Wednesday, 21 May 1986 Madam SPEAKER (Hon. Joan Child) took the chair at 10 a.m., and read prayers. Mr WEST(Cunningham-Minister for Housing and Construction)(10.01) —I move: That, in accordance with the provisions of the Public Works Committee Act 1969, it is expedient to carry out the following proposed work which was referred to the Parliamentary Standing Committee on Public Works and on which the Committee has duly reported to Parliament: Construction of new telephone exchange building for Telecom Australia at Dalley Street, Sydney. There is a need for new generation equipment and services to meet the current and forecast needs of Telecom Australia in the northern sector of the Sydney central business district. As such, the construction of a new telephone exchange building and associated cable bridges to link with the existing Dalley Street telephone exchange, is required. The new building will consist of a part basement, ground floor, first floor, six equipment levels and an enclosed roof level plant room. The equipment levels will be fitted out to Telecom's requirements. There will be three elevated cable bridges which will be constructed at second floor level to carry out telecommunication cabling and provide secure personnel access between the new and existing telephone exchanges. Alterations will be made to the existing telephone exchange to provide for the requirements of these cable bridges. The limit of cost of the proposed works is $13m at June 1985 prices. I would like to thank the Standing Committee on Public Works for its prompt consideration of the proposal. If the House agrees to support this motion, planning can proceed in accordance with the recommendations of the Public Works Committee. I have much pleasure in commending the motion to the House. Mr BEALE(Deakin)(10.04) —I thank the Minister for Housing and Construction (Mr West) for making available to me a copy of the motion that he has just moved. On 27 November 1985, when the Minister moved that this project be referred to the Standing Committee on Public Works, I asked him whether he would ensure that, in doing so, firstly, the design was such as to maximise the role of the private sector in the project; secondly, there would be no duplication between this exchange building and others being established in the Sydney area; and, thirdly, the design was such as to minimise industrial problems. The Public Works Committee report to the Parliament certainly covers the question of duplication between this building and other buildings in the area. It is not clear whether it has addressed the first question that I asked-namely, the question of the involvement of the private sector-but it has certainly done nothing with regard to the industrial relations aspect. The Opposition does not oppose this motion, but I draw to the Minister's attention that the Government should have asked the Public Works Committee, which is a committee comprising members from both sides of the Parliament, to give some attention to the matters that I raised on 27 November, particularly, having regard to Telecom's record in the industrial relations area. The cost of this project is estimated to be $13m in June 1985. The Public Works Committee has said that interest charges and administration costs are expected to amount to an additional $4 1/2m. Mr Hodgman —How much? Mr BEALE —Four and half million dollars extra. With the Government running around saying that it needs to exercise fiscal restraint, I would have thought that the Minister would have drawn the attention of the House to the additional funds that will be involved. However, the Opposition does not oppose the motion. Question resolved in the affirmative. Debate resumed from 17 April, on motion by Mr Kerin: That the Bill be now read a second time. Madam SPEAKER —I understand that it is the wish of the House to debate the Tobacco Charge (No. 1) Amendment Bill 1986 concurrently with the Tobacco Charge (No. 2) Amendment Bill 1986 and the Tobacco Charge (No. 3) Amendment Bill 1986. There being no objection, the Chair will allow that course to be followed. Tobacco Legislation Tobacco Legislation Tobacco Legislation Tobacco Legislation Tobacco Legislation Tobacco Legislation Tobacco Legislation Tobacco Legislation Tobacco Legislation Mr TIM FISCHER(Farrer)(10.07) —On behalf of the shadow Minister for Primary Industry and Deputy Leader of the National Party of Australia, the honourable member for Gwydir (Mr Hunt), whose aircraft is delayed by fog this morning, I wish to advise the House that the Tobacco Charge (No. 1) Amendment Bill 1986, the Tobacco Charge (No. 2) Amendment Bill 1986 and the Tobacco Charge (No. 3) Amendment Bill 1986 are of a machinery nature and are endorsed by Opposition members. In fact, one might ask why this matter needed to come before the Parliament. With a little more vigilance, the matter could have been handled without reference to this place. Last year, from the start of the selling season, the levy paid by growers per kilogram of tobacco leaf was raised from 2.5c to 3.5c. The present levy is split into 2.7c for research and 0.8c towards the operation of the Australian Tobacco Board. Honourable members may recall that the Parliament last year enacted legislation which drew together the research efforts of about a dozen farm industries under common operational guidelines. It was quite a battle. The National Farmers Federation had not been given adequate notice of these sweeping changes. The Minister for Primary Industry (Mr Kerin) ignored those protests and stuck to his hard-nosed, bulldozing attitude. Mr Hodgman —That is typical. Mr TIM FISCHER —Indeed, it does reflect the attitude of the Minister. It was left to the Liberal, National and Democrats parties in the Senate to pull the reins on the Minister, forestalling his legislation until he took notice of the perfectly reasonable requests by the NFF and its constituent bodies. In fact, the shadow Minister had to take that action on four separate occasions last May to get the message home. He has had to do the same on a number of occasions since. One would have thought that, under the circumstances, adequate attention would been given to implementation of the Tobacco Research Acts after they had passed Parliament. That was not the case. Amendments under the Rural Industries Research Act 1985 repealed the mechanism for charging tobacco levies and provided for the rate to be prescribed by regulations made under the Tobacco Charge Acts (Nos 1 to 3) of 1955. Yet, those regulations were not made by 1 April this year. Regulations which are retrospective to 1 April cannot be made, so the blue has to be corrected by Parliament. The rate of levy will not change; we are simply putting the rules back in place. To the Government's credit, the mistake was admitted quickly. The Acting Treasurer explained the mistake, and now we will be able to ensure that the period over which the tobacco charge has been collected without legislative bases will be minimal. To the Government's discredit, it is a mistake which should never have occurred in the first place. I know that administering complex legislation is not easy, especially when that administration involves more than one department. Yet, surely it is not too much to expect that controversial, highly publicised Bills would be properly implemented once they had passed the Parliament. This is not the first occasion during the term of the Thirty-fourth Parliament that we have been asked to take retrospective, corrective action on primary industry matters. The Government should not consider it has carte blanche with these corrections. They are occuring too frequently. The research levy of 2.7c is higher than for other industries, which generally attract matching Commonwealth research funds to a maximum of 0.5 per cent of the gross value of production. This is for a good reason. The Australian tobacco industry is significant but not large. It is certainly going through difficult times with the different and changing priorities associated with the industry. Producers recognised that they needed to intensify their research effort if they were to keep pace with market trends. I strongly commend the industry for its foresight in developing its strong research effort, and the Government deserves a share of that credit for matching the increased funding percentage. The initiative of growers is also demonstrated in the tobacco farm recovery program, originally to apply in 1985 but now extended to 1986. This program has a dual aim of speeding up farm management improvements and improving future tobacco quality-in other words, keeping up with the times. It is this kind of tenacity and initiative which has served Australian farmers so well through our nation's history. Our farmers have proved that, given a fair go by governments, they can mix it with the best in the world. All they need is that fair go. I turn briefly to one concern which warrants prompt Government attention. Tobacco excise has copped the same treatment under Labor as fuel excise-that is, quiet, tricky indexation of excise every six months to nudge more and more revenue into Canberra's coffers. Certainly the Liberal and National parties in government did introduce moderate excise increases. But we did so publicly, not behind the scenes. We did so up-front; we were prepared to wear the public debate involved. Not so now. When did honourable members last hear that Labor has increased the tobacco excise? Yet it rose nearly 1c for cigarettes and cigars by the indexation mechanism in February 1985, nearly 1.5c in August and another 1.5c in February this year-a 4c increase in all by this sneaky process over the past 15 months. Excise on manufactured tobacco was more than 6c lower than for cigarette and cigar leaf in 1984. That gap is now back to about 1c and will soon close entirely. This Labor Government should come clean with its excise increases and scrap the automatic indexation provision. Indexation of excise is a nonsense concept, and serves only to fuel inflation and to gather government revenue. It is little wonder that, in the space of a few years, Australia has rocketed from the lower to the higher end of the inflation scale among Organisation for Economic Co-operation and Development countries. It is little wonder that our inflation rate is nearly treble the average of our major trading competitors. If the Government is so badly hooked on revenue to fund many of its wasteful programs, let it re-do the sums and find a different way of collecting the amount from tobacco excise indexation. It is a bad concept and warrants at the very least a thorough rethink. Labor started it; Labor should now hit it on the head. We can no longer afford to use the primary industries as milch cows to fund the excesses of pro-Australian Council of Trade Union policies. It is not easy for the Australian industry, which is heavily labour-intensive, to compete against such nations as Zimbabwe, Malawi or Brazil where wages are commonly less than 2 per cent of the rate paid in Australia. I do not decry our farm workers getting a just wage. We are a developed nation and all have a right to share in our relatively high, although declining, standards of living. Yet manufacturers use 57 per cent Australian leaf and, to its credit, this $70m Australian industry has developed export markets valued at $15m in 1983-84. It is important that our 750 or so growers be given the best possible chance to compete. This will not be enhanced by the string of new taxes, especially the capital gains tax, the legislation for which has yet to see the light of day. In the meantime, a great deal of difficulty and hardship is being created for many people right across Australia as a consequence of the lack of information in relation to that horrendous tax. Even though we have seen the legislation in respect of the fringe benefits tax, that, too, has created massive concern across Australia. I know that it would not be in order for me to dwell unduly on the fringe benefits tax, but it does include a tax on meals for children under 12 in certain circumstances. That is absolutely horrific. Our ability to compete will not be enhanced by general primary industry policies which are shredding to pieces our ability to survive with falling world commodity prices. Tobacco growing is not an easy task at the best of times. It is confined to sandy, well drained, low fertility soils such as are found in Mareeba, Dimbulah, the Glasshouse Mountains in the electorate of my colleague the honourable member for Fisher (Mr Slipper), and Texas in Queensland, across to Ashford and Bonshaw in northern New South Wales, which is not far from Inverell, where I will be on Friday and where the headquarters of the New South Wales Tobacco Marketing Board are located, and further south near Corowa and Tooma in my electorate and, of course, in Myrtleford in the electorate of the honourable member for Indi (Mr Ewen Cameron). Tobacco growers, indeed all farm producers, have seen through the transparent rural economic statement made by the Minister for Primary Industry to this House on 15 April, which did nothing of significance to ease their plight and attack the fundamental problems affecting so many primary producers in almost every primary industry across Australia. The Minister for Primary Industry has now attacked the 14-point plan which was developed and released by the Deputy Leader of the National Party of Australia and shadow Minister for Primary Industry, the honourable member for Gwydir. Yet out at the coal face in rural Australia there is great acceptance of that 14-point plan as being the only basis on which Australia's rural industries can be rescued from the rural financial crisis that exists at this time. It is the only plan by which the 40 per cent plus of Australian export income earned by primary industries can be maintained in the interests of protecting the standard of living of all Australians. It is very short-sighted of the Minister for Primary Industry to take such a negative attitude to the constructive initiatives that have been advanced by the Deputy Leader of the National Party on behalf of the Liberal and National parties in relation to the rural financial crisis. I add that I do not believe that the gravity of the rural financial crisis and of the rural economic situation has seeped into the minds of Government members or of Government senators, or indeed has really seeped into the thinking of people in metropolitan Australia, although some progress has been made on that score. Opinion polls have indicated that. Undoubtedly there is a long way to go before there is a real understanding, especially at State and Federal government levels, of the extent of the fundamental problems affecting rural Australia. I know that the Government cannot solve all of those problems. I know that the source of some of those problems is related to factors and events beyond the control of the Australian Government, especially those which relate to the European Economic Community, its common agricultural policy and so forth. But I reiterate that a more sympathetic attitude by governments at the State and Federal level, and a more constructive approach in line with the thrust of the 14-point plan brought forward by the Deputy Leader of the National Party, would go a long way towards providing the real assistance required at this time to boost the capability of our primary industries to remain viable and to be more effective in fulfulling their role of continuing to provide some 40 per cent plus of Australia's export income-at a time when we need every dollar of export income that we can obtain, especially following the release of the balance of payments figures last week. The Opposition is not opposed to the tobacco charge legislative package. Mr GAYLER(Leichhardt)(10.20) —As the Tobacco Charge (Nos 1-3) Amendment Bills are of a routine nature, I do not wish to take a great deal of time of the House, but I would like to reflect on some aspects of the industry and to comment on some provisions of the Bills. The major purpose of the Bills is to amend the Tobacco Charge Acts (Nos 1 to 3) 1955 to restore, with effect on and from 1 April 1986, the rate of charge that applied immediately prior to that date. It is important to reflect on the purpose of the existing Acts, which were implemented some 31 years ago. The purpose of the Tobacco Charge Acts and the Tobacco Industry Act was to establish a tobacco industry trust account, the funds from which were to be used to finance tobacco research and advisory activities. The funds available under the trust account are obtained from tobacco growers, tobacco manufacturers and contributions from the Federal Government. Tobacco has been grown in Australia on a commercial scale since the early part of last century. Although in the past there have been periods of rapid expansion, the industry has suffered a series of setbacks over the years. These checks on development have been attributed in certain cases to pests and disease, production on unsuitable soil types, unsuitable strands of tobacco, poor curing techniques and in other cases to marketing difficulties and price instability. It was said in October 1955 by the Minister of the day that expansion of the Australian tobacco growing industry was important to the general development of Australia and in particular for encouraging the closer settlement of those areas having poor sandy soils but with climatic conditions suitable to tobacco culture. Furthermore, it was said some of the areas which offered the greatest opportunities for the expansion of tobacco leaf production-for example, far north Queensland-were regarded as regions of strategic importance. Tobacco production is one of the few agricultural industries which can be undertaken successfully in these areas and as such offers scope for attracting and holding population in the regions. This was a view expressed over 30 years ago and it is interesting to note that during that time nothing has changed. Apart from the importance of the tobacco industry and its continuance to the development and diversification of rural production in areas of far north Queensland, it makes a significant contribution to the conservation of overseas credits. When one considers that the industry generates $65m annually, based on 1984 figures, it is clear that the industry is a major contributor to the revenue of this nation. I have been personally involved with the industry over a number of years but more particularly during the last 3 1/2 years, since I have been a member of this Parliament. I am acutely aware of the significance of the industry in my part of Australia particularly when one considers that in far north Queensland the industry generates revenue of some $40m in the production of approximately 7,044,000 kilograms of tobacco. In fact, the township of Mareeba is almost totally dependent upon the industry, with 2,200 people on family farms together with another 400 who work on those farms. Tobacco is of course the major industry in Mareeba. The consequences of the loss of that industry to that district would be catastrophic. The industry has been in existence in Mareeba since about 1931 and contributes to about 95 per cent of the Queensland tobacco production. Apart from the initiatives of the Tobacco Charges Acts, the Government is involved in stabilisation arrangements with the industry. Stabilisation plans have been in operation since 1965, using marketing quotas and a reserve price. These stabilisation arrangements are facilitated by complementary Commonwealth-State legislation, with the Australian Tobacco Board being responsible for administering the stabilisation plan. Purchase of Australian tobacco by cigarette companies is encouraged by an arrangement under which manufacturers must use 50 per cent Australian leaf in their blends in order to qualify for a concessional rate of duty on imported tobacco. However, as was indicated by the honourable member for Farrer (Mr Tim Fischer) who spoke before me, manufacturers are currently using 57 per cent of Australian leaf on a voluntary basis. The continued application of the current stabilisation plan is critical not only to the future of the industry but also to the confidence that is needed in that future. The stabilisation plan currently in place provides for rate increases to a maximum of 4.7 per cent per annum and for the recommended level of increase to take into account the result of the international pricing formula. It provides further for national marketing quotas to be set in line with consumption trends. Another factor taken into account is the reduction of the manufacturers leaf stocks to 13 months usage in 1988. Transferability of grower quotas and the adjustment to the price and grade schedule to reflect more closely manufacturers' specific demands for certain leaf stocks is another important factor of the stabilisation plan. The stabilisation plan arose from the 1982 Industries Assistance Commission inquiry into the industry. This Government implemented the current stabilisation plan, taking a less severe approach from that recommended by the IAC in spite of strong opposition from other sectors of the community. The industry is to be commended for its compliance with the provisions of the plan. The manufacturers' stocks have already been reduced to 13-month usage levels compared with 15.9 months at the beginning of the plan, and there has been a significant transfer of quota intrastate and interstate, with around one-third of New South Wales quota having been transferred to the Mareeba district and national quotas having been progressively reduced. It is evident that, with the co-operation of the industry, its future has a degree of predictability. As well, adjustments have been made to the grade and minimum price schedule to reflect changes in the market for various types of leaf. In fact in 1985, five of the 105 grades were deleted and another 35 grades were downgraded. Whilst international price competitiveness is proving more difficult to achieve even though minimum average prices approved by the Australian Agricultural Council since 1984 have been less than 4.7 per cent, the maximum permitted under the plan, the restraint imposed on growers by the industry has been such that price increases in 1984 were restricted to 4.7 per cent, in 1985 to 3.79 per cent, and in 1986 to 3.56 per cent. Notwithstanding such severe restrictions, the Australian Tobacco Board acknowledges the need for severe continued price restraint in the remaining years of the plan. Madam Speaker, before I conclude, I would like to comment on the recent announcement of the 1987 tobacco leaf market quota. The Australian Agricultural Council has determined the quota for 1987 on the recommendation of the Australian Tobacco Board. Once again the industry has shown its willingness to co-operate with the authorities in complying with the stabilisation plan. Whilst the quota for Australian flue cured tobacco leaf has been increased marginally to 13.5 million kilograms, a 0.5 million kilogram rise, this has been brought about by the success of stock reduction and leaf stocks held by manufacturers are expected to be reduced to the equivalent of 13 months usage by the end of 1986, two years earlier than originally expected. This early reduction in leaf stocks enables the market quota to be set more in line with consumption levels. Consequently the 1987 quota is higher than the 1986 quota of 13 million kilograms. A decision such as this made under the stabilisation plan is of real importance to the industry because it allows the various organisations directly or indirectly concerned with marketing tobacco leaf to begin planning for the 1987 crop; but more significantly, it retains confidence in the industry, which plays a major role in the economy of far north Queensland. The amendments to the legislation contained in the Bills, as I indicated at the outset, are routine. They are before this House today to restore the previous rate of tobacco charge of 3.5c per kilogram of tobacco leaf to apply to chargeable sales made on or after 1 April this year. In view of the importance of this industry within our community, and certainly the importance of continued research and development, these Bills are appropriate and I commend them to the House. Mr EWEN CAMERON(Indi)(10.28) —We are debating the Tobacco Charge (No. 1) Amendment Bill, the Tobacco Charge (No. 2) Amendment Bill and the Tobacco Charge (No. 3) Amendment Bill, which impose charges on both growers of tobacco leaf and manufacturers of the end product. The Bills replace legislation passed in 1985 which has become inoperative owing to inefficient administration by the Government. Over recent years there has been a great deal of emotive debate regarding smoking, health and the general usage of tobacco products. Unfortunately, this debate has often swamped sensible and clear consideration of the problems being faced by the Australian tobacco growing industry. The Australian tobacco growing industry is both a legitimate and a highly respectable primary industry. It is an important producer of a product which saves Australia approximately $80m on import expenditure. This is a very significant sum of money and it is of the utmost importance, particularly in the light of Australia's present trade balance problems. The tobacco growing industry must not be neglected. It is only too willing, and indeed has already proven that it is prepared, to work towards eventual self-sufficiency. To achieve this goal the industry requires an intensive research program which will improve the quality of leaf, develop disease resistance and tackle a great many other problems associated with the growing of tobacco. The revenue raised by this legislation is essential to provide industry funding to match the Commonwealth Government contribution on a dollar for dollar basis. Tobacco research is mainly being carried out at research stations at Mareeba in Queensland and Myrtleford in Victoria. Research into leaf quality is of paramount importance, as a high quality