believe that honourable members opposite do not understand what they are doing, because there can be no other excuse. I am President of the Queensland Training and Placement Activity Therapy Centre for the Blind in South Brisbane. Our organisation will be up for $1,500 each year because we issue a car to one of our staff members. I ask the honourable member for Stirling not to go away, because if he stays he might learn something. If we were to leave that car in the streets of South Brisbane at night-we do not have a garage-that car would be knocked off within a week. Only a few months ago a nurse came to visit us in the middle of the day. She was in our institution talking for two hours, and when she came out her new Commodore had gone. Many organisations and companies have absolutely nowhere to place their vehicles at night and have no alternative to asking somebody to take the vehicle home. Honourable members opposite say that such people are tax cheats and dodgers and that the Government has had to rearrange everything because these people have all these special benefits. The special benefit of our car to which I have referred is that during the day it picks up blind people and brings them to our therapy centre. It is used to take people to visit the blind and to pick up timber to be used in our woodwork section and other materials. Because the supervisor takes that car home, it is portrayed as a massive financial benefit; so our organisation has to fork up $1,500. The organisation mans four street stalls a year in the suburb of Annerley in Brisbane, which brings us a total of $1,600. The Government is hooking into the proceeds of our four street stalls for which women have baked cakes and sewn and done all that sort of thing. Honourable members opposite think it is quite legitimate to get into that area. I will give the House another example. At the end of last year I wrote to the charities in my electorate asking: `How do these measures affect you?' The Endeavour Foundation, a charity which looks after the sub-normal-honourable members opposite ought to put their chests out on this one!-has advised me that this measure will cost it exactly $65,000 in a year. That does not relate just to the motor cars. The staff of the Foundation have cars because they may be telephoned in the middle of the night with a request to attend one of the people they service, due to some problem. Many of the staff have telephones so that those calls can be made in the middle of the night. This Government is so decrepit and so bankrupt in its thinking that it is even going to apply a tax on the value of those telephones. Mr Slipper —Shameful! Mr DONALD CAMERON —It is shameful. The Government proposes to apply a tax even to the value of the telephone. The Endeavour Foundation is assisted greatly by the Government in other ways-with funding-as are many charities. But honourable members opposite are Indian givers. They are giving with one hand and taking back with the other. If this country has reached such a sad state that honourable members opposite have to rip into people who hold street stalls, the sub-normal and the others to whom I could refer, it is about time they gave the game away. It is little wonder that the polls are showing that they have slipped behind the Opposition in popularity. They are not rearranging the economy of this country; they are slamming in on any group that can be portrayed as a special group which has privileges that the rest of us, the community, does not have. This is just one incident, one of a series of things that the Government has done in the last three years. I am glad that there is now some quiet on the other side. I do not believe that Government members could have understood what they agreed to in their own party room when they agreed to these measures. I will give them another little pearl. Let us say that the Queensland Cancer Fund holds a function-a luncheon, for instance. If it had the honourable member for Capricornia (Mr Wright) as guest speaker, probably not enough people would arrive to warrant its bringing in its staff to act as ushers. If it were to invite someone such as the Leader of the Opposition (Mr Howard) and a big crowd turns up and a member of the Funds says to the staff `Okay, we have such a big crowd that we are asking you all to come along to help seat the guests but you can have a meal while you are there' what would the lousy mob opposite do in that case? Under this legislation, if the hotel or the place where the function being held charged $20 for a meal, the Government would say to the charity: `Twenty times 46c amounts to about another $9 and that amount will have to be paid by you as a tax'. Therefore, because the charity has asked people to come along and act as ushers, it will cost the charity an extra $9. The charity would have to pay the hotel or the place where the luncheon was held $20 and because of this legislation supported by honourable members opposite-the greedy grubs-another $9 in taxation. That is what they expect us to support in this House. I honestly do not believe that the heartless members on the other side of the House really understand that they have got to the bottom of the barrel on this subject. I hope that there will be a revolt in the Senate, because the Government does not have the numbers over there. I have referred to the taxing of charities because earlier in the debate one speaker, a Labor member, said that any Opposition member who said that there was anything wrong with this legislation was a liar. I can assure honourable members that what I have just said is the truth. Mr Slipper —Is that parliamentary? Mr DONALD CAMERON —No. The honourable member concerned was asked to withdraw the remark. The Deputy Speaker in the chair at the time then said: `The honourable member can say it is not true'. That is just another way of saying someone is a liar, but it is a more gentlemanly way of saying it. The story I have just told about the Training and Placement Centre for the Blind in Brisbane was run last Tuesday in the Brisbane Courier-Mail. Senator Black from Queensland, who is supposed to be a lover of Queensland, asked the Minister for Finance (Senator Walsh) to explain what I was talking about in that article. The Minister said: `I do not understand it. It is not right. Cameron is off the track. It would not be like this'. Just because we say to him that our charity needs to take its car home and does not want to leave it on the streets of South Brisbane, the Government is now asking for $1,500. I say the best of luck to the Government because the next Budget may be the last it is asked to balance for a long, long time. I have been talking on the subject of taxes. There is an old saying that there are two things in life that we cannot avoid: One is taxes and the other is death. Mr Deputy Speaker, I hope that you may be a little generous to me whilst I have a couple of minutes left to speak on this debate and allow me to raise the subject of death. Dr Charlesworth —Crematoriums! Mr DONALD CAMERON —The subject of crematoriums, as the honourable member for Perth rightly interjects. Honourable members are well aware of my views on the ways in which Brisbane Crematoriums Ltd has been behaving in recent times. It has undertaken that in the year 2007 it will throw out the ashes of people buried in the year 1957 whose descendants did not come along in the forty-ninth year to pay another amount of money so that the ashes can stay in their niche. There are only two crematoriums in Brisbane. One is at Albany Creek and the other is at Mount Thompson. I have discovered in recent times that Mr Brierley is a real mover in the Brisbane crematorium game. The other day in the grievance debate I named the six directors of Brisbane Crematorium. Mr Brierley's Industrial Equity Ltd owns 50 per cent of BCL. What is causing me great concern is the announcement that he has just bought into another funeral group called Simplicity Funerals Pty Ltd. The news yesterday in the Queensland edition of the Australian was that he has bought 10 per cent of the stock in that particular business. Keith Russell, the managing director, who, like Brierley, is a Kiwi, is reported as saying: We're opening up the possibility of the average man in the street buying a funeral franchise instead of a McDonald's franchise. That has very little to do with what I am saying, except that I want honourable members to have some idea of the mentality of some of those people. We have enough troubles in Brisbane at the moment because of the monopoly which exists, with the heartless money-grabbing company up there that is prepared-- Mr Chynoweth —That is free enterprise, isn't it? Mr DONALD CAMERON —I say to the honourable member that I do not believe that free enterprise should be allowed in this field. That statement comes from a Liberal. I am free enterprise to the boots, but I do not trust people in this field. Brierley may be just a mover and a dealer, but he has bought in 10 per cent of the stock in Simplicity Funerals. In the last couple of years, the Brisbane City Council has built another crematorium in Brisbane. It was to be run by the Brisbane City Council, but the recommendations of the former Council and the current Council-one was Labor and the other Liberal-was to sell it off as it was getting a little costly. It was put out for tender. Guess who has tendered $551,000 for the Parkinson Crematorium in Brisbane? Mr Chynoweth —Mr Brierley? Mr DONALD CAMERON —No. It was Simplicity Funerals. The plot thickens. This will become the third string of the eventual monopoly. That really creates a stranglehold in Brisbane. I have been condemning Brisbane Crematorium Ltd for saying that it would kick people's ashes out after 50 years. Apparently a policy is in place in Melbourne that it will be 25 years, and out the ashes go. Who is to know that people's ashes will be booted out within another 10 years, or five years, or five weeks? Ashes will go in and out. A crematorium need have only one niche. It could save a lot of land. It could sell off much of its land and just have one niche. A person's ashes would have a week in that niche, then out they would go. I am just drawing the attention of the House to what is going on in this undertaking, cremation, burial business. It is high time that State governments stepped in and put an end to this. I made inquiries in Sydney today. When I told people at one of the crematoriums about what was being proposed in Brisbane, they were shocked. They had heard about it, but they were shocked that people could even contemplate such recycling in two-thirds of one's normal lifetime. Mr DEPUTY SPEAKER(Mr Drummond) —Order! I think that the honourable member for Moreton has more than strayed from the Bill. Mr DONALD CAMERON —You are probably right, Mr Deputy Speaker. I did outline my argument in the context of death and taxes. I really did look after the tax side of the argument in the first five minutes of my speech. I touched on the other matter in the last part. I note that the Minister for Aboriginal Affairs (Mr Holding), who represents the Minister for Veterans' Affairs in this chamber, is at the table. I know that the Government is determined to ensure that these crematoriums will not heave out the remains of former servicemen, and I commend the Government on that. I notice that the shadow Minister for Veterans' Affairs, the honourable member for Farrer (Mr Tim Fischer), is sitting opposite the Minister and agrees. Mr DEPUTY SPEAKER —Order! The honourable member for Moreton has been warned that the subject he is discussing has nothing to do with the Bill. Mr DONALD CAMERON —Mr Deputy Speaker, I just took advantage of the opportunity given to me. I will not repeat what I said on the subject of tax except to say that I hope that the Government will withdraw those proposals when the heat comes on it in the other place. Mr WRIGHT(Capricornia)(5.28) —I think that the honourable member for Moreton (Mr Donald Cameron) was as off beam in the subject he raised as he was with some of the comments he made on the original tax debate. We all agree that charities are given a special position, and that should be the case in our society. At the same time, charities, regardless of who and what they are, should pay their way when it comes to their employees. I simply cannot accept what the honourable member for Moreton has said to the effect that there should be special arrangements so that the laws that apply to others within our community shall not apply to those who work for charities. I would like to see some laws with regard to charitable institutions and even grammar schools changed in Queensland. Let us take the grammar schools for a moment. Those who work within most grammar schools are paid far less than anyone else in the community. People who work in a school laundry could end up with a little over $100 a week for the hours that they put in. If they work in the residential areas they get paid less. I do not think that is good enough. I concur with one aspect of the speech of the honourable member for Moreton: If these measures are going to create problems, we need to look at that issue as a total community. But we have to say that there will be some sort of consistency in our tax laws. We do not want people setting up phoney charities, as did a fellow in Rockhampton some years ago involving the collecting of rags. I wonder whether the honourable member for Moreton would like us to give him special privileges and fringe benefits on his car and on his house simply because he is involved in a so-called charity. What that fellow in Rockhampton was doing was racing around collecting rags and giving a small percentage to charity while making a considerable amount of money on the side. Just because a group constitutes a charity it does not mean that it needs special preference and privileges. On the broad side of this argument, I think that members of the Opposition have an enormous hide to come into this chamber and even mention the word `tax'. After all, this is the Liberal Party of Australia which has a record on taxation which almost constitutes a national scandal. For five years we saw the most blatant tax scandals in Australia's history. In that period we saw a rundown in tax administration in this nation. We saw the coalition Government-the Liberal-National Party Government-do nothing to address the basic failings of the tax system. Every time one hears a complaint about the amount of tax we pay in Australia one should realise that prior to the Hawke Government the Liberals and Nationals were in power for more than 30 years. For a very short time we had the Whitlam Government in power trying to redress the situation, but for the bulk of the time the Tories have been there. What did they do? They did nothing-except support the tax avoiders and the tax evaders. During that period the Liberal Government under Fraser, Howard and a lot of the honourable members who are still sitting on the Opposition front bench, repeatedly broke their tax promises to the people-promises to index the scales. We saw all sorts of wild promises every time there was an election, but nothing was ever done. We can contrast that record with what this Government has done. It has instituted a vigorous policy of closing the tax loopholes and gaps. I doubt whether there are many Australians, except the rorters, the evaders and the avoiders, who do not support us today. We have seen these gaps closed-gaps in the superannuation areas, income splitting, the use of unit trusts, the leverage leasing system, the prescribed payments system, the sales tax schemes and many others. The rorts went on and on. When this Government acted to try to get back some of the money from the bottom of the harbour schemes we found the Liberal and National parties opposing the legislation that would have allowed this Government and the people of Australia to get back that revenue. That is what we are talking about when we talk about tax-the revenue available to the people of Australia. When this Government tried to do something to recoup those hundreds of millions of dollars, who voted against the measure? Who stopped the Government from succeeding in its attempt? Members of the Liberal and National parties. They stand condemned. Their record is so bad that they should hang their heads in shame. The Hawke Government has re-invigorated tax administration in this country with major additions to its resources, as well as a massive overhaul of the penalty and compliance provisions. We have field officers out there now checking the system. Ten times more tax returns are being checked now than in the last year of the Fraser Government. The banks are co-operating properly and declaring the interest earned on bank accounts. Those bank accounts are owned by many people who were not declaring their interest regardless of the fact that it was income. Some were doing so because of ignorance but many were doing so purposely. Now we have a government that is prepared to act to overhaul the tax system with the most comprehensive tax reforms since income tax was established in this nation. These reforms involve, first, the closure of the loopholes in capital gains, fringe benefits and tax sheltering areas. They also involve the largest tax cuts in Australia's history-some $41.2 billion with a rate of 49 per cent. This is so important because many of us who move around the nation have spoken to small business people and others who are prepared to have a go, but who say: `What is the use of working more when you are paying 60 per cent in tax?' This Government has acted properly because it is bringing fairness back into the tax system. No-one likes to pay tax but we must pay our way. If we want defence forces, roads, schools, hospitals, proper care arrangements and facilities and a proper social infrastructure in our nation then we must pay our way. But the Liberal Party says no. It says let the poor, the workers and the aged pay the way, but not those who are part of that special silver tailed, blue ribbon group in the Liberal Party. Liberal members want them to have all the fringe benefits in the world. I say no and I believe that the people of Australia will say no. This Government is acting to close all the loopholes and the rorts that the Liberals and their mates have been using for three decades. This Government has also introduced an imputation system for dividends. That is the most substantial change in corporate tax in our history. Honourable members opposite should talk to those who have paid tax on dividends made to them, even though the company has also paid tax. They were fed up with that double dipping. This Government has acted to stop that, yet we hear Opposition members say that we are anti-business. We are not anti-business; we are giving businesses opportunities that they have never had before. They asked the Liberals for those opportunities but they never got them. This tax package is all encompassing. From the tax point of view it will cover those areas which have been used for evasion and avoidance. Take, for example, the private use of company motor cars. I doubt whether there is one person listening to this debate who does not know someone who has had a company car and has used it privately over and over again. We want to put an end to that. We do not want to be unfair; so we are allowing the use of the car to be measured and checked on to ensure that those who use their cars for business purposes or for income earning purposes have that claimable deduction. But those who are not-- Mr Tim Fischer —The farmer with his utility has to make seven entries every time he uses his vehicle. Mr WRIGHT —That is not so. If the honourable member looks at the legislation he will see that there is a measure that will be used in such cases. I will explain it if he wishes me to do so. It has been introduced in such a way that a person has an option to adopt the statutory formula. I think that is fair because not everyone will have the time to sit down and fill in the records. There will be those who will opt for that preference. The Government will overcome so many problems here. Take as another example of fringe benefits the interest free loans for those who deserve them as an incentive for employment. In the banking area negotiations are going on with bank employees. Other matters covered by this legislation include the release of debts and the payment of private expenses. Is it right that someone should get, as part of his income, part C or part D, the costs incurred in sending his kids to school? Every other Australian must pay his own way. But the Liberals and the Nationals say no, there are those Hottentots, those who sit on top of the pine tree, who should have special advantages. Instead of being paid an extra $10,000 a year in wages which are taxable, those people have had their children's fees to some of the posh private schools paid for them. That was a way of getting around the tax laws. Those fees were income but they were not being taxed. This Government says no and the people of Australia say no. They say that everyone must pay his way. The Bill also covers free and subsidised residential accommodation. The Government is not being stupid over this; it has recognised the difficulties of isolation and distance. It has accepted these problems. It is quite hard to get people to go to regions such as mine, in the mining area, and it is necessary to subsidise their accommodation as an incentive. So the Government said it would give such people special consideration. The Bill also covers free and subsidised board and concessional fares for airline transport. While we accept that these should not be used as some sort of means of tax evasion, the Government has said that it will come up with an arrangement which is being negotiated now with the airline industry unions so that those who get a special benefit because of their employment will not lose out. The list goes on. (Quorum formed) The quorum was called by members of the Liberal and National parties because they do not really want this issue to be debated. They do not want the people of Australia to hear what they have been doing and what we are trying to stop. As I said before, those at the top of the tree-the Tories who want to keep their special advantages-want to rort the tax system and not pay their way. But this Government is determined to overcome those problems. The fringe benefits tax is typical of what we are about, just as is the entertainment tax which I mentioned a moment ago. The revenue gained from the imposition of the fringe benefits tax on or after 1 July is estimated to be worth $330m for 1986-87, $540m for 1987-88 and $625m for 1988-89. Millions upon millions of dollars will be used for the people of Australia. This money will not be used in the board rooms of some of the big corporations of this nation; it will not be used to back the toffs and the Hottentots. The money will be used for hospitals, roads and local authorities. As I say, the money will be used for the people of Australia. It is no wonder the Tories do not want to see this happen. We know their record of supporting the evaders and avoiders. This Government is introducing a fringe benefits tax because the tax system has been increasingly subjected to evasion in the fringe benefits area. What did we find when the blatant paper schemes were closed off in the early 1980s? We found that the high income taxpayers-again the Tories, the Liberal supporters, the National Party supporters-increasingly turned to fringe benefits as a means of minimising the tax paid on their total remuneration. They were not prepared to pay their way and they used any scheme available to them legally, and in some cases illegally, to avoid paying tax. As I said, the Liberal Party's record on taxation is abysmal. It has always sought to defend the tax avoiders and the tax evaders. It has always sided with its high income friends who make party jokes about how much tax they do not pay. We in the Labor Party represent people. We realise that governments must have revenue. However, we realise that everybody ought to pay tax on an equal basis. The Labor Party has always taken a firm stand against tax avoidance and evasion since its election to office. The Labor Party has introduced dozens of measures aimed at making the tax system fairer and less open to abuse. The measures before the House tonight also have that objective. However, as usual, the Liberal Party is going to oppose us. The Liberal Party will continue to fight and say: `This is not in the interests of the people.' What baloney, what bunkum. It is time the people of Australia realise what is going on and the real motives of the Liberal Party. The Opposition dishonestly supports the tax cuts provided by the Government to honest taxpayers. Members of the Opposition certainly want tax cuts to be given. They say that that is wonderful. But when it comes to finding the revenue to meet those tax cuts-this is revenue neutral; in other words, we will give the moneys we raise back to the people-the Liberals and the Nationals say: `Well, we do not want those taxes but we want the tax cuts'. They have no credibility whatsoever. They certainly cannot have it both ways. It is time they got on side with the people of Australia and realised that the people of Australia want each and every one of us to do what is right, to be fair dinkum when it comes to the tax system. We need to act against those who are blatantly avoiding their burden of tax. We accept that taxation is a burden. But we all have a responsibility to bear. The motor vehicle fringe benefits are typical examples of rorts. As I said before the quorum was called, many of us know of people who use business vehicles for private purposes. The same sort of thing can be said about entertainment. I recall talking last year to some lawyers in Brisbane who told me that their daytime eating arrangements were finished. Five of them used to take turns to pay for a meal. On Monday one of the lawyers would pick up the tab for everybody. The next day another lawyer would pick up the tab and so it went on and on. It was also a common practice around the Inns of Court. Regrettably, lawyers in particular were in it up to their necks. This was the normal thing. The restaurateur did not even have to take any money from them. He even knew whose turn it was to pay. He just noted which lawyer owed what on a particular day. I am sure that many people in the business sector did exactly the same thing. I should not cast too many aspersions on lawyers because we have some mighty young and successful lawyers on this side of the House. I notice that my colleague from South Australia, the honourable member for Makin (Mr Duncan), the honourable member for Maribyrnong (Mr Griffiths) from Victoria and a few others are in the chamber listening to this important debate. I would not want to cast aspersions on my colleagues because I might need the numbers in Caucus. However, people have been rorting the entertainment system. I do not want to introduce too much frivolity into the debate because this is an important subject. It is important that we have a proper tax system. It is important that people pay their way. It is important that governments bite the bullet and close the tax loopholes. That is exactly what this Government is doing. The people shall be the beneficiaries. The losers will be the rorters, the tax evaders and the tax avoiders. I am pleased to say that most of them are members or supporters of the Liberal Party and the National Party. Mr SLIPPER(Fisher)(5.46) —Once again we have heard a load of tripe from the honourable member for Capricornia (Mr Wright). He portrays himself and his Party as not being anti-business and not being opposed to the professionals in this society. He got into trouble when he started to cast aspersions on lawyers in the Australian Labor Party. It was interesting to see how quickly he retreated when in fact they looked at him in a way which meant that his future prospects could be threatened. It was 225 days ago-19 September 1985-when the Treasurer (Mr Keating), the bowser bandit as I think he is called by some people on this side of the House, came in here and told us about his reform of the Australian taxation system. The Government claimed that the new system would be fair. It claimed that the new system would be equitable. But the reverse happened. Since 19 September 1985, employers, employees, business people-the ordinary men and women of Australia-have been concerned, worried and overcome by a state of uncertainty because of the way this Government has prevaricated and threatened so many industries through its broad brush approach and its failure to take into account both the needs of the people of Australia as well as the desire and the need to keep industry viable. We find that the taxation Bill debated in the House yesterday and the fringe benefits taxation package discussed today total 199 pages of legislation. There are 151 pages in the four Bills relating to fringe benefits alone. We find that there are 274 pages in the explanatory memoranda, and on it goes. Yet, we find that the second reading speeches of the Treasurer and the Minister of Immigration and Ethnic Affairs and Minister assisting the Treasurer (Mr Hurford) total only 22 pages. We wonder whether the Government is trying to avoid its responsibility to outline to the Parliament the way that it intends to change the laws of this nation. We should consider some of the things which are being adversely affected and some of the areas which will be hurt, and hurt drastically, by the Labor Government's policy. The car industry is now in great trouble because of the tax on motor vehicle fringe benefits. Mr Bannon, the Premier of South Australia, came to Canberra just a couple of days ago and spoke at a dinner. He said that he had hoped to bring good news-good news for the industry which plays such a vital role in South Australia. However, he had to stand up and say in effect, though not in these words: `The ALP Federal Government has let down the State of South Australia'. Mr Downer —It has. Mr SLIPPER —As the honourable member for Mayo points out, it has. The South Australian Labor Government will be swept from office and replaced by a National-Liberal Party government in South Australia after the next State election. We find that people in remote areas and those who are in receipt of housing benefits will be threatened, admittedly not to the extent that the Government first outlined. But people who are in mining areas and remote areas are adversely affected by the Government's policies and by the legislation that is being debated today. The Government is threatening the jobs of 10,000 restaurant employees. Ten thousand people will be cast out of employment in the restaurant industry. It is a sad and sorry day for Australia when the Income Tax Assessment Act is being turned upside down and cast out the window. Assessable income has traditionally been calculated in this country by subtracting reasonable and allowable deductions from gross income. I think it would be illuminating for members of this House if I read section 51 (1) of the Income Tax Assessment Act. It states: All losses and outgoings to the extent to which they are incurred in gaining or producing the assessable income, or are necessarily incurred in carrying on a business for the purpose of gaining or producing such income, shall be allowable deductions . . . What has happened is that deductions, which traditionally have been allowable deductions-which the Treasurer himself admits are allowable deductions-are no longer to be deducted. The result, at least in the restaurant industry, is that 10,000 Australian men and women-employees whom the Australian Labor Party purports to represent-will be cast out of employment and will be cast on to Labor's dole queues. We know how unemployment is rising under this Government. We know how more and more people are being cast out of work by the disastrous policies of the Hawke Government. We find that the fringe benefits tax is only one aspect of the Government's overall budgetary tax strategy. We find that the Prime Minister (Mr Hawke) said in his election policy speech at the Sydney Opera House prior to the election in March 1983 that there would be no new capital gains tax. What do we find now? We find a new capital gains tax. We find that the quarantining of farm losses has now been brought in. We find also that negative gearing is to be abolished. What this Government is doing is mounting a concerted attack and undermining the traditional Australian idea of a fair day's reward for a fair day's work. We find that there will no longer be, after this legislation is passed, any reward for initiative, enterprise and hard work. We in the Opposition believe that the Government will stand condemned for this. We believe that the measures that the Government has brought before the House will in no way carry into effect the idle rhetoric that the Prime Minister and Treasurer of this nation saw fit to utter before the people of Australia prior to the National Taxation Summit. It is interesting to note that prior to that Summit the Prime Minister announced nine principles to be followed in any tax reform measures. The fourth of these principles stated: . . . any reform must lead to a simpler system, which therefore all Australians can understand more easily-- The eighth principle stated: . . . any reform must provide the best possible climate for investment, growth and employment in Australia. The ninth principle stated: . . . any reform package must have widespread community support- In fact, these three points have no public support. Indeed, the other six principles have been rejected by the people of Australia also. I really wonder why this Government insists on inflicting on the people of Australia-the people who make up our country-such adverse and terrible policies; policies which will undermine so many industries. We know what Mr Bannon said. We know what the restaurant situation is. I think it is now time for the Government to re-evaluate what it is doing. I would like now to look at a couple of other aspects of the legislation. In my electorate I have been approached by very many airline employees and former airline employees who are concerned by the way that the fringe benefits tax will affect their entitlements. We should remember that airline employees and former airline employees travel on a sub-load basis. They do not get a confirmed ticket; they do not get the sort of ticket that anyone who pays the full fare gets. However, we find that this Government will penalise those people. As a result, there is a very real possibility that the airlines will withdraw these benefits and that there could be very considerable disruption in the airline industry as a result. I have heard it suggested that there could be a blockade of Canberra by the airlines. I suggest that there should not be a blockade of Canberra because members on this side of the House support the airline employees one hundred per cent. What would be more appropriate perhaps would be a black ban