leaf is most necessary to enable the industry to maintain its 57 per cent of all leaf used by Australian tobacco manufacturers. There is really no reason why 100 per cent Australian leaf could not be used in the future if the quality was suitable and the price was acceptable to producers. Disease is another vital area for research, and the battle to breed resistance to the dreaded black rot disease takes a leading role. Alternative fuels and processes for curing the leaf and cutting costs is but another important area of research. In the light of all these areas of most important research, it is very difficult to understand why the Victorian Government is withdrawing its financial support from the Ovens Tobacco Research Station near Myrtleford. This is a most retrograde step and must be condemned in the strongest terms. I am very pleased that the new Tobacco Research Council, under the chairmanship of Mr Eric Meeking, Manager of the Tobacco Leaf Marketing Board of Vic- toria, will continue the research programs already under way. I hope that it will be possible for them to keep the Ovens Research Station operative in some form, even though the Victorian Government may pull out. In closing, I would like to repeat: The Australian tobacco growing industry should not be overshadowed by the health debate. It is a legitimate primary industry and should receive the same consideration as any other primary industry. It does not receive financial support from the taxpayer other than the Commonwealth Government's dollar for dollar contribution for research, which is similar to research funding applying to a great many other primary industries. This research amounted to $630,000 in the 1985-86 financial year. There is a widely spread but false impression held by the public today that the taxpayer supports the price of tobacco grown in Australia. This is not so. The price stabilisation arrangements for the tobacco growing industry are funded by tobacco consumers in the price paid for the end product. It gives me great pleasure to support these Bills. Mr BALDWIN(Sydney)(10.35) —I intend to take a somewhat different tack on these pieces of legislation, which, as earlier speakers have pointed out, are largely of a machinery nature and do not warrant significant comment in their own right. I begin by making just a couple of observations on the speech by the previous speaker, the honourable member for Indi (Mr Ewen Cameron). We heard the tobacco industry described as a totally legitimate and highly desirable industry. We heard that the Australian taxpayer does not subsidise this industry to any great extent, and we heard a suggestion that one should not allow one's consideration of the issues involved in the Tobacco Charge (No. 1) Amendment Bill, the Tobacco Charge (No. 2) Amendment Bill and the Tobacco Charge (No. 3) Amendment Bill to be influenced by emotive considerations to do with health issues. I find that a most extraordinary set of propositions. My basic contention is that we have legislation here that raises some revenue out of the tobacco industry and ploughs that revenue back into various forms of tobacco research, predominantly into things like the breeding of new varieties with resistance to diseases such as black rot, mould and so forth, and the development of dry farming techniques to maintain quality and to avoid deterioration from barn rot, et cetera. Just recently we have had a slight alteration in that we now have some research into developing breeds of tobacco that have a lower tar content. Nonetheless, the basic thrust of the research that is carried out is overwhelmingly in order to reduce the cost of producing tobacco, reducing the risks of growing tobacco and reducing problems arising from diseases in tobacco plants, and so forth. I believe that this whole discussion reflects an utterly perverse set of priorities in our society. The honourable member for Indi spoke of the lack of support by the Australian taxpayer for the tobacco industry. In a direct sense that might be true; but of course, what he failed to take into consideration is the additional $800m or so spent each year on providing health care to the population of this country for tobacco related illnesses. He left that little minor detail out. He does not seem to be all that concerned about the 16,000 people each year who die of tobacco related illnesses. Apparently he thinks it is far more important that the local tobacco industry makes a contribution to our balance of payments problems. I invite the honourable member to follow that absurd line of reasoning through to its logical conclusion-which is that we ought to set up research to assist a local marijuana and heroin industry so that we can reduce our balance of payments problems that way. I think it is absolutely phenomenal that we have an opposition-conservative members of Parliament-that favours punitive penalties for people who grow and sell things such as marijuana and other forms of drugs, yet at the same time it favours a tobacco industry which produces and uses all the techniques of modern advertising and marketing to purvey a drug which demonstrably has health effects as bad as and probably worse than certainly marijuana. I find the double standards and the hypocrisy utterly extraordinary. I take this opportunity to make reference to some of the evidence on this and some of the consequences of cigarette smoking. The debate on the health effects of cigarette smoking largely got under way in 1964, when the Surgeon-General in the United States of America first reported on the dangers and the evidence linking smoking to diseases such as lung cancer, heart disease, emphysema, foetal injury and premature birth. That evidence has been reinforced since then many times over. It is now known that, in addition to causing specific forms of cancer, cigarette smoking reduces the overall effectiveness of the body's immune system and consequently increases its vulnerability to all types of cancer and to other types of disease. On a global basis, according to reliable evidence, it seems that cigarette smoking is responsible for two and a half million deaths a year, and that, according to a report released this year by the World Watch Institute, mortality from lung cancer is likely to increase by 50 per cent by the turn of the century. The report claims that the global use of tobacco has increased by almost 75 per cent in the last 20 years, which is an epidemic growing at 2.1 per cent a year, faster than the population growth. In the main, it is Third World countries where there is this massive expansion in cigarette consumption. Of course, Australia is not immune to that problem. There have been a few bright spots on the horizon. We have seen over the last 20 years an overall decline in the proportion of people smoking in this country. This is similar to trends in the United States of America and the United Kingdom. However, this fall has now levelled off and the decline has occurred largely among older men, while smoking has actually increased among young people and women. Polls conducted by the Morgan Research Centre show that in 1964 43 per cent of Australians over the age of 14 smoked, smokers making up 58 per cent of men and 28 per cent of women. By 1981 the proportion of smokers over the age of 14 had declined to 32 per cent. Thirty-four per cent of men were smokers, but unfortunately, because there has been a dramatic rise among women, 30 per cent of women were smokers. That sur- vey was reported in the Sydney Morning Herald of 23 March 1986. More disturbing still are the statistics which suggest that 31 per cent of girls aged 13 and 25 per cent of boys aged 13 smoke. In other words, we still have a very major problem and in certain sections of the population it is actually getting worse. More than 2,000 chemicals are released from a lighted cigarette, of which about 50 are regarded as harmful to health. These include toxic substances such as carbon monoxide, nicotine and tar. Studies suggest that heavy smokers are three times more likely to suffer a stroke, 10 times more likely to contract lung cancer and up to five times more likely to suffer heart disease. Smoking depresses the immune system, which is one explanation given for smokers having more varieties of cancer as compared with non-smokers. One-third of all cancer deaths are now attributed to cigarette smoking. The lung disease emphysema accelerates the aging of the lungs. Although not all smokers contract emphysema, 99 per cent of those who do are smokers. Smokers are predisposed to common chronic conditions such as bronchitis. The rate at which women are stopping smoking is slower than that of men. Lung cancer is fast outstripping breast cancer as the number one cancer killer for women. Along with male smokers, women who smoke face very real risks of cancers, coronary and vascular diseases, chronic obstructive lung diseases, bronchitis and emphysema but, with the overall increase in numbers of women smokers, other serious dangers are being increasingly recognised. Women who smoke 20 cigarettes a day have twice the chance of heart attack as non-smokers, and women who smoke while taking the contraceptive pill increase that risk by about 40 times. Women who smoke heavily appear to run 13 times the risk of developing cervical cancer run by non-smokers. There are increased risks of miscarriage; complications in pregnancy; low birth weights among babies of smokers, along with an up to 35 per cent increase in the risk of infant death within the first month of life; and a higher incidence of sudden infant death syndrome for the child of a mother who smoked during pregnancy and who continues to smoke. Studies into involuntary or passive smoking also reveal alarming results. Tobacco smoking is now said to be a major cause of death in Australia for both active and passive smokers. A higher concentration of cancer-producing constituents of cigarette smoke occurs in sidestream smoke than in mainstream smoke-the normal inhaled smoke-and significant links have been shown between involuntary smoking and the risk of lung cancer. It has been suggested that for a non-smoker an hour in a smokey room could be the equivalent of smoking one cigarette. The pro-smoking lobbies argue that statistics and medical evidence against tobacco are questionable and that no direct causative link has been established between these diseases and smoking. The fact is that that is utter balderdash. No reputable health authority in the world disputes that cigarette smoking has serious deleterious effects on health. The arguments put forward by those involved in the cigarette industry are sheer, self-seeking sophistry and ought to be dismissed as such. These people are quite willing to go on using all the most sophisticated techniques of marketing to purvey a drug which has demonstrably massively harmful effects, as the material to which I have just referred indicates. There is no doubt about that at all. It makes me sick to think that 16,000 Australians are dying every year and that $800m a year is being added to our health care bill because of the effects of this drug. A small amount of revenue is being raised in the form of the tobacco charges with which we are dealing today, the great bulk of which is put into developing better ways of making even cheaper and more marketable forms of tobacco. I think that is phenomenal hypocrisy. I thought I would make those observations in the context of these purely machinery Bills. Mr IAN CAMERON(Maranoa)(10.45) —It is my pleasure today to speak to the Tobacco Charge (No. 1) Amendment Bill and cognate Bills. In doing so I ask the honourable member for Sydney (Mr Baldwin) whether he intends banning motor cars. Unfortunately we cannot totally ban harmful products because this is a free country and we have a free market. I gave up smoking five or six years ago. Many people want to smoke. I do not wish to encourage smoking but there is a market for tobacco products and many families are involved in producing tobacco in my electorate of Maranoa, and in north Queensland, New South Wales and Victoria. While there is a market we should be in a position to meet it. Under the present arrangements 50 per cent of all tobacco manufactured in Australia has to be local leaf. It is interesting to note the banana republic tag that has been put upon us in the last few days and the popularity polls in this morning's Press. Those polls give some idea of what the people of Australia think of the present Labor Government. Mr Gayler —That is the first time you have referred to the polls in three years. Mr IAN CAMERON —That may be so but we have been going down the drain-pipe every month for the last three years. We on this side of the House and farmers throughout Australia, including tobacco farmers, are concerned. The farmers have been on the steps of Parliament House in their thousands trying to get through to this Labor socialist Government what they think of the economy and how hard they have been hit. They know they are the first to have been hit. They have given up their time to drive all the way to Canberra to demonstrate against this Government and to try to get through the thick heads of its members what sort of a financial position we are in. At long last the Government has got the message. Mr DEPUTY SPEAKER(Mr Mildren) —Order! The honourable member will return to the subject of the Bills. Mr IAN CAMERON —Many tobacco farmers have been demonstrating outside Parliament House. They are as concerned as any other farmer about the deterioration of our trade, the deterioration of their standard of living, the lack of concern of this Labor Government, the fact that it continues to borrow massive amounts of money from overseas and is running horrendous deficit Budgets just to keep its union mates happy and its social security payments flowing. We have seen all sorts of rows within Cabinet about how much more money we are expected to pay. We are now paying $20 billion a year in social security benefits. It is the farmers and small businessmen who are expected to keep paying. I inform the House-there are only two members of the Australian Labor Party here so I will inform those two gentlemen-that we cannot do this any longer. We have been totally stripped dry. There is not a cent left in us. The Government will have to put its claws into some other section of the community, perhaps into unionists and those people whom the Government supports. Those people are becoming scared. That is why they are starting to change their minds about whether they will vote for the Labor Government. The polls show that they will not. A Howard-Sinclair Liberal-National Party government will be elected to office at the next election. If I may return to tobacco, these Bills should not have been introduced today. It is the fault of the Government and the clumsiness of the Minister for Primary Industry (Mr Kerin), who forgot to include some of these clauses the last time such legislation was before us. That is why the special Bills have been introduced to collect the levies. The Government had forgotten to do it. A 3.5c a kilogram levy is being imposed on all tobacco leaf. Government regulations concerning this were introduced on 1 April this year. The Opposition does not oppose the Bills. The breakdown of the levy is that 0.8c a kilogram goes to the Australian Tobacco Board and 2.7c a kilogram goes to tobacco research. It is estimated that about $300,000 will be collected from these Bills. Queensland produces more than half the tobacco crop. As I said, our Treasurer (Mr Keating) has a horrendous balance of payments problem. Therefore, I suggest that he look at the tobacco industry to see whether we can use more Australian tobacco. Some 57 per cent of tobacco produced in Australia goes towards local manufacture. Therefore, 43 per cent of the tobacco is still being imported. The Americans have not been very kind to us of late-by undercutting our sales of wheat and other products, but I will come to that in a minute. I suggest that it is now a good time to look at increasing the tobacco quota to allow local producers to produce even more leaf to manufacture into the local product. Of course, that would be a tremendous help for our balance of payments situation. There have been some other problems associated with the tobacco industry. Tobacco growers are not all that happy about some of the things this Government has been doing. They wonder what might be in store for them in the next round of negotiations on the stabilisation of the industry. As yet they have not been able to get from the Minister for Primary Industry just what plans the Government has. However, they have been talking with the Minister. Apparently, the Industries Assistance Commission is to report on the matter. However, at this stage the growers are finding the situation very difficult. They would like to know what is in store for them. Tobacco leaf farmers have to look ahead and plan. They have to plant the tobacco on our farms. It takes 12 months for that crop to grow. The crop then has to be harvested, processed and sold. Probably it is about an 18-month process. Therefore, it is important that producers know exactly what the Government has in mind. Unfortunately for us we have, as I said, a disastrous balance of payments situation. I am hoping that tobacco may help. I would like quickly to refer to a couple of items other than tobacco which are affecting our balance of payments. We heard of a whole sheaf of such matters when the Treasurer spoke yesterday. I would like to draw the attention of the House to the headline concerning wheat growers in this week's Country Life. The article in that paper says that it is expected that the price of wheat under our stabilisation plan will drop for the first time below the guaranteed minimum price. This Government will have to pay up to $60m to wheat growers under that agreement. That is the sort of disastrous situation in which we have got ourselves. For the first time, because of the terms of the arrangement, taxpayers in this country will have to put into the stabilisation fund. Most of this has been brought about because the American Government has dropped its guaranteed price for wheat to $2.30 a bushel. This has put a price floor on the world wheat market. Our price has dropped from $160 or $150 a tonne f.o.b. to $130. The Government will have to make up the difference. Not only do we see headlines about wheat but also we see headlines about barley. The Americans have undercut us with wheat, with rice exported to New Guinea and now barley sold to the Saudi Arabian market. This will mean a tremendous loss of barley exports. Saudi Arabia was one of our biggest barley buyers. Tobacco is grown throughout the eastern coast of Australia. It is best grown in north Queensland. There are a number of farms around Texas in my electorate of Maranoa. Of course it is a very important industry. It is a family operated industry. The National and Liberal parties are all for the family unit. I have had a fair bit to say about that of late. We continue to support the family unit and the family farm. That is what we are on about in politics. I expect the Labor Government to do the same. Of course, it is not really keen on supporting the family. It is more interested in busting the family up and encouraging mothers to work in factories et cetera. Of course, I am totally opposed to those socialist concepts. I refer now to the other problems that we have had. There is a whole list of primary industry exports that the Treasurer rattled off here yesterday. I would like quickly to cover a couple more of those exports. The price of fuel has affected tobacco more than any other product of late. This Government wonders why the farmers are screaming and going bankrupt. The spot price of oil has dropped to $10. However, I bought some oil the other day and it cost me $450 for a 44-gallon drum-$450! That works out at $10 a gallon for oil put in our tractors, and the Government wonders why we cannot survive. Of course, the Government is taking about 60 per cent of that in taxation. It must get out of taxing in these areas. If farmers are to survive, compete on the export markets and gain revenue for this country, the Government must get off our backs and let us get on with the job. There have not been any exports of crude oil. Mr DEPUTY SPEAKER(Mr Mildren) —Order! The Chair has given a great deal of latitude to the honourable member of Maranoa. I suggest that he return to the subject of the debate. Mr IAN CAMERON —Thank you, Mr Deputy Speaker, but my point is that the tobacco growers are very dependent on fuel to operate their tractors. Also, they use an enormous amount of chemicals for spraying and most of those chemicals are derived from oil products. Prices of chemicals have continued to increase. One thing for which I must congratulate the Government is that it has moved the tariff across to bounties, although the taxpayer still pays that amount. I do not know why we should pay either tariffs or bounties. I believe that the Government should lift all bounties and tariffs and free up the market to enable us to be more competitive. Obviously that is what we must do. Only six cargoes of crude oil in 100,000 tonnes of shipping have gone out this financial year. Last year there were 30 cargoes which earned us $2 billion in export income. So far this year only six cargoes have gone out. The oil companies will not export because the Government takes up to 94 per cent of revenue from the Bass Strait oilfields. The Government has also lifted the differential between the retail price, index price and realised price on export and a rebate has been offered of 35 per cent-- Mr DEPUTY SPEAKER —Order! The Chair has been very tolerant towards the honourable member for Maranoa. If he wishes to continue his speech I ask him to return to the subject of the Bill. Mr IAN CAMERON —I will do so, Mr Deputy Speaker. It is a very good speech. I have already said something about tobacco and the concerns felt by primary producers throughout Australia about our balance of payments and our banana republic status. Much has been said about our so-called banana republic, and our so-called Treasurer has put us in this position by hoodwinking the Australian farmer. The Treasurer has been saying how well we have been performing; now he at least has had the guts to admit that we are not doing so well. I must give him full praise for that. At long last he is being honest about the situation. We are in a hole and we must look at the reasons for it. One of the main reasons is that last year we earned $2 billion in export revenue from crude oil and we now earn hardly a cent-- Mr DEPUTY SPEAKER —Order! The honourable member for Maranoa defies the Chair. I give him a last opportunity to return to the subject of the debate. Mr IAN CAMERON —I would like to return to the tobacco legislation. All the tobacco growers in Queensland have been suffering under this Labor Government. Many growers and their families live in my electorate and they have my support. In the electorate of Maranoa, not only have the oil industries been affected, but also the coal industries. We wonder why we have not been exporting coal of late, and that is another subject-- Mr Cunningham —What has that got to do with the Bill? Mr IAN CAMERON —I will tell the honourable member. The unionists in the coal industry have been on strike-- Mr DEPUTY SPEAKER —Order! The honourable member for Maranoa will resume his seat. Question resolved in the affirmative. Bill read a second time. Leave granted for third reading to be moved forthwith. Bill (on motion by Mr Duffy) read a third time. Consideration resumed from 17 April, on motion by Mr Kerin: 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 Duffy) read a third time. Consideration resumed from 17 April, on motion by Mr Kerin: 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 Duffy) read a third time. Debate resumed from 1 May, on motion by Mr John Brown: That the Bill be now read a second time. Mr DEPUTY SPEAKER(Mr Mildren) —I understand that it is the wish of the House to debate this order of the day concurrently with orders of the day Nos 5 and 6. There being no objection, the Chair will allow that course to be followed. Mr CARLTON(Mackellar)(11.02) —This morning we are debating Supply Bill (No. 1) 1986-87, Supply Bill (No. 2) 1986-87 and Supply (Parliamentary Departments) Bill 1986-87. Honourable members will understand that Supply Bills seek interim funding for the continuing operations of the Government in the period from 1 July 1986 to 1 November 1986, pending decisions regarding the 1986-87 Budget. The need for Supply Bills arises because we consider the Budget after the beginning of the financial year. One of the questions always asked is: Why do we do that? It is a very good question and one which I think we should look at carefully to see whether our Budgets should be debated before the beginning of the financial year. At the moment the Opposition suggests very strongly that, because of the very severe economic difficulties we face, evidenced by the very bad balance of trade and balance of payments figures and severe problems in the economy, a mini-Budget should be brought down in May in order to cut government expenditure, so that those expenditure cuts would begin from 1 July-the first day of the financial year. I think the Supply Bills give us an opportunity to underline the need to take that necessary action. I will refer to that point later in my speech. Supply Bills give us an opportunity to consider the overall stewardship of the Government and the overall state of the economy. There are certain measures that are supported by these Supply Bills which my colleagues will deal with in some detail in their respective ways. In particular, there is the subsidy to be paid to savings banks, as part of the Government's deal with the savings banks-which left out the building societies, I might say-following the Government's decision to deregulate housing interest rates for new borrowers. That is a very serious issue which my