on Labor Party politicians because they are the gentlemen, and I suppose I should say gentlewomen, who are bringing in this legislation-a law that will act against airline employees and retired employees with such adverse effect. It is about time that the Government took note of the prevailing political climate in Australia. We should look at the opinion poll published yesterday in the Bulletin magazine which shows that the ALP has now fallen behind the National and Liberal parties. That is a trend which will continue. It will grow. There is no doubt in my that the ALP will be swept from office at the next election. We heard the Special Minister of State (Mr Young) this morning state that the election would take place at the end of 1987. I hope that this Government goes its full term, but we have heard promises before. ALP promises seem to be torn to shreds and thrown out the window over and over again. We believe that governments should run their full course. We know how the Prime Minister broke his promise in 1984 when he called an election for December in that year. We know what his promises are worth. The fringe benefits tax proposals which are before the House are yet another indication of the way that the Labor Party is continuing to ignore its promises and continuing to ignore the interests of the people of Australia. The National Party has been completely and utterly opposed-I make this clear for those people who are listening-to the fringe benefits tax since that proposal was unveiled by Labor in 1985, 225 days ago. It has taken Labor that length of time to get this legislation before the Parliament. We have all read the newspapers. We all know that there has been a great factional battle in the ALP. We have had left against right; we have had centre left, presumably, against the rest; we have had the socialist left against everyone else; we have had the left guard against the right guard; and I do not think any honourable member would be surprised, if we had the mud guard as well. We remain opposed to the fringe benefits tax. We wish to assure the people of Australia of our opposition to this tremendously negative impost on business and, indeed, on all Australian people. We remain opposed to Labor's assets test, especially when it is going out of its way to hurt those people who for so many years have contributed to make Australia the country that it is today. We are opposed to that miserable, underhanded deal of the ALP with the unions for a 3 per cent superannuation payment. Without doubt Labor is trying to drive all incentive and initiative out of Australia's most efficient and industrious innovators, namely the small business and export industries. Why is Labor opposed to these industries, I wonder? Indeed, the people of Australia no doubt also are wondering. If we cannot stop Labor's fringe benefits tax-we will certainly be doing our best to do so in the Senate-it is important for us to get rid of the fringe benefits tax on our return to government at the next election. Mr Tim Fischer —Hear, hear! Mr SLIPPER —I thank the honourable member for Farrer for his whole-hearted support. I guarantee that I will be working along with my colleagues to make sure that Labor's fringe benefits tax and the adverse effects which it will have on Australian business, Australian farmers and the Australian people as a whole, will be repealed after the next election. Mr MOUNTFORD(Banks)(5.58) —I am pleased to join this debate and support the Fringe Benefits Tax Assessment Bill and cognate bills, which have been the subject of much public debate recently. I am surprised that the previous speaker, the honourable member for Fisher (Mr Slipper), did not put forward any arguments, on behalf of the Opposition, against the fringe benefits tax to the degree where he was able to point out to this House how those taxes would affect the ordinary people of Australia. We heard a lot of rhetoric from the previous speaker. In fact, when one talks about left guards and right guards one must say that perhaps he is appearing as the rear-guard of the National Party of Australia. The Fringe Benefits Tax Assessment Bill introduces another major element of the tax reform package. It represents a system for effectively taxing remuneration obtained as fringe benefits which, up until now, largely have escaped tax. The legislation redresses the position whereby over the years there has been a very strong movement towards the remuneration of employees, especially higher income earners, by fringe benefits packages which allowed income tax to be avoided on substantial parts of the overall remuneration. So-called tax-free perks came to dominate salary package negotiations, and such packages were openly advertised in the business market-place. Increasingly innovative deals were emerging, particularly following the demise of the `paper' tax avoidance schemes in the early 1980's. This situation was exacerbated because of deficiencies in the income tax law which was unable to cope with the necessity for subjective judgments on a case-by-case basis to be made for taxation purposes of the value of fringe benefits in the hands of individual employees. From the outset let us examine some of these fringe benefits in greater detail. Fringe benefits, in the form of company cars, low interest or no interest company loans, subsidised accommodation and the like, are goods and services. They are goods and services just like the ones that any average income earner may acquire, with one important exception-the taxpayer does not pay for the benefit. It is pointless arguing that a mere taxpayer on $25,000 without any fringe benefits is in the same position as a salaried staff member on $25,000 per annum who has his own company car, the ability to borrow money from his employer at a favourable rate or make use of other company-provided fringe benefits. Clearly, fringe benefits put employees in a far better position, a position which cannot be analysed purely in terms of actual money paid out to them as salary. If fringe benefits were quantified and added to income we would see our hypothetical employee's income take a quantum leap of many thousands of dollars. It was during the reign of our predecessors that fringe benefits packages became so popular. As a result of these extra benefits going untaxed, usually to the benefit of upper income earners, the Government lost more and more revenue. To make this up, more pressure was exerted on those on marginal income levels to come good with the tax money. Again, the rich got richer, and the poor made up the difference. Again, it is in the interests of equity amongst taxpayers that the Government should intervene to ensure that the burden is evenly shared. For administrative reasons, the tax will be assessed and paid by the employer, not the employee. To avoid unnecessary administrative burden, the tax will be payable for benefits in a year ending on 31 March, rather than on 30 June. The tax will be payable in quarterly instalments by 28 July, 28 October and 28 January only. That transition period will be from 1 July this year to 31 March 1987. The tax rate for the transitional year will be 46 per cent, while the rate will go up to 49 per cent in subsequent years. One need only look at the specific provisions of the legislation to see how just is the Government's approach. It is only right, for example, that an employee, when engaged in his work away from home, should be given an allowance to cover his expenses. As such, a reasonable living away from home allowance is not taxable. However, the practice has arisen of virtually awarding employees a tax-free bonus by bestowing allowances out of all proportion to the needs of an employee when engaged in work out of town. Such excess amount will come within the ambit of the legislation. Other areas of necessary exemption are staff canteens, employee commuter transport benefits and the provision of child care facilities. It would be hypocritical for a government committed to equal opportunity for women to have taxed child minding facilities, the very facilities which are necessary to allow some women to enter the work force. Other, strictly drawn provisions, will exempt clergy members of religious orders from taxes. Clearly, the legislation is designed to affect only those who have escaped tax for some time through fringe benefits, and not to hurt the average income earner. Several speakers have already dealt with the question of the effect the taxation will have on the motor vehicle industry. The only contribution I wish to make is this: The Opposition is already prophesying doom, as is usual, following the introduction of this tax. It claims that vehicle sales will be down this year on last year's figures. Of course they will be down. Last year was an extraordinary year of growth for the whole economy, and the best that the motor industry has ever had. We know that growth will be lower this year, and therefore so will sales in the industry. As for the effect of fringe benefits taxes, I can again only reiterate the facts. The promised lull in the entertainment industry following the abolition of tax deductible business lunches did not occur. Another example is the attitude towards the tax as it affects airline employees. The previous speaker said that airline employees would be affected. That, of course, is not the case. When first announced, airline employees justifiably feared the effects on their very generous travel concessions. I received many representations from airline employees within my electorate. Following talks with the Australian Council of Trade Unions, and the airline industry unions, the airlines have agreed to pay the full cost of the tax without threatening the existing travel concessions. This is yet another example of consensus in action. I think it must be clear, even to the Opposition, that ethics of justifiable evasion of tax by well-heeled taxpayers is a thing of the past as far as this Government is concerned. Bottom of the harbour schemes are out, and now we are pursuing some of the residual benefits which the rich still have to the detriment of the average earner. Until now there has been a perception in the community that everyone has to pay tax except for those rich enough to get out of it. Frankly, the people have had a gutful of it. The Bills before us today are a giant step forward towards restoring equity to the taxation system. They are measures which are necessary to give the public confidence in the ability of the Government-any future government-to tax fairly. One must also bear in mind that the revenue gained from the tax measures before the House today will be passed back to the taxpayers by way of tax cuts. As I and other speakers pointed out yesterday, the amount of tax cuts which will go back to taxpayers from the beginning of the next financial year will be more than generous. Indeed, it will more than offset any of the revenue gained. People will receive in their pockets during the next financial year just over $9 per week. In the following financial year it will amount to an average of $15 per week for the average wage earner. In conclusion, I support these Bills because they form part of the tax package, the first part of which was passed by the House yesterday, to try to bring about tax equity for the Australian community. Until now, that has only been a myth because those who have been able to get out of paying tax have had very little remedy applied to them. These tax Bills, along with those passed yesterday, will correct that situation. I believe they should be supported by the Opposition. Surely, the Opposition is not in the business of backing those people who are trying to get out of paying their fair share of tax. I commend the Bills to the House. Mr DOWNER(Mayo)(6.07) —I have listened to this debate almost from its beginning this morning. I have heard a large number of very good speeches from members on both sides of the House, expressing quite different, and quite legitimate, points of view. I draw the attention of the House to the quality of only one speech-that is, the speech by the honourable member for Capricornia (Mr Wright)-who, as usual, directed a voluble flow of defamatory abuse against members of this House and members of the Australian community. He does it every time he speaks. If any of his constituents are listening, I hope that they will take note of that point. This debate, of course, concerns measures which form part of the Government's taxation package. We have already had some debate on that package yesterday. One would have hoped that, in introducing some tax initiatives, the Government would have taken account of the three bases of an effective taxation system: A system which is efficient, a system which is simple, and a system which is equitable. This measure and, indeed, other measures in the Government's tax package, do not meet those three basic requirements which all economists would agree are important requirements for an effective taxation system. This measure is clearly not efficient in economic terms because it reduces economic growth, takes jobs away from Australians and adds costs to the extent of between $600m and $800m to Australian industry. It is not simple, as other speakers have pointed out, because the paperwork in relation to this legislation alone comprises 151 pages of legislation, 176 pages of explanatory memorandum and a 56-page booklet which is to be sent to all businesses in Australia to explain how this tax is supposed to work. It obviously is going to impose an enormous burden of paperwork on the 700,000 or 800,000 businesses which will have to cope with the legislation. That could not by any definition be described as simple. It is not equitable legislation either, particularly when one looks at the effect it is going to have on the jobs of those people in the car industry in South Australia and other parts of the nation. The 4,500 people in South Australia who will lose jobs because of this legislation will not regard it as equitable; nor will the disadvantaged in our community regard other tax measures, such as the negative gearing proposal as equitable when we consider the effect that has had on rental prices in Australia. It is not equitable either under the Australian taxation law or under the principles we have applied to taxation in this country to make the employers pay the tax rather than employees. Mr Rocher —Hear, hear! Mr DOWNER —This a point that the honourable member for Curtin very much wanted to make had the Government, by way of the guillotine, not taken away the right of that honourable member to represent the views of his electorate. It is not equitable to tax a non-beneficiary for a benefit. The Government has done that because it is too cowardly to face the wrath of the Australian Council of Trade Unions, which apparently will not implement equity on this occasion. This fringe benefits tax proposal is having a very severe effect on Australian industries. It is having a severe effect on manufacturing industry, as I shall explain. It is having a severe effect on the mining industry, as others have pointed out. It is even hitting hard Australia's primary industries, those industries which in any case are the hardest hit by both the Government's policies and international circumstances. Mr Andrew —Hear, hear! Mr DOWNER —Fancy imposing another cost on that industry when it is in the disastrous circumstances so often articulated by the honourable member for Wakefield. The industry I want to talk about briefly is the industry which is so important to the State of South Australia, the automotive industry, and the effect this fringe benefits tax will have on that industry. Honourable members will be aware that between 40 and 50 per cent of car sales in Australia are fleet sales, that is, cars sold in the interests of business. The fringe benefits tax will increase the cost of those cars to employers by some $1,600. It is not surprising then that already this year sales in the car industry have dropped by a staggering 25 per cent. The effect of that on the State of South Australia, which depends so much on the automotive industry, has clearly been quite disastrous. The South Australian Government, a Labor government, pleaded with the Federal Labor Party to abandon this measure. The Premier of South Australia, as the honourable member for Fisher (Mr Slipper) mentioned earlier, was speaking in Canberra only last Tuesday. In his speech he said: I am addressing you- these were car people- in the knowledge that a decision has been taken which will prove detrimental to the car industry and one which will have severe ramifications for my State in particular . . . I am particularly disappointed that the Federal Government was unable to show the flexibility to change its plans as this was an issue which was not being opposed on purely sectional grounds. They are the words of the South Australian Labor Premier, Mr John Bannon. He was right to say those things because he knows-and these are his own figures-that 4,500 jobs will be lost in the State of South Australia because of this measure. Indeed, the estimate is that nationally some 10,000 jobs will be lost. The Government apparently is not concerned about the consequences of this legislation on employment in my State or in other parts of Australia. I think that shows an extraordinary lack of compassion and common sense on its part. Car sales in general terms are going to fall very substantially specifically because of this legislation. The National Institute for Economic and Industrial Research, which is by no means a political organisation and which has no political sympathies, estimates that in 1986 some 35,000 cars will not be sold because of the fringe benefits tax and that in subsequent years 25,000 cars a year will not be sold. The total effect of this tax on the automotive industry is simply a disaster. It is also a disaster in terms of the Government's own car industry plan. When I personally raised this question in the House with the Treasurer (Mr Keating) late last year the Treasurer's response was that when the Government introduces tax legislation it does not necessarily do a study of the effects of those taxes on an industry and he conceded that no such study was done in the case of the car industry. The consequence will be that employers who are purchasing cars for their employees will purchase smaller and cheaper cars rather than the Commodores and Falcons they have been purchasing until now, and those smaller and cheaper cars have a lower local content. That will create chaos in the context of the car plan. No wonder Senator Button went to Cabinet pleading for this measure to be changed. No wonder so many members of the Labor Party expressed concern about it. It really is an extraordinary indictment of the Treasurer's arrogance that he should have cast aside all those jobs that will be lost in my State and other States and indeed the effects of this tax package on the Government's car plan. In recent days, with the co-operation of the Liberal candidate for the Federal seat of Hawker, Mr Kym Jacobs, a man who will be a member of this House after the next election, I have conducted a survey of metropolitan Adelaide and country areas of South Australia to establish what effects this legislation and other recent initiatives of the Government have had already on the car dealers. Those car dealers who have responded to the survey have pointed out that their sales are down on average by between 30 and 50 per cent this month. The simple consequence of that is that they are now beginning to lay off staff. In the town of Murray Bridge in my electorate, for example, Murray Mitsubishi has said that it has not sold one single fleet car this year and as a consequence is beginning to lay off staff. Martin Motors Pty Ltd in the country town of Yankalilla which is already struggling because of the consequences of the rural decline has pointed out that from its point of view things could not get any worse because it cannot sell any cars anyway. It cannot sell any cars partly because of the rural crisis and partly because of interest rates, so from its point of view the fringe benefits tax will not be so devastating because it is going under any way. Two dealers in the town of Victor Harbor have said that sales will be down by between 40 and 50 per cent. One of those dealers, Southern Holden, has cut back its staff by two. The impact of this legislation on a small town like Victor Harbor in rural South Australia is the loss of jobs. It obviously has a very negative impact on that society. I would have thought that members of the Labor Party would have shown more compassion for those who are going to lose their jobs through this legislation and would have shown more common sense about the total impact of this legislation on the car industry and other industries. Mr Rocher —And some courage. Mr DOWNER —I would have thought that, as the honourable member for Curtin says, South Australian Labor members and senators would have had some courage in this matter and stood up for their State and their electorates instead of scurrying behind the cloak of the Labor Party and would have voted in the House of Representatives and the Senate against this pernicious anti-South Australian measure. If they took their electorates seriously and if they respected the people who put them in the Parliament rather than just the internal processes of the Labor Party, they would have voted against this legislation. The Labor Party would not have expelled them all from the great Labor Party of South Australia. They would not have been expelled. The Labor Party would not have dared expel every single Federal member from South Australia. Of course it would not. Those members, including the Leader of the House and honourable member for Port Adelaide (Mr Young), who has just walked in, have not had the courage to stand up and vote against this legislation-legislation which is anti-South Australian, legislation which is anti-business, legislation which makes our industries less competitive and legislation ultimately which will savage the weak and savage the disadvantaged. Mr SNOW(Eden-Monaro)(6.20) —I want to speak on the Fringe Benefits Tax Assessment Bill and cognate Bills before the House. I have some reservations on only one aspect of these Bills which disadvantage farmers and, more particularly, their employees. The bulk of the Bills are reasonable and do face up to some massive tax rorts. After careful consideration, I have decided to vote for them. They counter the increasing tax burden borne by pay as you earn taxpayers where others are able to use tax provisions to avoid paying tax on benefits received. PAYE taxpayers are forced into paying their tax each week without the types of strategies that can be developed by non-pay as you earn taxpayers. Why should wage and salary earners pay more and more tax while others can claim meals at posh restaurants, call-girls, and flash hotels as tax deductions? My concern, which will take only a few minutes to express, is that farm employer-employee relationships need to be properly considered when we look at fringe benefit tax. I note that in the paper put out entitled `Fringe Benefits Tax-a guide for employers', where residential accommodation is within Australia but not located in a designated remote area the taxable value of the housing benefit in the transitional year of the tax is also the market value of the right to occupy or use the accommodation for the period of the year during which the employee had that right, less the amount of any rent paid by the employee. In future years of tax the taxable value of accommodation within this category will be subject to indexation arrangements. These will be explained in the further booklet to be published in relation to subsequent years of tax. The booklet then goes on to talk about residential accommodation in a remote area and notes that if an area is near a population of 14,000 or more, for farms less than 40 kilometres by the shortest practical surface route from the centre point of such a centre or less than 100 kilometres from the centre of an area with a population of 130,000 or more, then it has remote area consideration. There are different strategies for those remote areas. I would like to point out a problem in areas which are within those limits; for instance, this sub-region of Canberra to which my electorate adjoins. Farmers in these close areas near the Australian Capital Territory and similarly farmers near the close areas of cities such as Sydney, Melbourne, Adelaide, Brisbane and Perth are often paying wages to employees. They could lease out their cottage for $80 or $100 a week simply by making it available to a person in a nearby town. These people are confronted with a difficult choice. First of all, they can charge the employee full rent and face the possibility of losing the employee and not getting another one, or they can allow the full rent and pay perhaps up to $35 a week more tax. This might lead to a decision to reduce the number of employees on a farm. The employer and employee could, alternatively, share the drop in which case neither would be particularly happy and again the relationship between the employee and the employer would be soured, or there could be other strategies to minimise tax. Of course, these are always looked at and quite often found. I make the point that it is up to the Australian Taxation Office to dispute any assessment that is made by a farmer. It is interesting that an estimated 42,000 people receive accommodation benefits on farms in Australia. Of those people quite a lot of shearers, pickers and others are exempt from this fringe benefits tax. In all, not more than 30,000 people will be affected. This is approximately one sixth of the total farms. A fairly significant number of people will still be affected and a number will be classified as living in remote areas. Many measures are alleged to threaten employment in the list of fringe benefits taxes but very few of them affect employment so directly as this one and virtually none of them on an industry sector which has such an important role in our balance of payments, as has the primary industry sector. One of the previous speakers, the honourable member for Fisher (Mr Slipper), spoke about the employee concessional travel, such as that by the airline employees. He neglected to reveal the fact that there has been a joint agreement by the Australian Council of Trade Unions, the airline industry unions, Ansett Airlines of Australia, Trans Australia Airlines and Qantas Airways Ltd on the taxation of staff travel concessions. In fact, airline employees have been advised that there has been a co-operative approach by unions and companies on this very issue. Successful discussions have been held and an agreement has been reached which results in a reasonable level of tax to be paid by the companies. So for employees the existing entitlements to staff travel concessions will remain unchanged. That has been agreed to by the airlines and the ACTU. Since the announcement of the package the ACTU and the airline companies have met with the Treasurer (Mr Keating) and his advisers and have discussed the airline industries, concerns regarding implementation. These discussions have been mutually beneficial. First of all the point needs to be made that the companies will pay the tax, not the employees. Secondly, in answering the question how is the tax calculated, it needs to be said that the fringe benefit tax applies to the arms length price of an airline ticket. The arms length price is 50 per cent of the lowest published fare for international travel. The Government concession accepts that staff travel is not equivalent to commercial travel. There has been a joint statement on the fringe benefits tax which establishes the tax value of fringe benefits. This indicates a 75 per cent of arms length fare, minus employee contributions and minus $200 per employee per annum. The final money amount resultant is then taxed at 46c in 1986-87 and 49c in the dollar thereafter. The tax is to be paid by the company. To establish the amount of tax payable by each airline it may be necessary to change procedures in order to minimise administrative costs. While the tax will mean an additional cost impost for each company, the result is reasonable in all the circumstances. It has also been asked: What will happen to existing travel concessions? Nothing will happen to existing travel concessions. The parties have agreed to maintain the status quo. The airlines will not diminish staff concessional travel arrangements, nor will benefits be improved. Existing concessional travel or entitlements for current and future employees, eligible relatives and retired employees will be maintained. Employees staff travel concessions in the airline industry have been protected. The ACTU and airlines have agreed to enter discussions on a formal, signed document which reflects that agreement. I feel that 13 measures other than the particular one I mentioned affecting farm accommodation contained in this Bill are not only acceptable but also are important in turning the tax burden away from pay as you earn tax payers. I therefore support the Bill. Mr ROCHER(Curtin)(6.30) —Against all principle, the fringe benefits tax is to be levied on the employer and not the beneficiary-- Mr DEPUTY SPEAKER(Mr Cowan) —Order! I am sorry to interrupt the honourable member for Curtin. The Chair will be resumed at 8 p.m. Sitting suspended from 6.30 to 8 p.m. Mr ROCHER —I seek leave, Madam Speaker, to continue my remarks at a later stage. Leave granted; debate adjourned. Motion (by Mr Young)-by leave-agreed to: That standing order 103, the 11 o'clock rule, be suspended for this sitting. Motion (by Mr Young) proposed: That the time allotted in connection with the Fringe Benefits Tax Assessment Bill 1986, Fringe Benefits Tax Bill 1986, Fringe Benefits Tax (Application to the Commonwealth) Bill 1986 and Fringe Benefits Tax (Miscellaneous Provisions) Bill 1986 be varied as follows: (1) Fringe Benefits Tax Assessment Bill- (a) For the second reading, until 10.50 p.m. this day. (b) For the committee stage, until 10.55 p.m. this day. (c) For the remaining stages of the Bill, until 11.00 p.m. this day. (2) Fringe Benefits Tax Bill- For the remaining stages of the Bill, until 11.05 p.m. this day. (3) Fringe Benefits Tax (Application to the Commonwealth) Bill- For the remaining stages of the Bill, until 11.10 p.m. this day. (4) Fringe Benefits Tax (Miscellaneous Provisions) Bill- For the remaining stages of the Bill, until 11.15 p.m. this day. Mr SINCLAIR(New England-Manager of Opposition Business)(8.01) —I intend, Madam Speaker, to say a little more when the next motion comes before the House. However, the people of Australia need to know that this small extension of allotted time for this particular package of Bills-the Fringe Benefits Tax Assessment Bill, the Fringe Benefits Tax Bill, the Fringe Benefits Tax (Application to the Commonwealth) Bill, and the Fringe Benefits Tax (Miscellaneous Provisions) Bill-relates, as I explained earlier today, to the Government's failure to get its act together on the whole question of taxation. We are dealing, under a guillotine, with measures that were first foreshadowed last September. On 19 September we were told that these Bills would be introduced. We have waited from then until now for them to come into this Parliament. Mr Kent —We were waiting for you to do it for seven years. Mr SINCLAIR —The Government is unable to control its members-including the honourable gentleman who is endeavouring to interject, the honourable member for Hotham (Mr Kent). The left wing of the Labor Party is increasingly dictating to the members of the Government where they are going and how they are going, and what they are doing in foreign policy and what they are doing to Indonesia-and the honourable member has done more harm to our relations with Indonesia than many others. It is appropriate that the people realise that the Government has extended this guillotine only because of its inability to introduce legislation at the time that it should introduce it. This measure provides an extension of the hours on the guillotine measure introduced by the Government yesterday morning. It is of no credit to the Government that significant pieces of tax legislation adversely affecting every Australian are not being given adequate consideration in this place but are being now given a guillotine extension not because the Government wishes to give greater opportunity for parliamentary debate but because it has another piece of legislation and, were it not to extend the hours, it is probable that the tax Bills would not come up in time. In that climate, we object to the whole of the character of these proceedings. We believe it inappropriate for the Government to try to confuse the electorate by bringing in yet another important and sensitive piece of legislation through a device which is facilitated only by the motion that the Leader of the House (Mr Young) has just moved. We understand why the Government is introducing the measure. We oppose it. Whilst we may not vote against it in this instance, that is only because the clock is ticking away and there are so many matters about which we wish to talk that are of extreme importance. In that climate, we oppose the measure but will not vote against it. Question resolved in the affirmative. Bill-by leave-presented by Mr Lionel Bowen and read a first time. Mr LIONEL BOWEN(Kingsford-Smith-Attorney-General)(8.04) —I move: That the Bill be now read a second time. Madam Speaker, I refer to my statement that the Government intended 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, and this Bill is to establish such a Commission of Inquiry. Madam Speaker, it is a matter of record that on 28 April Mr Justice Murphy was acquitted by a jury in a trial which had obliged him to stand down from the High Court of Australia pending its hearing. It is also a matter of record that on 29 April the Opposition issued a statement in the following terms: In view of the finding in the trial of Mr Justice Murphy, the Opposition does not propose to take parliamentary action in terms of section 72 of the Constitution based on the specific issues dealt with in the criminal trial. The High Court was to resume sittings on Tuesday, 6 May. At 3 p.m. on Friday, 2 May, at a meeting with the Chief Justice, I was informed that Mr Justice Murphy had agreed to meet with his fellow judges at 2 p.m. on Monday, 5 May, to discuss matters known only to them. Following that meeting it was announced that Mr Justice Murphy would voluntarily refrain from sitting on the High Court until such time as he had had an opportunity to answer matters allegedly involving him as published in the National Times newspaper of Thursday, 1 May, and also matters relevant to him in the confidential volume 2 of the Royal Commission of Inquiry into Alleged Telephone Interceptions tabled in this House on 1 May. It was also announced that Mr Justice Murphy's statement by way of an answer is to be made available for consideration to the Court, the Attorney-General, the Leader of the Opposition and the Leader of the Australian Democrats. This meant that there would be a further meeting by Mr Justice Murphy with his fellow justices of the Court at a time dependent upon when he had had an opportunity to furnish his statement. This announcement caused a great deal of misunderstanding of the intentions of the justices of the Court and on 6 May the Chief Justice was obliged to make a statement that the justices did not intend to make any inquiry or make any finding in order to resolve any controversy as to Mr Justice Murphy's judicial status, rights or duties. The statement further mentioned that the members of the Court agreed to postpone further discussion until Mr Justice Murphy has made such response as he wished. It is clear that further discussion between the justices will not resolve the matter and there is the likelihood of further allegations being made in the National Times newspaper. This makes it imperative that all such matters are resolved as expeditiously as possible. Accordingly, as the Government has always been mindful to have full regard to the necessity of protecting the standing and integrity of the High Court and the preservation of public confidence in it, it decided that this Commission should be established without delay. Madam Speaker, this Bill is to establish a Parliamentary Commission of Inquiry into the conduct of Mr Justice Murphy. The Commission is to consist of three persons who are or have been judges of a superior court. The terms of reference are set out in clause 5 and are to inquire and advise the Parliament whether any conduct of Mr Justice Murphy has been such as to amount to proved misbehaviour within the meaning of section 72 of the Constitution. It will be noted that the terms of reference provide for a potentially wide-ranging inquiry. This has been necessary because, notwithstanding his acquittals of criminal charges, allegations continue to be made against His Honour. It is necessary for the standing of the Judge and of the High Court that all allegations be dealt with one way or the other. The width of the terms of reference is to be read in the light of clause 5 (2), under which in carrying out its inquiry the Commission is to consider only specific allegations made in precise terms. Mr Justice Murphy is not to be required to give evidence before the Commission on a matter unless it is of the opinion that there is before the Commission evidence of misbehaviour sufficient to require an answer and the Commission has given the Judge particulars in writing of that evidence. These important requirements are intended to limit the inquiry to specific allegations, and also allow vexatious or irrelevant complaints to be summarily rejected by the Commission. In addition, clause 5 (4) requires the Commission not to reopen issues dealt with in the trials leading to the acquittal of Mr Justice Murphy except to the extent it is necessary to do so in order to examine other issues in the performance of its inquiry. This includes in particular the issue of guilt or innocence of the charges laid, and whether the conduct the subject of the charges was such as to constitute proved misbehaviour in any other way. The Commission is required by clause 6 (2) to base its findings on evidence admissible in a court of law. It is to have all the normal powers of a royal commission, including the power to subpoena witnesses and call for documents and other material. This will include Mr Justice Murphy, where the Commission decides that there is a case to answer on the matter in question. As is normal for royal commissions, self-incrimination is no excuse for failing to answer, but the evidence cannot be used in any court proceedings other than for perjury. I refer the House to clauses 16 and 27. In order to enable the fullest possible consideration of the matters in issue, but in such a way as not to unduly prejudice the rights and reputations of individuals, the presumption is to be-subject to any decision to the contrary by the Commission-that the proceedings of the Commission will be conducted in private. I refer to clause 7 (1). The Commission is to have access to documents and other materials of the Stewart Royal Commission, including tapes and tape transcripts and summaries, now held by the National Crime Authority. I refer to clause 13 (1). In considering any allegation it is to have regard to the outcome of any previous official inquiry into the allegation, and consider it only to the extent that the Commission considers it necessary or desirable to do so. I refer to clause 5 (3). Under clause 8, the report of the Commission is to be furnished on or by 30 September 1986 unless both Houses extend that date. The Commission is to report to the President of the Senate and the Speaker of the House of Representatives- (a) its findings of fact; and (b) its conclusions whether any conduct of Mr Justice Murphy has been such as to amount, in its opinion, to proved misbehaviour within the meaning of section 72 of the constitution. As honourable members appreciate, if it so reports it will still be for each House of Parliament to decide whether a case of proved misbehaviour within the meaning of section 72 of the Constitution has been established. If the report is that there is no conduct that amounts to proved misbehaviour it will, I trust, be accepted by all members as putting the matters dealt with finally to rest. I commend the Bill to the House. I present the explanatory memorandum to the Bill. Leave granted for second reading debate to continue. Declaration of Urgency Mr YOUNG(Port Adelaide-Leader of the House)(8.12) —I declare the Parliamentary Commission of Inquiry Bill 1986 an urgent Bill. Madam SPEAKER —The question is: That the Bill be considered an urgent Bill. Question resolved in the affirmative. Allotment of Time Mr YOUNG(Port Adelaide-Leader of the House)(8.12) —I move: That the time allotted be: For the second reading stage of the Bill, until 9.20 p.m. this day; for the Committee stage, until 9.25 p.m. this day; and for the remaining stages until 9.30 p.m. this day. It was not my intention to take up any of the time of the House on this matter, but I rather resent the opportunities taken by the Manager of Opposition Business (Mr Sinclair) to keep lecturing us on the way in which the business of this House ought to be conducted. There was never a more scandalous use of the conventions and the practices of this House than under the Fraser Government, when the then Deputy Leader of the National Party of Australia, the right honourable member for New England (Mr Sinclair), was running the House. All of this Government's practices have been in accord with the conventions of the Parliament and have dealt with the problems as they have come before the Parliament. Members of the Parliament will realise that they have had more opportunity to express themselves in debates in this chamber under this Government, even with the increased numbers, than they would ever have had under the Fraser Administration, when the right honourable member for New England was Leader of the House. I intend to see that those opportunities continue in the future. Mr SINCLAIR(New England-Manager of Opposition Business)(8.13) —The hypocrisy of the honourable gentleman who has just spoken is no better epitomised than in the motion which we are now debating. We have been given five minutes in which to analyse one of the most significant measures ever brought before the Australian Parliament-five minutes in Committee. This Government has done more to undermine the institutions of this nation than has any other. This is not purely a matter of debating time within the Parliament, it involves the character of the Parliamentary Commission of Inquiry Bill itself. While each of us on this side of the House is determined that, so far as it is in our command, there will be sufficient time to allow some consideration of this measure, it is essential that people outside this place recognise that the man who has just moved this motion is inhibiting the opportunity for proper consideration in the House of Representatives of measures that have been forced on the Government by the members of that left wing rump who garble away in this Parliament at every possible opportunity. Those on the Left, the sycophants of those who in this place so often try to destroy what is right and proper, are those who are really calling the shots. We all know of the revolt in Caucus this morning. We know the reason why there is no opportunity for us in this place to consider this Bill. It is only because the members of the Left of the Australian Labor Party were not prepared to accept the Bill as it was originally submitted to Caucus. Having had a reprint later this afternoon, now, at a quarter past eight, we are told that the Bill has to be passed through this Parliament within approximately an hour and a half so that it can get to the Senate. I believe that there is no greater condemnation of the Leader of the House (Mr Young) and the Government than the fact that they are not able to control members of their own Caucus in introducing a measure which is designed to sustain the integrity of the High Court of Australia any more than they are able to determine the proper and correct procedures of the House of Representatives. This place more and more is becoming very secondary to the Senate in the consideration of significant legislation. The reason is measures such as that which the Leader of the House has just introduced. This measure is designed to reduce debate on this Bill. It is designed to give the members of the House of Representatives one and a half hours, including five minutes in committee, to consider matters that deal necessarily with the secrecy of the inquiry; the wording and the adequacy of the terms of inquiry; and the degree to which others outside this Parliament, and certainly in the Labor Party and holding high office in the Government of New South Wales, may or may not be involved. For this measure to be accepted by this House is an indictment of democracy itself. Regrettably, we have no time to debate the measure. It is in that climate that, while we are opposed totally to the motion moved by the Leader of the House, I do not intend to delay the House by calling for a division. But people outside the Parliament need to understand that it is not because we do not object; it is only because the Government gives us no alternative. Mr YOUNG(Port Adelaide-Leader of the House)(8.17) —in reply-Again, I resent the charge made by the- Mr Spender —Come off it! Mr YOUNG —I am going to answer. If the Manager of Opposition Business (Mr Sinclair) is going to make these charges, I am going to answer them. If the Opposition wants to waste the time- Mr Carlton —Are you going to waste the time of the House? Mr YOUNG —The honourable member can yell out all he likes; it is his and his colleagues' time. Mr Carlton —This is your time and it is running out. Madam SPEAKER —Order! The honourable member for Mackellar will cease interjecting. Mr YOUNG —The honourable member will have a heart attack. He had better be quiet. He is getting very red in the face. Madam Speaker, I am not going to sit here as Leader of the House and just listen to charges which are so untrue being made against the Government. The Opposition is being given the opportunity to scrutinise the Parliamentary Commission of Inquiry Bill. The shadow Minister was given a look at it very early in the day. As for the accusations made against the Caucus meeting, if I may give the House a story from Caucus, the Prime Minister (Mr Hawke) congratulated the Caucus this morning on one of the best Caucus meetings we have ever had-and so it was. I say this to the Manager of Opposition Business: He talks about what the Parliament has the opportunity to scrutinise and what it does not. The Parliament is able to scrutinise this measure, as are the Press and the public. But we were not able to scrutinise Malcolm when he sneaked around the back of Government House in 1975. Who scrutinised that little effort on the Constitution and the conventions of Australia? While the right honourable member for New England was one of the main actors in that little affair- Mr Carlton —Sixty minutes to deal with the High Court. Madam SPEAKER —Order! Mr Carlton —Sixty minutes. Madam SPEAKER —Order! The honourable member for Mackellar will cease interjecting. Mr YOUNG —The honourable member should be quiet. He will have a heart attack. Mr Carlton —Sixty minutes- Madam SPEAKER —I warn the honourable member for Mackellar. Mr YOUNG —We do not intend to let go unchallenged the charges that honourable members opposite make, so unrealistically, about the conduct of this Parliament. Question resolved in the affirmative. Debate resumed. Mr SPENDER(North Sydney)(8.19) —This is an historic and sad occasion. It is the only time in our history when we have had to consider action under section 72 of the Constitution. It is sad because it has to be done and because it involves the highest court in the land-the court on whose standing, repute and perceived integrity public confidence in our legal system depends. The Opposition's proposal has been adopted by this Government. To that extent, we most certainly welcome the Parliamentary Commission of Inquiry Bill which is before the House. But we leave it to this House and to the public to judge how far the principles underlying that proposal have been adopted by this Bill. We have heard almost nothing from the Attorney-General (Mr Lionel Bowen) in explanation of what has taken place, but I gathered two things from him. He thought that the High Court had caused a great deal of misunderstanding-we all know where the misunderstanding came from-and he said it was now imperative that all issues be resolved as soon as possible. It has been imperative for months that all issues be resolved as soon as possible and Blind Freddy would have known that. We are not debating this legislation tonight because of some principled decision by this Government. The Government has been driven here by the Opposition, by the inexorable pressure of events, and by the mounting tide of public opinion. It has abjectly surrendered the position it has taken in the past. It has half-heartedly brought this Bill into the Parliament because it has been forced to do so and not for any other reason. It did not lack warnings. In September 1984 Senator Durack said to the Senate: If the Government really were willing to resolve the substance of this matter . . . it would co-operate in establishing a form of Parliamentary commission. That is exactly what is being done now. Twenty months later, after two Senate hearings, two trials, one application to the High Court of Australia, an appeal to the Court of Appeal of New South Wales and immeasurable controversy, we are here debating a Bill to set up a commission to investigate matters relating to His Honour Mr Justice Murphy. Just a scant 48 hours ago we heard the Prime Minister (Mr Hawke) speak on this matter in this chamber. Let me quote two passages of what he said: It is impossible for this Government to discharge its primary duty, which arises under section 72 of the Constitution, without allowing the members of the High Court to go through that process . . . He said that it was impossible 48 hours ago. Again, what did that pathetic man say? He said: The miserable people on the other side of the House . . . now seek to usurp the function of the High Court itself. We said at all times that a commission should be established. The Government sought refuge by any means available to it. Was that a call of principle? The Government was looking for the political fix by the High Court regardless of the odium that the High Court might reap as a consequence. The impossibility has disappeared and the Australian Labor Party, condemned by its own Leader, has been dragged here on a pretence of integrity which demonstrates not only a grievous and cowardly failure of duty over months but also an unprincipled abdication of constitutional responsibility. So bereft in understanding of questions of high principle has this Government been that it would devolve responsibility to anyone, regardless of the potential cost to our institutions, as long as it could get itself off the political meat-hook on which it had impaled itself. The Bill before the House should offer an inquiry so wide as to encompass any charge and any allegation so that no possible basis of controversy would remain. Yet it appears that pressures have been at work. Perhaps there was pressure from supporters of His Honour Mr Justice Murphy, and with supporters such as those honourable members who take his cause in the Caucus he needs no enemies. Added to that is the Government's incompetence and incomprehension of the gravity of the issues and the demands of factionalism. The result is that we may have before us an inquiry whose limitations-limitations which are enshrined in the Bill-may doom it to failure. In short, the Government, having shot itself in one political foot, has taken dead aim at the other and, quite by accident, at the judge himself. Let us therefore examine the Bill and some of the issues. We do not have time to examine all the issues, and we are not talking about any single matter. Single events, single instances, single matters by themselves may be excusable and we are not here to pass judgment, but together they must be assessed and weighed. It is the cumulative effect of events, when examined and when the question at issue is one of conduct, that can present a devastating indictment. I do not for a moment say that is the case here, but let us look at some of the issues that the Commission of Inquiry must look at. It must look at the material presented to the Senate Select Committee on the Conduct of a Judge, appointed by the Senate in March 1984. It must look at the material presented to the Senate Select Committee on Allegations Concerning a Judge, appointed in September 1984. It must look at the relevant material presented to the Stewart Royal Commission of Inquiry into Alleged Telephone Interceptions and the issues arising out of and related to that material. It must look at the material relating to the alleged communications and the relationships between the judge and Inspector Don Thomas, as he then was, of the Australian Federal Police, and other persons. All members of this House know that there was a joint opinion and we all know that there was a recommendation that a prosecution be launched against the judge in respect of those matters, and that must be regarded. I should not have thought that any honourable member in the chamber would deny that proposition. The inquiry must look to the nature of the relationship between Mr Justice Murphy and Mr Morgan Ryan and others and between Mr Justice Murphy and other persons referred to in volumes 1 and 2 of the Stewart Royal Commission. It must look at any conflicts of evidence between evidence given by Mr Justice Murphy in the first trial and the unsworn statement made by Mr Justice Murphy in the second trial. It must look to the failure of Mr Justice Murphy to give evidence in the second trial. It seems to be thought in some circles in the Labor Party that it is a matter of no consequence that a justice of the High Court should not give sworn evidence. It was perfectly open to His Honour Mr Justice Murphy as a citizen of this country not to go into the witness box. It was perfectly open to him to adopt the procedure which grew up in the nineteenth century when, so the rules were, one was not entitled to give evidence on one's own behalf, and in many cases for many charges one was denied counsel. That rule still exists in New South Wales. It has been abolished elsewhere. It exists in some other jurisdictions. As a citizen, Mr Justice Murphy is entitled to the benefit of that rule. But the question that the Commission must address itself to is this: Since the evidence for the prosecution was given in the witness box, since the justice's case was put to the prosecution witnesses, was it correct behaviour for the justice then to adopt the process of making an unsworn statement, a statement which is colloquially known in Phillip Street as a statement from the dock? What is the purpose of such a statement? The purpose these days is usually to assist those who may find the strain of giving evidence, coupled with their lack of sophistication and education, too much. So that right still exists. That question must be looked at by the Commission and answered. It must look to the allegations by Mr Justice Murphy at the conclusion of the second case that the trial was politically motivated and at the reasons for that allegation and whether there were any grounds to sustain it. This is not just a case of an ordinary citizen coming out and saying that a trial was politically motivated. Here we have a justice of the High Court, a man who has had an extensive career in politics, who understands the nuances of public life, who after a grievously difficult case-there is no doubt about that-and who was certainly under a great strain, saying that the trial was politically motivated. Mr Griffiths —Of course it was. Mr SPENDER —`Of course it was'-there is the interjection. Now let us examine that allegation. The charges were brought by the Director of Public Prosecutions. The Director of Public Prosecutions is an institution set up by a statute passed by this Parliament under a Bill presented by this Government. The Director himself, Mr Temby, was appointed by this Government. Does anyone really suggest that he was politically motivated when he commenced his prosecutions against Mr Justice Murphy? The case in question on which he based his complaint-the Briese case-went to the Court of Appeal of New South Wales. The Court of Appeal of New South Wales sat a bench of five justices, which is almost unprecedented. I can recall only one other instance of that happening in about 20 years or more. There may be other cases, but that was a very unusual course. That court unanimously determined that there was a case to answer on the Briese allegations. Is it suggested that that decision was politically motivated? If neither the Director of Public Prosecutions nor the Court of Appeal of New South Wales can be considered to be politically motivated, what are the reasons for that statement? Let me put this to honourable members opposite-this should be examined by the Commission-what kind of damage might that statement do to the institutions of justice in our country, coming from a justice of the High Court who says: `This prosecution was politically motivated'. That is as serious a charge as one can make against the administration of justice in this country. That matter must be investigated. We have the seven questions put to Mr Justice Murphy by Mr Justice Stewart in the course of the Stewart Royal Commission of Inquiry into Alleged Telephone Interceptions. Whatever those matters may be, it is a matter of public knowledge that those questions were put and that they should have been responded to. We must consider the failure of Mr Justice Murphy to respond to those allegations during the course of the inquiry. I do not contest that he was perfectly entitled, in the circumstances, to take the course that he took. As a citizen of this country that course was open to him; but as a justice of the High Court, was it? Is that the kind of behaviour that we should expect from a justice of the High Court? Was it really open to a justice of the High Court to say: `No, I do not believe I should go before your Commission. There is a case pending.' The correct procedure would have been for him to say: `Yes, I will come before your Commission; yes I will answer these questions, I have nothing to fear and I have an obligation higher than that of other citizens because I am a justice of the High Court and I must at all time co-operate with the institutions of justice, regardless of my own personal position'. Those matters, amongst others, must be investigated. I turn now to the Bill. I wish to say something about the problems that emerge when one examines it. Let us look first of all at the terms of reference which are to be found in clause 5 (1) That clause says: The Commission shall, in accordance with this section, inquire, and advise the Parliament, whether any conduct of the Honourable Lionel Keith Murphy has been such as to amount to proved misbehaviour-- That is a wide statement of the terms of reference. But the question is whether that wide statement is cut down by what appears later. In clause 5 (1) it says: In carrying out its inquiry the Commission shall consider only specific allegations made in precise terms. I am somewhat puzzled by that. Is it not a matter for the Commission itself to formulate whatever allegations it believes arise out of the material considered by it. Then we come to clause 5 (4). Originally, when I received the draft of the Bill shortly before 8 o'clock this morning, 5 (4) read in these terms: The Commission shall not consider the issues dealt with in the trials leading to the acquittal of the Honourable Lionel Keith Murphy of certain criminal charges on 5 July 1985 and 28 April 1986, except to the extent that the Commission considers necessary for the proper examination of other issues arising in the course of the Commission's inquiry. Honourable members will note that that provision is directed to the issues that were dealt with in the trials. The clause, which I understand is now before the House, since it is the clause that I have been provided with as an amendment, reads: The Commission shall not consider- (a) the issues dealt with in the trials leading to the acquittal of the Honourable Lionel Keith Murphy of certain criminal charges on 5 July 1985 and 28 April 1986 and, in particular, the issue of the Honourable Lionel Keith Murphy's guilt or innocence of those charges; I do not for a moment say that the question of his guilt or innocence should be re-examined. The clause goes on: (a) whether the conduct to which those charges related was such as to constitute proved misbehaviour within the meaning of section 72 of the Constitution, except to the extent that the Commission considers necessary for the proper examination of other issues arising in the course of the Commission's inquiry. The focus there is on conduct to which those charges related. Apparently that means conduct revealed to the court, conduct which may be revealed elsewhere and conduct as revealed before the Senate Committee on Allegations Concerning a Judge. That greatly broadens, it seems to me, the exclusion of the matters that the Commission can examine. The Commission must find some other issue arising in its inquiry before it can look at that conduct. I turn to clause 6 which deals with evidence. This is a crucial clause because it provides first of all that Mr Justice Murphy shall not be required to give evidence on a matter before the Commission unless the Commission is of the opinion that there is before it evidence of misbehaviour-I emphasise the words `evidence of misbehaviour'-within the meaning of section 72 of the Constitution, sufficient to require an answer and the Commission has given Mr Justice Murphy the particulars of that evidence. Therefore there must be evidence of misbehaviour before the Commission and the particulars must be given to Mr Justice Murphy. So far as we are talking about a prima facie case, we have no quarrel with that. There should be a prima facie case set up which Mr Justice Murphy has to meet before he is compelled to give an answer. That seems fair enough. However, we know that one of the matters at issue before the Commission will be the Age tapes. We have two reports on the Age tapes and transcripts. We have the findings of Mr Justice Stewart in the published volume and we know the extent to which those findings go. Let me read to the House what he said on page 292 of volume 1. The report states: The police witnesses' inability for the most part to identify with any precision elements of the tapes and transcripts, or to give first hand evidence about them, renders it highly unlikely that any such material would be admitted as evidence in criminal proceedings. Let me stop there and tell the House that in general terms there is little difference between the rules of evidence that apply to criminal proceedings as opposed to civil proceedings. The judge goes on to say: The Commission has certainly not succeeded in drawing up an accurate picture of the identity of each person responsible for each part of the process leading to the creation of the material in its possession and has concluded that this would be an impossible task- note the words `impossible task'- In the vast majority of cases the Commission cannot be satisfied as to who typed any particular page-- Once again note the words `vast majority of cases'. He continues: However the Commission has received sufficient evidence to lead it to the inescapable conclusion that the material is the product of illegal telephone interceptions carried out by officers of the NSW police in NSW. So he concludes that the material is the product of interception. Let me return now to clause 6 because this is the linchpin when one looks at the Age tapes and transcripts. Remember that there must be evidence of misbehaviour before an answer can be called for from Mr Justice Murphy. Clause 6 (2) states: In the conduct of its inquiry, the Commission shall not make a finding except upon evidence that would be admissible in proceedings in a court. There is the key and this is how it, in all probability, will work. Certainly, this is what is going to be submitted, I should have thought, on behalf of His Honour. First he will say: `Under clause 6 it is necessary for there to be evidence of misbehaviour'. Next he will say: `In order for there to be evidence of misbehaviour you must be in a position to make findings because, unless you have made findings or are in a position to make findings, you cannot have evidence. Recall that evidence must be evidence admissible in proceedings in court'. He will say, or one can imagine it being submitted: `Since it is impossible to identify who made the tapes, since it is impossible to identify the authors of the transcript, it is not possible for anyone to make a finding against me. There is no legal evidence and therefore I cannot be called on to make an answer to any matter arising out of the Age tapes or the Age transcripts'. It may be that the Commission will have greater luck than Mr Justice Stewart did. One would think that that was unlikely. One would think that with Mr Justice Stewart's analysis of the evidence, with his wide-ranging powers to recommend indemnities, which cover incidentally quite a few pages, he would have found, if anyone could, who it was who had made the relevant transcripts. But he says-and again I repeat: The police witnesses' inability for the most part to identify with any precision elements of the tapes and transcripts, or to give first hand evidence about them, renders it highly unlikely that any such material would be admitted as evidence in criminal proceedings. Does this mean: Exit the Age tapes, exit the Age transcripts? Were these matters in the mind of the Government? Did it not understand that that was one consequence of applying at all stages the strict rules of evidence? We have sought to overcome this in an amendment which has been circulated and which we have, along with other amendments, no more than five minutes to explain. Our amendment seeks to make sure that this matter is dealt with in a way which would leave matters within the power of the Commission and would safeguard the interests of Mr Justice Murphy. What this Government has done, deliberately or unwittingly, is, in all likelihood, to exclude the Age tapes material and the transcript as any basis on which findings can be made. Next, I refer to the conduct of the hearings in private. Is it not astonishing that a creature of this Parliament-and that is what we are talking about-is going to hold its hearings in private? Clause 7 (1) reads: The Commission shall, unless it thinks the circumstances require otherwise, conduct the whole of its inquiry in private. We have had enough of private inquiries. If we are to be in a position to dispel once and for all the controversies which have arisen, let us have the hearings in public. How are we going to keep it private when it comes back here? Let me show honourable members what I mean. Clause 8 (3) provides that when the Commission comes back here `the Commission shall submit with its report a record of so much of the evidence before the Commission as the Commission thinks necessary to substantiate its findings of fact and its conclusions'. What appalling nonsense. It is not for us to consider simply the material that the Commission relies upon. It is for us to consider the whole of the material before the Commission and nothing less. Let me point out to the House that so long as any part of the inquiry is closed, so long as the public or members of parliament cannot be confident of what is taking place, so long as inquiries are not going to be subject to public scrutiny, we will have rumour and innuendo-we will have a repetition of the kinds of problems that plague us presently. Let me go to the climax of incompetence which this Bill presents to us, and that is to be found in clause 8 which, very briefly, provides for certain matters. It provides for the Commission forming an opinion. Of what? It forms an opinion that `a person who has been or may be charged with an offence may not receive a fair trial', that the conduct of an investigation or a breach of a law may be impaired or that there may be prejudice to the reputation of a person or prejudice to his safety. In those events, and in some other events as well, the Commission has these powers: It can `include those findings or conclusions, or that evidence, in a separate report and deliver the report to the President of the Senate and the Speaker of the House of Representatives, together with a statement of its opinion'. One would think: `Well, that is interesting; what is meant by a separate report?'