colleagues will deal with during the debate. On behalf of the Opposition I will move an amendment in principle to the motion for the second reading which, while not denying passage to the Supply Bills, will draw the House's attention to certain shortcomings in the state of the economy and the Government's actions, and will suggest remedies for those difficulties. I will begin my general overview of where we stand in the economic debate and the Government's stewardship of our economy by suggesting that the Government must face up to seven very serious questions. Those questions are: Firstly, what will the Government do about the balance of payments problem? Secondly, what will it do about our massive overseas public debt, which is currently about $70 billion and which will move rapidly to, by the end of the next financial year, an estimated $100 billion, which is up to South American levels? Thirdly, how can it reduce our rate of inflation from over 9 per cent to the Organisation for Economic Co-operation and Development average of 2.9 per cent or less, as time goes on? Inflation in other countries is rapidly diminishing almost to zero point; in fact, it has virtually reached that level in West Germany and is almost at that level in Japan. Fourthly, how can the Government prevent our high inflation rates flowing on to wages and thereby eroding our international competitiveness? Fifthly, when will it be able to reduce unemployment below the current level of about 8 per cent and when will it be able to reduce youth unemployment below its current level of 22 per cent? Sixthly, what hope does the Government hold out for taxpayers, 50 per cent of whom will be paying a top marginal rate of 40c in the dollar or higher by 1987-88 when the full effects of last year's tax package are in place? There is an additional question relating to tax: When will the promised tax cuts from the 19 September package of last year be made available anyway, in view of the clear indication by the Treasurer (Mr Keating) in the House yesterday that they will not be introduced on 1 September, that they will be delayed? The seventh important question for the Government is this: What will it do about business investment, which has not revived to the levels achieved before the 1982-83 recession? If business investment is not revived at least to those pre-recession levels, we have no hope of pulling ourselves out of the balance of payments problem and the problem of rising unemployment. They are the seven major questions which this Government must face. That is the agenda-the political and economic agenda-for the rest of this year and certainly for the remainder of this Government's term of office, which will terminate at the next Federal election. We have had in the last few days the most extraordinary example of a switch in presentation of the nation's true economic situation that we have seen in many years by any government. We had over a long period a consistent series of statements and claims by the Prime Minister (Mr Hawke) and the Treasurer that all was well with the Australian economy. I will quote one or two comments by the Treasurer and the Prime Minister. As recently as 20 March the Treasurer said: The fact is that the Government's policy settings this year have been totally correct. That is the kind of language that the very arrogant Treasurer of this country uses. On 20 March he also stated: The Government's strategy has been entirely appropriate. On 3 April, in addressing a conference on equity financing, he said: We are convinced that the policy mix which has underpinned our achievement-particularly the policies of the prices and incomes accord and our overall approach to fiscal and monetary policy-are the right mix for Australia. More serious is what the Treasurer said when he addressed a meeting of the Economic Planning Advisory Council, which is one of the bodies that were set up after the National Economic Summit Conference to advise the Government on economic policy. It is chaired by the Prime Minister and comprises representatives of the States, business, unions and so on. On Friday, 9 May, only a couple of weeks ago, the Treasurer made remarks which would have lulled the Economic Planning Advisory Council into a state of very false security in view of what he said subsequently. The kind of remarks that he made at that meeting would have had an anodine effect. He said that investment was up. He stated: Since the trough in 1983 real fixed capital expenditure has increased by around 20 per cent. I believe that we will continue to see a strengthening in business investment. Simon Crean, the leader of the Australian Council of Trade Unions, does not agree with that view, although he is a member of EPAC. He said that business was not investing. The Treasurer continued: Importantly within the aggregates, investment in plant and equipment and in the manufacturing and mining industries is set to strengthen considerably. Overall, 1986 is emerging as a year of slower, but still satisfactory growth, a year in which we will see a consolidation of the very strong gains of the past three years, and in which the economy can deal with the imbalance on our external account. That is what the Treasurer said to the Economic Planning Advisory Council on 9 May. He told the body which is supposed to discuss with the Government the main elements of its economic policy that all was well and that, the way things were going, the Government would be able to deal with any imbalance on the external account. What happened subsequently? Dreadful balance of payments figures were released on Tuesday of last week and the $1.5 billion deficit in one month-about 50 percent up on the previous month-pushed the overall balance of payments for the year way above Budget estimates. The Treasurer would not make a statement at all on the day the figures came out. He went to ground. The following day he spoke on a radio program in Sydney with Mr John Laws and gave a totally different picture from that which he had given to the Economic Planning Advisory Council and to the Australian people over the previous 12 months. He said to Mr Laws: Well, the fact is it isn't business as usual because Australia can't pay its international way without borrowing $12 billion a year to do it. At the EPAC meeting on 9 May he said that we are in a situation `in which the economy can deal with the imbalance on our external account'. Mr Cadman —That is May of this year? Mr CARLTON —On May 9 this year, two weeks ago, the Treasurer told the Economic Planning Advisory Council that the economy can deal with the imbalance on our external account. A couple of weeks later-last Wednesday to be precise-the Treasurer said to Mr John Laws: Well the fact is it isn't business as usual because Australia can't pay its international way without borrowing $12 billion a year to do it. He said: The problems are more intractable. This is our fourth year of office. Four years of damage, of course. He also said: . . . we must let Australians know truthfully, honestly, earnestly just what sort of an international hole Australia is in. If he was going to be truthful and honest when speaking on the John Laws program, what was he doing in front of the Economic Planning Advisory Council two weeks before? Was he telling it fibs? Was he creating a totally false picture? Of course he was. He has been creating a false picture for a whole year. He said to Mr Laws: If this Government can't get the adjustment, get manufacturing going again and keep moderate wage outcomes and a sensible economic policy, then Australia is basically done for. We will just end up being a third rate economy. He said to Mr Laws: Well then you are gone. You know you are a banana republic. Mr Laws quite correctly asked: Well it is pretty serious, isn't it? The Treasurer replied: It is the most serious problem we have faced. We welcome this outburst of honesty on the John Laws program which was not evident in the Treasurer's speech two weeks before to the Economic Planning Advisory Council and which makes an absolute mockery of the very machinery this Government set up after the National Economic Summit, supposedly to monitor economic progress and to advise the Government on any changes in direction. I have put before the House this morning seven important questions for the Government. Those questions relate to these critical areas: What is the Government going to do about the balance of payments problem; what is it going to do about our massive overseas debt; how is it going to reduce our inflation rate from over three times the average of the Organisation for Economic Co-operation and Development; how can it prevent our inflation rates flowing on to wages and therefore eroding our international competitiveness; when will it be able to reduce the rate of unemployment to below 8 per cent and youth unemployment to below 22 per cent; what about taxpayers who are going to lose the tax cuts they were promised in September of this year; and what about business investment which still has not risen to the pre-recession levels of 1982-83? What is the Government going to do about all of these things? My central proposition this morning is that all seven questions stem from two fundamental weaknesses in our economy that the Government has failed to tackle during three easy years and is now structurally incapable of tackling because of the composition of the Australian Labor Party itself. These two basic weaknesses are: Firstly, levels of government spending that have become too high for our tax base and our borrowing capacity to bear-in other words, the Government has been spending more than we can tax or afford; and, secondly, a union dominated industrial relations system that prevents us from having a sensible wages policy and also prevents employers and employees from working together to improve productivity at the necessary rate. We are heading towards the status of a banana republic because we are taxed too much and because we have an industrial relations system which will not give us a sensible wages policy and which prevents people working together to improve productivity. They are the two fundamental weaknesses of our economy and they have not been tackled over the last three years. Instead of weakening the forces which give rise to these two major problems, the Government has strengthened them. It has spent far too much and it has further strengthened trade union power. Under the smokescreen of an effective public relations campaign, it has painted us into a corner-the corner described by the Treasurer honestly on the John Laws program but hidden from the Australian people for at least the last 12 months. Mr Langmore —You are misrepresenting the situation. Mr CARLTON —The Labor Party, being what it is, cannot cut spending. The honourable member for Fraser would be one of those who would oppose the Government cutting spending. Mr Langmore —Ours is one of the lowest taxed countries in the world. Mr CARLTON —The Left would oppose it. The Government cannot cut spending because of members such as the honourable member for Fraser, who is interjecting. The honourable member wants higher government expenditure; he wants higher taxes. The Labor Party as a whole wants higher government spending and therefore will tax people more because of it. The Government is at this very moment in the pro- cess of removing the proposed tax cuts which it promised last year. The second reason why the Government cannot solve these problems is that it cannot face up to the unions. The great pity is that this ought to be a time of opportunity and optimism for Australia's economic future. At a time when the rest of the world is striking an optimistic note, greatly influenced by the fall in world oil prices, we are back to contemplating our perennial problem of the balance of payments. All those familiar structural problems in the Australian economy are beginning to reappear as jagged rocks as the tide of economic recovery begins to run out. It is a familiar problem, but this time there will be many more people around the world looking at it-and why? It is because of the floating of the Australian dollar. We in the Opposition approve of the floating of the Australian dollar, which was recommended by the Campbell Committee of Inquiry into the Australian Financial System and was carried out by this Government-and I agree with its actions. But that puts an international spotlight on our performance. Everybody around the world now every day observes how well Australia is doing and marks our dollar accordingly. From the viewpoint of the national interest this should be welcomed, because if we are not earning our keep in the world the earlier we know about it the better. I happen to believe that the testing that this puts on Australia presents an historic opportunity to face up to the fundamental problems of our economy and to make the changes necessary to ensure that next time the tide of the business cycle runs out, the rocks and the shoals do not reappear. Political forces are available to assist us in making these changes. However, let me deal first with some history. The version of history I will put to honourable members will differ somewhat from that put forward by the Prime Minister and the Treasurer. Some people will still be so sold on that version that they will not notice the truth. The Hawke Government has now had three years in office, and therefore it has a record on which it can be judged. Let us see how well it has used the political opportunities available to it to deal with Australia's economic problems. The main reason for the Prime Minister's accession to office was the recession of 1982-83. The Prime Minister's allies in the trade union movement contributed to the depth of that recession, just as the Prime Minister himself, as President of the Australian Council of Trade Unions, directly contributed to the disasters of 1974-75, during the Whitlam period, with excessive wage demands backed by determined industrial action. The prime causes of recession-namely, the lagged effect of the world economic downturn and the severe drought-were beyond government influence. In speech after speech the Prime Minister and the Treasurer have blamed the Fraser Government's economic policies for the recession, but now no sensible person believes them. Thus the Prime Minister and the Treasurer benefited politically from the recession. When they took over they also had the benefits of the stimulatory effects of the 1982 Fraser Budget, the cost containment effects of the Fraser wage pause, the breaking of the drought, and the upturn in the world economy. They added to this stock of political capital with their fraudulent claims about the so-called $9.6 billion deficit inherited from the Fraser Government. Although nobody these days is misled by those claims, I would like to remind the House that the deficit for the recession year of 1982-83 was $4 1/2 billion-that is, less than the present deficit-and the supposed $9.6 billion deficit that the present Treasurer was talking about was a February 1983 forward estimate of the deficit for 1983-84, assuming no changes in policy and based on a continuation of the recession. The shallowness and sheer dishonesty of those claims was revealed the following year when the Treasurer refused to make public the exact same figure for his first year in office on the grounds that it was meaningless. He had made so much of this figure during the election campaign and afterwards that the next year, when the equivalent figure was sitting in the Treasury and we asked the Treasurer to make it public so that we would know what it was, he said: `I won't because it would be misleading-it is a meaningless figure'. Meaningless or not, the figure was hammered into the Australian electorate by the Prime Minister and the Treasurer in the media with considerable political effect both before and after the 1984 election. The real benefits inherited by the Government were, naturally enough, not emphasised by the Government, yet its greatest political liability was paraded as a benefit. I refer to the ALP-ACTU accord and the relationship between the political and industrial wings of Labor, of which the accord is the visible expression. In return for a promise of comparative industrial harmony, the Government has committed itself to the economic nonsense of full indexation of wages against inflation, an extension of the so-called social wage, opposition to indirect tax and massive intervention in industry. That is the deal with the devil that the Government has done. It has committed us to a series of economic equations which are now starting to cripple us. We all know that we cannot conduct a serious economic policy with automatic wage indexation. Last year the Italian electorate as a whole voted against such a proposition in a referendum put forward by the Communist Party. The Communist Party in Italy in June last year suggested that the Italian people should go away from their existing system of wage fixation to one the same as that under the ACTU-ALP accord. The Italian electorate as a whole in a referendum quite sensibly rejected that Communist Party proposal. All OECD countries are making it clear that we have to have a greater flexibility in wages policy and that we simply cannot have it under a full indexation of wages. The Treasurer has attempted to sidestep this problem with a series of juggling acts. First there was the Medicare fiddle on the CPI, bought at the cost of an extra $2 billion of so-called social wage-that was the Medicare expenditure-added to the 1983 Budget. Under the accord mark 2, a 2 per cent partial discounting against CPI increases resulting from devaluation, which was an essential requirement, was bought with a promise of tax cuts-the unions are now not going to get them, but they were promised them-and support for a so-called productivity wage increase of 3 per cent taken under the guise of superannuation. That is currently before the Australian Conciliation and Arbitration Commission. If the Commission in any way takes account of current economic conditions, it will have to reject that proposal to cook up a wage increase under the guise of a superannuation payment. If it agrees to that proposal and goes ahead with it, it will be loading on to an already uncompetitive economy an extra wage increase taken in disguise which will put us into further international debt. Under current economic conditions the albatross is still there, but the Treasurer has run out of tricks. With an inflation rate in 1986 three times that of the OECD average, the accord binds us to full wage indexation. The competitive advantage gained from a 25 per cent deva-luation will not last long under this kind of wages system, yet it is difficult to see the trade union leadership allowing the Government any alternative. Indeed, in the leaked 1986-87 Budget strategy paper presented by the Treasurer to Cabinet, a change in wages policy was specifically ruled out. Notwithstanding what the Trea-surer said last week on the John Laws program, he still refused to acknowledge the need to redress wages. The Minister for Employment-or what passes for employment under this Government-and Industrial Relations (Mr Willis) in the House yesterday, and consistently in public, has rejected any changes in the wage fixing system. I draw attention to a line the Treasurer was following yesterday in the House and has been pushing round the traps for a while. A report in today's Australian Financial Review by Mr Taylor contains the following passage: . . . the Opposition failed to mount a sustained attack against the Treasurer and allowed him to draw a clear line between what the Hawke Government had achieved in the domestic economic arena and the problems confronting it in the form of an adverse balance of payments situation. It is a line the Government intends pursuing until such time as it believes it has achieved electoral understanding. If the reporter concerned had listened to the remainder of the debate-my speech followed that of the Treasurer and I dealt with this particular point-this totally misleading report would not have appeared. Yesterday the Treasurer had the effrontery to tell the House that there was a clear distinction between a sound domestic economy and weakness on the external account. This reporter has taken up that theme, did not listen to what I said afterwards, and said that it is a line the Government intends pursuing until such time as it believes it has achieved electoral understanding. All I can say is that if the Treasurer is able to convince the Australian public that we can have a booming domestic economy and be broke externally, he is a better salesman than I thought he was. In a newspaper report two weeks ago one of the Treasurer's own Cabinet colleagues was quoted as saying: `He's too good at selling a bad argument'. That comment was quoted in a story in the Daily Telegraph by Mr Peter Logue. In this case there is no way the Treasurer will get away from this. Heavens above, if the domestic economy and international economy are not linked, we are in a banana republic and pigs are flying. It is an absolute nonsense. It is like saying to somebody who has problems in meeting payments to the bank, `Interest rates and prices have gone up, your expenditure has exceeded your income' but telling his family, `It is perfectly all right, you can keep spending because you have a healthy domestic economy. You are spending money you have borrowed; you just have an external weakness. Your external account is a bit thin because you owe more than you can pay back. Each month you have to go back and borrow more'. That is what is happening to Australia. Australia is overspending, it has overborrowed. It has had boom internally over the last few months, which is now stopping-it stopped at Christmas time-but all on borrowed money. The Treasurer comes into the House and says: `Look at the national accounts for the last quarter of 1985. The economy is booming. All we have is an external weakness'. The external weakness is that we are going broke. We owe nearly $100 billion abroad; the Government itself owes over $30 billion abroad. The other link between the domestic economy and the external economy, which the Treasurer had denied exists, is the link between domestic inflation and our competitiveness in the rest of the world. He has said on a number of occasions that our competitiveness has increased enormously because of devaluation. It is true that our unit labour costs will go down if we devalue the dollar. If we make ourselves 25 per cent poorer against the rest of the world, of course our labour costs will be cheaper compared with the rest of the world. But if subsequently internally we have a very high rate of inflation which is three times that of our trading partners, and a system of paying wages which automatically passes that inflation into the wages system, that competitiveness is eroded very quickly. For a start, there is a clear link through the wages system between the domestic economy and the external economy. If prices go up to the degree that they are increasing in Australia-three times what they are in the rest of the world-and if those price increases are passed on to wages, any good effect that we get from devaluation by making ourselves more competitive will be lost over a very short period. The Treasurer points to relatively low increases in wages over the last 12 months. What of the next 12 months? What of the current wage case with a 3 per cent productivity claim and 2.2 per cent on the general account? Also, what about next September when the effects of 9.2 inflation will be passed into wages? What will happen in the early part of next year? What will happen when all the high costs and price increases are passed on to wages? What will that do to our international competitiveness? Of course these things are linked. We will not put up with that and day after day we will hammer that proposition put forward by the Treasurer to show how stupid it is. There is no way that he will sell that to the Australian populace. In order to make clear our view of this Government's economic policies, I move: That all words after `That' be omitted with a view to substituting the following words: `whilst not declining to give the Bill a second reading, the House- (a) draws attention to: (i) the growing realisation of severe economic difficulties facing Australia, revealed by the disastrous statistics on inflation, balance of payments and overseas borrowing, (ii) the panic, chaos and confusion in the ranks of the Government following the release of such statistics, (iii) the failure of the Government to guarantee its promised tax cuts due on 1 September 1986, and (b) calls upon the Government to adopt as a matter of urgency the Opposition's 5 point plan for economic recovery, namely: (1) A mini-budget to cut government spending, (2) the postponement of the 3% productivity superannuation claims currently before the Conciliation and Arbitration Commission, (3) the postponement of the current wage case to September, and full discounting for the price effects of devaluation thereafter, (4) the abandonment of the anti-investment elements of the tax package, and (5) a substantial relaxation of foreign investment restrictions'. They are the five steps that need to be taken immediately by the Government. We will certainly propose also that the wage fixation system, the industrial relations system, be made more flexible by the changes given in our recent announcement of industrial relations policy. Finally, all I say to the House on this matter is that on 1 September this year, when everybody in Australia expects his tax cut promised in the September statement of last year, and finds that he does not get it, he will realise finally that we are in great trouble. Mr DEPUTY SPEAKER(Mr Blanchard) —Order! The honourable member's time has expired. Is the amendment seconded? Mr Blunt —I second the amendment. Mr LANGMORE(Fraser)(11.32) —The honourable member for Mackellar (Mr Carlton) largely repeated the