. We know what a separate report is. We had one a few days ago. There is one for the public and there is one which is not to be for the public. Clause 8 (6) provides: Where a separate report is prepared in accordance with sub-section (5), the President of the Senate and the Speaker of the House of Representatives shall not cause that separate report to be laid before the Houses of the Parliament. Will anybody here explain to me the answer to this question: If a separate report is delivered, if it goes to the Speaker of this House and the President of the Senate and is not laid before the Houses of Parliament, how are we to make a judgment? Is that possible? It is not. Are we to make a judgment upon a report that we have not seen? Are we to make a judgment on a report that we cannot debate? Are we to make a judgment on the basis of material that we are not allowed to see? That puts this absurd series of provisions out of court. We can only hope that it will not be necessary and that the Commission will have the sense to bring all of its material back before this Parliament. Let me lastly say something about the constitutional duties of this Government. Its duty was to set up an inquiry that will put to an end forever the controversies that have festered for more than two years. Its duty was to place Parliament in a position to make an informed and definitive judgment on all issues, with members voting according to their individual judgment on the matters before them and not in the pursuit of any part political aims. If we find ourselves in a position where there is a separate confidential report, we will simply be unable to make a judgment. If, as it turns out, the Commission takes a restricted view of what it should or should not do, we will be in the same position. I ask honourable members this: If the Age tapes material is excluded, will it be an entirely full inquiry? We wish the Commission well. We hope that, despite what I believe to be very major deficiencies in this legislation, it operates fully, openly and quickly and comes back with the result which all members of both Houses can accept. Mr HOLDING(Melbourne Ports-Minister for Aboriginal Affairs)(8.49) —It is critical on an issue as significant as the one before us that the House direct its mind to the important issues that not only go to the integrity of our judicial system, the reputation of the High Court of Australia and, indeed, the reputation of Mr Justice Murphy, but also go to the very complex relationship that exists between this Parliament, in the exercise of its responsibilities under the Constitution, and the High Court. All honourable members will be fully aware of the issues which led to the trial of Mr Justice Murphy. I do not propose to canvass them again. However, I want to address the minds of honourable members to the decision made by the Opposition following the decision on the trial of Mr Justice Murphy. I will quote that position as it was stated on 29 April by the shadow Attorney-General, the honourable member for North Sydney (Mr Spender). The Opposition's conclusion was: In view of the finding in the trial of Mr Justice Murphy the Opposition does not propose to take parliamentary action in terms of section 72 of the Constitution based on the specific issues dealt with in the criminal trial. Mr Griffiths —Read that again. Mr HOLDING —The shadow Attorney-General stated: In view of the finding in the trial of Mr Justice Murphy the Opposition does not propose to take parliamentary action in terms of section 72 of the Constitution based on the specific issues dealt with in the criminal trial. That is a thoroughly impeccable position. What the Opposition recognised is what every member of this Parliament recognises-we do not have a system of double jeopardy in this country. We do not have a system whereby the institution of parliament seeks to bypass the findings of the jury. It is as simple as that. If that were the case for the Opposition-it was certainly the case for the Government-what then has changed? What then has brought about this legislation? The facts are that fresh allegations-at this stage they have the status only of allegations-have been directed at Mr Justice Murphy. Those allegations-I repeat that they are no more than allegations-were specifically rejected by Mr Temby, the Director of Public Prosecutions, as founding any cause of criminal action against Mr Justice Murphy. I ask honourable members to consider that. We are considering the situation of a man who has stood trial, who has been acquitted by a jury and who is ready to take his place back in the community and in the execution of the high judicial office that he holds. However there are some fresh allegations. The person in our legal system who is responsible for deciding whether these allegations lay any foundation or any basis for any further criminal charge against Mr Justice Murphy-this is the issue-has answered `no'. What problem does that present to this Parliament, this House and this Government? The reality is that in regard to other events and other trials some of these allegations will emerge in various ways. Mr Justice Murphy will not be involved in those trials. Some of those allegations may amount to scuttlebutt which will be rejected by the court. The tribunal which is dealing with other issues may decide that they are completely irrelevant. However, the High Court of Australia has said-the Government has accepted the view and indeed, I think Mr Justice Murphy has accepted the view-that until these issues are finally dealt with and resolved, in fact, it is untenable for Mr Justice Murphy to be sitting on the court and discharging his responsibilities while this sort of material continues to appear in the media and when questions are being continuously raised. The proposal before the House is a very simple proposal. It says that we will get judges, exercising judicial power, to look at those allegations which the Director of Public Prosecutions says cannot found any criminal charges against Mr Justice Murphy. The reason these proposals are being examined is so that the House finally can be informed of the facts. That is the reason. I am disturbed to hear the honourable member for North Sydney take the view that there is something intrinsically wrong in any citizen, be he a judge, member of parliament or Minister of the Crown, exercising his rights to make an unsworn statement, which is part of our judicial process. We are in an extraordinary situation. I must say, if the Press comment I have read which is attributed to some justices of the High Court is correct, it is a matter of regret and concern to me that there can be a view in any judicial body in this land that a right available to a defendant who is accused of a breach of law should not be used, when that very process, which is an inherent part of our judicial system, is intrinsically as much a right of the accused as is the duty upon the Crown to discharge the onus of proof. It is a matter of regret that if an accused person exercises his right someone should then say: `Hang on, he is not like an ordinary citizen, he has a law degree'. That person might be a politician or a Minister of the Crown. The proposition that such a person has some reduced right is untenable and unconscionable. The honourable member for North Sydney knows that that is so. On how many occasions has he, as has any lawyer who has had the conduct of a case, said to his client: `I think we are so far ahead I am not even going to waste the time of the court by putting you in the box'? Mr Spender —The last time I did it I didn't want to put him in it. Mr HOLDING —That might be so, but the point I am making to the honourable gentleman is that the integrity of our judicial system and the integrity of our High Court does not just rest on the reputation and the integrity of the individual justices who compose it; it rests upon their capacity to maintain the rule of law, to see that the fabric of our judicial system is maintained. The right of any accused, be he the most ordinary and most humble citizen or the one holding the most exalted office, to exercise his rights, rights that are given to him by the judicial system, is not something that can just be put aside. It is the duty of the court, it is the duty of any judge, to maintain the integrity of that proposition as part of the whole process of trials proceedings. It cannot be said-it should not be said; it is mischievous to say-in regard to this aspect of the law that a person who happens to be a professional man, a lawyer, a judge or, God help us, a politician, has fewer rights than the other citizen. That is a nonsense proposition. It is a mischievous proposition. It is a proposition which ultimately would undermine the whole fabric of our judicial system. Mr Rocher —Why the register of pecuniary interests if we are not different? Mr HOLDING —I do not want to take up too much time in this debate because I think time ought to be made available to the Opposition. However, I am concerned to join issue on what I believe are some of the basic and essential factors that we have to consider. In all this it is perfectly true that Lionel Murphy was a controversial political figure. In my view it is equally true that he is a great judge. In my view, neither of those facts in any way should be allowed to demean his rights as an ordinary citizen. This Government-I hope this Opposition too, regardless of whatever political advantage it may see in it-should not allow itself to go into a situation in which a citizen finds himself having to answer not criminal charges, because Mr Temby has said that there is no foundation for criminal charges, but slanders, smears and innuendo. This is particularly so if that smear or innuendo is based on evidence which has been illegally obtained. This is an important issue. Do we, as a parliament, say to our courts and to our judges that if a person happens to be a parliamentarian, a Minister of the Crown or a judge and there is an illegal phone tap-we do not know whether the recording is true of false, but it might be true-that that person should have his rights and liberties as a citizen reduced because there might be a political advantage at the end of the day. That is the issue that I think this Parliament must face, and face squarely. We have here a man who has stood trial and been acquitted. So those matters are no longer in issue. What we are dealing with at this stage are allegations, many of them unsubstantiated, many of them to be tested, many of them illegally obtained. What we as a Parliament are saying is that in order to ascertain the credibility of those propositions, because we are not entitled to presume the truth or the accuracy of those propositions, we will adopt a process which will ensure the rights and liberties of Lionel Murphy, citizen of Australia. Because he is a judge of the High Court, he has not lost those liberties. Because he is a judge of the High Court, he has not lost those rights. The honourable member for North Sydney found it a little difficult to comprehend the process that will take place. This Commission will determine the veracity of this evidence-I do not know whether I should use the word `evidence'-or this scuttlebutt. If it believes that there are some issues which need answering, it will call upon Mr Justice Murphy to answer them. The concept of privacy is a concept which has been produced in order to protect the reputation of the Court and the individual. There is not a politician in this place who, from time to time, has not said in this place that he has been misrepresented. Are we, the people who are continually involved in that process, now saying that if somebody says something that is untrue, on the basis of information illegally obtained, we will say that that is all right as it has to be dealt with in a public way, no matter what damage it does, no matter how false it might be? Those are the issues. They are complex and difficult issues. Ultimately, the responsibility will rest upon this Parliament. The obligations upon the Parliament are clear and they are set out in the Constitution. They cannot be abrogated. They cannot be handed over to a set of judges in the High Court. We have asked judges to look at allegations which at this stage do not have the status of evidence which could be accepted in a court, allegations which the Director of Public Prosecutions has said that he has found no basis upon which anybody can be charged, and then to advise this Parliament in respect of those matters. We believe that there are two elements involved: To resolve these issues once and for all and to resolve them within the framework of accepted judicial standards and accepted judicial processes, but, ultimately, also to decide them in terms of the rights and liberties of a very distinguished Australian. Because Mr Justice Murphy has that distinction, because some people here may dislike him and some people may love him, he does not lose those basic rights. If we go down a track that suggests an abnegation of those principles, we will have done a grievous wrong not only to Mr Justice Murphy, but also to our judicial system. More importantly, we will have done an awful wrong to every citizen of this nation. Because the rights of Lionel Murphy are no more, and no less than the rights of every Australian. Question resolved in the affirmative. Bill read a second time. Message from the Governor-General recommending appropriation announced. The Bill. Mr SPENDER(North Sydney)(9.05) —by leave-I move: (1) Clause 3, page 2, line 5, omit from the definition of ``Judge'', ``a court created by the Parliament'', substitute ``the Federal Court of Australia''. (2) Clause 5, page 2, line 34, omit ``made in precise terms''. (3) Clause 5, pages 2 and 3, omit sub-clause (3). (4) Clause 5, page 3, omit sub-clause (4), substitute the following sub-clause: ``(4) The Commission shall not consider the issues dealt with in the trials leading to the acquittal of the Honourable Lionel Keith Murphy of certain criminal charges on 5 July 1985 and 28 April 1986 except to the extent that the Commission considers necessary for the proper examination of the other issues arising in the course of the Commission's inquiry.''. (5) Clause 6, page 3, line 18, before ``evidence'' (second occurring) insert ``prima facie''. (6) Clause 6, page 3, omit sub-clause (2), substitute the following sub-clause: ``(2) In the conduct of its inquiry, the Commission shall inform itself of the matters necessarily incidental to the carrying out of its functions in such manner as it thinks fit.''. (7) Clause 7, page 3, line 27, omit ``private'', substitute ``public''. (8) Clause 8, pages 3 and 4, omit the clause, substitute the following clause: Report to Parliament ``8. (1) The Commission shall report to the President of the Senate and the Speaker of the House of Representatives in accordance with this Act, and such report shall include- (a) the Commission's findings of fact; (b) the material on which those findings of fact were based; (c) the Commission's conclusions as to whether any conduct of the Honourable Lionel Keith Murphy has been such as to amount, in the opinion of the Commission, to proved misbehaviour within the meaning of section 72 of the Constitution; and (d) the Commission's reasons for the foregoing. ``(2) The Commission shall submit with its report the complete record of evidence and all other material presented to the Commission. ``(3) The President of the Senate and the Speaker of the House of Representatives shall as soon as practicable thereafter, cause copies of the report, the record of evidence and all other material presented to the Commission to be laid before the Senate and the House of Representatives. ``(4) If the Commission is of the opinion that, if any of its findings or conclusions, or any of the evidence given before the Commission were to be laid before the Houses of Parliament- (a) the conduct of an investigation of a breach or possible breach, of the law, may be prejudiced; (b) the existence or identity of a confidential source of information in relation to the enforcement or administration of the law may be disclosed or a person enabled to ascertain the existence or identity of that source; or (c) there may be prejudice to the physical safety, of a person, the President of the Senate and the Speaker of the House of Representatives may, prior to the report being laid before the Houses of Parliament, the record of evidence and all other material presented to the Commission before the Senate and the House of Representatives, communicate to the Senate and the House of Representatives the opinion of the Commission and, if there is a resolution by each of the Senate and the House of Representatives that the material referred to in the relevant opinion of the Commission not be laid before the Senate and the House of Representatives, the relevant material shall not be laid before the Houses of Parliament.''. (9) Clause 14, page 7, after sub-clause (6) insert the following sub-clause: ``(6A) For the purpose of removing doubt, it is hereby declared that any Member of the House of Representatives and any Senator has standing to appear before the Commission and to put such submissions in writing to the Commission as of right either personally or by his or her representative.''. (10) Clause 14, page 7, sub-clause (7), line 30, after ``virtue'' (first occurring) insert ``of sub-section (4), by virtue''. (11) Clause 14, page 8, sub-clause (10), line 12, omit ``not'' (twice occurring). (12) Clause 14, page 8, sub-clause (10), line 12, omit ``and'', substitute ``but''. (13) Clause 14, page 8, sub-clause (10), line 13, after ``if'' insert ``not''. (13) Clause 14, page 8, paragraph 11 (b), after `'contravention'' insert ``a direction under''. (15) Clause 21, page 10, sub-clause (3),line 22, omit ``as a witness'' (first occurring), substitute ``or making written submissions to the Commission''. In view of the fact that other members wish to speak on this Bill and time is very limited, I will say nothing further. Mr DUNCAN(Makin)(9.06) —I will speak briefly in the Committee stage tonight in relation to some of the amendments that have been moved by the honourable member for North Sydney (Mr Spender). I will refer briefly to two of those amendments in particular. Amendment (2) seeks to omit the words `made in precise terms', which relate, of course, to the charges-if not charges, the allegations, at least, or whatever else they might be-that must be made under clause 5. The proposed sub-clause (6a) in clause 14 reads: For the purpose of removing doubt, it is hereby declared that any Member of the House of Representatives and any Senator has standing to appear before the Commission and to put such submissions in writing to the Commission as of right either personally or by his or her representative. I think I can amply claim that that sub-clause specifically is intended to be a muck-raker's charter. That, of course, is what this Opposition has done for the last 2 1/2 years. It wants to set up tonight a commission which will give it the opportunity to continue to pillory Mr Justice Lionel Murphy to its heart's content until it hounds him from the Bench. That is what these amendments are designed to do. Members of the Opposition want to have the opportunity, as members of the House of Representatives or the Senate, to appear before the Parliamentary Commission of Inquiry and trot out any allegations that they can find. They do not want them to be in precise terms. They specifically want to be able to make them generalisations. They are not interested in putting up specific allegations. They want to make generalisations which are much harder to answer. More importantly, they want to have a muck-raker's charter. They want any member of this House to be able to go before the Commission, with his or her barrister, and be able to wheel out any nonsense muck or rubbish as he sees fit. That is in keeping with the great tradition of conservatives in this country since federation. One has only to look at the history of the High Court to see the way in which the conservatives in this country have always hectored and hounded Labor appointees to the High Court. I need only mention what occurred in the 1930s when Evatt and McTiernan were appointed to the High Court. For years and years afterwards members of this place refused to recognise them as legitimate appointments. They attacked them in this Parliament. If one cares to look at standing order 75, one will see the results of that. It was found necessary in this Parliament to pass specific standing orders to stop people attacking Labor appointees to the High Court. That is the sort of thing that went on. One can look at instances which occurred even earlier than that. In the early years of the federation the Fisher Labor Government appointed a person named Piddington to the High Court. He was then known as a liberal conservative, which in itself is a contradiction in terms. His appointment was so greeted with outrage by the conservatives in the nation that before he took his seat on the Bench he chose not to sit. Because that outrage which greeted his appointment was so great he decided not to do any harm to the institution. I want finally to refer to the first days of Mr Justice Lionel Murphy's sitting on that bench. Various conservative elements in the legal profession refused to recognise him; said that they would not appear before him, and the like. He overcame that. He has overcome two and a half years of hectoring and hounding by those opposite and many others of their ilk in the community. He will overcome the allegation and the smears that are now at foot and at large in the community, and I have no doubt that when the Commission brings down its findings he will have been cleared, as he has been cleared of the criminal charges brought against him. I want to conclude by saying just one or two more things. Mr Hodgman —Come on. Mr DUNCAN —I said I will make one or two comments, and I will. These amendments attempt to water down the provisions for hearings in private that are contained in the Bill. Every fruit cake, every nut case in this nation at the moment knows full well that the way to get his face and name on the front pages of the nation's newspapers is to become linked with Mr Justice Lionel Murphy. I have no doubt that before this Commission is through there will be plenty of examples of the crazies of this nation, the sad cases-we have seen a couple of them already making allegations-wanting to make allegations before the Commission. If the privacy arrangements hold, those people will achieve little or nothing by their baseless allegations. If this Bill is changed so that it is possible for these fruit cakes, as I describe them, to wheel out their baseless and crazy allegations, the inevitable fact is that newspapers in this nation-particularly the more disreputable ones such as the National Times-will run such allegations, baseless as they may be, to the fullest extent. Is that fair? Is that just? Is that the way to run a nation? I suggest that it is not. I believe that these amendments, in total, ought to be rejected, and rejected soundly by this Committee and by the Parliament. The Commission ought to get on with its job and at the earliest possible time bring back its findings so that Mr Justice Murphy will be able to retake his place on the High Court bench and continue to give this nation the outstanding judicial service for which he has become renowned. Mr HODGMAN(Denison)(9.13) —It is a matter of profound regret that we are debating in minutes a measure which will impact upon the legal and constitutional framework of our Commonwealth for decades. As the honourable member for North Sydney (Mr Spender) has pointed out so eloquently, members of the Opposition feel that we would be failing in our duty were we not to express our gravest concern as to some aspects of the Parliamentary Commission of Inquiry Bill and our determination to move, to argue for and to vote for amendments which in our judgment are absolutely crucial if this Commission if to properly perform the function for which it has been established. The Opposition will not be a party to flawed legislation which makes or tends to make this Commission a hobbled commission from its inception. This Commission is to carry out a very important preliminary stage in the most significant legal/constitutional process ever to be debated during the lifetime of the Commonwealth of Australia. Whilst it is clear beyond doubt that responsibility for the ultimate decision under section 72 of the Constitution rests on the shoulders of both Houses of this Parliament, it is axiomatic that the findings of this Commission are being sought by this Parliament for the ultimate use of the Parliament itself. I must emphatically reject the contention by the honourable member for Makin (Mr Duncan) that a member of this Parliament should be denied access to and audience before the Parliament's Commission. I further adopt the comments of the honourable member for North Sydney, in that as the Commission is carrying out a function on behalf of the Parliament it is untenable that any part of the Commission's findings or determinations be kept from the Parliament-which is what this legislation proposes. I have to be brief because others wish to speak, but I want to make these points if I may: That great founding father, Isaac Isaacs-later Sir Isaac Isaacs, Chief Justice of the High Court of Australia, and a very great Chief Justice, and Governor-General of the Commonwealth-was emphatic that the ultimate decision of the Parliament would be final and unchallengeable. He even referred to the address from both Houses, referred to in section 72 of the Constitution, as being a verdict. I think it would be of benefit to honourable members if I read the precise words from the debates of the 1898 convention in Melbourne. The reference is the official record of the debates on 31 January 1898 on the Commonwealth of Australia Bill, at page 313. Isaac Isaacs said: I want to lay it down distinctly that a judge shall not be removed under any circumstances, except for misbehaviour or incapacity; but I want the verdict of Parliament-the verdict of the States House by itself- I interpolate to say that that is the Senate; as well as the verdict of the people's House, the House of Representatives- the conjoint, independent, and separate verdicts of these two Houses to be final and unchallengeable. This Parliament will be denied the opportunity of properly performing its functions, whichever way it goes, if this flawed legislation passes in its present form. I believe that the honourable member for North Sydney has impeccably pointed to the flaws. I do not wish to see, nor does anyone in this Parliament wish to see, a situation in which this Commission's functions do not conclude this matter one way or the other. I urge the Government, even at this late hour, to accept the propriety, the integrity and the absolutely overwhelming veracity of the amendments moved and the arguments advanced in this chamber by my colleague the shadow Attorney-General. Mr DEPUTY CHAIRMAN(Mr Keogh) —I call the honourable member for Flinders. Mr REITH(Flinders)(9.17) —Mr Deputy Chairman-- Mr Duffy —Mr Deputy Chairman-- Mr DEPUTY CHAIRMAN —Order! I was not aware that the Minister was rising to speak. I took it that he was rising to move from his place. I apologise to the honourable member for Flinders, and I call the Minister for Communications. Mr Slipper —On a point of order, Mr Deputy Chairman: I submit that once the honourable member for Flinders has been given the call he ought not to be sat down. Mr DEPUTY CHAIRMAN —Order! There is no point of order. Mr DUFFY(Holt-Minister for Communications)(9.18) —I want to deal briefly with amendment (7), which is the proposal to omit `private' and substitute `public'. I think that very much the questions raised by the honourable member for Makin (Mr Duncan) are relevant to the amendment moved by the Opposition. Clearly the points that he made about the continuing attempts to smear Mr Justice Lionel Murphy really are at the heart of this quite ridiculous amendment. When we bear in mind the subject matter of this Parliamentary Commission of Inquiry and the need to preserve the public stature of the High Court of Australia, it is the view of this Government that the public interest will not be well served by the publication of evidence before the Commission has determined the relevance of that evidence to its terms of reference, as well as its credibility. As the honourable member for Makin stated earlier when he was referring to nut cases-there are a few of them over there-the fact is that there would be all sorts of attempts to get evidence in. The situation is that there will be a continuing flow of allegations which are ventilated in a way which maximises the prejudice not only to Mr Justice Lionel Murphy but also to judicial institutions. To have all of these allegations publicly ventilated-seriously, I do not know how the honourable member for North Sydney can put forward that sort of an amendment-would totally defeat the aim of the exercise, which is to permit Parliament to finally settle the question and the issues involving Mr Justice Murphy. Mr Beale —How can we settle the question unless we know what they are talking about? Mr DUFFY —The honourable member does not understand that we are not talking about the report back to this Parliament; we are talking about the fact that at this stage the Commission has not even determined the relevance of the evidence. I am not talking about the report back to the Parliament. If you would sit there and listen, you silly idiot, you might understand it. Additionally, pursuant to clause 6 (2), the Commission-- Mr Spender —Mr Deputy Chairman, I raise a point of order. The point of order is that shouting across the table `that silly idiot over there' will not assist debate. It is not parliamentary and it should be withdrawn. Mr DEPUTY CHAIRMAN(Mr Keogh) —I am sure the Minister will withdraw the offensive word. Mr DUFFY —I did not notice that the honourable member for North Sydney indicated it was offensive. If he does, I will withdraw it. If he stops interjecting there will be less shouting across the table. Additionally, pursuant to clause 6 (2), the Commission will make its findings upon evidence that would be admissible in a court of law. That makes this Commission considerably different from the normal royal commission. It is likely that material will be supplied to the Commission which would not meet this criterion and it would be inappropriate for such material to be published. That is one of the basic points-the need to protect the evidence that is given. It is the Government's view that the public interest would not be well served by the publication of evidence before the Commission has even determined the relevance of that evidence to its term of reference as well as its credibility. It is likely that the unique body has the structure and powers of a royal commission, including the powers to require incriminating answers to questions put to witnesses. Like royal commissions, this body is likely to deal with very sensitive matters requiring confidentiality. I would have hoped that honourable members would be aware that for these reasons royal commissions frequently take evidence in camera. But this Commission is also unique in that the conduct of the particular named person is under scrutiny and on trial. There is no analogy with ordinary judicial proceedings-the honourable member for North Sydney fully understands that, and that is why I repeat that it is just staggering that he put forward these amendments-where the general rule is that evidence is taken in public and in which the tribunal finally determines the issues between the parties. This Commission can report only to the two Houses of Parliament which, under the Constitution, must make that determination. The evidence, conclusions and findings of the Commission will, generally speaking, be made public subject only to the specific limited exceptions authorised by sub-clause 8 (5) and then only when the Commission, in its discretion, decides that the material should be included in a separate report to be furnished only to the Presiding Officers of both Houses. It is absolutely beyond my comprehension, when one looks at the credibility of those opposite and at the amendments, how they can in any way justify the suggestion that in these circumstances this sort of stuff should come out other than as determined by the Bill as it stands at the moment, which says that it will be a private hearing. The view of the Government is that the public interest is not well served by the publication-- Mr DEPUTY CHAIRMAN —Order! It being 9.25 p.m., the time allotted for the Committee stage of the Bill has expired. Question put: That amendments (Mr Spender's) be agreed to. The Committee divided. (The Deputy Chairman-Mr L. J. Keogh) Ayes . . . . . . . . . . . 53 Noes . . . . . . . . . . . 74 —— Majority . . . . . . . . . 21 —— Adermann, A. E. Hodgman, W. M. Aldred, K. J. Hunt, R. J. D. Andrew, J. N. (Teller) Jull, D. F. Beale, J. H. Lloyd, B. Blunt, C. W. McArthur, F. S. Braithwaite, R. A. McGauran, P. J. Brown, John MacKellar, M. J. R. Burr, M. A. McVeigh, D. T. Cadman, A. G. Macphee, I. M. Cameron, Donald Miles, C. G. Cameron, Ewen Millar, P. C. Carlton, J. J. Peacock, A. S. Cobb, M. R. Porter, J. R. Coleman, W. P. Reith, P. K. Connolly, D. M. Rocher, A. C. Cowan, D. B. Shack, P. D. Dobie, J. D. M. Sharp, J. Downer, A. J. G. Sinclair, I. McC. Drummond, P. H. Slipper, P. N. Edwards, Harry Smith, W. Fischer, Tim Spender, J. M. Fisher, Peter Tuckey, C. W. Hall, Steele Watson, DavidHalverson, R. G. Webster, A. P. Hawker, D. P. M. White, P. N. D. Hicks, N. J. (Teller) Wilson, I. B. C. Hodges, J. C. Baldwin, P. J. Jenkins, H. A. Beddall, D. P. Jones, BarryBilney, G. N. Keating, P. J. Blanchard, C. A. Kelly, R. J. Blewett, N. Kent, L. Bowen, Lionel Kerin, J. C. Brown, John Klugman, R. E. Brown, Robert Lamb, A. H. Brumby, J. M. Langmore, J. V. Charles, D. E. Lee, M. Charlesworth, R. I. Lindsay, E. J. Chynoweth, R. L. McHugh, J. Cleeland, P. R. McLeay, LeoCohen, B. Maher, M. J. Cross, M. D. Martin, S. P. Cunningham, B. T. (Teller) Mayer, H. 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. Holding, A. C. Tickner, R. E. Hollis, C. Uren, T. Howe, B. L. West, S. J. Humphreys, B. C. (Teller) Willis, R. Jacobi, R. Wright, K. W. Jakobsen, C. A. Young, M. J. Hurford, C. J. Everingham, P. A. E. Staples, P. R. Nehl, G. B. Beazley, K. C. Conquest, B. J. Darling, E. E. Shipton, R. F. Question resolved in the negative. Bill agreed to. Bill reported without amendment. Mr DEPUTY SPEAKER(Mr Leo McLeay) —The time allotted for the remaining stages of the Bill has expired. The question now is: That the report be adopted and that the Bill be now read a third time. Question resolved in the affirmative. Bill read a third time. Debate resumed. Mr DEPUTY SPEAKER(Mr Leo McLeay) —I remind the House that it has been agreed that a general debate be allowed covering the Fringe Benefits Tax Assessment Bill and orders of the day Nos 2 to 4. Mr ROCHER(Curtin)(9.36) —As I was saying before the suspension of the sitting for dinner, against all principle the fringe benefits tax is to be levied on the employer and not on the beneficiary. Surely equity demands that any tax on non-cash benefits be levied on the recipient of the benefits. To support that point of view, I need go only to the Government's draft White Paper published in June 1985, which states, at paragraph 8.9: The best approach in principle, would be to include the defined value of fringe benefits in the employee's assessable income so that tax would be paid on total remuneration, whether received as salaries or wages or by way of fringe benefits at the employee's personal tax rate. As if that were not enough, the same draft White Paper had this to say, at paragraph 8.11: With clear provisions in the law for valuing benefits, it would generally be practicable to collect tax on a PAYE basis in respect of most such benefits. So there you have it, Mr Deputy Speaker. The Government knew the principle and knew how the tax should be levied and collected. All that it lacks is the political courage to do what it knows to be absolutely right. The problem of non-disclosure of benefits by employees would be overcome by requiring employers to do what is set out in paragraph 8.12 of the draft White Paper, which states: . . . report all elements of each employee's `remuneration package' that are not now disclosed on a group certificate, in the form of `An annual statement of non cash benefits granted to each employee'. That provision already exists in the Income Tax Assessment Act. If the Government had the courage to require the Commissioner of Taxation to enforce the Act as it now stands, that is all that would be needed. Whilst there may have been some abuse of non-cash fringe benefits laws which already exist, and which allow for those abuses to be tackled by the Australian Taxation Office, the tackling of such abuse is, undeniably, a difficult task. I do not believe that there is sufficient justification for overturning the basic tax principle that benefits of this kind should never be a tax on employment, as is the payroll tax. That is what this fringe benefits tax is, essentially: It is a tax on employment. The assertion by the Treasurer (Mr Keating) in his second reading speech that `there is no practical alternative' to imposing the fringe benefits tax on employers, contrasts sharply with the comments in the draft White Paper of June 1985, parts of which I have just quoted. On the very first page of his second reading speech, the Treasurer makes much of the Government's goal to: . . . improve the fairness of the system for the majority of Australians by pursuing with resolve our policy of rooting out tax avoidance and evasion practices . . . Yet when we examine two important fringe benefits-namely, low interest loans and employer-provided cars-we find that the majority of people receiving low interest loans, in the first instance, are on or below average weekly earnings. For instance, the figures for 1985 show that bank officers in the sixth year of service received-they do not receive much more now-$16,856 per annum, or 81 per cent of average weekly earnings and, in the thirteenth year of their service, were entitled to receive $19,457, or 94 per cent of average weekly earnings. Low interest loans raise the average bank employee's effective income by around 14 per cent. Now, with over 200,000 people in the finance and investment industry and about half of these likely to be in receipt of subsidised loans of one sort or another, we are not dealing here with the highly remunerated employees the Treasurer was so concerned to identify and of the type whom we heard so crudely referred to by members of the Government back bench in the course of this debate earlier today. I move to the area of employer-provided cars. One estimate has around 70 per cent of fleet vehicles as being in the Commodore-Falcon class. These are largely provided to employees earning around average weekly earnings. Only about 7 per cent of the fleet market could be said to be in the luxury car class. The truth is that the majority of people provided with access to a company car are not high income earners. A practical example of the effect of the Government's tax policies can be seen in the current state of the car industry. My respected colleague the honourable member for Mayo (Mr Downer), who made an excellent speech before the suspension of the sitting for dinner, has also mentioned this point. The Treasurer has argued that it was the Government's considered view that the: . . . tax rules are quite fair . . . and will not produce distortions in the car market. While acknowledging an impact on car sales, the Treasurer said also: . . . the loss of unit sales due to the tax will fall within tolerable limits for the industry. Well, good luck to the Treasurer! He did not ask the car industry for its opinion. He will wish he did before his days are out. Mr Hodgman —I bet he will. Mr ROCHER —I am glad the support from the honourable member for Denison. The Treasurer went on to say that we `cannot let short term adjustment considerations' stand in the way of his proposed changes. He then added: The industry need not rely on unfair tax advantages in the context of the stronger economy, improved competitiveness and the further advantages provided by the car plan . . . . Yet this has not been the judgment of the car industry or those he intends to tax. While it is quite true that the Governments's fringe benefits tax on company cars cannot be held totally accountable for the downturn that is being experienced in the car industry at all levels, it is a major contributor, if not the major contributor, to that set of circumstances. Obviously, the rural crisis has had an effect, and I acknowledge it. So have higher interest rates and higher car prices caused by the devaluation-both to some extent attributable to the economic policies of this Government. The Treasurer cannot have it both ways. If he wants to claim what he sees as the strengths in general economic conditions as credits to offset problems now being foisted on the car industry, he is also liable to severe criticism from us and others over the conduct of economic policy resulting in high interest rates and the 20 per cent or more devaluation of the Australian dollar now affecting consumers and as seen clearly in evidence in the prices of cars. Mr Max Gransden, the Marketing Director of the Ford Motor Co. Australia Ltd, recently noted: The average young couple has things like a mortgage and school fees to pay. The sort of car they'd be looking at buying-the Mazda 626- which was very ecumenical of him- the Telstar, the Magna, the Corona and the Camira have gone up in price by about 20 per cent since the start of the year. The year being 1986. At the very least, the Government has picked a most inappropriate time to introduce a tax that has already seriously hit fleet sales. Mr Lim Say Boon pointed out in the Australian Financial Review on Monday of this week that there has been a sharp downturn. He wrote: There are serious fears of a slump in market volume leading to widespread retrenchment, dealership failures and massive financial losses following the 2.5 per cent market decline in the first quarter of the year. With private, urban and rural markets in severe decline, the fringe benefits tax could not possibly have come at a worse time for the car industry. If the current trend continues, the market will find itself in the appalling position of turning over only something like 520,000 units this year. This would be 48,000 units below those recorded sales during the 1983 slump. No wonder we find Mr Max Gransden of Ford, to whom I referred earlier, saying: I think you can say the downturn was greater than expected . . . the industry is in a pretty serious state. It is no wonder that Mr Steve Markwell, Sales and Marketing Director of Nissan Motor Co. (Australia) Pty Ltd, recently said: We desperately need numbers . . . I'm pretty depressed about this . . . He is not the only one. Mr Graeme Longbottom, Deputy Managing Director of Mitsubishi Motors Australia Ltd, said that his organisation: . . . will be struggling to turn in a profit this year. The Executive Director of the Australian Automobile Dealers' Association, Mr Alex Brown, told the Australian Financial Review: Since the start of the year around 20 dealers have fallen into serious financial trouble. The story goes on and on. My colleagues and I could have spent the full 20 minutes we are normally allocated in this place to speak on important measures with great effect. We will not be able to debate the Bills clause by clause simply because this Government and the Leader of the House (Mr Young) cannot organise the order of business and speaking time for this vastly expanded Parliament. It is preposterous and a disgrace. We have, by acceding to this method of handling the business of the House, given away all our rights to the Senate, which has become the true legislative chamber in this country. That is not to our credit and I think it is something we will live to regret. Dr CHARLESWORTH(Perth)(9.48) —The Government was elected in 1983 with a mandate to provide economic management for this country and, perhaps, to lead it out of the industrial chaos which had characterised the previous Government. If there is any way by which one can measure the success of this Government, I think it is the figure that was mentioned by the Prime Minister (Mr Hawke) today in Question Time. It is the figure that gives outstanding testimony to the success of this Government. The achievement of 670,000 new jobs in three years is indeed an outstanding record of performance in economic management for the Government. But there is one other thing which was demanded by the people of Australia and, indeed, which this Government intends to fulfil, and that is a significant and wide-ranging reform of the taxation system in this country. There is no question that the progressivity of our taxation system had been severely eroded over the last couple of decades and that the fairness and equity of the system had suffered as a result of oppressive marginal tax rates. Indeed, it is this principle of providing incentive for those who wish to work hard and produce which underlies the principles behind the Fringe Benefits Tax Assessment Bill 1986. It is the measures contained within these four Fringe Benefits Taxation Bills which will provide the wherewithal for the Government to lower the marginal tax rates and thereby provide an incentive for all Australians to work hard and provide for a fair and equitable taxation system. Yesterday in this place we discussed the negative gearing provisions and other measures in the other tax Bills and we heard from the Opposition bleatings about how unfair this was and how industry would suffer. Today, in these four Bills we get a thorough reassessment of the benefits provided by employers to employees. They contain specific rules for valuing the kinds of fringe benefits that are provided by employers, and the following cases are included: The private use of motor cars, interest free or low interest loans that are provided to employees, the release of debts, payment of private expenses, free or subsidised residential accommodation, excessive living away from home allowances, free or subsidised board, concessional fares for airline transport, entertainment for tax exempt bodies only, and free or discounted goods or other property. A number of other measures are included within the ambit of these Bills. I will just take one or two examples. It is clear for all to see that there are significant benefits for employees in circumstances where, for instance, the school fees of children at a private school are paid by the employer. When those fees come up to the level of perhaps $3,000, $4,000 or $5,000 a year, it is clear that an employee in those circumstances is receiving a significant tax benefit from that sort of fringe benefit that is provided by an employer. The provision of cheap accommodation may be another way in which it is possible for a tangible benefit to be received by an employee from an employer, and there is no way under the present provisions in which the Government is able to obtain taxation revenue from that arrangement. Certainly, the provision of a motor car for use privately provides the employee with a significant tax free benefit. I could go on. The simple way around this problem would be for the employee to be paid money that is equal to the benefit. Then the Australian Taxation Office would be able to retain a significant proportion of tax from that amount. What sorts of responses did we get from members of the Opposition? The honourable member for Gippsland (Mr McGauran) came into the chamber yesterday and said that his response to these proposals was that he could provide an army of accountants and lawyers who would allow him to slide around the new provisions. If that is the sort of approach we have from the Opposition, it is not surprising that it is opposing some of these measures. The honourable member for Mayo (Mr Downer) went into nervous paroxysms about how the car industry will suffer and how the housing industry is suffering. The honourable member for Moreton (Mr Donald Cameron) was even more explicit. He came into the chamber and talked about crematoriums in Brisbane and how the National Party had been involved in mismanagement on certain occasions. It seems that the only debating point that the Opposition has with regard to these Bills is that of jobs. The Opposition says that jobs will be lost and it is concerned about jobs. This Opposition provided us in its last year in government with a net job loss of a quarter of a million in this country. It is trying to tell us-people who in three years have provided 670,000 new jobs-how we should go about providing jobs in our community. That is sheer humbug. It is very depressing for all honourable members on this side of the House to think that after three years honourable members opposite have learnt absolutely nothing in opposition. The pet concern of the honourable member for Mayo is the car industry. He comes into the House and speculates widely and talks down the car manufacturing industry. There has been a downturn in car sales in this country in the early part of this year. There are a number of reasons for this. No doubt the state of interest rates in this country forms part of the story. Clearly, 1985 was a record year for the car industry. Perhaps one would expect that there would be some downturn. The introduction of unleaded petrol caused a pull forward of orders, and that has distorted the figures somewhat. It is the employment story in the industry that we hear about consistently from members of the Opposition. The honourable member for Mayo should know the story because there is a significant car manufacturing industry in South Australia. I draw his attention to an article in the Adelaide Advertiser of 2 May which provides a survey of employment effects in the car industry in the early months of this year. I will quote from that report. The Australian car manufacturing industry overall is recruiting and not sacking workers despite a downturn in sales and worries over the looming car tax. Mitsubishi has taken on 400 workers this year. The Mitsubishi company is one of the principal manufacturers in South Australia, and the reference is to this calendar year. In fact, Mitsubishi is expanding its operations. I heard recently that it was talking about introducing a new facility in South Australia for exporting cars. This will be possible because of the Government's policy on deregulation, together with the devaluation of the dollar, which has made our industry more efficient and more able to export. The article continues: Nissan is employing 300 extra; Toyota is advertising jobs to overcome a `shortage'; Ford says it has not had to shed any staff and GMH says the 500 employees it has lost over the past six months are the result of a wind-down of the Woodville plant announced three years ago. Clearly, the evidence is not that there has been a significant downturn in the car industry in South Australia. The article continues: In addition, major Adelaide automotive component supplier W. H. Wylie and Co. is advertising for process workers to cover normal attrition and keep up its workforce numbers . . . In South Australia, Mitsubishi's workforce has increased from about 4,000 at the start of the year to 4,400, while production is running at full capacity of about 300 vehicles a day, despite the general market slump. Within the industry there is variation from car dealer to car dealer, but I do not think, on that evidence and on other evidence that is available, that it is fair to talk down the industry; nor is it fair to say that this tax is the reason for the present circumstances. As I said yesterday, it is not appropriate that industries in this country should be underpinned by tax shelters. That applies to negative gearing provisions just as it applies to the fringe benefits taxes that are proposed in the Bills. But the complaints from the members of the Opposition continue. Jobs will be lost, they say. What validity is there to this sort of argument? I take another example. Let us look at the impact on employment in the entertainment industry of the fringe benefits tax on entertainment-the so-called free lunch proposal-which was introduced by this Government in September last year. The industry protagonists, the tax avoiders and, of course, the Opposition have been saying that this proposal would bring about disaster in the restaurant industry. I note that the honourable member for Denison (Mr Hodgman), who is sitting opposite, has revised his figures with regard to that industry. His latest estimate is that 10,000 jobs will be lost in that industry as a result of this legislation. I see him nodding his head. At least I am glad that he is sticking by his latest estimate. Mr Saunderson —What happened to the 80,000? Dr CHARLESWORTH —Eighty thousand was the figure, but that has come down. I accept the personal explanation that the honourable member made today and I have seen his Press release. Perhaps there was a misquote. Ten thousand is now his figure. The National Restaurant and Catering Association said that 10,500 jobs would be lost, but in the other place Senator Messner gave a figure that was a little more expansive. He said 18,500 would be lost. Looking at the Australian Bureau of Statistics category of figures for restaurants, hotels and personal services, the latest figure available before this measure was introduced showed employment of 284,000 in the industry. In December 1985-the latest figure available to us-303,000 were employed in the industry. Since the fringe benefits provisions were changed-since the end of the free lunch-there has been an increase of 6.9 per cent. The total industry increase in employment over those four months was 2.3 per cent. Not only was that a very good result over four months-a 2.3 per cent increase in total industry employment-but also employment in the restaurant industry increased by 6.9 per cent, three times the figure for the total industry. That just gives the lie to the mindless exaggeration and the talking down of the economy that we get from those on the other side of the House. Mr Saunderson —There are more jobs. Dr CHARLESWORTH —It seems that those changes have made more jobs or perhaps it is just a result of this Government's progressive policy with respect to tourism and in other areas. The honourable member for Denison is wrong by 30,000 after four months. God knows how far he will be out after a year. This legislation will have an effect on ordinary people. It will allow them to share the burden fairly and evenly. It will allow this Government to reduce significantly the marginal rates of taxation. That will provide incentives for those who want to work hard. It will provide for those who want to produce and employ people in this country. Tax will be paid where it is due and where it should be paid. This legislation will stamp out many of the distortions which presently exist within our system. I have no hesitation in supporting the legislation and I commend the Bills to the House. Mr HODGMAN(Denison)(10.00) —I suppose that some of the revenues that will be raised from the fringe benefits tax which is being introduced under the Hawke-Keating tax package will go to the running of this Parliament and I suppose that some will probably go towards paying the costs of the Commission, the appointment of which will follow the passing of the Parliamentary Commission of Inquiry Bill 1986 which we dealt with so badly just a short time ago. We made history and we made it very badly indeed. On Friday 1 November last year the Australian Financial Review was kind enough to publish, as the main letter in the letters to the editor column, a letter that I wrote on this very subject of the fringe benefits tax. Because I believe in consistency in argument I went back to the files and obtained the letter. I preface my remarks by reading that letter. It is not very long but some of the points it makes will be picked up and accepted as reasonable and valid by the men and women of Australia who are listening to this debate tonight. The letter amounts to a condemnation of the Government which has brought in what I believe to be a tax package which is quite contrary to the interests of Australia. Under the heading `Government tax package a fraud' it said: Sir, The Hawke-Keating tax package is a fraud and should be opposed-lock stock and barrel. The package must be viewed as a whole. It is not divisible. Although it will be presented in separate Bills, the poison in it far outweighs the few sugar-coated pills. They are the `sweeteners' and only suckers would fall for a few `sweeteners' in such a poisonous tax package. I wrote this letter on 1 November last year and it was published on that day. Mr Peacock —You were right. Mr HODGMAN —I am grateful. The honourable member for Kooyong, as ever, is on the ball, completely and absolutely. My letter continued: Two fundamental principles of income tax law are at stake. Firstly, the inviolate principle that expenditure incurred in earning income is tax deductible will go out the door with the elimination of entertainment allowances. Quite bluntly, Section 51 of the Act is being raped. Secondly, the fringe benefits tax proposals transfer the obligation from the employees to the employer and, as John Spalvins has pointed out, thousands and thousands of Australians will lose their jobs as a direct result of this proposal alone. It is bad enough that the Hawke-Keating package will wipe out one-quarter of the motor industry,- and that is correct- one-third of the tourism industry- and that is correct- and one-half of the restaurants in Australia,- that also is correct- but it is even worse, the Hawke socialist Government will `get its foot in the door' to further ravage the fundamental principle of section 51-which is sacrosanct in every free enterprise democracy in the world. I concluded by saying this: The package is, at worst, a prescription for economic disaster to private enterprise in Australia-and at best a fiscal presentation of The Mad Hatter's Tea Party. Between them The Bandicoot and The Ferret are about to stuff-up Australia's economic development for at least a decade to come. I believe every single word that I wrote is correct. Mr Peacock —Who is the `bandicoot' and who is the `ferret'? Mr HODGMAN —We all know who the bandicoot and the ferret are. The Opposition opposes lock, stock and barrel this disgraceful Fringe Benefits Tax Assessment Bill. It is one of a package of six Bills which have been rammed through this House with gagged debates. The guillotine has been used so much that the Special Minister of State (Mr Young) will be known from this day forward as Monsieur Defarge. He guillotined the Affirmative Action (Equal Employment Opportunity for Women) Bill, he guillotined the tax legislation, he guillotined the infamous Bill that we have just passed and now he is guillotining this Bill. The people of Australia should know that this Government is so scared of free, frank and full debate on this issue that it has limited the members of this Parliament to a miserable 10 minutes each in the middle of the night to talk about legislation which will put thousands and thousands of Australians out of their jobs. With the greatest respect to the honourable member for Perth (Dr Charlesworth), who spoke before me, he has proved two things: First, he is a magnificent hockey player and a superb captain of Australia; and secondly, he is a lousy politician. He just does not understand that the legislation he has been caucused to vote for and which he blindly supports is legislation that will put decent Australians out of their jobs. I thank the honourable member for Perth for accepting my personal explanation in the House today. I issued a Press statement on the very subject of the fringe benefits tax on 7 October last year. Ah! I see that the grave robber has entered the chamber-- Mr DEPUTY SPEAKER(Mr Keogh) —Order! The honourable member for Denison knows only too well that that is an infringement of Standing Orders. He must refer to honourable members by their electorate names and to Ministers by the portfolio they hold. I assume that the honourable member for Denison was referring to a Minister. Mr HODGMAN —Yes, the Minister for Social Security (Mr Howe) and he has now left the chamber. Back on 7 October last year I said in my Press release: The Hawke Socialist Government's proposed abolition of entertainment expenses will cost the Australian restaurant industry at least 10,000 jobs in 1985-86. I went on to say that a further 10,000 jobs in industries servicing the hospitality industry were now on the line. That was twisted by a Minister in another place. That Minister is fast earning the reputation of a person of very doubtful veracity. He stood up in the Senate this week and claimed that I had said that 80,000 jobs would be lost in the restaurant industry arising from the fringe benefits legislation. Mr Peacock —Which Minister was that? Mr HODGMAN —Do I have to refer to Ministers in another place by name? This Minister has many nicknames. Mr DEPUTY SPEAKER —The honourable member for Denison has been here long enough to know the correct procedure. Mr HODGMAN —The Minister who made that statement was Senator Walsh. He claimed that I said that 80,000 jobs would be lost in the restaurant industry. That claim was false, as I have proved by producing my Press statement which the Special Minister of State permitted me to table in the Parliament today. That Press statement said `10,000 jobs'. If honourable members opposite make a thing about me being out by something like 20 per cent, what do they think about a Minister for Finance who is out by about 800 per cent? What about that? No wonder people say that certain people are `barmy as bandicoots' and `mad as a gumtree full of galahs'. The plain fact is that it would be funny if it were not so serious. Let us look at the situation. The Government is turning a deaf ear to the motor industry which is crippled and on its knees. Government members are skiting and laughing to themselves and the Treasurer (Mr Keating) is saying that they must be able to accept and tolerate these things. The Government is turning a deaf ear to the restaurant and tourist industries which it claims to support-- Dr Charlesworth —The restaurant industry is booming. Mr HODGMAN —The honourable member for Perth says that it is booming. Obviously he is so ignorant of the facts that he does not realise that restaurant employment goes up in the summer months. That is how thick the Hawke socialist Government is. There is no doubt that these figures go up in summer. You, Mr Deputy Speaker, know that in Queensland employment goes up in the summer. My daughter is working in the tourist industry and she knows that employment goes up in the summer months. Dr Charlesworth —You have destroyed tourism. Mr DEPUTY SPEAKER —Order! The honourable member for Perth has made a contribution to the debate. He should remember that these interjections are out of order. Mr HODGMAN —Thank you for your protection, Mr Deputy Speaker. This rabble that occupies Moscow corner does not understand. Dr Charlesworth —On a point of order, Mr Deputy Speaker: Earlier you allowed the honourable member for Denison to refer to me as a disastrous politician-- Mr HODGMAN —I did not; I said that you were a lousy politician. Dr Charlesworth —Well, whatever, I really believe that that comment should be withdrawn. Mr DEPUTY SPEAKER —I did not hear the remark made by the honourable member for Denison about the honourable member for Perth. I am sure, knowing full well the tolerance and understanding of the honourable member for Denison, that he will withdraw any remarks that the honourable member for Perth regards as offensive. Mr HODGMAN —Of course I will. This Government does not understand private enterprise, it does not believe in it and by this legislation it is proving that it will get the last drop of blood out of every crippled small business in this country in order to pay for the enormous socialist programs which are part and parcel of its philosophy. The Minister for Social Security, who is now at the table, is the most committed and dangerous socialist this country has seen. He makes Dr Jim Cairns look like a choir boy. The honourable member for Kooyong knows of restaurateurs in his city of Melbourne, as I know of them in my city of Hobart, who will go to the wall. I am not talking about big, rich silvertail restaurants. I am talking about people who have worked their guts out to make a living in this industry and to support the tourist industry, which the Government claims to support but which, by its actions, it has stabbed in the back. The time that has been allotted to me has almost expired. Dr Charlesworth —It has gone. Mr HODGMAN —I have a couple of minutes in time on, in hockey terms. If it is good enough for the honourable member to get time on-the honourable member is a darn good hockey player but we know what sort of politician he is-it is good enough for me to get a couple of minutes time on so that I can finish my remarks. As I said, we have the most extraordinary situation. In the other place we have a Minister described as being as mad as a gum tree full of galahs and as barmy as a bandicoot. He happens to be the Minister for Finance. In this House we have a person who on any basis has been involved in tax evasion which would make any of us cringe, as we do. Mr Peacock —Who was that? Mr HODGMAN —Well, he is the Minister for Trade (Mr Dawkins). So we have a situation-- Mr DEPUTY SPEAKER(Mr Leo McLeay) —Order! I think the honourable member should withdraw that. Mr Peacock —I asked him. Mr HODGMAN —Well, it is fact. Mr Howe —I take a point of order. I think the remark that was made by the honourable member was offensive to a Minister and ought to be withdrawn. Mr DEPUTY SPEAKER —I am asking the honourable member to withdraw it. Mr HODGMAN —Well, it is true, but I withdraw it. I withdraw. I would like this to be the subject of a substantive motion to deal with this properly. In conclusion-I have gone one minute over my allotted time-I say that the chickens are going to come home to roost for this Government. Its fringe benefits tax legislation is going to cost it a heck of a lot of votes. Its capital gains tax legislation is going to cost it ten to 20 time more. Its negative gearing legislation will get not the tall poppies but middle Australians. Last but not least, I say to everybody: Do not hold your breath waiting for the Hawke-Keating promised tax cuts because I guarantee that this time next year we will be wondering what on earth happened to them. They will not be delivered; they cannot be delivered. This Government is derelict, bankrupt and thoroughly disgraced. It is a minority government in Australia today. Honourable members opposite are on the way out. I ask them to enjoy the remainder of their time in government because the Lodge will be back in the right hands with the right person in it before any of us are very much older. Mr SAUNDERSON(Aston)(10.14) —I laughed a lot at a dinner the other day attended by Fred Daly. I thought that Fred would have been a good comedian. Now I know that the honourable member for Denison (Mr Hodgman) would probably make a better one, because I have never heard so many funny lines in one speech. The honourable member stood up and said that the Government was supporting tax evasion despite the fact that for seven years the Government of which he was a member allowed the greatest tax rorts to develop. The tax evaders that prospered under his Government were supported by his Government. In fact, they probably voted for that Government. The former Government allowed those tax evaders to rob the Treasury and thereby deprive honest taxpayers of millions and millions of dollars. It is an absolute joke for the honourable member to come in here and say that this Government supports tax evasion. In fact, we are now debating Bills which are designed to close down the tax shelters and the rorts that were allowed to grow and prosper under the previous Government. A great deal of time has been spent today in discussing the implications of this legislation for restaurants and the car industry. However, we have homed in on other types of fringe benefits, particularly the benefits which allow people to receive payment in kind and the payment of private school fees which is not declared as part of income and which therefore is not subject to tax. We are now eliminating those sorts of rorts. The honourable member for Denison embarked on an exercise of saying that jobs will be lost because of the Government's desire to clamp down on and eliminate the free lunch. People have been able to claim the cost of the most expensive lunch as a business expense. In effect, the honest taxpayer had to pay for this. The honourable member claimed that 10,000 jobs would be lost in the restaurant industry. He also claimed that a third of the car industry would go. Not even the car industry claims that. That is how much nonsense he speaks. The car industry is not even predicting that sort of doom. He also said that a third of the tourist industry would be lost. Australia is experiencing the greatest boom in tourism that we have ever seen. The planes are coming in absolutely jam packed with tourists. Yet we hear this nonsense from the honourable member for Denison who talks about a third of the tourist industry going bankrupt because of all the jobs that are going to be lost. We are told that half the restaurants in Australia are going to close. What absolutely arrant nonsense! The honourable member for Perth (Dr Charlesworth) gave a very clear indication of what is happening. The restaurant industry is growing because of the growth in the tourist industry. The honourable member cited figures which reflect that growth. There are more jobs in the restaurant industry since we moved to eliminate free lunches in restaurants. There are more jobs, not fewer. There are not 10,000 fewer jobs, as the honourable member for Denison claimed. The honourable member is about 37,000 out on his figures and his predictions are getting worse all the time. Honourable members opposite talk about a disaster, and that is what the Opposition really is. All that members of the Opposition can do in regard to every positive step we have taken to eliminate tax evasion is the same as the tax evaders-stand up and cast misery and doom. Mr Hodgman —Mr Deputy Speaker, I take a point of order. I take offence at that reference to any member on this side of the House being the same as a tax evader. I ask the honourable member to withdraw it. Mr DEPUTY SPEAKER —Could the honourable member for Aston tell the Chair again what he said? Mr SAUNDERSON —I said that members of the Opposition used the same sorts of words that the tax evaders do. They stand up and cast misery and doom in regard