speech that he made yesterday. The Treasurer (Mr Keating) replied to the points raised by the honourable member in that debate and, of course, the Treasurer clearly won; the papers this morning showed that. Repetition of those points today by the honourable member does not give them any greater credibility. I want to talk about a couple of things that he mentioned. He talked of two fundamental weaknesses. The first he claimed to be levels of government spending too high for Australia to afford. He also claimed that we are taxed too much. Both claims are simply untrue, I will demonstrate that in a moment. He also criticised the prices and incomes policy and implied support from the Organisation for Economic Co-operation and Development for his comments. Yet the Secretary-General of the OECD spoke last year of Australia's brilliant economic performance and commended Australia's incomes policy. So the honourable member was clearly misrepresenting the OECD in the comments that he made. This debate on the Supply Bill (No. 1) 1986-87, Supply Bill (No. 2) 1986-87 and Supply (Parliamentary Departments) Bill 1986-87 is an occasion for discussing the medium term and reviewing the general direction of economic policy. I want to use the opportunity to discuss a central element, the issue raised by the honourable member for Mackellar-budgetary policy-and the issues raised in a paper published by the secretariat of the Economic Planning Advisory Council entitled `Issues in Medium-Term Budgetary Policy'. The foreword to that paper emphasises that the views expressed are the responsibility of the office of EPAC and therefore do not carry the imprimatur of the Government. But since EPAC advised the Government, the views of the EPAC secretariat must be taken seriously. Its published work is an appropriate subject for parliamentary debate. The Council paper No. 16 written by the EPAC secretariat is lop-sided and narrowly focused. It would be sad indeed if it were to influence government policy. The way that the paper was released suggests that the EPAC secretariat is playing politics. It was released on Easter Monday, when there was little news and thus it was ensured maximum media coverage. The introduction to the paper is tendentious for it implies that extremist and inaccurate views should be taken seriously. For example, it talks about excessive government borrowing, of high levels of taxation and of the impact of taxation on incentive. This implies endorsement of a caricature of the Australian economy that has little foundation in fact. Most of the report is about borrowing; I will come back to that in a minute. But there is no foundation for allegations about high levels of taxation. Australia has one of the lowest levels of taxation of any Western country. I will demonstrate this. During the five years from 1978 to 1982 the average level of taxation in Australia as a proportion of national income was 33 per cent. This compares with an OECD average of 41 per cent over the same period. That means that the average level of taxation in Australia was eight percentage points below the average of all Western countries and therefore far below the levels in most of them. I repeat: Australia is one of the lowest taxed countries in the Western world. So even to appear to consider seriously a criticism about high levels of taxation is to misrepresent the situation. I am horrified that the honourable member for Mackellar would make that same absolutely untrue allegation. The reference to the effect of taxation on incentive is also misleading. This issue of the effect of taxation on the incentive to work has been rigorously studied during the last decade. Careful empirical research has shown that taxation has very little impact on labour supply. A comprehensive survey of all the evidence by the OECD, which organisation the honourable member for Mackellar likes to quote, concluded: . . . taxation does not have a large and significant effect on the total supply of work effort and that in particular, the net effect on the labour supply of male family heads is likely to be very small. Mr Barry Jones —Sweden illustrates that. Mr LANGMORE —Exactly. Sweden is a very good example. The survey also stated: Moreover, there is some evidence that taxation has little influence on the choice of occupation. The empirical work available therefore tends to support (the conclusion) that the net effect of taxation on labour supply is not large enough to be of great economic or sociological importance. That carefully worded conclusion indicates very clearly that tax rates have little impact on the supply of labour. A more recently published OECD survey came to the same conclusion-that on balance labour supply effects of the income tax system are quite small. However, neither of those issues is the central subject of either the honourable member's comments or the EPAC secretariat's report, and it is on those that I want principally to concentrate. The principal subject of the EPAC secretariat report is government debt. The EPAC office implies that the main objective of medium term fiscal policy should be to stabilise the accumulation of public debt. This is an extraordinary misjudgment of the goals of economic policy. No Australian government of either party would have accepted such a narrowly focused goal at any time during the last 40 years. All post-war Australian governments have aimed for economic growth, price stability, full employment and balance in external payments, though, of course, with differing emphases between Labor and coalition governments and at various times. The Fraser Government gave pre-eminence to reducing inflation first. The Hawke Government was able to achieve national agreement at the 1983 National Economic Summit Conference on the aims of simultaneously reducing unemployment and inflation. The present Government emphasises the pre-eminence of economic growth in achieving employment growth and raising living standards as well as the importance of increasing productivity and external viability. In none of these goals is the reduction of public debt a central feature. While it is certainly an important subsidiary goal, it is not central. So the principal misjudgment of the EPAC secretariat paper is in its giving reduction of debt such a central place. Another crucial defect of the paper is that it seems to assume that borrowing for use in public expenditure does not contribute to growth. That is the most extreme form of what is called the crowding out hypothesis. The crowding out theoreticians believe that the effect of public sector borrowing is either to prevent equivalent borrowing by the private sector or to force up interest rates to such an extent that private investment is severely constrained, so the benefits of increased public sector outlays on the level of economic activity are offset by the alleged restraints on private sector growth. Tests of the crowding out thesis in Australia have produced little conclusive evidence for the theory, not least perhaps because of the availability of capital from overseas. The monetarists have certainly exaggerated the danger of financial crowding out in Australia and were recently authoritatively criticised for doing so. The Brookings Institute review of the Australian economy, published last year, criticised `deficit fixation' here and commented that the Treasury was `frightening the bourgeoisie by exaggerating the deficit problem'. That is exactly what the Opposition has been doing for 10 years, at great cost to the level of economic activity in this country. In any case, the danger of financial crowding out can be minimised by applying neutral monetary policy so that monetary growth keeps up with the growth of nominal national income and so does not constrain real growth. The OECD concluded, in a recent comprehensive survey of experience in Western countries, that even where crowding out operates, the fiscal multiplier remains positive; that is, the net impact of increased borrowing and spending by government is to increase the rate of economic growth overall. The total benefits everywhere are greater than the costs. Therefore, the EPAC office errs severely in neglecting the positive impact which fiscal policy can have on economic growth. The central point is that budgetary policy can make a major contribution to the rate of economic growth. The tone of the EPAC secretariat paper is alarmist, the evidence exaggerated and the conclusions unwarranted. A careful reading of even the evidence presented in the paper shows this. International comparisons shows this even more clearly, and I will come to those in a few moments, but firstly I want to comment on the evidence presented in the paper. Page 5 of the paper describes an increasing public sector borrowing requirement over the past decade, yet a simple examination of the graph on that page shows that the public sector borrowing requirement has fallen during the past 10 years. It may be that the secretariat has expressed its conclusion loosely. It would be warranted in describing an upward trend in public sector borrowing requirement as a proportion of gross domestic product, but if that was its intention it should have written so, for in fact the public sector borrowing requirement has fallen from 5 per cent of GDP in 1976 to a little over 4 1/2 per cent in 1986. The same graph shows also that the public sector borrowing has fallen from over 7 per cent in 1983-84 to around 4 1/2 per cent now-a sharp fall during a period of only two years-so it is clear that even if it was talking about an upward trend during the past 10 years, that trend has now been reversed. The secretariat seems to be discussing a problem which might have been identified a couple of years ago, but for which the crisis, if ever there were one, is over. The graph shows also that the Commonwealth deficit as a proportion of GDP has fallen from around 4 1/2 per cent in 1983-84 to just over 2 per cent in 1985-86; that is, the Commonwealth's own deficit has been more than halved as a proportion of GDP during the past two years. The secretariat is therefore addressing a problem which has already been brought under control. The principal concern of the paper is the growth of public debt. Other things being equal, it is obviously desirable that the debt be decreased because that reduces the drain on the Budget for interest payments, yet public sector net debt is lower now than it was in the 1960s and much lower than it was in the 1950s. The paper shows that net public sector debt is now only at the same level, as a proportion of GDP, as it was in 1969; that is, about 34 per cent. The major part of the public sector debt is that of the Commonwealth, so it is worth recalling that Commonwealth debt was 120 per cent of GDP in 1950, yet at that time there was little questioning of the issue because it was regarded as having been essential borrowing during the war. By 1960, Commonwealth debt had fallen to 63 per cent of GDP; by 1983 it was down to 24 per cent; and by the end of June 1985 it was 27 per cent. So it has fallen from 120 per cent in 1950 to 27 per cent now-a massive reduction of about 75 per cent. The small recent increase is clearly no cause for alarm when looked at in the context of the whole post-war period in Australia. The recent increase was due to the fact that there was increased borrowing during the recent recession, which was the most severe for 50 years. The recent increase in borrowing was clearly necessary as a counter-cyclical measure because fiscal policy was being used for stabilisation. Now that the economy is recovering the extent of borrowing can be reduced, and that has been happening. The EPAC secretariat paper shows this. Net public sector debt in 1968-69 was 34 per cent of GDP and in 1985-86 it is still 34 per cent, therefore the alarmist tone of the paper is entirely unjustified. A similar conclusion can be drawn by the figures presented on the primary public sector borrowing requirement, which is public sector borrowing less net interest payments by the public sector. In 1985-86 this was estimated to be down to 0.9 per cent of GDP; that is, net borrowing after deducting interest payments is now less than one per cent of GDP. To demonstrate the alleged seriousness of the problem the secretariat makes some hypothetical estimates using various hypothetical economic growth rates and interest rates, yet none of those examples examines the situation which has existed for 10 of the past 15 years when real interest rates were less than 2 per cent. In fact, for much of that period real interest rates were negative. That may not be desirable for lenders, but the fact is that for five or six years the real bond rate was less than zero and for 10 or 11 of the past 15 years it was less than 2 per cent, yet the secretariat did not bother to make estimates for a zero or 2 per cent real interest rate scenario. Perhaps it thought that such low real interest rates would not recur. It acknowledged that interest rates overseas are critically important to the level of interest rates in Australia, yet failed to mention that actual interest rates are falling steadily overseas and real interest rates with them. Real rates of interest on go-vernment bonds are still above 2 per cent in major countries, but they can be expected to fall as low inflation rates are maintained and financial market expectations that low inflation will continue are strengthened. One of the principal points of the EPAC secretariat is that high interest rates are one of the principal causes of high debt servicing costs at present. That is certainly true, but there are several ways of reducing interest rates, and it examines only some of them. Interest rates can be reduced by sustained reductions in the rate of inflation, through the decline of interest rates overseas, through relaxing monetary policy or by reducing government borrowing, yet the role of monetary policy in the setting of interest rates was not even discussed in the paper. The paper argues that reducing the public sector borrowing requirement will lead to reductions in the rate of interest. That was the orthodox view during the Fraser years as well, but neither in the Fraser years nor in the past couple of years has the evidence confirmed that hypothesis. For example, between 1983-84 and 1985-86 the public sector borrowing requirement has been reduced from about 7 1/2 per cent to 4 1/2 per cent, yet interest rates have risen. Treasury 26-week notes were yielding 11.7 per cent in June 1984 and 17.8 per cent in January this year. The reason is that the stance of monetary policy is more important than the extent of government borrowing. The same inverse relationship between the deficit and interest rates occurred in the early 1980s, yet some ideologically blinkered observers still refuse to accept the fact. Perhaps most important of all, the EPAC secretariat paper neglects international comparisons. When the Australian situation is put in the international context, a quite different light from that articulated by the secretariat is thrown on our experience. The OECD has recently published a special report on the role of the public sector which puts the Australian experience into perspective. That report shows that Australia has one of the smallest public sectors in the Western world as a proportion of GDP. The Australian public sector as a proportion of GDP exceeds in size only that of Spain, Japan and Iceland. In 1982, the level of general government expenditure was 36 per cent of GDP in Australia, compared with an average of 47 per cent for the whole of the Western world. Even the United States of America has a larger public sector than Australia and equivalent figures for comparable countries are all higher than ours. Australia's public sector is one of the smallest of all rich countries. Secondly, Australia is also notable for having the lowest level of transfer payments of any Western country. Australia's social security system has been made to be one of the poorest in the Western world by 30 years of conservative rule. Thirdly, government investment has stagnated in Australia. Fourthly, and perhaps most importantly for the purposes of the EPAC secretariat paper, general government gross debt in Australia is amongst the lowest of Western countries. That being the case, the alarmist tone of the paper is completely unwarranted. Also, the level of debt in Australia has fallen sharply. It is true that interest rates are high at present but, as I have emphasised, there is every reason to believe that they will continue to fall as interest rates overseas fall. So in the context of international comparisons Australia has no need at all to be concerned about the general level of public debt. I want to make one final fundamentally important point. There is a tendency in Australia to neglect the contribution made by public investment to the rate of economic growth. Investment is essential to the growth of any country or business and countries and corporations everywhere borrow in order to invest. So do households, of course. When people want to build a house, they have to borrow to do so. The same principle applies to government. It is entirely logical for governments to borrow to construct roads, dams, electricity generators and communications because such infrastructure investments contribute to future income growth. All Western governments borrow to pay for capital works, but Australia does so to a considerably smaller extent than the OECD average. That is one reason why it should be increased. Mr DEPUTY SPEAKER(Mr Blanchard) —Order! The honourable member's time has expired. Mr ALDRED(Bruce)(11.52) —In the debate on the Supply Bills, I wish to address my remarks to the matter of illegal immigration in Australia and the fact that the elimination of that trade is not being properly tackled because of the lack of resources being given by this Government to the Australian Federal Police and to the Department of Immigration and Ethnic Affairs. I also wish to deal with some of the other ramifications of that in relation to social security payments and other areas of expenditure. In early 1984 the commander of the eastern region of the AFP directed that activities of the AFP in that region should cease in relation to seeking out and apprehending prohibited non-citizens. That activity had been carried out up until that time in conjunction with the Department of Immigration and Ethnic Affairs. As part of that direction the dedicated squad which had been specifically used for some time to pursue and apprehend illegal immigrants, or prohibited non-citizens, as they are called, was disbanded. Similar activities in other regions of the AFP also ceased, although the other regions did not have the dedicated squad of the eastern region. The eastern region has to cover Sydney, and in particular the port of Sydney, which is the major entry point for prohibited non-citizens in this country. Up until this time AFP officers in the eastern region had been apprehending approximately 1,000 prohibited non-citizens annually in conjunction with the officers of the Department of Immigration and Ethnic Affairs. A large number of successful prosecutions subsequently emanated from the arrests. It is interesting to note that although it is still possible technically to prosecute prohibited non-citizens when they are illegally in Australia, the practice at the moment is not to enforce such prosecutions, and the Department of Immigration and Ethnic Affairs tends to take the easy way out and simply apprehends them where it can and deports them. On current information it appears that we have some 50,000 to 60,000 prohibited non-citizens. As one would expect, the greater number of those people are in Sydney and Melbourne. On the estimates of some people, it may well be that that figure is quite conservative, because, as I pointed out, since early 1984 the AFP has ceased its specific activities in this area. Those specific activities have ceased very much at the behest of the policy of the government of the day, where it is decided that the AFP will not pursue that matter. It is also well known that prohibited non-citizens are a major factor in defrauding the social security system, and of course they are significant recipients of both unemployment benefits and similar related benefits. Intelligence estimates show quite clearly that a number of prohibited non-citizens are also significantly engaged in organised crime. The degree to which they are defrauding the social security system is open to debate. Evidence placed before the Joint Select Committee on an Australia Card showed very clearly that there were differing interpretations of the degree to which social security fraud was being taken advantage of by prohibited non-citizens. There was a marked degree of difference between the material put forward to that Committee by the Department of Immigration and Ethnic Affairs and the Department of Social Security. Notwithstanding what the reality might be, there is still no doubt that we face a significant problem with the defrauding of social security expenditure by prohibited non-citizens. We have a further quite serious problem with this group of people. That relates to the fact that the British are leaving Hong Kong in 1997. Because of that we are, through various means, seeing a movement of Chinese people from Hong Kong to Australia. Earlier this year we had cases in the media of Chinese jumping from ships and swimming ashore in Sydney. The media also highlighted a racket involving the production of false travel documents for those wishing to move from Hong Kong not only to Australia but also to the United States of America. There is no doubt that we are going to face a very significant problem with the movement of people out of Hong Kong to Australia and other places. In many cases when Chinese prohibited non-citizens have been apprehended by authorities they have indicated that they are paying up to $HK30,000 to buy illegal passage to Australia. The problem is particularly acute in Sydney because the lack of security surrounding docking facilities enables people simply to walk off the ships and then to be accommodated quite comfortably in the local Chinese community. There is no doubt that elements of the Chinese community in Sydney have been quite happy to absorb those people and find them employment. The great disadvantage that prohibited non-citizens face in that situation is that the threat of exposure makes them very vulnerable to exploitation in that area and they take below award wages. They are also most reluctant to go to the authorities. Because of the policy the Government is following in not actively pursuing the illegal immigration trade, the AFP in the eastern region covering Sydney is now specifically directed not to seek out prohibited non-citizens, but if in the course of other duties and other investigations they should happen to come across a prohibited non-citizen, they are to hand him over to officers of the Department of Immigration and Ethnic Affairs. We know that the Department of Immigration and Ethnic Affairs has quite solid information as to the whereabouts at the moment of some 600 prohibited non-citizens in Sydney. As they do not have the investigative resources to properly follow through and apprehend those people, by and large that community of illegal immigrants in Sydney at the moment is going largely untouched. The same is true of Melbourne and some other cities, but of course the dimension of the problem is much less in those cities. The level of illegal immigration in Melbourne and other capitals is less than it is in Sydney. Since the AFP has been relieved of the responsibility of pursuing the illegal immigration trade and the responsibilities in this area have been handed over to the Department of Immigration and Ethnic Affairs, public servants, untrained in this area of investigation and enforcement, are attempting, when they have the time from their other duties, to carry out these investigations. This has often led to quite unpleasant consequences. In fact, there have been several instances in Sydney of public servants from the Department of Immigration and Ethnic Affairs being assaulted by people such as Tongans and Fijians when those officers have attempted to apprehend them. The unemployment situation is worsened by the illegal immigration trade being left largely untouched by this Government. As everybody is well aware, we have a significant problem in this area and have had for some years. There can be no doubt that the magnitude of that problem has been worsened by the fact that this Government is following a policy of not pursuing illegal immigrants. That makes the unemployment problem much worse. Hygiene, simple medical and health standards, is another area of concern. Obviously prohibited non-citizens coming to this country are not given the degree of guidance and instruction that normal immigrants are given. When they come from the more depressed parts of the world they can often bring with them particular difficulties. These people are often accommodated in sub-standard dwellings, but they cannot bring that to the attention of the appropriate authorities because that would reveal their status as prohibited non-citizens. It is also of concern that in October 1985 the then Minister for Immigration and Ethnic Affairs very clearly laid down directions to the effect that the entry of prohibited non-citizens was to be cracked down on and that those who were already here were to be deported. The paradox with that situation is that, as there has been no direction to the AFP to properly pursue this area and as it does not have the resources to do so, that directive issued in October 1985 has for all practical purposes not been brought into effect. Even the Department of Immigration and Ethnic Affairs does not have the resources or the trained personnel to properly follow that matter through. Despite that directive from the Minister in October 1985 that the matter should be followed through and pursued, nothing of any significance is happening. In fact, the problem is getting worse. We have seen recently in Sydney mass attempts by Fijians, for instance, to enter this country by stowing away on cruise ships. Instead of the AFP resolving that problem, it had to be handed over to the New South Wales State Police and to Australian Public Service members who are not really trained or equipped to handle this particular problem. The Chinese coming out of Hong Kong is also a matter of concern. We have there a very real problem which we share with the rest of the Western world. As part of that exodus of Chinese from Hong Kong, both legally and illegally, we are seeing the steady movement of Triad assets and people out of Hong Kong to various places around the world. A major problem results from this, and it already exists in a number of United States west coast cities, Canada, parts of Western Europe such as Amsterdam, and the United Kingdom. There can be no doubt that that same problem must now pertain to us, yet because of this lack of investigative effort by this Government in this area that problem is going unchecked. I suggest that this may be one of the more serious consequences of the problem of illegal entry to this country not being properly pursued. I conclude my remarks by saying that I think the Government again has to look very closely at this area. That the Government is not properly pursuing this matter is a matter of severe concern. Since the AFP's responsibility in this area was removed in 1984 nothing of any consequence has happened. The great body of prohibited non-citizens in this country is largely going untouched, and where something is being done it is being done by people who are not trained to do it. In conjunction with that we are seeing a further erosion of the position of the Australian Federal Police as a national law enforcement body. That is also, of itself, a matter for considerable concern. If we do not take up the responsibilities that must be properly exercised not only are we going to see a worsening of social security fraud-certain aspects of the unemployment problem-but also, I suggest, in relation to illegal criminal activities, particularly with the triads coming out of Hong Kong, we will be building up for ourselves for the future a very major problem. Mr HOLLIS(Throsby)(12.07) —I rise to speak in this cognate debate on some of the provisions of Supply Bill (No. 1) 1986-87 and Supply Bill (No. 2) 1986-87. In Schedule 1 of Supply Bill (No. 2) I notice that funds will be made available for the construction of a grain handling terminal at Port Kembla. Under the steel industry plan the Federal Government will make a contribution of something like $18.7m to the grain handling terminal, now under construction at Port Kembla. It is a project that is welcomed by all the members who come from the mighty Illawarra area. We are following this matter very closely and we are very pleased about it. One aspect that concerns me a little is that for the grain handling terminal at Port Kembla to be successful and for the port of Kembla to reach its full potential as an export port it must have adequate infrastructure. Although at the moment the Maldon-Donbarton rail link is under construction, it has long been my belief that there has to be an adequate road network there. I have recently seen reports that a road through Calloola Pass, which is just outside Albion Park, should be constructed. I believe that by constructing that road we will see the port of Kembla reach its full potential as an export development port. I turn to Supply Bill (No. 1). I note that under the Department of Arts, Heritage and Environment allocation $6,537,000 has been allocated to the Australian Archives. It is my honour to be a member of the Advisory Council on the Australian Archives with Senator Reid from another place. We represent the Parliament on that Council. It has long been felt that the Australian Archives wants to improve its public profile. Those who work at the Australian Archives and those of us who are on the Council feel that it is very important for the Australian Archives to improve its public profile and also to improve the services to government and the public throughout Australia. It is very difficult for the Archives to achieve this public profile, especially here in Canberra. There is a lot of public interest in the Archives. For example, last Sunday, May 18, people had the opportunity to look behind the scenes at the Archives repository in the suburb of Mitchell here in Canberra. I believe over 500 people took advantage of that opportunity. Last Sunday, as honourable members may or may not be aware, was International Museum Day. Mr Carlton —We all know that. Mr HOLLIS —Of course; as the honourable member said, we all know that. Although the Archives is not a museum, as an act of consensus, I suppose, or of solidarity with the museums, the Archives opened its doors on that day and it had over 500 visitors. These visitors got a good idea of how the holdings at Mitchell can be used by the public. They also saw some interesting material on display. This reinforces my belief, as I have said previously in this chamber, of the importance of the Archives having a truly national public presence in Canberra in an accessible public building which Australians can use for the full range of purposes in seeking access to government records, whether that involves exercising their rights, or research, recreation or general interest in our national heritage. This Government has the construction of such a building under consideration and I hope the time will soon come when this exciting project becomes a reality. In terms of proper housing of national institutions, this most significant gap remains, and I firmly believe that the Government should be moving to try to fill that gap. Turning to another matter under the Supply Bill (No. 1) 1986-87, I note under the Department of Foreign Affairs that just over $6m is allocated to international organisations. Australia has always played a significant role in international organisations and I hope that that continues. We played a role in the old League of Nations. Indeed, we played a role in the formation of the United Nations, and in some of its bodies or associated bodies, such as the United Nations Educational, Scientific and Cultural Organisation, the International Labour Organisation and various others, Australia has always played a significant role. International organisations are often very convenient whipping blocks when governments or individuals do not get their own way. UNESCO is under considerable attack at the moment. UNESCO came into being in November 1946 with the objective of promoting peace and security through international collaboration in education, science, culture and communications. As I said before, Australia played a significant role in the founding of UNESCO and has always been a most active participant in this world body. One of UNESCO's major achievements has been the establishment of a world forum for the discussion of global problems. These problems can range over whole fields, be they problems in education, science or culture. It was my privilege last year to attend an international meeting of UNESCO dealing with adult education. I found that of great benefit. Australia, like many countries, has profited from UNESCO by contributing to the development of solutions to a wide range of problems of interest not only to Australia and government departments but also to professional bodies in Australia and to some non-government organisations. Another important role UNESCO plays is that of building bridges between countries, especially in this area and the Asia-Pacific region. These bridges help overcome our geographical isolation and generally further our foreign policy interests. Criticism of UNESCO has been running for the last couple of years. Much of it is very ill-informed and misguided. I do not believe that in Australia the debate on UNESCO has been helped by a media campaign of disinformation and, indeed, attempts to destabilise UNESCO. In many aspects of international affairs we do not get a very good coverage in Australia of UNESCO's activities, and the reports I have seen have been fairly biased. Over the last couple of years we have had the example of first the United States of America and then Britain withdrawing from UNESCO. The United States has withdrawn from international organisations before. It withdrew from the ILO a few years back, but it has now rejoined. I was particularly disappointed that Britain, which played such a leading role in the foundation of UNESCO-one of its citizens was the first Director-General-should first of all give notice and then withdraw from UNESCO. Of course, there will be pressure on Australia and other countries to follow suit. Indeed, in this chamber over the last couple of months I have heard such calls from some members of the Opposition. There was such a call in a newspaper article recently, which I answered in this chamber. My answer did not get any publicity but the attack on UNESCO in the newspaper article did. The honourable member for Bruce (Mr Aldred), who preceded me in this debate, made a fairly scathing attack not only on UNESCO but also on the United Nations. I believe it is a great pity that one of those leading the campaign to have countries withdraw from UNESCO and thus attempting to destroy this important world body is a former Australian ambassador to UNESCO, Professor Owen Harries. He now occupies his time with a very right wing American organisation called the Heritage Foundation. The Heritage Foundation goes under the euphemism of a `think tank' but it is an extremely right wing organisation. Among its claims to fame are that it supported totally Ian Smith's campaign in Rhodesia before it became Zimbabwe, and it is a great protagonist of the concept of preserving South Africa as a white-supremacist state. UNESCO provides funds for projects and the moneys allocated-- Mr Peacock —You realise that Professor Harries left the Heritage Foundation nearly a year ago. You are as ill-informed on that as the rest of your mates. Mr DEPUTY SPEAKER(Mr Mildren) —Order! The honourable member for Kooyong will cease interjecting. Mr Peacock —He ought to be up to date if he is going to besmirch the character of that man. Mr DEPUTY SPEAKER —Order! Does the honourable member for Kooyong defy the Chair? Mr HOLLIS —I am very pleased that the honourable member for Kooyong interjects, because I pay him a compliment for his strong support of UNESCO and, indeed, his comments when the United States withdrew from the ILO a few years ago. Until quite recently Professor Harries was still on the payroll of the Heritage Foundation and the damage he did there and the role of the Heritage Foundation most certainly has not changed whether he is still there or not. Mr Peacock —On a point of order, Mr Deputy Speaker: I am a great admirer of both the Heritage Foundation and Professor Harries. I am not going to allow these sorts of criticisms and besmirchments to be made without at least putting that on the record by way of a point of order. Mr DEPUTY SPEAKER —Order! There is no point of order! Mr HOLLIS —I am pleased that the honourable member for Kooyong has put on the record his support for the Heritage Foundation. Having said that, maybe my admiration for him will not be quite so fulsome as it has been in the past. Over the last few years many Australians have participated in UNESCO activities overseas. Their participation promotes Australia overseas as a source of expert knowledge on a variety of technical and other issues. It enables experts from different countries to have mutually beneficial links with each other and it generates ideas for further development in Australia. I suggest that the good will generated is really immeasurable. Many of UNESCO's educational, scientific and cultural programs are acknowledged around the world as irreplaceable. Some of the criticism in the United States leading up to its withdrawal focused on the future inability of United States scientists to collaborate with colleagues overseas through UNESCO and to have access to basic research data. For these reasons the United States has decided to remain on a number of UNESCO sponsored bodies. One body which I happen to know is still a member, because its delegate attended a lunch which I also attended, is the Intergovernmental Oceanographic Commission. The United States is a member of this body despite its withdrawal from UNESCO itself. As I have said, Australia's membership of the organisation and its sponsored bodies has been rewarding. We pay just over one per cent of the total UNESCO budget, but the returns from our involvement are substantial. Technology transfer opportunities; the exchange of scientific and technical information; and the increase in community understanding of cultural heritage, discrimination and the precarious state of our biosphere are all invaluable benefits of our UNESCO membership. Furthermore, participation in UNESCO programs, especially in our region, enables Australia to develop in practical ways its political objectives of greater involvement with the region and the pursuit of our wider foreign policy goals. As you will be aware, Mr Deputy Speaker, at the last general conference the Australian Ambassador to UNESCO, His Excellency Gough Whitlam, was appointed to the Executive Board. One thing that has concerned me since the Ambassador has been appointed to the Executive Board is that no back-up staffing resources have been made available. I know that we are in a period of tight budgetary constraints, or restraints, but I think at the very least, as the Ambassador, the head of our delegation, is now on the Executive Board, he needs one full-time person working out of the Australian National Commission for UNESCO. I hope that either the Minister for Education (Senator Ryan), who administers the National Commission or, indeed, the Department of Foreign Affairs will look quite closely at this question. If we are to do our job effectively on the Executive Board, I believe that we have to have the resources to do it. At the last general conference Australia, after some very effective lobbying, moved out of the Western European and Others group at UNESCO and into the Asia-Pacific group. This will become effective from the next general meeting, which will be in 1987. It was not easy to achieve this change because in some parts of this region Australia has a degree of poor credibility. Australia needs to be seen to be active in the field that UNESCO covers-the field of education and science-and we must be active in this region. This need not mean our spending a lot of money. I am sure that would make the Minister for Finance (Senator Walsh) very happy. Rather, it will mean persuading or perhaps encouraging universities and others to run seminars and arrange exchanges with experts from these areas which would bring people from the Asia-Pacific region on educational, scientific or cultural visits and, indeed, enable Australians to visit that region. I commend these Bills to the House. Mr McVEIGH(Groom)(12.24) —I support the second reading amendment in relation to Supply Bill (No. 1) moved by the honourable member for Mackellar (Mr Carlton). In supporting that amendment, it is interesting to note that the refreshingly chill winds which blew across Canberra last week with the candid remarks of the Treasurer (Mr Keating) about the state of our economy were welcomed indeed. He set out the dire position of Australia as a trading nation and, at the same time, made all Australians painfully aware of how important it is and will continue to be for all of us to work together to revitalise a competitive economy. For too long we have been cuddled into the safe, secure feeling propagated by the Treasurer that we should wait for the J curve to rise and sweep away our major problems. However, with the Treasurer's remarks of last week, this dream has been shattered and the cold reality of our position as a nation with a potential Third world economy has been realised. It is with no great relief or pride that I make these remarks when addressing the Supply Bills. As a farmer and a representative of a provincial city, I see every day the effects on our rural communities of lower commodity prices and loss of markets. I also witness the consequential effects this has on our youth who are willing but unable to find permanent employment. Like many others, I have spoken frequently on the theme of getting our people, our businesses and our government working together as one so that we can prosper and grow as a nation. It is only when we all work together that we will be able to take our place alongside other major trading nations. If there can be a silver lining in the dark news of our current account deficit, it must be a signalling of change in the attitude of Ministers of the Labor Government towards a more fiscal approach in budgetary policy. This is something that the coalition and business leaders have been calling for since the infamous J-curve failed to rise above the horizontal baseline of the economic graph. There is even a hint from the Government side of a realisation that something must be done to provide for more flexibility in our labour market. The acknowledgment that State governments must also take some responsibility for reining in expenditure is particularly welcome. However, the union movement's push for superannuation and productivity increases will remain intact. Does this entrenched attitude towards the unions and their role in our economic recovery bear questioning? Whilst I agree that the average wage and salary earner should not be made to bear the whole burden of our past economic folly, I feel that business, and especially our small businessmen, have been victimised for long enough. All of us must be willing to work together to turn our economy around, out of the red and into the black. We can begin doing this by buying more of our Australian-made products instead of sending our hard earned income to an overseas country in the form of profits. This would apply not only on the individual level but also on business and government levels. A reminder by the Government via an advertising campaign to buy Australian-made goods would call attention further to our united responsibility to keep our people in jobs and our profits where they belong-at home in Australia. The Government also needs to create a more favourable internal environment which would encourage our offshore companies to relocate back to Australia, particularly in Tasmania and Queensland. The main reasons for their locating out of Australia were the lower tax charges in other countries and the lower and more flexible wage systems. I realise that the Government is in a dilemma in this area because of a general reluctance on the part of business to expand operations, boost productivity and hire additional staff. This reluctance can be traced back to a reliance on monetary policy which has driven up interest rates and caused so much uncertainty in the market-place. However, it appears that the proposed summit, or whatever the Government is going to call it, will address these issues on a tripartite basis, which is encouraging at least. State governments must also make a critical appraisal of their capital works programs and overseas borrowings in order to cut back on expenditure. The Treasurer has already warned of the probable cut in funding for States at the next Premiers Conference. We must have a balanced approach in the call to make sacrifices in our spending habits. As I stated earlier, it is not up to wage and salary earners alone to bear the brunt of cutbacks in expenditure. If we are all to work to make our economy more competitive, it is necessary for all of us to work in whatever capacity we have. I refer to those who are un- able or unwilling to work, those with little or no skills and those who have found it too disheartening to go out and find a job-any job. Mr Fitzgibbon —Shoot them; that's your philosophy. Mr Ian Cameron —Good idea. Mr McVEIGH —I want to be dissociated from that inhuman, infamous remark of a Labor member. It belittles him, his Party and those associated with him. Mr Fitzgibbon —I take a point of order. I said: `Yes, your philosophy is to shoot them'. The honourable member for Maranoa said: `Good idea'. Mr DEPUTY SPEAKER(Mr Mildren) —Order! There is no point of order. I ask the honourable member for Hunter to cease interjecting so that he will not get himself into that sort of trouble. Mr McVEIGH —Mr Deputy Speaker, I thank you for telling the whole of Australia that the honourable member is a bit of a fool. Mr Fitzgibbon —I take a point of order. Everyone in this House would know that a test of mental ability between the honourable member and me would prove my superiority. Mr DEPUTY SPEAKER —Order! There is no point of order. Mr McVEIGH —Obviously the honourable member for Hunter is a bit sensitive about his mental capacity. We can understand why. The 600,000 unemployed people should also contribute to making our nation a country of workers, not of loafers and down-and-outs. Recently a program called Workfare has been established in several States in the United States of America. The concept behind this scheme is to make people work for their welfare cheque. I know that this has been talked about periodically by everyone concerned about our unemployment problem. There are arguments for and against such a proposal. Surely it is about time that we started getting serious about doing something positive about this problem and understanding the traumatic and agonising experience of people who just cannot get a job. Are we not concerned about them? Are we not interested and are we not prepared to offer them a little guidance and encouragement? If the unions could be convinced that this measure would be seen as being temporary and not permanent surely they-and even the honourable member for Hunter, with his limited ability-would rethink their opposition to the scheme of giving employment to people. This proposal does not want to take advantage of cheap labour but rather make the unemployed feel useful to the community. I am concerned about those unemployed people and want to make them feel part of the wider community so that each day they have something to do and have something positive to offer and contribute to the good of all. As the honourable member for Denison (Mr Hodgman) knows only too well, the greatest indignity that a person can suffer is not to have a job. A day's work would give the unemployed pride and dignity and, most importantly, it would give the taxpayer a feeling that he is getting value for the tax money he pays out for social security. So many areas in our cities and towns are crying out for additional hands to help out. Our hospitals are hopelessly understaffed. There is plenty of work there in repairs and maintenance of grounds. Our community services are facing a rundown. The petty crime and burglary rate is increasing rapidly for the simple reason, Mr Deputy Speaker, as you and I know-surely the honourable member for Hunter would know this-that if people are idle they will have more time to get into trouble. I want to give them something to do so that they keep out of trouble. The community employment program, for all its value and worth, does not go far enough to get people where the needs are-in our hospitals, our institutions for the handicapped and disabled-or helping out with those with drug or drinking problems. While I feel strongly that the CEP has been a great success we could expand this concept to help others dependent on handouts for their living. As I stated earlier, there are over 600,000 people or 8 per cent of our population in this position. Surely the Hawke socialists have no great pride in that. Surely they share my concern and agony at the fact that 600,000 people do not have jobs. Mr Conquest —We do. Mr McVEIGH —I am delighted that the honourable member for Hinkler dissociates himself from the remarks of the honourable member for Hunter. The honourable member for Hinkler is worried and concerned about those 600,000 people who do not have jobs. I am delighted to be associated with a man of the calibre of the honourable member for Hinkler and dissociate myself from the honourable member for Hunter, who has no empathy with or sympathy for the 600,000 people. His Government is denying them a job. Should we not give them a chance to feel that they are contributing to the well-being of our nation, not just being takers? Instead of punishing them, as the honourable member for Hunter would want to do, for being poor, unskilled or unwanted the members of the Liberal Party and the National Party want to make them feel worth while and give them dignity. It is our responsibility as a nation to help the unemployed gain self-esteem, confidence and a chance to be responsible for themselves and their families. We must learn that it is up to all of us to pull our weight and not depend on taxpayers to do it for us. Taxpayers are like everyone else. They work to support their families in the best style that they can afford. They want others to do the same. Taxpayers, business and unions alike want to feel safe and secure that their future prosperity can be assured. In calling a mini-summit-or whatever the Prime Minister (Mr Hawke) during his radio telephone hook-up the other morning told Government members to call it-the Government has provided another opportunity to bring unions and business together to discuss these vital issues. Please, let us not forget the farmers. It could be said that the results of this talk will influence how we see ourselves as a nation and our position in the world context well into the next decade. Australia is faced with some tough problems. We cannot afford to shirk the responsibility of making the hard decisions necessary and adhering to them. We must be tough; we must be honest. We must have a political and social philosophy and stick to it because if we do not we will saddle our children with a national debt that they