to every one of the Bills we have introduced. I did not say that members of the Opposition are tax evaders. I did not say they were associated with them. I said that they used the same arguments. Mr DEPUTY SPEAKER —I do not think it is unparliamentary to say that people cast misery and doom. Mr Hodgman —I take exception to the honourable member using the words `the same as a tax evader'. Mr Deputy Speaker, you properly directed me to withdraw the remarks I made about the Minister. I object to being compared with tax evaders and I ask for that remark to be withdrawn. Mr DEPUTY SPEAKER —It would suit the House if the honourable member for Aston withdrew the remark. Mr SAUNDERSON —Mr Deputy Speaker, in deference to your position and rather than get into a long debate, I will withdraw. Mr DEPUTY SPEAKER —I think the honourable member might just say that he withdraws. Mr SAUNDERSON —I withdraw. All we get from the Opposition is misery and doom. We introduced these Bills to eliminate tax shelters and rorts. All we get from the Opposition is claims that there will be disaster. What is the Opposition's solution? Its solution is to leave in the provisions which allow the tax shelters. The Opposition has no alternative. The Government is taking a logical step. I wish to refer again to something that the honourable member for Perth said. In talking about the car industry the honourable member pointed out that no industry in Australia can expect to survive on the basis of a tax rort or a tax shelter. The honourable member for Denison, who has just left the chamber, said that disaster would befall one-third of the car industry and that one-third of the car industry would close down and be finished. It is interesting to note the comments that were made in the other place yesterday by the Minister for Industry, Technology and Commerce (Senator Button) about what has been happening in the car industry since we have announced the changes, in view of the forecasts of misery and doom that have been made in respect of the car industry. I might just run through the salient points in a report in the Adelaide Advertiser to which the Minister referred. The report stated: The Australian car manufacturing industry overall is recruiting and not sacking workers despite a downturn in sales and worries over the looming car tax. Mitsubishi has taken on 400 workers this year. The Minister then said: Mitsubishi is a principal manufacturer in South Australia and the reference is to this calendar year. The article continued: Nissan is employing 300 extra; Toyota is advertising jobs to overcome a `shortage'; Ford says it has not had to shed any staff and GMH says that 500 employees it has lost over the past six months are the result of a wind-down of the Woodville plant announced three years ago. In addition, major Adelaide automotive component supplier W. H. Wylie and Co. is advertising for process workers to cover normal attrition and to kept up its work-force numbers. In SA, Mitsubishi's workforce has increased from about 4,000 at the start of the year to 4,400, while production is running at full capacity of about 300 vehicles a day, despite the general market slump. Where is the argument of the honourable member for Denison (Mr Hodgman) in regard to this? He has said that a third of the car industry will be destroyed and that a third of car industry jobs will be lost. The facts show up his statements for what they are-arrant nonsense. The reality is that the car tax will not have that impact. I support the tax provisions that we are introducing because for the first time we really are attacking those in the wealthy class in Australia who have been in a position to evade tax and to manipulate the tax system to suit themselves so that they have virtually been in a position of not having to pay tax at all. The pay as you earn taxpayer is the person who has borne the weight of that tax evasion. These Bills represent the first part of the taxation package which will turn around that assault on the ordinary PAYE taxpayer. In coming to the end of my speech, I would like also to take up a point raised by the honourable member for Denison in regard to the gag which has been moved on these Bills. He came in here and said that we have gagged the debate on these issues because we are not prepared to debate them. He knows that is not true. It is simply the fact that Opposition senators have decided not to deal with any business after 30 May. Mr Cadman —We have waited for nine months to see the legislation. The Government would not take that decision. Mr SAUNDERSON —The honourable member knows that we have used the gag because Opposition senators have said that they will refuse to consider any Bills introduced after 30 May. They have said virtually: `We have worked long enough, we will take a holiday after 30 May. We will not consider new business'. In fact they know their responsibility is to consider business as we introduce it. That is why we are sitting an extra week; that is why we have to introduce the gag on these Bills. It has nothing to do with our not being prepared to debate the issue. We would like to debate it more than we have been able to do. We would like a lot more time to talk about many of the other benefits contained in the tax package. We do not have the time because we are forced to this schedule by Opposition senators deciding to go on strike after 30 May. The reality is that they will not consider any business after that date. I will summarise the two main points I have mentioned. I talked about the free lunch and the car industry. I think the figures that I have given and the figures given by my colleagues who spoke before me have shown quite clearly that the tax reforms we are introducing are not affecting the restaurant and car industries. In fact, there is evidence to show that those industries are benefiting not just from the tax package but also from other economic decisions we have taken. These industries are in a better position because of our being in government. Taxpayers are in a better position because in government we have attacked the tax evasion industry and we are introducing the greatest tax reform we have seen in this Parliament for many years. The benefit of this will flow directly to those honest taxpayers who will receive reduced personal income tax payments as a direct result of the package we are debating today. I support the Bill. Mr TUCKEY(O'Connor)(10.24) —The honourable member for Perth (Dr Charlesworth) and other honourable members opposite have been at pains to tell us just how well things are going in the business community and, in particular, the small business community. I think it is worth drawing their attention to the report in the Australian of 2 May 1986 which is headed `Bankruptcies blamed for 9.6 per cent fall in AGC profit'. The article states: Directors blamed the result on the growing number of bankruptcies in the small business sector, caused by- I hope honourable members are listening to this- high interest rate, high levels of unemployment, the impact of tax changes- This is an independent view. This is the view of a group of directors who are turning around to look at the reasons for their fall in profits. They are identifying the reasons for the fall and the low level of economic activity. The directors of Australian Guarantee Corporation put that in black and white in their report. Unlike the Treasurer (Mr Keating) who wanders around convincing people that two and two equals any number up to 10, these gentlemen have the figures in front of them. These are the figures for the last six months. Mr Saunderson —Tell us about the initiative that you put into small business. Mr TUCKEY —Oh, I see. I ask the honour- able member not to worry about that. He is in the Government. His Government is running this. This is the situation his Government has caused. The article continued: AGC's directors said yesterday that the results were attributable to difficult economic conditions in the past six months. We had the Minister for Employment and Industrial Relations (Mr Willis) in here the other day reading out to us all the beautiful figures, but he never read out one figure that applied after November 1985. There is not one figure after that. People are living today. Honourable members opposite form the Government. It is about time that they stopped telling themselves fibs. Mr Saunderson —And we are a good Government, too. Mr TUCKEY —Yes, the honourable member keeps telling himself that but the pity is that people have to suffer while he deludes himself. The article continued: The net charge against profits for bad and doubtful debts amounted to $39.3m, up 300 per cent on last year's charge of $13.3m. Those are the figures for six months as compared to 12 months. That is the economic indicator which it is time honourable members opposite took notice of. I remind honourable members opposite that one of the causes listed for bankruptcies which they have been denying was, of course, the impact of the tax changes. That is what we are here to talk about. The words I quoted are not my words; they are the words of the directors of the Australian Guarantee Corporation, one of the biggest finance companies in Australia. Mr Saunderson —What else have they got. Mr TUCKEY —Get Paul to ring them up and abuse them for having the temerity to put out a report like that. He does it to everyone else. Mr DEPUTY SPEAKER(Mr Leo McLeay) —Order! The honourable member for Aston will cease interjecting. Mr Howe —Mr Deputy Speaker, I rise on a point of order-- Mr TUCKEY —The Minister does not know who Paul is; sit down. Mr DEPUTY SPEAKER —Order! If the honourable member for O'Connor is referring to a Minister he will refer to him by his correct designation. Mr TUCKEY —We will get the Treasurer to ring up and use some of his filthy language, just as he did to our Leader. Mr DEPUTY SPEAKER —Order! The honourable member for O'Connor shall not reflect upon another member. He would assist the House by withdrawing. Mr TUCKEY —I withdraw because I cannot afford the time to argue. Mr DEPUTY SPEAKER —I think you should just withdraw. Mr TUCKEY —I withdraw. That is the point that we get to. Where are we now? Let us look at some of the myths. Mr Howe —The scum. Mr Hodgman —Mr Deputy Speaker, I raise a point of order-- Mr DEPUTY SPEAKER —I ask the Minister to withdraw. Mr Howe —Withdraw what? Mr TUCKEY —Withdraw what you said. You have been asked to withdraw. Come on, hurry up! Mr Howe —Mr Deputy Speaker, I referred to no particular member. Mr TUCKEY —I referred to `Paul'. He could have been the bloke who worked at Galilee. Mr DEPUTY SPEAKER —Order! There is a provision that if a member makes an allegation against a class of members he can be called upon to withdraw. I ask the Minister to withdraw. Mr Howe —I withdraw. Mr TUCKEY —We have so many myths in relation to this Government today that it is becoming a problem to which we should refer. Originally, there was the myth that this Government had the best group of Ministers in history. They are now the Ministers best equated as being wax dolls. They go very soft at the first heat. We have seen one after the other fall down. They cannot cop it. They were pretty good at giving it while the road is smooth and while the going is easy. However, they all start tripping up when they run into a few pot holes and someone gives them a bit of it back. They are wax doll Ministers supported, of course, by a lame duck back bench that lets the Ministers roll it every day of the week. Mr Howe —How many Ministers did you lose-13 or 15? Mr Saunderson —How many Ministers resigned in your Government-all 27 of them. Mr TUCKEY —It is the honourable member's seat that is at risk. We also have the myth of tax cuts. Let us look at the National Australia Bank Monthly Summary for November last year, shortly after the Treasurer made his statement of 19 September. The National Bank talked about what honourable members opposite have been telling us today, that all the pain that the Government is going to inflict on people, all the administrative burden, all the cost, is to save someone some money. No doubt, honourable members opposite expect that there will be some saving for average weekly earnings. Let us see what this reputable document has to say about that. It states: No attempt has been made to compensate for the effects of inflation on income between now and June 1987 when the new rates come into effect. This means that a taxpayer on average weekly earnings in June 1985 and paying 22.4 per cent of salary in tax, will actually pay 23.4 per cent tax when the new tax scales come into effect two years later, should average earnings increase by eight per cent per annum in the interim! The suggestion is that the CPI increase will be only 8 per cent. It is running at 9.2 per cent, and that will make it worse. The document continues: More alarming however, no commitment has been made to index the tax scales for inflation beyond 1987-88. In other words, there is nothing in place to prevent 50 per cent becoming the marginal rate for the majority of full-time salary earners in the near future, or looking further ahead, to prevent 50 per cent scale from gradually assuming dominance, even to the point of eventually creating a virtual flat tax system at this still substantial income tax rate. Is this tax reform? It is a fraud to suggest that people must carry burdens that are delivered in this fashion on the understanding that in the future they will get some tax cuts. That document shows how fraudulent that statement is. People will pay one per cent more of their income after all of these burdens are placed upon them. How did it all happen? We all think that this was something that materialised on about 19 September. We had the Tax Summit in July-that wonderful occasion on which the Treasurer strutted before Australians, telling us he had it dead right, it was all going to be fixed, and he would give us a consumer tax. He did all the things that history has recorded. A little research tells us that on 3 February, about six months before the Tax Summit took place, Mr Kelty of the Australian Council of Trade Unions gave a speech to the Socialist Forum in Melbourne. Maybe the Minister for Social Security (Mr Howe), who is at the table, was present. Mr Kelty laid down the tax package in February, according to an article which states: The ACTU has predicted a bumper year for wage and salary earners, including two national wage rises, additional money for low income earners, no tax increases and superannuation for every worker. A little later the article states: He also foreshadowed a push by the ACTU for a Government crackdown on perks-such as company cars, expense accounts and education fees enjoyed by executives-and an expansion of the tax `pot' into currently non-taxable areas. Quite clearly, he was talking about the capital gains tax, the tax we have heard about since 19 September, but we still do not have any legislation to tell the Australian people how it will work. That is when the Government received its instructions to introduce this stuff. It is further evidence as to who is running the country. It is certainly not the Treasurer or these wax doll Ministers that we have experienced in recent times. Let us look at the fringe benefits tax proposal. I know all about equity in the tax system. I am prepared to concede equity in the tax system. I am prepared to concede that there have been abuses of the fringe benefits arrangements. That has happened because the Commissioner of Taxation has not used the laws available to him to address those problems. One has only to look at the tax return form that most people fill in. There is provision on that form to tell the Commissioner of non-cash fringe benefits. Those provisions exist today. The Opposition is objecting to what we see in this legislation because the Government is throwing the baby out with the bath water. That is what it is doing. It is hitting little people in farm houses. It is hitting the small country shire clerk. He needs some of the things he gets because he is not living in an environment where he can buy and sell a house on arrival, as he would in a big city. There is no bus stop at the front of the house where he can jump on a bus to go into work. He drives a vehicle all day. Like so many other employees, if he did not take it home and put it in the garage, it would stay out in the open. Those people can be treated differently. But the Government does not choose to do that. They will be the ones who will be hardest hit. Small businesses will suddenly find themselves with a substantial administrative burden. Many of them will be obliged to pay a tax when, due to the economic circumstances that this Government has created, they will have tax losses. They cannot offset that tax against losses; they will have to pay in this way. Let us look at who will pay the cost burden in the end. I am told that Elders IXL Ltd has a fleet of 5,000 cars. When it pays the tax on those 5,000 cars, as it must because its business is such that its employees cannot be without vehicles, Mr Elliott must maintain his shareholders' dividends. He cannot absorb that loss. It will be passed on to our rural sector, which cannot afford it. That will go on and on. In regard to the stupid taxes on State and local government, those officers will continue to vote themselves the fringe benefits they receive today. The taxpayer, that ordinary Australian for whom the Government has all of this sympathy, will pay for that also. But the greatest fraud of all-and I close on this point-is that we have a separate Bill particularly to allow the Government to tax itself. Have honourable members ever heard of anything more silly? Take it out of one pocket, put it in the other, and slap oneself on the wrist in the process. It is a Bill for an Act to provide for-and here are the operative words-`notional application of fringe benefits tax in relation to the benefits provided in respect of the employment of Commonwealth employees'. I say to the Minister that if he and the Treasurer are fair dinkum about the abuse of fringe benefits, they should stop giving them to their employees at the Commonwealth level. They will be the privileged group. They will continue to get their benefits. The Commonwealth will suffer no cost because the money just rolls back in and the Commonwealth cannot tax itself. So they will have the benefit. Those packages can still be offered. Yet in every other sector of employment this disincentive contained in this proposal will remain. It is a ridiculous proposal. The Government has thrown the baby out with the bath water. It is contributing to all those bankruptcies to which AGC has called its attention. Mr JULL(Fadden)(10.37) —I am delighted tonight to be able to follow the honourable member for O'Connor (Mr Tuckey) in this debate, which has been raging in this chamber for almost 12 hours. In many respects it has been the most amazing debate that I have seen during my time-almost a decade-in this House. It is an amazing debate because it involves probably the biggest single change to the tax structure of Australia that we have seen for decades. Yet we are all restricted in terms of time limits for the debate. The Government has introduced an amendment at the last minute. Under the Standing Orders of the House we have no opportunity to debate that amendment. When the guillotine finally strikes, the whole thing must go through. When we are considering such fundamental changes to the system of taxation in Australia, I think that is a very poor reflection on the calibre of the type of government that we have in this country. Even at this late hour, when not one member of the Government is present on the back bench and the Government has run out of speakers, we are still being subjected to the same old line that we have copped all day. That line is definitely the Government line. There has been no original thinking on the part of honourable members on the other side of the House. Indeed, there has been very little contribution by Government members to the debate. I have been present for an hour or so. I have had to put up with the honourable member for Perth (Dr Charlesworth) and the honourable member for Aston (Mr Saunderson) giving the Government line. I suggest that many of the figures that have been given to us tonight are nebulous, to say the least. Indeed, many of the aspersions that have been cast on so many sections of Australian society and Australian industry have been unwarranted. I think it is about time that we brought a few of the facts to the fore. I was amazed that the honourable member for Perth should talk about the restaurant industry and the tremendous creation of jobs in that industry. This has been the sort of misrepresentation that we have had in this House since 9 o'clock this morning. It is really quite amazing. There is no argument from this side of the House that we should have any sympathy whatsoever for tax dodgers or tax cheats or for those who rort the perks system in Australia. Nobody on this side is arguing with that. The point has just been made by the honourable member for O'Connor that within the taxation system and within the powers of the Commissioner of Taxation we have had the facility to be able to deal with any rorts that have taken place. In fact, this Government and the bureaucracy of this country have not acted in regard to those rorts. I think it is a shame that industries such as the motor vehicle industry and the restaurant industry have been literally smashed to pieces because the Government has not been prepared to use the legislation that is already in place. I am amazed to hear of the growth of employment in the restaurant industry. I have been checking my figures tonight and there is no doubt that there has been an increase in the number of people employed in the hospitality industry so far this year, but I can name the places where that increase in employment has occurred. It has occurred in Jupiter's Casino, in the Adelaide casino and in the casino in Perth, and it has occurred in a number of new hotels that have opened. In the meantime, the restaurant industry in Australia is in decline. In my city of Brisbane alone in the last few weeks no fewer than three restaurants have gone to the wall, and they were top-class restaurants. I refer to Dods House, Dooley's and the old Camelia restaurant which was one of the long-established silver service restaurants in Australia. It had been in business for some 26 years. For the honourable member for Perth to come in here tonight and talk about the rorts and the frauds that have been going on in the restaurant industry when a couple of days ago he talked in this place about the tremendous job that the Government has done in terms of infrastructure for the America's Cup in Perth, is absolutely amazing. While this Government has been pouring tens of millions of dollars into Perth to look after what some of its members would call a silver-tailed sport, it amazes me that it has let this sector of the hospitality industry decline. That is a very poor reflection indeed on the honourable member for Perth. Yes, 2,800 jobs have been created in the hospitality industry in recent months, but the restaurant industry in Australia has experienced a major decline in employment. Admittedly many people have gone out of the restaurant industry into the casino and hotel businesses. That is fair enough, but what will happen in the coming months and what effect that will have especially on the tourist industry never ceases to amaze me. It is surprising indeed that the Minister for Sport, Recreation and Tourism (Mr John Brown) comes in here and trumpets his so-called achievements in terms of his capacity to be able to bring people into Australia when in fact he is destroying the basic infrastructure that he is trying to support. It is no good putting on America's Cups; it is no good putting on Expo 88s if we do not have the capacity, the infrastructure, to service those people who come to Australia. The restaurant industry is an area on which we should concentrate because it has been one of the few growth industries in terms of employment that Australia has had. It is one of the few industries that has the capacity to continue to increase employment opportunities for the young people of today. I am amazed to hear the Government and the Minister for Education (Senator Ryan) trumpeting also about the tremendous funds the Government has invested in Australia's education system. I give due credit to the Government; it has poured literally hundreds of thousands of dollars into providing secondary and tertiary education for the hospitality industry. I wonder what the young people involved at the moment in hospitality industry courses, who have their minds set on a career-a long-term career at that-in the hospitality industry think about these moves being made in the legislation we are debating tonight when they know that their very future is in jeopardy because of the Government's attitude. As I say, there is nobody on this side of the House who is not prepared to go after those rorts in an industry such as this. But the mechanism exists. We should have gone after those rorts and not become virtually the only country in the world that does not allow legitimate entertainment expenses. That is a fact. Why did the Government not have a look at the voucher system that exists in the United States, or the means of claiming legitimate entertainment expenses that exists in Britain at the moment? These things just were not considered. This action is really the fraud of the whole operation. It is income generation for the Government to get itself out of a tight spot. It had the legitimate argument, it said, to go ahead and knock these so-called rorts on the head. It did more than knock the rorts on the head-it knocked a whole industry on the head and it destroyed the potential employment opportunities of many of the young people of Australia. Tonight I will not go ahead and talk about the motor vehicle industry because I think that that has been well covered. We heard this morning of the Peugeot motor people who are trying to get back some of the import market. It is amazing that one of the biggest distributors of imported motor vehicles in Australia is on the verge of giving away its franchise on one of the most popular makes of imported cars. That, in its own right, is a surprising move. That distributor estimates that 9,000 jobs will be in jeopardy because of that move. We hear about employment in the local motor vehicle industry, but the imported motor vehicle industry in its own way also provides a tremendous number of jobs for Australians. There has been no mention of that from the Government benches; there has been no mention that we may not be able to by Mazda motor vehicles in Australia in the near future because the distributor is going out of business. Of course there are two reasons why the importation of those vehicles may be stopped. Admittedly the devaluation has something to do with it, but most importantly it is to do with the drop in business from the fleet market. So once again people will lose their jobs because of this measure. The imported motor vehicle industry caters to a very specialised market, as well. The hour is late and I know another member wants to speak, but we heard today about airline employees who get tremendous perks in the way of travel arrangements. It is interesting to hear quotes from companies such as East-West Airlines Ltd, in regard to this tax. I agree there has been an agreement between the Australian Council of Trade Unions and the airlines that the airlines will pay this tax, but East-West Airlines is talking about having to pay half a million dollars to cover the tax. What will that do to services? I ask the honourable member for Perth: What happens if Skywest Airlines Pty Ltd gets in trouble with its network in Western Australia? That is very much on the cards. Ansett Airlines of Australia and Trans Australia Airlines will be up for a bill of between $4m and $6m to cover their costs, and Qantas Airways Limited will be up for between $6m and $8m to cover its costs. Who will pay for that? You can bet your bottom dollar that the airlines will not pay for it; they will pass it on to the consumers of Australia. Once again we see the fraud of the Government's alleged cheap airline regime, because that sort of money will have to go into the cost of fares in Australia. That will not only affect business in Australia; it will also, in itself, affect the domestic tourism industry and, even more importantly, it will affect Australia's international tourism market once again. The only people who I believe will benefit from this legislation and its 150-odd pages of explanatory memorandum are the accountants. That industry will do very well, but we have to make sure that we try to get rid of this legislation if we possibly can because literally hundreds of thousands of people, ordinary people in Australia, will be most adversely affected indeed. Mr CADMAN(Mitchell)(10.48) —I have never heard so much prejudice and pure exaggeration from the Australian Labor Party as I have heard today in this debate on the fringe benefits legislation. This is a list of some of the organisations that will be affected by the Government's so-called positive steps to eliminate tax evasion and, to use another term that has been used frequently today, the rorting of the tax system: The Smith Family, the Salvation Army, the Sydney City Mission, the St Vincent De Paul Society, the Wesley Central Mission, the Autistic Association, the Spastic Centre, the St John of God Hospital and the New South Wales deaf and blind societies. These are the organisations the Government is getting at in relation to the rip-offs it has described in the House today-the charitable and hospitable organisations; those that depend on the donations of well-intentioned Australians to keep on providing their services. Their dedicated employees are often under-paid, or lowly paid, and work long hours because they believe in what they are doing. What about the Government's definition of the clergy? That brilliant and capable man, Brother Anthony Duncan, who runs the St John of God Hospital, is a member of the clergy, yes, but he is not doing religious duties as defined by the legislation passing through this House today. What is the Government up to, hitting these people who look after the poor and the needy? No doubt they will be taxed on their tea and biscuits and on the low-priced lunches they have at the institutions. The Treasurer (Mr Keating) ought to be called the charity bandit rather than the bedroom bandit, as I think he was called by one of our members. It will cost the Central Wesley Mission $35,000 for the fringe benefits tax. It thought it had solved this problem at the Tax Summit, but the Government is going to go ahead and tax it anyway. All these charitable organisations are looking after the poor, the needy and the helpless. That is how good the Government's tax is. It ought to be thrown out. Mr DEPUTY SPEAKER(Mr Leo McLeay) —Order! The time allotted for debate on this matter has expired. Question put: That the Bill be now read a second time. The House divided. (Mr Deputy Speaker-Mr Leo McLeay) Ayes . . . . . . . . . . . 73 Noes . . . . . . . . . . . 52 —— Majority . . . . . . . . . 21 —— 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 Kerin, J. C. Brown, John Klugman, R. E. Brown, Robert Lamb, A. H. Brumby, J. M. Langmore, J. V. Charles, D. E. Lee, M. Charlesworth, R. I. Lindsay, E. J. Chynoweth, R. L. McHugh, J. Cleeland, P. R. Maher, M. J. Cohen, B. Martin, S. P. Cross, M. D. Mayer, M. J. Cunningham, B. T. (Teller) 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. Holding, A. C. Tickner, R. E. Hollis, C. Uren, T. Howe, B. L. West, S. J. Humphreys, B. C. (Teller) Willis, R. Jacobi, R. Wright, K. W. Jakobsen, C. A. Young, M. J. Jenkins, H. A. Adermann, A. E. Hodges, J. C. Aldred, K. J. Hodgman, W. M. Andrew, J. N. (Teller) Jull, D. F. Beale, J. H. Lloyd, B. Blunt, C. W. McArthur, F. S. Braithwaite, R. A. McGauran, P. J. Brown, N. A. MacKellar, M. J. R. Burr, M. A. McVeigh, D. T. Cadman, A. G. Macphee, I. M. Cameron, Donald Miles, C. G. Cameron, Ewen Millar, P. C. Carlton, J. J. Peacock, A. S. Cobb, M. R. Porter, J. R. Coleman, W. P. Reith, P. K. Connolly, D. M. Rocher, A. C. Cowan, D. B. Shack, P. D. Dobie, J. D. M. Sharp, J. Downer, A. J. G. Sinclair, I. McC. Drummond, P. H. Slipper, P. N. Edwards, Harry Smith, W. Fischer, Tim Spender, J. M. Fisher, Peter Tuckey, C. W. Hall, Steele Watson, DavidHalverson, R. G. Webster, A. P. Hawker, D. P. M. White, P. N. D. Hicks, N. J. (Teller) Wilson, I. B. C. Everingham, P. A. E. Hurford, C. G. Nehl, G. B. Staples, P. R. Conquest, B. G. Beazley, K. C. Shipton, R. F. Darling, E. E. Question so resolved in the affirmative. Bill read a second time. Government's circulated amendment- Clause 47, page 41, at the end of the clause add the following sub-clause: ``(8) Where- (a) a residual benefit provided in respect of the employment of an employee arose out of priority of access, for a child or children of the employee to a child care facility operated by an eligible organisation within the meaning of section 4 of the Child Care Act 1972; (b) the employer of the employee, or an associate of the employer, made a contribution, under the scheme administered by the Commonwealth and known as the Children's Services Program, to obtain that priority of access; and (c) a grant has been made to the eligible organisation in respect of the child care facility under section 11 of the Child Care Act 1972, the residual benefit is an exempt benefit.''. Mr DEPUTY CHAIRMAN(Mr Millar) —Order! The time allotted for the Committee stage of the Bill has expired. The question now is that the Bill and the circulated amendment of the Government be agreed to, and that the Bill be reported with an amendment. Question resolved in the affirmative. Bill reported with an amendment; report-by leave-adopted. Motion (by Mr Howe)-by leave-proposed: That the Bill be now read a third time. Mr Hodgman-Mr Deputy Speaker-- Mr DEPUTY SPEAKER(Mr Leo McLeay) —The attention of the honourable member for Denison is drawn to the fact that the time for consideration of this Bill has expired. Mr Hodgman-Disgraceful! Mr DEPUTY SPEAKER —Order! The honourable member will resume his seat. Question resolved in the affirmative. Bill read a third time. Debate resumed from 2 May, on motion by Mr Keating: That the Bill be now read a second time. Mr KEATING(Blaxland-Treasurer)(11.01) —in reply-I take this opportunity to record the Government's thanks to those members of the Australian Taxation Office and the Treasury who have worked so incessantly on this legislation from its inception in 1985, and who have, as I said at the opening of the second reading debate, withstood all of the pressures to see the measures ameliorated, and who have worked as assiduously to see that the Bills have been constructed so as to impose a decent tax to achieve its purposes and objectives to make the Australian tax system fairer and more decent. Question resolved in the affirmative. Bill read a second time. Leave granted for third reading to be moved forthwith. Motion (by Mr Keating) proposed: That the Bill be now read a third time. Mr HODGMAN(Denison)(11.02) —Mr Deputy Speaker, I would just like to take one minute to point out to the House that from figures provided to me by an expert who works with the shadow Treasurer it is interesting to note that in the three years that the honourable member for Blaxland (Mr Keating) has been Treasurer of Australia, personal and company tax receipts have risen by 43.1 per cent. He, therefore, is the highest taxing Treasurer in the history of Australia. He has beaten the record of the Whitlam Government, under which tax receipts rose by 38 per cent in three years. As of 30 June this year, this fiscal ferret will have on his record, which will go into the Guinness Book of Records, along with his record of being one of the greatest breachers of promise ever, a 43.1 per cent increase in personal and company tax receipts over the three years from 1 July 1983 to 30 June 1986. The honourable member might as well enjoy his time while he is in that office. He is Treasurer in a minority government. The majority of Australians do not want that government to remain in office, according to the latest public opinion poll. It is on borrowed time. The honourable member for Blaxland should not get up in this House and beam with the pride of a man who has ripped off the workers of Australia with tax increases of 43.1 per cent in the last 36 months. If he were an accountant, he would be in gaol behind bars. Question resolved in the affirmative. Bill read a third time. Consideration resumed from 2 May, on motion by Mr Keating: That the Bill be now read a second time. Question resolved in the affirmative. Bill read a second time. Leave granted for third reading to be moved forthwith. Motion (by Mr Keating) proposed: That the Bill be now read a third time. Mr DONALD CAMERON(Moreton)(11.05) —I just wish to express concern about the fact that the Treasurer (Mr Keating) has not personally replied to my allegations about the way in which this Government is ripping into cripples, blind people and all the other people who have afflictions. The Government has no compassion. It has to use blind, crippled and sub-normal people to try to balance its budget. It is disgraceful. The Treasurer did not even come into the Chamber and front this Parliament. He has been locked away in his office, along with the Government front bench, refusing to face matters I raised in relation, for instance, to a training and placement centre for the blind, the Endeavour Foundation, and many other organisations. The way that the Government has railroaded these tax measures through is a sad reflection of the lack of humanity that exists in the Australian Labor Party. When in Opposition, for years it paraded itself as being a caring party. It has no care for anyone when it comes to balancing a budget, because this has also been the biggest spending government that this country has ever known. It is time that the Treasurer gave it away. All those honourable members sitting behind him and supporting him will be wiped out at the next election. Question resolved in the affirmative. Bill read a third time. Consideration resumed from 2 May, on motion by Mr Keating: That the Bill be now read a second time. Question resolved in the affirmative. Bill read a second time. Leave granted for third reading to be moved forthwith. Bill (on motion by Mr Keating) read a third time. Mr PORTER(Barker) —On behalf of the Joint Select Committee on an Australia Card, I present the report of the Committee, which incorporates a dissenting report, together with the transcript of evidence and written replies received to questions asked by the Committee. Mr Deputy Speaker, I ask leave of this House to make a short statement in connection with the report. Leave granted. Mr PORTER —I thank the House. By resolution of the House of Representatives and the Senate, a Joint Select Committee of eight members, representing each of the four main political parties, was established on 29 November 1985 to examine the Government's proposal for an Australia Card to combat tax evasion, social security fraud and illegal immigration. The Committee fulfilled this task within what has been a very tight time schedule. We have held public hearings in every State; we have taken 5,000 pages of oral and written evidence; and we have heard 168 witnesses and held 18 public hearings. The Committee believes that it has served an important function in encouraging a systematic and widespread debate about the related issues of privacy, civil liberties, prevention of tax and social welfare fraud, and the question of illegal immigration. In addressing those issues, the Committee was able to come to a series of unanimous recommendations which we believe will be of value to the Government, the Parliament and the Australian community at large. These recommendations are contained in chapter 2 of the report. For the interest of honourable members and honourable senators, it is worth briefly listing those areas of agreed concern: The computerisation of births, deaths and marriages registers; the introduction of a data protection agency; the introduction of privacy legislation; the implementation of banking controls, recommended by the Costigan Royal Commission on the Activities of the Federated Ship Painters and Dockers Union; the implementation of the House of Representatives Standing Committee on Expenditure recommendations on illegal immigrants; the transfer of the responsibility for payments under education assistance schemes from the Department of Education to the Department of Social Security; and administrative reforms within the Department of Social Security relating to proof of identity procedures. However, when the major issue of whether or not there should be an Australia Card was addressed, the Committee split in a 5:3 decision. A majority of the Committee-Senators Puplick and Haines, the honourable member for Richmond (Mr Blunt), the honourable member for Aston (Mr Saunderson) and I-favoured an upgraded tax file number system in preference to the Government's Australia Card proposal. The proposed high integrity tax file number would be used in a wide range of financial transactions and in the reporting of information to the Australian Taxation Office. The majority view point left open the question whether a card should be issued with the tax file number. A minority-Senator Aulich, the honourable member for Charlton (Mr Robert Brown) and the honourable member for Bendigo (Mr Brumby)-supported a modified version of the Australia Card proposal. The main modifications in the minority report were recommendations supporting the inclusion of a photograph on the card-- Mr Robert Brown —There is a range of views on this side! Mr PORTER —There is indeed a range of responses from the Government side to that proposal-and the limitation of its use to four government agencies: The Australian Taxation Office, the Department of Social Security, the Health Insurance Commission and, on a more limited basis, the Department of Immigration and Ethnic Affairs. I look forward to the reports of the Caucus debates on these recommendations. Thus the report contains unanimous recommendations, a majority viewpoint, a minority dissenting viewpoint and a personal addendum by Senator Puplick. The Joint Select Committee on an Australia Card arose out of Opposition concern about the Government's proposal and our declared position to oppose the granting of funds until the Government proved its case. The Australian Democrats shared our concern and, in the face of this united opposition, the Minister for Health (Dr Blewett) was forced to back down and accept an inquiry. The report vindicates the stand taken by the Opposition against the hurried implementation of an ill-considered identity card plan. Not one member of the Committee supports the Government's proposal. The majority of the Committee-made up of two Liberals, Senator Puplick and me; one member of the National Party, the honourable member for Richmond; one member of the Australian Labor Party, the honourable member for Aston; and one member of the Australian Democrats, Senator Haines; in other words, representatives of all parties-does not believe that the Government's proposal will achieve its stated objectives. That is, the Government's ID card proposal fails properly to address the major problems of tax evasion, welfare fraud and the identification of illegal immigrants. While the majority of the Committee disagrees with the Government, indeed, so does the minority. It believes that the card must have a photograph-a proposal clearly rejected by the Government last year-- Mr Brumby —Rubbish! Mr PORTER —Rubbish? We are talking about the Government's proposal, which rejected a photograph. In other words, no member of the Committee supports the Government's proposal. Mr Scott —Hear, hear! Mr PORTER —I thank the honourable member for Hindmarsh for the support from the Government benches. Let me go to the heart of the decision of the majority of the Committee. We believe that there are much cheaper and more effective ways of overcoming tax evasion than the proposed ID card, and such alternatives do not have all the civil liberties problems associated with an ID card. The primary function of the ID card is to allow a better matching of information regarding financial transactions, interest earned, et cetera with the Australian Taxation Office files. The Government's proposal was never intended to monitor the black or cash economy, where the big tax evasion occurs. However, a better matching system, as proposed by the majority, may assist in identifying some of the so-called hidden money in bank accounts and elsewhere. The majority believes that its proposal to upgrade the integrity of the tax file number to that of the proposed Australia Card will enable the better matching of the information held by the Australian Taxation Office and the raw data within the financial sector. I put the proposal to officers of the Australian Taxation Office when they came before us. Their response was in the following terms: If we followed the Australia Card identification requirements before allocating tax file numbers and purified existing records on that basis, we would expect to achieve similar revenue gains to those under the Australia Card option, without a photograph, with a similar staff and equipment costs. Let me give one example of the advantages of increasing the ability of the Taxation Office to match information it has on file with that which is provided to it under current laws by banks and others. In the Taxation Office's view, one of the largest areas of revenue evaded arises because of the Taxation Office's inability to match income returns with information provided by banks. According to the Australian Taxation Office, at the moment only 18 to 20 per cent of the total interest paid in Australia is reported to it by banks and the Taxation Office is able to match only about half of those transactions. The Taxation Office believes that an improved capacity to match information, such as the majority has proposed, would enable it to match up to 75 per cent of dividends and interest, resulting in an increase in revenue collection of around $255m a year. A point I make in passing is that the whole of the Committee believes that the Australian Taxation Office has available to it powers and information which are not fully utilised, and that there are alternative measures which can also make substantial inroads into tax evasion. The Government has a heavy responsibility to ensure that immediate action is taken to upgrade the administration of the Australian Taxation Office and, according to the majority of the Committee, it should do so when it implements the action proposed by the majority to upgrade the use of and the integrity of tax file numbers. One of the other aims of the Government was to act against social security fraud, yet we discover that the Government's proposal would result in no net gain from the introduction of the Australia Card. I repeat: The Australia Card would not result in any savings in the area of social security. The Government's submission also claims that one of the largest gains to revenue through the introduction of the Australia Card is in the area of the identification of illegal immigrants. Yet the whole Committee stated, as to the revenue of some $1,000m expected by the Government in this area-I quote from paragraph 1.56 of the report: . . . it became clear that the estimates for illegal immigrants were based on guesswork, the percentage of illegal immigrants who worked was based on guesswork, the percentage of visitors who worked illegally came from a departmental study based on guesswork. The discount factor could not be defended and the overall benefits from 1987-88 to 1991-92 was the result of `crystal ball gazing'. In the light of these statements the Committee- I repeat, this is the whole of the Committee- is unable to place any confidence in the proposed revenue gains under this use. Those are the words from the report. The whole of the Committee stated that it was unable to place any confidence in the proposed revenue gains-some $1,000m relied on by the Government-under this use; namely, to assist in overcoming problems relating to illegal immigrants. In the area of social security the Committee has established that the Government's identity card proposal will result in no net gain to government. In the area of illegal immigrants, the Committee has no confidence in the Government's revenue estimates. Finally, in the area of tax evasion, the Taxation Office agrees that the majority proposal for the extended use of a high integrity tax file number would raise the same revenue as the Australia Card proposal put forward by the Government. The minority report was made available to the rest of the Committee only at 5 p.m. tonight. In it, we read that the minority has attacked the majority proposal without, of course, giving the majority an opportunity to review the minority's proposal. This sort of underhand behaviour does not give one much confidence in the contents of the minority report. I shall therefore deal briefly with the minority's criticism of the majority report. Mr Robert Brown —Hey, what about the agreement? Mr Brumby —We had an agreement; you have been going for 15 minutes. Mr PORTER —I know that those honourable members opposite do not want us to deal with this, and it was kept from us so that we could not deal with it. If honourable members in the Government ranks were to stop arguing amongst themselves, we would be able to get through this debate much faster. What is more, if the Government had been a little more organised we could have been debating this report at 6 p.m., instead of its rushing into this House legislation that it should have rushed in three days ago. Mr Hand —Get on with your speech, you moron. Mr DEPUTY SPEAKER(Mr Drummond) —Order! Mr PORTER —He cannot help himself. The first of the objections of the minority to the majority proposal that I want to refer to is the point made in paragraph 4 of the minority report, which states: The integrity of the tax file number system is not capable of being upgraded to the standard of the Australia Card, with or without a photograph. There will be less rigorous checks on the issue of a tax file number and, accordingly, it will be easier to use such a number to defraud the revenue. The majority in its report states quite clearly: That the integrity of the tax file number be upgraded to that of the proposed Australia Card number based on the following premises . . . Included in those premises is the following requirement: . . . persons who do not currently possess a tax file number verify their identity to the same level of integrity as proposed under the Australia Card . . . In other words, the same rules would apply. Those who have a continuous record tax exceeding five years initially would not have to make an application for a number under this scheme, because they have been recognised by the Taxation Office for over five years. So in our proposal we are trying to assist in the early implementation of this program. Initially, those taxpayers would not have to go through that process. Of course, over time they will be subject to audit and verification of the same standard as that required by the Government for the issue of the Australia Card. There is no difference. Secondly, the minority report states: The fact that no card will be issued (and hence the tax file notice issued will have no security features) means it will be relatively simple to fake the document, or use stolen or lost tax file numbers. The recommendation of the majority of the Committee is as follows: We accept that the ATO will need to provide formal notification to each individual of their registered tax file number. This can be done in a variety of ways, however, it may be most convenient for this notice to be provided annually when the ATO issues taxpayers with their notice of assessment. The form of notification requires further investigation. We accept that that is what we say. We expect work to be done on the most appropriate form of identification of the number. Again, the criticism of the minority is totally unfounded. The minority report says further: The proposed administrative arrangements whereby the Department of Social Security . . . or its nominated agents interview applicants, yet Australian Taxation Office . . . issues the numbers, is cumbersome and inefficient. The minority report says the public will be considerably inconvenienced and expected to travel large distances for interviews with the Department of Social Security with regard to the issue of numbers because, as the minority report says, the DSS has only 204 branch offices whereas Medicare has 356. Again, I refer to the recommendation of the majority, which states quite clearly: . . . the interview process for verifying identity be conducted by the Department of Social Security or nominated agents . . . We specifically put that point in because we were aware that in a number of areas, specifically in country areas, there are not that many offices of the Department of Social Security. So we are suggesting that other offices do the work for the Department of Social Security. Mr Brumby —Like Medicare? Mr PORTER —There is no reason why Medicare could not do it in those cases. Dr Blewett —You don't like Medicare, do you? Mr PORTER —You are quite right. Dr Blewett —It is an obsession. Mr PORTER —The Minister is quite right; we do not like his Medicare proposal. We believe that he has provided incentives for enormous fraud and overservicing, and we believe that he has cost the taxpayer an enormous amount of money through his maladministration of the Medicare program. Mr DEPUTY SPEAKER —Order! I suggest that the Minister cease interjecting and that the honourable member for Barker return to the subject. Mr PORTER —Thank you, Mr Deputy Speaker. I am sorry that I responded to the interjections of the Minister for Health. Mr Reith —Don't be provoked. Mr PORTER —I will try not to be provoked. The next point of criticism by the minority of the majority is as follows: The establishment and operating costs of the tax file number registry will actually be far higher than estimated in the majority report. No explanation is given for that statement. The Australian Taxation Office says that it can implement the proposal for the same cost; yet the minority report says: `Oh, no, the Taxation Office is wrong'. The minority report goes on to say: The proposal for one tax file number registry and another independent registry for Medicare, represents a costly duplication of time, effort and money. Do we not have two registries now? The criticism is just farcical. Let me finish up with the best criticism of all from the minority. Let me read it to honourable members. This is supposed to be a criticism. The last point of criticism in the minority report is as follows: The ATO revenue gains from the tax file proposal over ten years will compare most favourably with Government estimates of $3.115b for the Australia Card proposal (without photo), or at a very conservative minimum, $4.074b with photo . . . In other words, the minority report ends up by saying that our proposal is as good as the Australia Card proposal. That is some criticism! I just cannot believe it. I return to the majority report. It highlights the fact that the Government's proposal is full of holes, ill-conceived and ill-considered. It is yet another example of the maladministration by the Minister for Health of his portfolio. It is really quite extraordinary that the Government should propose that the Minister for Health be put in charge of holding secure personal information which is garnered for the purposes of an ID card. How on earth could it make such a suggestion? How could we believe that he could keep such information confidential when the records that he has kept of Medicare information, which he supposedly promised to keep confidential, appears on the front page of newspapers? It is unbelievable. We have no confidence in the Minister and the majority of the Committee has no confidence in the Government's ID card proposal, put forward by the Minister for Health. Mr ROBERT BROWN(Charlton) —by leave-At the outset I wish to draw the attention of members, senators and the community to the fact that the total report of the Joint Select Committee on an Australia Card is in excess of 400 pages. However, one does not have to read 400 pages, one only has to read the content of the dissenting report by Senator Terry Aulich, my colleague Mr John Brumby and myself because that report provides a proposal of compelling logic. Not only does it provide a proposal of compelling logic, but also it provides absolutely devastating arguments against the majority report. It not only demolishes the content of the majority report, but also it unquestionably demolishes its credibility. I do not wish to go into the details of the content; that will be apparent to all those people who will and should take advantage of the opportunity to read it. I want to make a few general observations about some background issues to the dissenting report and the majority report itself. The minority report, or the dissenting report, has been motivated by a serious concern on the part of its signatories that the opportunity provided by the Australia Card proposal to make major inroads into tax evasion and social security fraud may be lost if the Government fails to adopt the system which will maximise the potential revenue advantages and, at the same time be characterised by the highest possible level of integrity. I take issue with the majority conclusions and recommendations on the following grounds: First, the majority has failed to appreciate the dimensions and the significance of tax evasion and social security fraud in the community and the contribution made to those abuses of the system by inadequate identification procedures. Secondly, the majority proposals are an inadequate response to the measures and approaches which are both necessary and desirable to confront these abuses most effectively. Third, the adoption of the majority proposals in the form in which they have been presented would represent a serious failure to take full advantage of the positive and significant benefits which can flow from this major initiative. The Australian Taxation Office was of the view that there was no other single action that would produce the revenue gains of the magnitude estimated as a result of the proposed Australia Card program. I accept that the complex and integrated nature of modern society necessarily requires some diminution in the citizen's right to privacy in order to ensure that all citizens make their rightful contribution to public finances and that no citizen draws more than his just entitlement. This clearly involves a trade-off and the making of subjective judgments. However, I am concerned about an apparent double standard which seems to accept the legitimacy of the gross and serious invasion of the privacy of disadvantaged individuals to prove their eligibility for benefits, but is reluctant to apply similar standards or requirements to the more affluent members of the community in order to ensure that they meet their obligations. I fail to see the sense in maintaining a separate Medicare number, as proposed in the majority recommendations, but I appreciate that the deficiencies of the majority proposal make it difficult or impossible to utilise the tax file numbers for Medicare purposes. I believe that maintaining separate and distinct numbers in this way-one for Medicare purposes and the other for other defined purposes-is unnecessarily confusing and expensive and involves avoidable duplication. The evidence from the polls and the surveys indicates a strong community support for the Australia Card proposal and the inclusion of a photograph on the card. I believe that because the Australia Card proposal is a significant new national initiative, the public is entitled to have its wishes recognised and responded to. Significant additional net revenue benefits would also result from the inclusion of a photograph on the card. I am concerned that this opportunity to strengthen the revenue base of the Commonwealth may be squandered if a `Mickey Mouse' system of the kind proposed in the majority report is adopted because it will fail to achieve two fundamental objectives: First, the establishment of a system of the highest possible integrity; and secondly, the maximisation of the potential revenue benefits. I emphasise that the Australia Card proposal will achieve its identified major revenue benefits without increasing either the range or rates of taxation. It will simply help to ensure that all taxpayers meet their legal obligations to public revenue. Also, it will achieve its goals without reducing either the range or the rates of welfare benefits. Again, it will simply help to ensure that noone draws from the system more than his just entitlements. I certainly do not claim that the total package proposed in the dissenting report will eliminate all tax evasion, social security fraud, illegal immigration or organised crime. To do so would be quite absurd. However, I do assert that the adoption of the dissenting recommendations would represent the most important and effective single assault on these abuses which have ever been undertaken in Australia. I believe that rather than threaten or diminish civil liberties and offend privacy considerations, adoption of the total package will positively enhance them. I also emphasise that in the sum total of human welfare, civil liberties are but one component. If it were asserted, incorrectly I believe, that the right to privacy might be at risk with the Australia Card proposal, I would confidently state in answer that on balance human welfare would be enhanced by it. I commend the dissenting report to honourable members, senators and the community at large. I hope that it encourages the Government in the initiatives that it and the Minister for Health (Dr Blewett) have already taken in connection with this matter. I hope the Government will proceed and introduce a system which will be of lasting benefit to all Australians and which will introduce a greater degree of equity than has existed hitherto. Mr BLUNT(Richmond) —by leave-Let me say at the outset that I regret that the opportunity for members to speak to the report of the Joint Select Committee on an Australia Card has been restricted because of the incompetence of this Government in its legislative program and its determination to bring the debate on this very important matter which is of great significance to the structure of Australia into the Parliament at this hour of night. Let me also say that I take great exception to the imputations made by the Chairman of the Committee when he was delivering his report in another place earlier tonight. He questioned the integrity of the majority of members of this Committee who brought down a recommendation which happened to be contrary to the Government's view. He suggested that there was collusion or some other form of co-operation to thwart the Government's program. All five members of this Committee, who have contributed to the majority report, are people of integrity who have considered this issue on its merits. They have considered the evidence provided objectively and they have brought down a report without collusion and with the best interests of the Australian people at heart. The three members of this Committee who have brought in a minority report, and who are all members of the Australian Labor Party, could be accused of simply towing the party line and not having the character or conviction to express their opinions for fear of party retribution. Let me congratulate the honourable member for Aston (Mr Saunderson) who had the courage of his convictions and was prepared to join with other committee members to bring down the report designed to achieve solutions to the problems that exist in the three areas we have considered. There is a general acknowledgment in Australian society that there are problems within the income tax system and the social security system in terms of illegal immigrants and, of course, organised crime. It concerns me that the proposal brought into this place by the Government is really one of sophistry. It has suggested that the solution to the problems of income tax evasion, social security fraud and illegal immigrants can be addressed by a national identification system. At no time-and certainly at no time did the majority of the members of the Committee take such a view-have we been convinced by the arguments or the evidence tabled by the Government or the Health Insurance Commission. The problem is that the ID system does not address specifically the problems of social security, income tax and immigration. It would be far preferable for the Government to admit that the problems of those systems could be addressed independently rather than to suggest the establishment of a bureaucratic system. It is appropriate to devote some time to considering the social security system. My colleague the honourable member for Barker (Mr Porter) addressed at considerable length-and rightly so-the minority report. As he said, the report of the majority of this Committee was made available over a week ago and the minority report was not available until about 5 p.m. this evening. Quite frankly, it is appropriate to say that the logic of that report is questionable and that its accuracy is doubtful. It is really appropriate to question some of the statements made in that minority report. It is also appropriate to address the question of social security overpayment and fraud. Although the honourable member for Aston has had the courage of his convictions, unfortunately the Minister for Social Security (Mr Howe) has not been prepared to make a statement about his attitude and the attitude of the Department of Social Security to the use of the Australia Card in addressing overpayments and fraud. In evidence to this Committee, senior officers of the Department of Social Security said that they did not regard the Australia Card proposal brought forward by the Minister for Health (Dr Blewett) as a sound document and would not rely upon it for identification purposes. On that basis, how could any member of the Committee agree with the proposition put forward by the minority that the Australia Card proposal will be of benefit in addressing social security fraud and overpayment? The public support for this proposal is based on the premise that the Australia Card proposal will address and solve the problems of fraud and overpayment in social security. That cannot be demonstrated, has not been demonstrated, is not accepted by the Minister, is not accepted by the Department and is certainly not accepted by the majority of members of the Committee. The members of that Committee who are of that opinion come from all parties. They come from the Liberal Party; they come from the Australian Labor Party; they come from the Australian Democrats; and I come from the National Party. We accept that proposition. The only people who will not accept that proposition are three members of the Australian Labor Party who have brought in a minority report which I will deal with at a later time and which quite frankly does not address the facts that have been presented to the Committee at great length by people of considerable expertise. The proposal for the Australia Card originated during the course of the Tax Summit, the ill-starred fiasco that took place in this chamber some time in 1985. From then the Government proposed a course of action. Because of the ability of the Opposition in this place and the other place to convince it of the errors of its ways, we were able to have a Committee set up to investigate that proposal. That Committee was established before Christmas 1985. The Government's submission to that Committee was not available until 28 February 1986. It was a submission of some 1,000 pages. That is unquestionably prima facie evidence that the Government did not in fact know what it proposed to do with the Australia Card proposal and set about justifying its proposal and developing its proposed uses after in fact it had been forced into a committee of inquiry by the Parliament of Australia. I believe that the Minister stands condemned for that course of action because, quite frankly, embarking on a proposal that would cost many hundreds of millions of dollars without first knowing exactly how it would be used and its effectiveness is bordering on the irresponsible. I have mentioned that the report of the minority is of doubtful accuracy. I would like to refer to paragraph 1 of the overview of that report. I quote quite briefly from that paragraph. It states: It is our firm belief- the view of the minority of three members of the Labor Party- that the Australia Card proposal is an effective, innovative approach to the problems of tax evasion, social security fraud . . . As I said previously, the Department of Social Security does not regard the Australia Card proposal as a sound document and will not rely upon it for identification purposes. Further, in the evidence given to the Committee by the Department of Social Security the Department said that the revenue benefits would be neutral-the cost of implementing the proposal for the Department would be matched by the benefits to flow from it. How can the three Labor members who brought in a minority report possibly claim that the Australia Card proposal is going to be of significance in reducing social security fraud and overpayment? The three Labor members have also suggested that the Australia Card will be of benefit to the Department of Social Security in checking the income status of recipients. That, quite frankly, is a direct and, I say, deliberate misrepresentation because the Department of Social Security, in giving evidence to the Committee on a number of occasions, said that the financial information