will not be able to repay. Currently our overseas debt, thanks to the policy of the Hawke socialists, is in the order of $70 billion. Mr Ian Cameron —What is the export rate? Mr McVEIGH —I am glad that the honour- able member for Maranoa has raised this point. It takes 14 per cent of our exports to pay the interest component of this debt each year. This growing debt surely needs to be controlled. That 14 per cent is for only the interest component. That does not include paying back the principal. It is an ominous thought that each child born in Australia has a debt of $4,450 over his or her head. Mr Deputy Speaker, how do you think I felt at 28 minutes past one last Saturday morning when my first grandchild was born-a beautiful little girl called Anna Kaitlyn. I am concerned that that five pound one ounce baby, because of the Hawke socialist policies, has a debt of $4,450 on her head and that, according to recently released figures, every Australian has a private debt of $7,900. Would any grandfather not be worried and concerned about her when she already has that debt on her little shoulders? This makes the national consumer credit bill about $59 billion. That is just private debt associated with government debt. Let me repeat those figures. The debt on every child born is $4,450 from the Government plus a private debt, according to statistics released today, of $7,900. Mr Hicks —They will never pay it. Mr McVEIGH —As the honourable member says, they will never pay it back. How the hang have they any hope under a do-nothing handout mentality Government? Quite obviously, as the polls indicate today, people are sick of that. They want us to get back into government. We will make the honest and tough decisions. We will remove the debt and get Australia back where it should be-in credit. Mr McGauran —Your son and daughter-in-law can be particularly proud of you. Mr McVEIGH —Of course, she will always be proud of me. We all understand that. Predictions indicate that Australia is about to move into a recession, a recession more severe than the market indicates. In effect, we are living beyond our means and sooner or later, as the honourable member for Riverina-Darling (Mr Hicks) said, there will be a day of reckoning. If we do not confront these problems we will witness the continual slide in our living standards. We now have a prediction by the worst Treasurer this country has ever seen, rather than the best. Did he not have the title of the best Treasurer a few years ago? The prediction by the Treasurer of Australia that this country is turning into a banana republic will come true. Shame on him for presiding over that sort of economy! I sincerely do not believe that any of us on either side of this House want to see that occur. I hope that the Labor socialists will show a little bit of intestinal fortitude and get on with the job of governing the country for the next 18 months at which time they will hand the mantle of responsibility over to us for us to treat with the respect it deserves. Mr LAMB(Streeton)(12.42) —It is not often I agree with some of the comments of the honourable member for Groom (Mr McVeigh). However, there are a couple of points which I can start off in a benevolent and bipartisan way by agreeing with. He made a call to all Australians to buy more Australian goods and services. I have to whole heartedly agree. Let me give an example. I have a family of four children. That means that when we go out in a motor car we need six seats. All the passengers should be belted in. However, one cannot purchase an Australian made car with that number of seats. Therefore, I was forced to buy an import-a French car, a fully imported Peugeot-so that my family could travel around. Mr Spender —You were forced to? That is priceless. Mr LAMB —I had already approached the Ford Motor Co. of Australia Ltd. Mr McGauran —How could you afford such a car? Mr Hodgman —A Peugeot socialist. Mr LAMB —I point out for the benefit of all the little smarties in the House that the Peugeot happened to be a discontinued model. It is now three years old. At the time it was only marginally more expensive than five-seater motor cars manufactured in Australia. That car was not a Volvo or a Mercedes Benz which honourable members who are now seeking to interject probably drive. Honourable members opposite are looking around among their friends to count the number who drive Volvos and Mercedes Benz with, perhaps, a BMW thrown in. The point is that I went to the Ford Motor Co. I said: `When are you people going to put an extra 10 inches or so in your wheel base so you can fit a third row of seats into one of your Fairmonts, Fairlanes or whatever it is? I did not get a satisfactory answer. The answer was that they were not into that sort of thing. They said: `Mr Lamb, we do happen to import a range of multi-passenger seated vehicles'. These are mainly from Japan. they are van based and seat six or seven people. However, they do not have the passenger safety that goes with a properly integrated motor car which is designed for passengers. I would have thought that if our motor car industry could have produced a satisfactory six- or seven-seater motor car I would have bought it. However, we must recognise that even to make those sorts of changes to the design of a standard model we need to turn out a certain number of motor cars. That requires certain economies of scale which are not available unless we have export markets available to our manufacturers. Therefore, I support the call of the honourable member for Groom for people to buy more Australian made products. Let us recognise, however, that not all commodities are available in Australia and that if we are to build up our economies of scale, our efficiency and our productivity we will still have to continue to import the component parts. We will still have to introduce the machinery and the wherewithal necessary for our increased production. When we examine the profile of imports to this country we should be careful to distinguish between unnecessary perhaps but necessarily straight consumer items and those necessary to build up the productive capacity of this country. I do not hear that sort of simple analysis from the Opposition. I do not hear that sort of call from the Opposition. All we hear is talking down of the economy; trying to blame the worker in this country and blame the Government for matters which are necessarily not all within our purviews-sometimes they are beyond our control. Mr DEPUTY SPEAKER(Mr Mildren) —Order! It being 12.45 p.m., the debate is interrupted in accordance with sessional order 101a. The debate may be resumed at a later hour. The honourable member will have leave to continue his speech when the debate is resumed. Sitting suspended from 12.45 to 2 p.m. Mr HOWARD —My question is addressed to the Acting Prime Minister. I refer him to the fact that the Government has announced today that it will request the Australian Conciliation and Arbitration Commission to reconvene the national wage case after next month's economic summit meeting in order to report to the Commission on the outcome of that summit. In the light of his comments playing down the importance of the summit and stressing the constant communication between himself and the Prime Minister overseas, I therefore ask the Acting Prime Minister whether the Prime Minister has been consulted about the decision to ask the Arbitration Commission to reconvene the case? Will he now agree that the forthcoming summit meeting will be much more important than he has tried to make out and could lead to a significant change in the Government's economic policies? Mr WILLIS —The proposal that the Commission be recalled to hear any outcome from the Advisory Committee on Prices and Incomes meeting in early June was raised by me at last Friday's Press conference announcing the ACPI meeting. There is, of course, no summit, although the Leader of the Opposition used this word in this question several times. It is a meeting of ACPI-that is, a meeting of the Government, the Australian Council of Trade Unions, the Business Council of Australia, the Confederation of Australian Industry, the Australian Council of Professions, and a number of State governments. It will be a round-table discussion and in no way can it be described as a summit. As I said, the prospect of asking the Arbitration Commission to reconvene to hear a report about the discussions from the participants in the meeting, all of whom are at the national wage case, was raised by me at the Press conference. I informed the Prime Minister of that point when I spoke to him on Friday and that point was made in the Commonwealth submission in the Arbitration Commission again today. It remains a valid point that if we are having discussions amongst the parties about the impact particularly of the balance of payments current account problem, anything that comes out of that meeting is relevant to the deliberations of the Commission. Indeed, it is a courtesy to the Commission to enable it to be directly informed about any such outcome rather than leaving it to read about it in the newspapers. I would have thought that that was a thoroughly commonsense thing to do and the Commonwealth believes that it is appropriate. I am sure that the parties at the meeting will have no problem with that. Ms MAYER —My question is addressed to the Minister for Transport. Has his attention been drawn to recent Press reports of the high speed car race entitled the `Capricorn Run' in which the target time for the distance Brisbane to Perth is 29 hours, requiring an average speed of more than 100 kilometres an hour without a break? Given that road crashes cost the economy $3,000m annually and 3,000 Australian lives, what action is possible by Government to prevent this lunacy? Mr PETER MORRIS —I have seen the report to which the honourable member has referred and I think everyone in this House who has seen it would share my sadness that this kind of competition is being promoted. All honourable members would agree that the most horrific social problem in this country is death and casualties on the road. The article to which the honourable member referred was published in the Daily Mirror and was entitled `Brisbane to Perth in 29 hours'. As she correctly said, to achieve that target time would require an average speed in excess of 100 kilometres per hour. That speed could not be achieved within the law and, sadly, the example it sets for young people to emulate is the very thing which is most likely to lead to death or serious injury on the roads. The article goes on to say that most vehicles competing in this race would have as standard equipment radar jammers, radar detectors, citizen band radios and brake light isolator switches, and that some participants have even invested $5,000 to buy infra-red night vision devices which would allow them to run without lights, thereby avoiding visual detection. Mr Goodluck —Who is sponsoring this? Mr PETER MORRIS —It is called the Australian Cannonball Run. I have not got a list of sponsors; I would have to check that. Budget Rent A Car System Pty Ltd appears to have entered a prestige fleet in the race. I will get the honourable member a list of the firms later. This kind of exercise encourages the very antithesis of the things we are trying to develop in young people who use the roads. Rather than developing responsibility, it will encourage irresponsibility; rather than encouraging a cautious safe speed, it will encourage high speed; it will also encourage driving long distances in a fatigued state- Mr Donald Cameron —What are you going to do about it? Mr PETER MORRIS —I am drawing attention to the dangers that are involved in this race, to the very flouting of the law that is proposed in order to achieve the target of this competition, and to the risking of young people's lives that is involved. We, as a government, have given very clear direction and priority to changing community attitudes and behaviour and driver attitudes and behaviour on our roads in an effort to reduce the level of road casualties. Car racing belongs to the race track, not to the highways or the roadways of this nation. I have every expectation that the State police and enforcement authorities will be very vigilant about this exercise. I want to see them do everything they can to ensure that the law is complied with and that the requirements and regulations are followed by the participants. I make one last appeal to those people who are associated with this exercise: Have another think about it, draw back and retire from it, and instead use your resources to encourage people to use the roads safely in an effort to reduce road casualties. Mr N.A. Brown —My question is directed to the Treasurer. In the light of the new, revised submission made today to the Conciliation and Arbitration Commission by the Commonwealth, is an increase in wages of 3 per cent, based on future productivity, presently justified by the state of the Australian economy? Mr KEATING —It is not a new and revised submission and I answered that question yesterday. Ms FATIN —My question is directed to the Minister for Local Government and Administrative Services. I draw his attention to an article on the front page of today's West Australian newspaper, claiming that some city and country shire councils might have to raise their rates substantially because of changes to the arrangements for the provision of Commonwealth general purpose financial assistance to local government. Is the report accurate? Mr UREN —I have seen the article in today's West Australian, plastered right across the front page. It is based on a statement made by the Leader of the Opposition in Western Australia. His statement is wrong in fact. It is an unfortunate article because of the alarm it may cause in local government circles. The Leader of the Opposition in Western Australia claimed that rural councils and even urban councils will suffer reduced grants because of the removal of weightings for sparsity and other factors from the minimum per capita grant provided to councils. Let me make five points: First, local government in Western Australia received $50.33m under the program in 1985-86; it will receive at least $53.85m in 1986-87 and at least $57.23m in 1987-88. Secondly, the methods for distributing funds among councils in 1986-87 will be the same as those for 1985-86. So I do not expect major changes to occur over the next year in the level of grants received by councils, whether in Western Australia or any other State. Thirdly, the removal of weights from the per capita grants is intended to reduce double counting of disabilities such as sparsity of population and distance. These disabilities will be counted under the improved equalisation arrangements. Rural shires and urban councils with higher than average disabilities will receive increased grants. Fourthly, changes to the arrangements for distribution of grants among councils will be phased in gradually over the next five years so as to minimise the effects on councils with high ratable capacity. Fifthly, the methods to be used in distributing grants are to be drawn up by the State government in consultation with local government. Those methods have yet to be developed. It is premature for anyone to say what the effect of the methods will be before the methods are determined. Honourable members know that this matter was debated in the House last night and it received fine bipartisan support. I think that all honourable members who spoke recognised that in a time of tight budgetary policy this Government has given a good deal to local government. I am particularly pleased, and I know my colleagues on the Government back bench have been particularly pleased. Mr Cadman —Not in the west. Mr UREN —For the benefit of the honour- able member for Mitchell, who is parroting that he is not getting a good deal, let me quote from a letter from the President of the Australian Council of Local Government Associations to the Prime Minister, dated 11 April: Dear Prime Minister The ACLGA wishes to place on record Local Government's appreciation of the Government's decision to accept the broad thrust of the Report of the National Inquiry into Local Government Finance and to provide a real terms minimum guarantee in respect of funding for the next two years with the prospect of real growth should the State Governments' recurrent and capital general purpose arrangements provide for such a betterment factor. Your decision on the funding level is especially welcome given the widespread recognition of the fact that the 1986-87 Budget is being framed in a difficult economic climate. That letter was written by the President of the Australian Council of Local Government Associations. I conclude on this point: Scaremongering is cheap politics. The statement made by the Leader of the Opposition in Western Australia was an example of irresponsible politics. Local government generally has been treated very favourably under the new arrangements. I think all members on this side agree with that statement. Mr HOWARD —My question is addressed to the Minister for Employment and Industrial Relations. I refer the Minister to the answer that he gave to my first question, in which he claimed that at his Press conference on Friday he had indicated that the Australian Conciliation and Arbitration Commission would be invited to reconvene after the outcome of the reconvened Advisory Committee on Prices and Incomes meeting-or summit meeting, which I believe is the correct description. I specifically ask the Minister: How does he square the answer he gave to my first question with the following response which appears on page 8 of the transcript of the Press conference, which I understand was issued by his office after the Press conference? In answer to a question the Minister stated: The timetabling of the meeting hasn't been decided yet and the case will probably finish the week after next. So we're not clear at this stage whether the meeting will come before the end of the case or vice versa. How does he square that response with the answer he gave to my first question? Mr WILLIS —Nothing in what the Leader of the Opposition has quoted, of course, contradicts what I said. My recollection is that I also raised the other point that there could be a reconvening of the case if the case finished before the ACPI meeting. Of course, that was not clear at that stage. It is now quite clear that the Commission's case will finish either at the end of this week or early next week. The ACPI meeting will follow that. Therefore, it is appropriate, in the circumstances in which the ACPI meeting comes after the end of the case, that there be a report back to the Commission by the parties involved. As I said, all of the parties involved in the national wage case will be at the ACPI meeting. It is appropriate that they report back to the Commission on the outcome of that meeting. My recollection is that that point was made at the Press conference. I do not have a copy of the transcript. Mr Howard —I seek leave to table the transcript of the Press conference held last Friday, issued by the Treasurer's office. Leave granted. Mr WRIGHT —Is the Minister for Trade aware of a recent sale by the United States of America of 90,000 tonnes of beef to Brazil? If so, what effect will this sale have on prospects for beef exports from Australia? Mr DAWKINS —I thank the honourable member for his question. It gives me an opportunity to reveal some good news as far as the Australian beef industry is concerned. Honourable members will recall that when the Prime Minister was in the United States recently he sought assurances from the United States that, in the disposition of the beef bought in as a result of the whole herd dairy buy-out program, Australia's interests would be taken into account. Under that program and the legislation it was necessary for 90,000 tonnes of beef to be exported. Australia was concerned that this should not be disposed of in a way which would upset our markets. The Brazilians have been seeking some quarter of a million tonnes of beef. It is a market which has not been available to Australia. Indeed, it has been supplied by the European Community. The fact that the Americans have now secured the sale of almost the whole of the amount mandated for export under the dairy herd buy-out program means that markets of interest to Australia will not be affected. It does have another effect as well-that is, the existence of the dairy herd buy-out program was having a depressing effect on beef prices both inside and outside the United States and the announcement of this sale should have a favourable effect on the market generally. Given that half of our beef exports go to the United States and that the result of this sale should see a firming of prices within the United States, this is obviously good news for Australian beef exporters. Mr HUNT —Has the Treasurer affirmed that the deferral of the tax cuts and the productivity superannuation deal will be among the issues to be laid on the table at the planned economic meeting on 5 June? In light of this concern over our alarming balance of trade deficit and our declining economic performance, will the Treasurer also place on the agenda the proposed capital gains and fringe benefit taxes, which are being viewed with extreme alarm, especially by the farming and small business sectors? Mr KEATING —Under the ruse of any decent semblance of argument, Opposition members will always hop in to protect a bit of tax avoidance. That is what they are about. The concept of taxation loopholes, which for 20 years they allowed their supporters to use, is so deeply ingrained in the psyche of their political analysis that they can concentrate on no other thing. The fact of the matter is, as the Deputy Leader of the National Party of Australia would know, that all existing farm properties are exempt from the capital gains tax. It does nobody a service to spread the notion that they are not exempt. Mr N.A. Brown —The owners might be, but the properties are not. Madam SPEAKER —Order! Mr N.A. Brown —If the-- Madam SPEAKER —Order! I warn the Deputy Leader of the Opposition. Mr KEATING —Because of the absence of tax reform or any semblance of fairness in the system in the years of the coalition Government, very steep marginal rates of tax over a narrow income range resulted in massive avoidance and minimisation, particularly in the use of fringe benefits, to enable people to walk around the tax system. Every employee who was not in a position to be able to use these fringe benefits was expected to pay the full going rate of tax while other people could minimise their tax by the use of fringe benefits. What test of public policy morality would let that position obtain? Really, where do members of the Opposition stand on these issues? We know where they stand. They are opposing our measures. The former Treasurer tried to place a fringe benefits tax, which recognises this principle, in respect of the Bowen Basin coal mines, and he failed. This is at least a sensible and decent advance in taxation and public policy. So why attack it on the spurious basis that it is going to be put on the table at the summit-the discussion. Mr Howard —The summit? You can sit down now. Well done! Mr KEATING —No, I am sorry; that was the word the Leader of the Opposition used. I was thinking of the expression used by the Leader of the Opposition. I was going to correct him. Madam Speaker, lest the Opposition breaks into mirth, I was going to correct the Leader's former and repeated imputation on this thing that it was a summit. I had that in my mind and it came out in that context. Let me make this clear: The Deputy Leader of the National Party wants us to put these tax principles on the table in a discussion about the balance of payments. It is very interesting that we have members of the Liberal Party getting up in this House, worrying about tax cuts and saying, `How dare the Government even consider some deferral of tax cuts'-while they oppose all the revenue-raising measures to fund them. On any basis of morality or principle, how can members of the Opposition believe that we on this side of the House ought to accept that view? The Opposition has made it clear that it will oppose our tax reform package in the Parliament. However, it seeks to deny to the Commonwealth Government its appropriate role in macro-economic flexibility at any meeting of the parties. The Opposition says: `How dare you, the Government, even consider this question of taxation in the context of the Budget. By the way, we will oppose all the measures but we insist that you give the tax cuts on time'. Really, do Opposition members think that cuts any ice over here? Do they think it cuts any ice with the public to be proposing that sort of thing? I have a regard for the Deputy Leader of the National Party, but it is less than honest to say to me that we ought not to have a capital gains tax on the farm sector when he knows that it does not apply to any existing properties held as of 19 September 1985. The absence of a fringe benefits tax has allowed many taxpayers to slip through their fair and reasonable tax obligations. The Deputy Leader of the National Party wants to try to use the forum of the Advisory Committee on Prices and Incomes meeting, at which there will be a discussion on the macroeconomic influences in the balance of payments, to get this matter considered. I should have thought that, after yesterday's lamentable performance by the Opposition, any cheap attempts to diminish the capacity of the Government to secure a better outcome in the economy on the balance of payments would at least today have been somewhat reduced. We have seen cheap attempts by the Deputy Leader of the National Party to suggest to the Government that we are going to be having some sort of repeat of the 1983 summit when quite clearly the Government has made it very plain that it will be the parties to the Australian Conciliation and Arbitration Commission and the normal members of ACPI