available to it through the Australia Card proposal, with or without a photograph, would not be sufficiently current for it to be of any use to the Department in determining the income of beneficiaries of the Department of Social Security. Let me take one moment to explain that. Income is earned on a weekly basis. The income returns available through the Government's Australia Card proposal would be at best available on an annual basis. Payments made by the Department of Social Security are made on a fortnightly basis. How can the Australia Card proposal possibly be used to determine the income status of clients of the Department of Social Security when the information is at any one time up to a year out of date? This is a most spurious argument-an argument deliberately designed to mislead the Parliament. I believe it would be appropriate for this matter to be brought on for a complete and full debate in this Parliament because it is a matter of great concern and great interest to the Australian people. It is not appropriate to bring this matter on at a late hour of the day after, as I have said, this Government's legislative incompetence and desire to guillotine and gag debate on important tax legislation and matters affecting the High Court of Australia. This matter has been brought on after 11 o'clock at night. It is then suggested that members of the Committee who are seeking to explain their position and to put the facts before the Australian people should wind up debate on this matter. In deference to my colleague the honourable member for Aston, who I am sure wants to speak on behalf of the majority view, I will curtail my remarks. Mr BRUMBY(Bendigo) —by leave-I happen to be a member of the Joint Select Committee on an Australia Card and Chairman of the House of Representatives Committee on Publications. At this stage I will be making some comments on the Australia Card and not on the Publications Committee's report. Firstly, I would like to place on the record my appreciation and, I know, the appreciation of all members of the Committee of the enormous contribution made by the secretariat of the Committee during our deliberations and in the preparation of the report. As most Committee members would know, the deadline has been extremely tight the past few weeks and the work load has been exceedingly heavy. On many occasions the secretariat staff worked right through weekends and on at least three occasions right through the night until 6 or 7 o'clock in the morning. I place on record my appreciation to the Committee secretary Tim Dodson and to research officers, Judy Ryan and, in recent times, Brett Levy. I also thank the stenographers Rachel Colombo, Janice Paull and many others who made a tremendous contribution and put in an enormous amount of work in the last week. Also I make clear for the benefit of honourable members that within this report there are two reports; there is a majority report, basically supported by Opposition members and a dissenting report, produced by Senator Aulich, myself and my colleague, the honourable member for Charlton (Mr Robert Brown). I want to make clear a number of points that we made in our dissenting report. We said that we are firmly convinced that the recommendations we have made for the use of an Australia Card with photograph should apply in very restricted areas to the Department of Social Security, the Australian Taxation Office and Medicare. We have recommended that it apply to those three users only. We believe that that is an excellent proposal that we have put before the Government. We believe it promises the potential of massive revenue gains-not tin pot, half baked revenue gains as would occur if the tax file proposal were implemented-in the order of $8 billion plus. Mr Simmons —How much? Mr BRUMBY —It would mean $8 billion plus over ten years. In ordinary money terms-in the terms that people can understand-that means tax cuts of $8 a fortnight for every wage and salary earner in Australia each year for each of the next ten years. That is what we are talking about when we talk about this card. We have said in our report that we do not accept the tax file number proposal. We do not really believe that all those members of the Committee who did propose that were genuine in their opposition to the Australia Card. There has been a fair amount of political skulduggery in this matter. Some honourable members have adopted positions simply on the basis of party affiliations. In coming to a conclusion in this report it has always been our view that what we ought to be recommending is a proposal which offers the greatest revenue benefits to the Australian people at minimum inconvenience and with minimum possible threat to civil liberties. Our three criteria are revenue benefits, in other words, catching the tax cheats, convenience to the public, because the public matter-I see that Senator Puplick is in the chamber and he would agree with that-and the question of civil liberties. Mr Peter Fisher —You have to be joking. Mr BRUMBY —I want to go through our dissenting proposal. I just make that clear again for some honourable members. We have not gone the whole way with the Government. We have not said that the Australia Card could be used for every single government department. We have recommended that its use be strictly controlled and confined to the Australian Taxation Office, the Department of Social Security and Medicare. We have recommended that no other departments use that card; that no other departments have access to it. For the benefit of the honourable member for Mallee (Mr Peter Fisher) who often has difficulty getting things into his skull, we have also recommended a data protection agency which will not just have coverage over the public sector data bases. We have said that in three years' time it ought also to be able to monitor private sector data bases. We have said that for a start. Let us be clear about it in order to understand that. We have recommended the establishment of a data protection agency able to monitor public sector data bases and eventually able to monitor private sector data bases. Let us turn to the second question about civil liberties. We have recommended that the Australian Law Reform Commission recommendations on privacy information legislation be implemented. That was a unanimous recommendation of the Committee. We have gone one further step in our dissenting report. We have said in respect of the three agencies which can use the Australia Card-Tax, Social Security and Medicare-that secrecy provisions which currently apply to the Australian Taxation Office also should apply to the remaining two agencies. The only criticism-I have to say this in all fairness and honesty-that we got as members of the Committee from people concerned about this proposal was in regard to people's concern that the Australia Card could become a national identifier and that they would have to produce it in a pub to buy a bottle of beer, on a tram or, if requested, by a member of the police force. Under no circumstances can it ever be said that as a result of what we have recommended that situation could ever eventuate. We have cut any possibility of that off at the knees. It simply cannot eventuate. We have identified three departments-Taxation, Social Security and Medicare. We have recommended the establishment of a data protection agency, privacy legislation and secrecy provisions. To suggest that there is any possible infringement of people's liberties or their personal freedom as a result of the possible implementation of recommendations for this Australia Card is absolute nonsense. We will see in the next few weeks when credible lawyers and others with concerns for civil liberties in the community analyse this report that they will come to the conclusion, as we do in our dissenting report, that if these things are implemented the cause of civil liberties and personal freedom in Australia will not be put back but in fact will be advanced many years. That is the fact of the matter in regard to this report. We are on a tight time constraint. Therefore, I want to conclude by repeating those three issues which I believe are fundamental. There is the question of revenue, the question of convenience to the public and the question of civil liberties. The revenue gains-they are conservative in regard to this proposal-will be more than $8 billion over 10 years. That is $8 billion from people who presently are avoiding their taxation responsibility for government programs or for cutting the taxes of ordinary wage and salary earners who I know are very much at the forefront for the thoughts of the honourable member for Hotham (Mr Kent). That is what the revenue will do. In terms of public convenience there will be 356 Medicare and Health Insurance Commission offices around Australia for interviewing and distributing Australia Cards. No one will be disadvantaged as a result of needing an Australia Card. No one will have to travel a long distance. Just as importantly, people in the private sector will not have large compliance costs as they would under the tax file number system. I conclude by saying that the tax file proposal, as advocated by the majority of members on the Committee, is a politically motivated proposal. It is the product of partisan people who have not put the interests of Australians at the forefront. It is a Mickey Mouse proposal and it will not work. Those honourable members know it. Let me make it quite clear about our proposal for an Australia Card with photograph. There has been no other proposal before the Government in the last decade, nor is there likely to be such a proposal in the next two decades, which offers such magnificent revenue benefits to the Commonwealth of Australia, benefits that can be distributed to ordinary wage and salary earners at such little cost to people in terms of convenience and civil liberties. Mr SAUNDERSON(Aston) —by leave-This report is the result of some quite extensive work. In the last six months the Joint Select Committee on an Australia Card has met in almost every capital city and has had numerous public hearings. As has been mentioned before, the report is over 400 pages long and the transcripts of evidence amount, I think, to some 5,000 pages. Therefore, I think it is not a report that anyone will take lightly. It is probably the most extensive study done on this sort of issue in Australia. Certainly, I think it will become recognised as one of some value. Obviously the extent of the report has meant that there has had to be some cramping at the end because of the pressure to finalise the report in order to present it to Parliament in time. Unfortunately that has resulted in some delay and our being here late tonight. In talking to the report I would like to make a few points. Firstly, I wrote a paper some 12 months ago in which I examined the propositions in favour of identity cards. At that time in my paper I put forward the proposition that there were viable alternatives to identity cards. One of these alternatives was, in fact, the extension of the tax file system. Over the period in which I have been involved in examining this issue, I have become, on the basis of all the evidence presented to me, more and more firm in my mind that the tax file system is in fact a viable option. That has been confirmed by evidence given to us by the Australian Taxation Office in March this year. It was reaffirmed at our latest meeting last Monday. When the Committee was in the final stages of making a decision, apart from the fact that I had resolved in my mind at that time the correct way to go, I had to weigh up the option of being part of a majority report which encompassed the views of all Opposition members or of voting with my Government colleagues. I found that I had to follow my commitment over that period. I am sure that my colleagues recognise that that has been part of my considerations. Nevertheless, the fact that I supported the tax file system-there has been a long history of my support for that matter-shows that there is an alternative that has had a lengthy period of examination. I pick up the point of the members who wrote the dissenting report and who have talked about a tin pot scheme or the Mickey Mouse scheme. It is nonsense to suggest that the extension of the tax file system has not had lengthy examination and is not a viable system. In fact, that option has been examined not just by me but in many other reports. The Australian Taxation Office has confirmed the fact that it is a system which can work and from which it can achieve the same savings as have been put forward by the Government's option. So it is nonsense for people to try to ridicule it. I will concentrate my remarks on the minority report because there are a number of points in it that I want to raise. The points made in the section regarding the integrity of the tax file number proposal do not stand up to examination. The report states that the file number system will not have the same integrity. In reality, if one reads the recommendations in relation to the tax file number proposal, one will find that we make that very point. In fact, it will have the integrity of the Australia Card proposition. We have gone further than that. For the first time we have laid down a process by which that integrity can be obtained. That is not contained in either the Government's proposition or the minority report. I refer to a couple of other points regarding the cost of tax file numbers. One of the major areas in which the minority report and, I believe, the Government report fail, is that they have not concentrated on the main areas-that is, the problems of tax evasion and how one will achieve the raising of that money. In my view there is also another problem. There is an assumption that Medicare has experience in this area of issuing identity cards. That is false. It does not exist. Medicare does not have that experience. It does not have the qualifications which it is claimed that it has. One of the major reasons why we went to the Department of Social Security is that at least Social Security, in its involvement with the community when people make application to it for pensions, has had tremendous experience in identifying people, getting them to make applications and dealing with people. This is not something that Medicare has ever done. So I do not accept that proposition. I think our evidence will quite clearly show that our proposition will be far more extensive than the Government's proposition. Another aspect I want to raise in relation to the minority report is the number of points it makes in relation to the integrity of the members who supported the majority report. I certainly take some exception to the point that is made that the majority report is primarily a political decision aimed at denying the Government significant revenues and a chance to implement a system which is manifestly popular in the electorate at large. Mr Robert Brown —We didn't mean you, John. Mr SAUNDERSON —All right. I make the point, as I said earlier, that my decision is not a political decision. It is not a decision which was made to deny the Government revenue. It is one to which I have given great thought. I would not have thought that it is necessarily a position of any government to do things that are necessarily popular in the community. There are a number of things that are popular in the community which I would certainly not support on any occasion-be it the ID card or the reintro- duction of hanging, which is manifestly popular in the community. I do not see that as being any reason to support it. A paragraph of the minority report states: . . . the majority report has been cobbled together and is demonstrably lacking in the thought and consideration needed to build a workable system to combat tax evasion . . . I take exception to that as I was a participant in the writing of the majority report. I take some credit for writing a significant number of those recommendations. The concept behind the extension of the tax file number system has been in place for many months. A lot of thought has gone into it. I must say that the minority report was written in the last 1 1/2 days. I also say in terms of those points that, when careful consideration is given to the report, people will find that the minority report is substantially lacking in a number of areas. I raise a number of other points to show how the minority report is lacking in depth. One Department that has been excluded from access to the proposed new Australia Card is the Department of Veterans' Affairs. It is a Department which has a very significant amount of pension payments. It has been excluded from it. We will find that there will be two different sorts of pensions. There will be those people who go through Social Security and receive a pension. They will be forced to produce ID cards. On this basis, veterans and widows of veterans will be treated differently. I am not saying that either group is dishonest. But there is no case to suggest that a group of people should be treated differently. A point was made concerning the extension of the secrecy provision. The honourable member for Bendigo (Mr Brumby), who spoke before me, pointed out that that was an example for how they had gone beyond us-they had extended the secrecy provision to other departments. They have done so only because they had to include other departments in their proposition. We went to the Tax Office to implement and maintain the system because it has a system of secrecy. There is no need for us to extend it to anybody else. We kept it with the Department which already has those provisions. I now refer to the reference in the minority report to $8 billion and the saving of $8 for each individual. As I said to my colleagues when I read that figure, what those members have done is to take the Tax Office figures and doubled them. They then multiplied by two and said: `That gives us $8 billion and that is $8 each'. I say that facetiously because I know where they obtained their figures. They have taken up a number of points that the Tax Office has made. The Tax Office indicated that it had underestimated its figures. Nobody disputes that. We accept that as well. It also indicated that there are at least two areas that it did not take into account. One area, of course, was the Tax Office being able to identify people who had not paid tax and therefore owed back taxes and they would recoup money in that way. We did not include that in our estimates because it is a common fact that exists. So the assumption in the minority report is that all of a sudden, because they added that figure to theirs, it makes their figures look better and they will get more money. It is simply not a true test. We have accepted that evidence. We have accepted that those facts exist. But we have not quantified it in our report. But if the $8 billion is the correct figure, it applies to every case, whether it be the majority view or the minority view. So there is no additional benefit. As I said, when people examine the reports they will find that the majority report contains 150 pages and unanimous recommendations, while there are only 40 pages in the minority report, and I am sure that the majority of the people who assess the reports will say that the majority report was correct. Friday, 9 May 1986 Mr BRUMBY(Bendigo) —I present the tenth report of the Standing Committee on Publications, sitting in conference with the Senate Standing Committee on Publications. I understand that copies of the report have been circulated to honourable members in the chamber. Report-by leave-adopted. Motion (by Dr Blewett) proposed: That the House do now adjourn. Mr TUCKEY(O'Connor)(12.10 a.m.) —This Parliament has debated at length the problems of road safety. Today the Minister for Transport (Mr Peter Morris) made further references to his road transport legislation, which has a safety component. Safety in the air is a matter of great importance, and whereas equipment failure on the highway need not result in any more than an interruption to one's journey until a tow truck arrives, most equipment failures in the sky result in major damage and/or human casualties. Consequently, the Department of Aviation has strict rules which restrict the maintenance and repair of all aircraft to Government licensed engineers. It is an offence to conduct repairs upon an aeroplane without a proper licence to do so. However, due often to commercial pressures, charter operators of light aircraft, particularly those operating to remote airstrips, can be tempted to undertake certain unauthorised maintenance outside the gaze of authority. Even some minor repairs can be dangerous, but major repairs put aircraft, pilot and passengers at substantial risk. I have been involved in the industry as a private pilot for many years, and support completely the tough stand taken by the Department of Aviation to maintain this policy. Operators have some rights over their own lives, but not over their innocent, fare-paying passengers. I have recently received reports of a charter operator in Carnarvon in north-west Australia who has blatantly undertaken major repair work upon his aeroplanes, and to the best of my knowledge may still do so. The work I refer to includes the removal and replacement of constant speed propellers and removal, adjustment and replacement of the inflight altitude trim adjustment mechanism. The undertaking of this work by untrained operators could, in the case of the propellers, result in the loss of a propeller in flight, or failure or malfunction of the constant speed adjustment with resultant engine failure. Failure of the trim gear as a result of this unauthorised removal could make the aircraft almost unmanageable, particularly during take-off and landing, resulting in a crash. Some years ago the operator-pilot referred to severely damaged a fast light twin which he had hired from me because he attempted a landing on a short landing strip which was totally unsuited to the aircraft concerned. The operator concerned is Paggi Aviation of Carnarvon, and I believe the Department of Aviation has been made aware of these offences. I also believe the Department has had difficulty gaining hard evidence from witnesses. Mr Paggi is a vindictive man, who has previously demonstrated a tendency to violence. Consequently few people would be prepared to give public evidence against him. I have spoken to a qualified witness of one of the activities to which I have referred and have asked the Department to investigate. As I am aware of the difficulties facing the Department, I see no alternative but to publicly warn members of the Australian community as to the level of risk they take in flying in Mr Paggi's aircraft. I am aware he has received Government contracts, and no doubt government and private employees are being carried in his aircraft as the result of their employers' arrangements. Workers compensation is little compensation for the loss of a loved one when it can be avoided. I have not taken this matter lightly, and my advice has come from more than one authentic source. From the evidence I have heard, I have no doubt that the unauthorised work I mention was done by Mr Paggi. There is no excuse, and the opportunity still exists for Mr Paggi to do this work on remote station airstrips if he so desires. If the Government cannot protect the public, the public must protect itself. Mr HALVERSON(Casey)(12.13 a.m.) —I believe, as a member of this Parliament that it is my inalienable and indisputable responsibility, obligation and privilege to represent to the best of my ability, with integrity and dignity and without fear or favour the people who live within my electorate of Casey. I have been elected to serve the best interests of my constituents and I have no intention of betraying this trust. To do so would be a gross and inexcusable dereliction of my duty. I may have neglected to do other things in my 48 years, but I have never neglected to do my duty. Part of that duty includes being aware of and sensitive to any matters which may, now or in the future, jeopardise the well-being of my constituents. It also includes an obligation to inform my constituents about such matters and alert them to the possible or probable implications and repercussions that may apply to them personally or to the community as a whole. If I must take certain risks-including leaving myself open to verbal attacks, abuse or misrepresentations by my political opponents-to ensure the safety, security and welfare of those who may be depending on me to represent their views or safeguard their interests, or to whom I am responsible and answerable for my actions, those risks must be taken, and I am prepared to take them. I believe in the simple wisdom of the well-known proverb: `It is better to be safe than sorry'. A prudent, careful and vigilant person, having noted dark clouds gathering on the horizon, is unlikely to venture forth into the expected storm without taking an umbrella. To do so would be to reflect a lack of caution and common sense. Similarly, I am not prepared to ignore the warning signs that this Government is possibly preparing to launch another attack against one of the most vulnerable and neglected sections of our community-our senior citizens-without endeavouring in some way to protect them. To do so would be inexcusable, unjustifiable and unforgivable. I would much rather have another member attack me for disclosing a potential threat to my constituents than leave myself open to attack from my constituents for having failed to do so. If exposing the Achilles heels and devious doings of this Government means I am to be continually subjected to baseless and biased criticism in this House, in the local Press in my electorate, and in any other forum my opponents may deem applicable, so be it. My shoulders are broad. In fact, I believe the disparaging remarks levelled at me during the adjournment debate last night by the honourable member for Streeton (Mr Lamb), who unfortunately is not with us tonight, do not arise because of any personal animosity, or because my actions in informing certain people within my electorate of a possible threat to their entitlements as pensioners were ill-founded or ill-advised or carried out in an improper manner. I believe he felt obliged to attack me because I am carrying out my duties in an effective manner, and this is causing him some concern. In future I intend to use his reactions as a barometer by which I may gauge my own effectiveness and performance as member for Casey. The more frequently and vehemently he and other tattered members of his Party harangue me, the more effectively I will be doing my job. Having said this, perhaps he will reconsider his position and cease his attacks. However, let me assure him I will be endeavouring to provide him with plenty of ammunition, for I intend to continue to bring to the attention of my constituents the mismanagement, neglect and appalling performance of this socialist-inspired Labor Government. Finally, Mr Deputy Speaker, Lord Alfred Milner once said: If we believe a thing to be bad, and if we have a right to prevent it, it is our duty to try to prevent it and to damn the consequences. I believe that any further imposition on our senior citizens would be bad. I have tried to prevent it; I stand by my actions and am certainly prepared to take any consequences. Question resolved in the affirmative. House adjourned at 12.18 a.m., (Friday) until 2 p.m. on Tuesday, 20 May 1986. Mr Andrew to ask Madam Speaker: (1) Has Madam Speaker's attention been drawn to the answers to questions on notice which appeared in the Daily Hansard of (a) 30 April 1986, pages 2801-2833, and (b) 1 May 1986, pages 2960-2961 and that (i) both had the heading date of 29 April 1986 (ii) page 2960 was not numbered and (iii) there were no answers to questions included in the Daily Hansard of 29 April 1986. (2) Is this considered an isolated incident or accident or is it Hansard policy; if it is Hansard policy, (a) when was the policy implemented, (b) who authorised the policy and (c) on what date are such answers included in the Weekly Hansard. Mr Andrew to ask Madam Speaker: How many questions on notice have been directed to (a) the Treasurer and (b) the Minister for Foreign Affairs in (i) 1984, (ii) 1985 and (iii) 1986 to date and for each such question, what was the (A) question number, (B) date on which the question appeared in the Notice Paper, (C) date and page number on which the answer appeared in the Daily Hansard and (D) number of completed months between the dates in paragraphs (B) and (C) above. The following notice was given: Mr Donald Cameron to move- (1) That a joint select committee be appointed to inquire into and report on- (a) the manner in which cemetery and crematorium trusts and companies care for the remains of war veterans and their families, and (b) the effect of the policies of these trusts and companies on the administration of war graves. (2) That the committee be given all powers and resources necessary to carry out its investigation and report to Parliament. (3) That a message be sent to the Senate acquainting it of this resolution and requesting that it concur and take action accordingly. The following paper was deemed to have been presented on 8 May 1986: Seat of Government (Administration) Act-Variation of plan of lay-out of City of Canberra and its environs, dated 8 May 1986. The following answers to questions were circulated: (Question No. 3351) Mr Donald Cameron asked the Minister for Social Security, upon notice, on 13 March 1986: Further to the answer to question Nos 3216 to 3243, what (a) was the stated purpose of each overseas trip made by employees of the Minister's Department and of all statutory authorities that report to the Minister in 1984-85, (b) was the classification or job description of each officer making each trip, (c) was the duration of each trip, (d) were the countries visited during each trip, and (e) was the estimated cost of each trip, with the air fare component identified separately. Mr Howe —The answer to the honourable member's question is as follows: There were twenty-three overseas trips undertaken by officers of this Department and one trip undertaken by the Commissioner for Employees' Compensation during the financial year 1984-85. Details on these trips are as follows: (b) (c) (d) (e) $ (i) (a) Discussions with Wang and Computer Corporation of America on equipment for `Stratplan'. Follow up on Wang training and the Wang Institute Scholarship. First Assistant Secretary, Level 3 27 July- 16 August 1984 USA Travelling allowance 4939.04 Airfare 5901.40 Assistant Secretary, Level 1 27 July- 16 August 1984 USA Travelling allowance 4800.66 Airfare 5901.40 Computer Systems Officer Grade 4 4-16 August 1984 USA Travelling allowance 2280.93 Airfare 4398.00 (ii) (a) To attend International Council of Social Welfare Conference. Discussions with Federal departments on social welfare matters. Discussions with Disabled Rehabilitation Agency in Chicago. Assistant Secretary, Level 1 2-19 August 1984 USA and Canada Travelling allowance 2744.37 Airfare 5181.80 (iii) (a) Attend International Social Security Association Conferences in Istanbul and Vienna. Inspection of Department of Social Security Office in London. Consultations with UK Department of Health and Social Security. National Manager, Level 5 1-29 September 1984 Turkey, Austria and England Travelling allowance 5008.67 Airfare 9430.00 (iv) (a) Attend International Wang conference. Visit Fujitsu computer company to discuss computer technology, and management aspects. Talks with French Social Security about their `Stratplan' approach. Visit other major Wang users in Europe. Deputy Secretary, Level 5 3 October- 4 November 1984 Japan, USA, France and England Travelling allowance Airfare 6698.82 5971.20 First Assistant Secretary, Level 3 3 October- 4 November 1984 Japan, USA, France and England Travelling allowance Airfare 5571.62 5971.20 (v) (a) Stratplan review meeting on contractual matters with Wang and IBM. Attend International Wang Conference. Discussions on Wang Institute Scholarships. Computer Systems Officer, GRade 5 16 October- 1 November 1984 USA Travelling allowance 3082.79 Airfare 4929.40 (vi) (a) Negotiations on the reciprocal Social Security agreement with Italy. Clerical Administrative, Class 11 2-19 November 1984 Italy Travelling allowance 2583.54 Airfare 4200.00 Clerical Administrative, Class 9 2-19 November 1984 Italy Travelling allowance 1983.33 Airfare 4200.00 (vii) (a) Negotiations on reciprocal Social Security agreement with Italy. Inspection of London Office. Deputy Secretary, Level 5 2-22 November 1984 Italy and England Travelling allowance 3195.70 Airfare 4489.00 (viii) (a) Attend Australasian Share Guide 12 (an annual meeting of users of IBM equipment). Computer Systems Officer, Grade 5 16-21 February 1985 New Zealand Travelling allowance 581.62 Airfare 720.20 Computer Systems Officer, Grade 5 16-21 February 1985 New Zealand Travelling allowance 772.84 Airfare 720.20 (ix) (a) Negotiations on the reciprocal Social Security agreement with New Zealand. Clerical Administrative, Class 11 20-24 April 1985 New Zealand Travelling allowance 459.74 Airfare 872.20 Clerical Administrative, Class 8 20-24 April 1985 New Zealand Travelling allowance 491.35 Airfare 872.20 (x) (a) Attend implementation of Stratplan Progress Meetings with Wang, and discussions with IBM about future product directions. Computer Systems Officer, Grade 4 16 May- 3 June 1985 USA and Canada Travelling allowance 3893.40 Airfare 5325.10 (xi) (a) Negotiations with Stratplan vendors. Assistant Secretary, Level 1 16 May- 3 June 1985 USA and Canada Travelling allowance 4099.45 Airfare 5522.30 (xii) (a) Attend implementation of Stratplan Progress Meetings with Wang, and discussions with IBM about future product directions. Deputy Secretary, Level 5 24 May- 12 June 1985 USA Travelling allowance 5811.33 Airfare 6200.00 Assistant Secretary, Level 1 24 May- 12 June 1985 USA Travelling allowance 6158.23 Airfare 5361.00 (xiii) (a) Negotiations with Stratplan vendors. First Assistant Secretary, Level 3 25 May- 16 June 1985 USA and England Travelling allowance 6173.59 Airfare 5417.00 (xiv) (a) To examine developments in social security policy and administration with relevance to Australia. Clerical Administrative, Class 11 25 May- 1 June 1985 New Zealand Travelling allowance 637.24 Airfare 872.20 Clerical Administrative, Class 11 25 May- 1 June 1985 New Zealand Travelling allowance 622.60 Airfare 872.20 Clerical Administrative, Class 11 25 May- 1 June 1985 New Zealand Travelling allowance 637.37 Airfare 872.20 (xv) (a) Visits to various compensation administrations to assist with the review and redevelopment of the legislation for and administration of compensation for Commonwealth employees. Commissioner for Employees' Compensation 15 June- 14 July 1985 USA, Canada and Sweden Travelling allowance 6067.44 *Airfare *13306.00 * This includes airfare for the Commissioner's spouse in accordance with Public Service Board guidelines dated 27 May 1982 which came into effect on 1 July 1982.