who will be involved. Mr LAMB —Has the attention of the Special Minister of State been drawn to suggestions that the Australian Federal Police in the eastern region have been directed not to pursue illegal immigrants? Can the Minister say whether such a direction has been given to the Australian Federal Police? Mr YOUNG —I thank the honourable member for his question. I make it perfectly clear to the Parliament that there has been no direction issued to the Australian Federal Police not to pursue illegal immigrants. There could well have been some misunderstanding on the issuing of the priorities for the Australian Federal Police last year when the Government made drug trafficking and organised crime the major priorities of the Australian Federal Police. That should in no way be interpreted as an instruction or direction to the Federal Police to drop other matters off their agenda. In fact, no such direction has been given. I should like to point out that the Department of Immigration and Ethnic Affairs has the primary responsibility for the location of illegal immigrants. At the time of the issue of this brief, 95 staff in that Department were allocated to the task. The staff of the DIEA are also assisted by the State police, the Australian Federal Police and the Australian Customs Service, all of which have powers under the Immigration Act. There is an excellent working relationship between these three bodies. Further, the Government's activities against illegal immigrants have increased over the past 18 months. Major initiatives to counter illegal immigration were announced in the Federal Parliament in October 1985. Visitors were urged to honour the conditions of their entry permits, not to work, and to leave when their entry permits expired. They were warned that if they overstayed and were located, enforced departure would inevitably follow. There has been a 50 per cent increase in the location of illegal immigrants over the past nine months compared with 1984-85. I should point out that, of course, the objectives and priorities of the Australian Federal Police are not immutable and they recognise the need for flexibility in the short term to deploy resources to the myriad of tasks confronting the Australian Federal Police. This, however, does not mean the wholesale redeployment of scarce resources to other matters which may become the responsibility of the police at any given time. I think it is also important for the Parliament to look back a few years and understand that prior to 1980 a series of actions were taken by the Fraser and Whitlam governments in granting certain dispensations to illegal immigrants in Australia at the time. The last amnesties of 1976 and again in 1980 by the Fraser Government allowed illegal immigrants with specific eligibility to remain in Australia. In 1980, the Fraser Government, with the support of the then Opposition, declared that there would be no future amnesties for illegal immigrants in this country. That policy has been supported, as I understand it, by both sides of the House since that time. Of course, there will have to be greater coverage of those matters in the future as a result of the decision, which people ought well understand, that there will be no future amnesties in this country. As to the specific question and the charge about the direction to the Australian Federal Police, I again reiterate that there has been no direction to the Police to stop pursuing this matter. I understand that in Parliament this morning a matter was raised concerning certain complications that could occur in Australia as a result of the Government of the People's Republic of China in Beijing taking control of Hong Kong in 1997. It was suggested that certain criminal elements from that area may attempt to come into Australia or may have already done so. I can assure the House that matters such as this have received scrutiny and are subject to a certain amount of investigation which is not available to the House at the moment. Mr Cadman —Madam Speaker, I require the Minister to table the documents from which he was reading. Mr Young —Some of it is confidential. Mr CARLTON —My question follows the Treasurer's answer to the question from the Deputy Leader of the National Party of Australia. Is the Treasurer aware that a recent Australian Bureau of Statistics survey of employment benefits showed that over three million or 60 per cent of all Australian employees receive some kind of fringe benefit? Is he aware that 1.1 million receive free or discounted goods and services; 200,000 receive free or subsidised housing; 500,000 receive free or subsidised telephones; 420,000 receive free or subsidised cars or transport; 186,000 receive free or subsidised health insurance; 235,000 receive an entertainment allowance; and 123,000 have their union dues paid totally or partially by their employers? Will all these employees be captured by the Keating fringe benefits tax legislation? Have all these three million people been engaging in tax avoidance? Mr KEATING —I am quite sure that one just cannot suggest that 200,000 people do one thing and another 200,000 do another. Obviously the same people are receiving some of these things. Does that not make the Government's case? Is it not supportive of it? What sort of high moral position could one draw from that? Mr Howard —Are they all tax avoiders? Madam SPEAKER —The Leader of the Opposition will cease interjecting. Mr KEATING —The Leader of the Opposition understands what the Government has said. It has said that, for benefits such as subsidised shopping by retail employees, we have an exemption up to $200 a year. Mr Howard —Like a charity. Mr KEATING —Well, if a charity pays an employee a fringe benefit-- Mr Howard —A clergyman? Madam SPEAKER —Order! Mr KEATING —No; religious groups are exempted. Mr Howard —For private use? Mr KEATING —Hang on; just look. Madam SPEAKER —Order! The Chair has repeatedly asked the Leader of the Opposition to cease calling out across the table. The Leader of the Opposition has to abide by the Standing Orders in the same way as does everyone else in this House. I now ask him to heed the Chair. Mr KEATING —The advent and proliferation of fringe benefits were a blight on the Australian tax system and a blight on Australian society. Mr Sinclair —Ha, ha! Mr KEATING —Opposition members may laugh if that is the level of their judgment about the matter, but why do they think that some Australians, who have no opportunity for these things, ought to pay a full rate of tax, and the tax of others, while other people skate through? It had to be addressed. As I said earlier, with the high marginal rates over a narrow income scale, and with the 60 per cent rate coming in at $35,000, which is about one and a half times average weekly earnings, the fact is that we would have seen much more of it. That is why it is unbelievable that the coalition has said that it will vote against the measures. It is unbelievable that a party which has been so recently a government and which wishes to hold up its head among the parties of the democracies can say that it will oppose a piece of legislation such as this. The Opposition has sunk to a depth that even I thought it was incapable of-and that is a long way down. The way the Opposition is going, we shall need a pair of binoculars to find it. If the honourable member for Mackellar thinks that that recital of the numbers of people who have been able to diminish their tax liabilities in some way stands as an argument against the fringe benefits tax, all I can say is that his rational capability is seriously in trouble. Mr PRICE —Has the attention of the Minister for Sport, Recreation and Tourism been drawn to reports that the South African Rugby Union has proposed an official Wallaby tour of South Africa? Opposition members interjecting- Mr PRICE —Listen and you might learn something. Can the Minister advise the House whether an official Australian or rebel rugby union tour of South Africa will affect Australia's bid to stage the 1992 Olympic Games in Brisbane? Mr JOHN BROWN —I am not surprised that this question has been asked by the honourable member for Chifley. He is a very compassionate man and has long held very strong views on sporting contacts with South Africa. In answering the question, at the outset I pay tribute to the Australian Rugby Football Union. Under successive governments-under Fraser, Whitlam and Hawke-the Australian Rugby Union has assiduously observed government policy in regard to sporting contacts with South Africa. It is a pity that the coalition which now sits opposite does not respect the high moral position that was taken by Malcolm Fraser on this subject. It is a pity that there are some rednecks within the Rugby Union who are trying to undermine the high-principled position taken by Sir Nicholas Shehadie and some of his cohorts vis-a-vis contacts with South Africa. It strikes me as almost perfidious that anybody would contemplate a tour of South Africa, either officially or in a rebel sense, given our knowledge of the inequalities of life in South Africa. Given that the white minority in South Africa enjoy a very high standard of living compared with the very poor standard of living suffered by the blacks, who are the majority of the population, I think one figure is worth citing. The South African Government, almost as an obscenity, spends 2,400 times as much on sport for the white minority as it does on the poor, depressed blacks. That fairly well sums up the attitude to black people in South Africa of the decrepit Botha regime. In regard to the Olympic Games, it is fair to observe that there are 90 votes to be cast at the International Olympic Committee meeting in Lausanne later this year as to the destination of the 1992 Games. Fifteen of those votes happen to be held by black African countries, so it should be fairly obvious, even to the most rednecked of Rugby Union officials, that any decision regarding an official or rebel tour would immediately throw 15 votes out of the window. One can add to them the Eastern bloc and Scandinavian countries, which also hold very strong views on this matter. It is rather strange, therefore, that the Premier of Queensland has joined the hallelujah chorus by suggesting to the Rugby Union that its players should go anyhow and that such a visit would have no effect on the Olympic Games. Of course, it would have a dramatic effect upon Australia's chances. The Lord Mayor of Brisbane, Alderman Sallyanne Atkinson, following the great efforts of her predecessor Alderman Roy Harvey, has made a magnificent effort to establish Australia's bid for the 1992 Games. At this stage Brisbane is neck and neck with Barcelona for the honour. If the selfish attitude in Rugby Union prevails over the more sensible, rational and sensitive people and decides on a tour of South Africa, the sporting public of Australia will be seriously disadvantaged and there will be no hope in the world of Australia having the 1992 Games in Brisbane. I hope that the Australian Rugby Union, in line with its always very principled stand on this matter, will continue to preserve that position and make Australia's chance of getting the 1992 Games very strong. Certainly, the bid put up by the Brisbane City Council in conjunction with the Commonwealth Government and the Queensland Government is entitled to success. Mr CARLTON —My question is addressed to the Treasurer. Now that the Government is seeking to delay this year's promised tax cuts for at least three months, will the Treasurer give an unequivocal assurance that the second round of tax cuts due on 1 July 1987 will be delivered in full and on time? Mr KEATING —Yes, sir. Mr MILDREN —Is the Minister for Communications aware of the concern that has been expressed regarding the timetable for consideration of the new AM/FM radio licence applications? Will he indicate what time frame the Department of Communications is using in the consideration of these applications? Mr DUFFY —In my statement yesterday on the development of commercial television in regional areas I confirmed that television equalisation is the Government's highest priority in broadcasting. In order to ensure that planning activity can proceed in a rational manner, I stated: . . . no new projects will be undertaken until technical specifications for the equalisation program have been completed. This does not mean that no new planning projects will be accepted for, say, a period of three to five years, which I understand has been suggested by some people. Nor does it mean that only projects relating to television equalisation will be addressed in the meantime. A period of perhaps 12 to 18 months is involved, that period being necessary for planning resources to be built up and for key projects already on hand to be adequately progressed. I indicated in the statement that my Department will complete all projects that are currently well advanced. For example, the new uniform inquiry regulations for the Australian Broadcasting Tribunal have been approved by the Executive Council and are expected to be gazetted on 23 May. I am therefore able to proceed to regazette notices for new commercial radio services in Newcastle and Mandurah and public radio services in Rockingham, Western Australia, Rockhampton, Queensland, Whyalla, South Australia as well as self-help Australian Broadcasting Corporation television services in Doomadgee and Dajarra, Queensland. Proposals for other new services will be finalised in the next few months. I also indicated that resources would be devoted to urgent major projects, which, of course, include Band 2 clearance, the ABC second regional radio network and remote commercial television services. On this issue it is essential to recognise that new radio services basically means new VHF-FM radio services. Until the clearance of television services from channels 3, 4 and 5, which make up Band 2, is undertaken, channels are not generally available for expansion of FM radio. Clearly it would be counterproductive at this stage to divert resources from that Band 2 clearance. Honourable members will be aware that new commercial radio services are also the subject of a current study within my Department. The Department has already completed the study on the conversion from AM to FM. Submissions providing comment on that study are due by the end of September. Now that the equalisation decision has been taken, the Department will be in a position to complete its work on options for the future development of commercial radio services. I trust that it is clear to honourable members that, far from the Government wishing to delay the establishment of new radio and television services within the commercial, public and national sectors, the decision will avoid adding to the log-jam that has existed for far too long; it is aimed at ensuring that planning can proceed in a rational manner so that the number of new services will be available as soon as possible. Mr HOWARD —My question is addressed to the Treasurer. I refer again to the Treasurer's frequent expressions of concern about Australia's deteriorating terms of trade, which he acknowledged yesterday had dramatically worsened from October 1985. In view of this, how does he possible justify the fact that the Government's submission to the current productivity hearing before the Conciliation and Arbitration Commission has to date barely referred to our terms of trade, despite the clear link between those terms of trade and the capacity of the national economy to pay any supposed productivity rise? Mr KEATING —It is not true that the submission does not refer to our terms of trade. Today's submission refers to it quite extensively. Mr Howard —Today's? Mr KEATING —Yes, today's submission. Mr N.A. Brown —That is the revised one. Mr KEATING —The honourable member is an industrial relations whizz; he knows all about industrial relations. The Government has always focused on the need to extend this process over an agreed time-table so that the costs to the economy are diminished in the face of the sort of trend in productivity that we have. Of course, that has been occasioned by the levels of growth which have attended this Government's policies. The accord and wage outcomes are part and parcel of that restraint. As we are talking about, and have been from its inception, a 1 1/2 per cent national cost a year and are facing a productivity increase well and truly above that, the arguments implicit in the honourable gentleman's question really do not apply. Dr KLUGMAN —My question, completely without notice, is addressed to the Minister for Communications. Has he noted that another English prince is getting married in a couple of months and that the British Broadcasting Corporation will carry a six-hour cover? In view of the fact that on a previous occasion the Australian Broadcasting Corporation and all commercial television stations provided exactly the same cover of a similar fantastically interesting event for a whole evening, will he encourage some of the networks on this occasion to provide alternatives for those viewers who are prepared to settle for a mention of it in the news programs, or even less? Mr DUFFY —This matter was raised with me by the honourable member for Prospect informally-and with considerably less reverence to me or to the subject matter of his question than he showed today. I must say that it has been my practice over what seems to be an interminable time now of three years to steer well clear of any interference in ABC programming. I would not even dare to venture into making suggestions or using persuasion in the way suggested by the honourable member. I think he fully understands that. However, the commercial stations have a particular concern about audiences and maybe they would take into account the views put by the honourable member today. If he cares to write to them and express his views in the way that he expressed them to me informally, I have no doubt that they might well take account of his concern. Mr WILLIS —Madam Speaker, with your indulgence I wish to add to an answer that I gave earlier to the Leader of the Opposition. I now understand that the transcript of the Press conference in fact does not show my saying that the national wage case could be reopened after the meeting of the Advisory Committee on Prices and Incomes. My recollection may well be at fault in that respect. But let me say that there is no doubt that I did raise the matter with the Prime Minister that afternoon and that the Prime Minister referred to this in his Press conference. Mr Howard —Have you got a transcript of that? Mr WILLIS —Yes, I have a transcript of the Prime Minister's Press conference in Tokyo that he gave that afternoon. At the Press conference in Tokyo on Friday afternoon the Prime Minister was asked: Mr Hawke, will this affect the current national wage case . . .? The Prime Minister said, in response to that question, in part: What Minister Willis was putting- that refers to the phone call that I had with him- was that if something concrete came out of the meeting which could be considered of relevance to the determination by the bench then it may be possible to re-open simply for the process of making the outcome of that meeting known. Of course, that is what is now happening. It is for the Commission to decide whether it reconvenes or not. But there is no doubt that this possibility has been in the public domain since last Friday. If the Opposition is trying to make some point about there being something new, that is not the case. Madam SPEAKER —Order! The Minister is now debating the question. Madam SPEAKER —I call the Minister for Transport. Mr N.A. Brown —Have you read that policy yet? Mr PETER MORRIS —Which one-today's? Madam SPEAKER —Is the Minister for Transport seeking the indulgence of the Chair? Mr PETER MORRIS —Yes, Madam Speaker. The jumbo dropped off the primary industry policy but I cannot tell you what will be delivered tomorrow. Madam SPEAKER —Order! The Minister is seeking the indulgence of the Chair. It will be withdrawn if he does not hurry up. Mr PETER MORRIS —I would like to correct something I said in answer to an interjection in the course of answering the question from the honourable member for Chisholm. Someone interjected and asked who was sponsoring the program. I glanced quickly at the report and mentioned Budget Car Rentals. It appears from a closer reading that Budget Car Rentals has a vehicle which may participate in the event, but it does not indicate that it is sponsoring it. I would like to withdraw that reference. Madam SPEAKER —For the information of honourable members, I present a schedule showing Government responses to House of Representatives and joint committee reports for the period 22 November 1985 to 8 May 1986. Copies of the schedule are being made available to honourable members. The schedule will be incorporated in Hansard. The schedule read as follows- HOUSE OF REPRESENTATIVES AND JOINT COMMITTEE REPORTS-GOVERNMENT RESPONSES FOR THE PERIOD 22 NOVEMBER 1985 TO 8 MAY 1986 AND OUTSTANDING RESPONSES TO REPORTS PRESENTED FROM 1980 Title of report Date Presented Date of Response Response within time specified (a) Aboriginal Affairs (House, Standing) Asbestos mining-effects on the Baryulgil Community... 9.10.84 nrtd(b) No Aboriginal Education (House, Select)... 26.11.85 nrtd No Aircraft Noise (House, Select)... 28.11.85 nrtd No Australian Capital Territory (Joint, Standing) Parliamentary Zone Draft Development Plan... 1.3.84 nrtd(b) No The Murrumbidgee River the A.C.T. Region... 11.9.84 28.11.85 No Australia Card (Joint, Select)... 8.5.86 (c) (c) Environment and Conservation (House, Standing) Environment Protection-Adequacy of Legislative and Administrative Arrangements-Second Report... 27.10.84 nrtd(b) No(d) Hazardous chemicals First Report... 29.4.82 nrtd(b) No(d) Second Report... 9.12.82 nrtd(b) (d) Bushfires and the Australian Environment... 4.10.84 12.2.86 No Protection of the Greater Daintree... 24.8.84 nrtd(b) No Protection of Bungle Bungle... 28.3.85 nrtd(b) No The Administration of the Environment Protection (Impact of Proposals) Act 1974... 24.5.85 17.4.86 No Protection of the Great Barrier Reef... 12.11.85 nrtd(b) No New South Wales World Heritage properties Commonwealth/State administrative arrangements... 26.11.85 nrtd No Electoral Reform (Joint, Select) Report No. 1-Determining the entitlement of federal territories and new States to representation in the Commonwealth Parliament... 17.2.86 (c) (c) Expenditure (House, Standing) Accommodation and Home Care for Aged... 28.10.82 29.11.85(e) (d) Control of prohibited immigration by the Department of Immigration and Ethnic Affairs... 13.11.85 nrtd No The Darling Harbour fiasco... 27.11.85 nrtd No Foreign Affairs and Defence (Joint, Standing) The Jackson Report on Australia's Overseas Aid Program... 24.5.85 28.11.85 No Members' Interests (House, Standing) Report relating to the registration requirements... 8.10.85 29.11.85 13.2.86(f) Yes National Crime Authority (Joint, Standing) First Report... 29.11.85 nrtd No New Parliament House (Joint, Standing) Future use of the provisional Parliament House... 7.6.84 28.11.85 No Precincts of the new Parliament House and the Parliamentary zone... 28.11.85 nrtd No Parliamentary Privilege (Joint, Standing)... 3.10.84 nrtd(b) No Procedure (House, Standing) Alternative opportunities of Members to concisely address the House... 13.5.85 (g) - Transport Safety (House, Standing)(h) Education, Training and Licensing of Drivers... 6.5.82 nrtd No(d) Road Safety Generally... 8.10.84 27.11.85 No Bicycle Helmet Safety-Final Report on motorcycle and bicycle helmet safety... 25.11.85 nrtd No Notes: nrtd-no response to date. (a) the time specified by Government is now 3 months from the presentation of the report-S.Deb. (24.8.83) 141. (b) the Government reported progress in the preparation of responses on 29.11.85. (c) the 3 month period for response has not expired. (d) the Government said its commitment to more prompt responses does not apply to reports presented in previous Parliaments-S. Deb (15.12.83) 3853. (e) H. R. Deb. (29.11.85) 4023. (f) H. R. Deb. (13.2.86) 425. (g) on 29.11.85 the Government said the report had to be considered in the context of the effective use of the time of the House which the committee was currently inquiring into. (h) includes reports of the former Road Safety Committee. Sources: Unless otherwise indicated, Votes and Proceedings of the House of Representatives. 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. This petition of concerned Australian citizens respectfully points out: That, for our survival, an effective Worldpeace Initiative needs to be established which will work towards mutual understanding, world disarmament, economic well-being for all and full employment. This Initiative will help to ensure a sustainable society conserving natural resources, and revitalising soils essential for growing a plentiful and healthy food supply and tree cover. By achieving these objectives, Australia can set an example for the rest of the world to follow. Your petitioners therefore humbly pray that your Honourable House will: 1. Propose to the United Nations General Assembly that 1989 be declared International Year for Repairing the Earth. 2. Implement action programs leading up to 1989 which will include: (a) Actively supporting the International Year of Peace in 1986 by reallocating at least 10% of our military expenditure to fund environmental repair programs. (b) Implementing National Recycling Programs to reuse water, and to compost into hygienic humus all presently wasted organic garbage and sewage-sludge mixed with fine ground powder from mineral-rich gravels and rocks, to use as a natural fertiliser in revitalising impoverished soils; (c) Developing National Employment Programs to give priority to irrigation systems and the planting and growing of healthy forests, food-producing trees and other crops and vegetation to assist the greening of Australia. And your petitioners, as in duty bound, will ever pray. by Mr Cowan,Mr Downer,Mr Grace,Mr Jull,Mr Langmore and Mr Leo McLeay. To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. This petition of concerned Australian citizens respectfully points out: That, for our survival, an effective Worldpeace Initiative needs to be established which will work towards mutual understanding, world disarmament, economic well-being for all, fulfilling employment, a sustainable society conserving natural resources and revitalising soils essential for growing a plentiful and healthy food supply and tree cover. By achieving these objectives, Australia can set an example for the rest of the world to follow. Your petitioners therefore humbly pray that your Honourable House will: 1. Create an Australian Ministry for Peace specifically devoted to peace-building and the non-violent resolution of conflict; 2. Convene a national Summit for Survival to discuss the issues of world disarmament, security and national and international co-operation; 3. Support the United Nations World Disarmament Campaign by allocating the equivalent of at least 10% of our military expenditure to fund peace activities; 4. Actively assist the International Year of Peace in 1986 by initiating programs for peace education, self help development and environmental repair; 5. Develop National Employment Programs to give priority to the planting and growing of forests, food-producing trees and other crops to assist the greening of Australia; 6. Implement National Recycling Programs to reuse water and to compost all presently wasted domestic sewage-sludge and organic garbage with mineral-rich gravel dust, a by-product from rock quarries and mines, into hygienic humus, a natural fertiliser, for use in revitalising impoverished soils; 7. Propose to the United Nations General Assembly that 1989 be declared International Year for Repairing the Earth, And your petitioners, as in duty bound, will ever pray. by Mr Duncan. To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The petition of the undersigned shows: That the Hawke Government should; pass on the full benefit of lower international oil prices on 1 March 1986; not increase or extend fuel taxes; and maintain its tax cut commitments. Your petitioners humbly pray that the Hawke Government honour its commitment to the Import Parity Pricing policy. And your petitioners, as in duty bound, will ever pray. by Mr Braithwaite,Mr Fife and Mr Tuckey. 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 suggests 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 Drummond and Mr Hicks. 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 radio- active substances and to immediately disallow the regulations that permit the irradiation of food here in Australia. by Ms Jakobsen and Mr Kent. 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 that whereas: 1. They are completely satisfied with the design of the existing Australian National Flag. 2. They are aware it properly reflects the immutable characteristics of Australia, namely: (a) The Union Jack, itself the creation of three Christian Crosses, represents the Nation's historical origin and the source of its language and law; (b) The Southern Cross on an azure blue background signifying its geographical location on this planet Earth; (c) The large star depicting the advent of Federation in 1901. 3. They know the Flag has been a source of inspiration to generations of Australians in peace and war. 4. They recall that millions of native-born Australians and newcomers to these shores from other parts of the world have become united under its proud symbolism. 5. They are certain that any change to the Flag will produce division in the Australian community. Your petitioners therefore pray that your honourable House will: Propose and pass a motion that ``the existing Australian National Flag be changed only with the approval of the Nation as expressed in a Referendum''. And your petitioners, as in duty bound, will ever pray. by Mr Beale. To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The humble petition of the undersigned citizens of Australia respectfully showeth that whereas: They are completely satisfied with the design of the existing Australian National Flag. Your petitioners therefore pray that your honourable House will: Give a speedy passage to the Flags Act Amendments Bill which provides that the Australian National Flag can only be changed by a Referendum. And your petitioners as in duty bound will ever pray. by Mr Ewen Cameron. To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The humble petition of we, the undersigned citizens of Australia, respectfully showeth: We deplore the tax threshold of $5100, as the proposal adversely affects welfare recipients and low income earners. We urge that the figure be $7500 to enable these citizens to have some chance to live with dignity. And your petitioners as in duty bound will ever pray. by Mr Bilney. To the Honourable the Speaker and Members of the House of Representatives, Parliament House, Canberra. The humble petition of the undersigned citizens of Australia respectfully showeth: The future of work at Port Arthur and Tasman Peninsula to conserve historic sites and present them to the public is under grave threat due to the proposed termination of the Port Arthur Conservation and Development Project on June 30th, 1986. Your petitioners therefore humbly pray that the Federal Government, in acknowledgement of the national significance of the historic remains on Tasman Peninsula, provide appropriate financial support for the continuation of the Port Arthur Conservation and Development Project in co-operation with the Tasmanian State Government. And your petitioners as in duty bound will ever pray. by Mr Burr. To the Honourable the Speaker and Members of the House of Representatives. 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 humble petition of concerned citizens respectfully points out: There is a need for specialised medical after-care facilities for people of all ages who are really ill. We ask that the Federal Government consider utilising facilities already available in the closed wards of our Main Hospitals. And your petitioners, will in duty ever pray. by Mr Cleeland. To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The Petition of the undersigned shows: That the proposed introduction of compulsory identification (ID) cards should be reconsidered and rejected because the system: (a) is not a cost-effective method of reducing tax evasion and social security fraud and, to the contrary, in the form proposed will facilitate such evasion and fraud; (b) will constitute an unwarranted infringement of individual privacy by the aggregation of a wide variety of personal information of a private nature; (c) will cause a further large and costly growth in the bureaucracy and burden on the taxpayer; and (d) cannot be guaranteed against misuse for purposes other than for which their introduction is stated to be intended and in fact provide the opportunity for blackmail and other forms of misuse. And your petitioners humbly pray that the problems which identification cards are intended to reduce should be attacked by other, more effective and less obnoxious methods. And your petitioners, as in duty bound, will ever pray. by Mr Kent. To the Honourable the Speaker and the Members of the House of Representatives in Parliament assembled. The humble petition of citizens of Australia shows: That the people of New Zealand and the New Zealand Government have given an example to the world in their efforts to achieve a nuclear free South Pacific, and such decision being endorsed by the people at a general election. Your petitioners therefore pray that the Australian Government support the principled stand taken by the New Zealand Government and urges it to condemn any efforts by the U.S. Government to impose economic or other sanctions on New Zealand in retaliation for their stand on nuclear vessels. We further urge the Australian Government to urgently implement its policy to promote the development of zones of peace and nuclear free zones in the Indian and Pacific Oceans. by Mr Kent. To the Speaker and Members of the House of Representatives in Parliament assembled. The Petitioners of the undersigned citizens of Australia respectfully showeth: That the humble petitioners respectfully believe that the representatives in Australia of the African National Congress and the South West Africa Peoples Organisation 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 pro- vision of: 1. Official recognition of A.N.C. and S.W.A.P.O. as the legitimate representatives of the people of South Africa and Namibia. 2. Financial support to the offices and representatives of the African National Congress and the South West Africa Peoples Organisation to promote the anti-Apartheid cause. 3. Additional financial support for the official representatives of the A.N.C. and S.W.A.P.O. 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 A.N.C. and S.W.A.P.O. education departments. And your petitioners, as in duty bound, will ever pray. by Mr Kent. To the Speaker and members of the House of Representatives in Parliament assembled. We the undersigned are deeply concerned that any proposal by the Government to adopt a flat rate family allowance scheme would cause considerable hardship to low income families. Your petitioners therefore humbly request that the House of Representatives in Parliament assembled, urge the Government to give due consideration to the effects of such a proposal on Australian families. And your petitioners, as in duty bound, will ever pray. by Mr Humphreys. To the Honourable the Speaker and members of the House of Representatives in Parliament assembled. We the undersigned believe that the quality of reception of the Brisbane SBS UHF television station is of a very poor quality in many of the Brisbane suburbs. Your petitioners therefore humbly pray that the House of Representatives in Parliament assembled urge the Government to erect a translator capable of providing a service comparable to that of the major cities in Australia. And your petitioners, as in duty bound, will ever pray. by Mr Humphreys. To the Honourable the Speaker and members of the House of Representatives in Parliament assembled. The humble petition of the undersigned citizens respectfully showeth that your petitioners are gravely concerned at the failure of the government to honour its election promises to pensioners. In particular those promises relate to the following commitments: 1. That within three years of its election to office, a Hawke Labor Government would raise the level of the standard pension to 25% of Average Weekly Earnings; 2. That the lag time between the announcement of the Consumer Price Index figures and the subsequent adjustment of pensions would be reduced to one month; and 3. That the disproportionate tax burden borne by low income earners would be lifted. None of these promises has been honoured to date. Your petitioners are extremely angry at the failure of the Government to live up to its commitments and as in duty bound will ever pray that these serious omissions will be given the attention they deserve. by Mr Nehl. To the Honourable the Speaker and members of the House of Representatives in Parliament assembled. The humble petition of certain electors of Australia respectfully showeth: 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 Members of the House of Representatives in Parliament assembled. The humble petition of certain electors of the Division of Cowper respectfully showeth: 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 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 unnecessary 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 assembled in Parliament: The petition of the undersigned citizens of Australia draws to the attention of the House the hardship and inconvenience which will be caused to these citizens as a consequence of Government action in closing postal facilities at the West Footscray Post Office at 291 Geeling Road, West Footscray, Victoria. The location of this post office is such that it services both an industrial area and several elderly persons accommodation homes as well as the residents of the district in general. Your petitioners therefore pray and request that the House urge the Government to immediately review and reverse the decision of the Government in this matter, by Mr Willis. To the Speaker and Members of the House of Representatives in the Parliament assembled. The petition of certain citizens of South Australia 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. And your petitioners, as in duty bound, will ever pray. by Mr Andrew. To the Honourable the Speaker and Members of the House of Representatives in the 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. And your petitioners, as in duty bound, will ever pray. by Mr Peter Fisher. To the Right Honourable the Speaker and Members of the House of Representatives of the Commonwealth in Parliament assembled. The humble petition of the undersigned citizens of New South Wales respectfully showeth: That they strongly support the establishment of the Western Sydney State University as recommended in the Parry Report and call upon the House to establish the Western Sydney State University in conjunction with the New South Wales Government. And your petitioners, as in duty bound, will ever pray. by Mr Free. To the Right Honourable the Speaker and Members of the House of Representatives of the Commonwealth in Parliament assembled. The humble petition of the undersigned citizens of New South Wales respectfully showeth: That they strongly support the establishment of the Western Sydney State University as recommended in the Parry Report and call upon the House to establish the Western Sydney State University in conjunction with the New South Wales Government. And your petitioners, as in duty bound, will ever pray. by Mr Grace. 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 State of Queensland 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 the present justice system in this country or 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 Slipper. To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The humble petition of the undersigned citizens of the Federal Division of Fisher in Queensland respectfully showeth: That the proposed Australian Bill of Rights Bill 1985 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 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 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 Ian Robinson. To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The petition of certain electors of Dawson shows that the proposed Bill of Rights overlooks basic rights concerning union membership, education, and private property, is a basis for massive intrusion into State responsibilities, establishes a Human Rights and Equal Opportunity Commission with powers similar to a court but without accepted legal procedures and protections for the accused, and provides no avenue of appeal against decisions of the HR&EOC. The petition further shows that fundamental protection of human rights is already to be found in the courts, in tolerance, in fair play, belief in democratic institutions, and in support for rule of law. Your petitioners humbly pray that the Parliament will not allow the Australian Bill of Rights Bill to pass into law. by Mr Braithwaite. To the Honourable the Speaker and Members of the House of Representatives assembled in Parliament: The petition of certain residents of the State of New South Wales asks that the Bill of Rights legislation be thrown out. The Bill does not strengthen our rights and endangers some of them. Your petitioners therefore request that the Bill of Rights legislation be withdrawn. And your petitioners, as in duty bound, will ever pray. by Mr Howard. 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 total disallowance by the Hawke Labor Government of tax deductibility for entertainment and hospitality expenses will unfairly penalise Australian business and cost thousands of jobs for young and unskilled people. Your petitioners humbly pray that the House of Representatives, in Parliament assembled, urge the Government to: Abandon its total ban on entertainment expenses and allow tax deductibility for legitimate and necessary expenses. 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 the Parliament assembled. The humble petition of 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 the 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 current policy pursued by the Hawke Government is causing an intolerable increase in home loan interest rates beyond the capacity of families to pay. that consequently this policy is causing grave hardship throughout Australia and is contributing to social problems and the breakup of the family unit. that unless the Government act urgently the Australian dream of home ownership is fast becoming shattered for many of our citizens. Your petitioners therefore humbly pray: That the Government make home loan interest rates tax deductible therefore alleviating the present crippling burden of current high interest rates on home owners and home buyers. And your petitioners, as in duty bound, will ever pray. by Mr Slipper. To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The humble petition of the undersigned citizens of the 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. To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled; the humble petition of the undersigned citizens of Fisher respectfully showeth: That we deplore the discriminatory tax proposals as outlined in the Government's `White Paper' and the Government's preferred option on proposed new and widened tax proposals as so outlined, namely: Capital Gains tax Hidden Death tax described as `Capital Gains tax after death' Gift Tax Increased Company tax Employer taxes on employees' employment benefits. All such taxes will discriminate against and inhibit progress, growth and employment throughout the nation. They will attack hardworking people who have built up their assets; they will discourage thrift; they will inhibit development; they will treat unfairly all who plan for the future; they will cause trouble and expense in arriving at the value of their assets; they will discourage industry and punish achievement. We ask that the tax proposals be rejected. And your petitioners, as in duty bound, will ever pray. by Mr Slipper. To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The petition of certain citizens of the Federal Division of Fisher in Queensland respectfully showeth that: 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 3 Christian crosses-represents the nation's historical origin, and the source of its language and law; (b) The Southern Cross on an azure blue background signifying its geographical location on this planet Earth; (c) The large star depicting the advent of Federation in 1901. 3. They know the flag has been a source of inspiration to generations of Australians in peace and war. 4. They recall that millions of native-born Australians and newcomers to these shores from other parts of the world have become united under its proud symbolism. 5. They are certain that any change to the flag will produce division in the Australian community. Your petitioners therefore pray that your Honourable House will propose and pass a motion that ``the existing Australian national flag remains sacrosanct from change''. And your petitioners, as in duty bound, will ever pray. by Mr Slipper. 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 WILLIS(Gellibrand-Minister for Employment and Industrial Relations) —For the information of honourable members, I present the first annual report of the Central Trades Committee for 1984-85. Madam SPEAKER —I have received a letter from the honourable member for Mackellar (Mr Carlton) proposing that a definite matter of public importance be submitted to the House for discussion, namely: The severe impact on individuals, families, farmers and business due to the combined effects of the Fringe Benefits Tax and the proposed deferral by the Government of the promised income tax cuts. 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 CARLTON(Mackellar)(2.57) —Today once again we are talking about tax. Over many months we have talked similarly about the subject of interest rates. Honourable members will recall that month after month when we raised what for the Treasurer (Mr Keating) was the extremely boring question of interest rates, the Treasurer treated the question and the debates with utter contempt. Now I would like to tell honourable members who might be listening in their rooms and those outside listening to the broadcast that the Treasurer is not present in the House for this debate. As usual, he is treating the House and the people of Australia with total contempt. It is exactly the same pattern as we had with interest rates. Honourable members will recall exactly what happened with interest rates. Before the last election the Treasurer and the Prime Minister (Mr Hawke) told us that in 1985 interest rates would go down. They said that before the election and they said it after the election and we drew their attention constantly to their promise to reduce interest rates during 1985. We all know the sad history; interest rates rose month by month and reached the highest levels since the Great Depression over 50 years ago. During the whole of last year businesses and farmers were going broke, home owners were paying more on their house mortgages and people were not able to buy new homes because interest rates were going up, totally contrary to the promises made by the Prime Minister and the Treasurer. Month after month the Treasurer refused to answer our questions and refused to answer us in debate. I am pleased to say that the Treasurer, rather languidly and in his usual arrogant style, has sauntered into the House. We will do exactly the same thing on tax as we did on interest rates because, as the Treasurer's responses on the interest rates debate became shorter and shorter, interest rates went up and up. As his promises to retain the interest rates ceiling became more certain, their uncertainty increased. Ultimately the Government reversed its position on the ceiling and did not fix up the problems of those borrowing from building societies. As a result, an enormous number of Australian families are still in desperate trouble and interest rates are still at an historically high level; they are still there. The two matters on tax that we raise specifically today are, first of all, the question of personal income tax cuts which were promised by the Treasurer in his statement of 19 September last year and, secondly, the question of the fringe benefits tax. This little tombstone booklet, this purple booklet, is going out to all employers now with another 38 pages of instructions on substantiation. That is another set of instructions which will be available from post offices next week. The Treasurer has now said that the date of introduction of the promised tax cuts on 1 September is uncertain, and by the normal method of prevarication that occurs when the Government secretly has changed its mind, when it has definitely changed its mind, about the introduction of the tax, we are proceeding full steam ahead with the introduction of a new business tax which will net some $600m to $800m from businesses throughout Australia. That is not just big business, it is every business, every farm, every shop, every office, every factory, and also every charitable, religious and non-profit body. A total of $600m to $800m will be taken in, proceeding at a pace, with booklets going out to employers, as well as these new booklets going out to post offices. They are all going out at a time when the promised income tax cuts which are supposed to be part of an offset for these new business taxes are being delayed. When we raised this matter of tax in the House on 30 April the Treasurer could barely bring himself to respond at all. He had 15 minutes to respond on the matter of public importance. At the end of 12 minutes, after a really languid performance, regarding all the arguments we put on behalf of the Australian people with total contempt, he finished up with these words: There is not much more to be said about it than that. I have a meeting to go to and, frankly, that is more important than answering this tripe. That was the Treasurer's response. Mr Hunt —What did he say? Mr CARLTON —He said: . . . frankly, that is more important-- referring to the meeting he had to go to- than answering this tripe. The tripe we were talking about was the impact of inflation on the tax cuts that were promised. Those tax cuts are being delayed. What we did point out on that occasion was that even by the time taxpayers got those cuts, if they got them in time-that is September this year and July next year-most of the value would have been eroded by inflation. In fact, about two million taxpayers would have moved from a 29 per cent top rate to a 40 per cent top rate by the time they got their proposed tax cuts. I have some news for all those people who might have listened to that debate and been concerned that they were being robbed by the Treasurer on 19 September last year. There is going to be a delay in the first round of the tax cuts of at least three months. That means hard dollars. We are not talking about fiddling around at the edges here. The tax cuts that were promised in hard dollars for 1 September, if they are delayed for three months, will cost taxpayers the following sums: A person earning at present $240 a week will have $50 taken out of his pocket by the Treasurer-$50 he had hoped to get by way of tax cuts over the three months will be gone. A person on $300 a week will be losing $59 by the decision of the Government; a person on $400 a week will be losing $79; a person on $480 a week will be losing $110; and a person on $600 a week will be losing $149. These are serious cuts and represent yet another breach of promise by this Treasurer, who does not know how to keep a promise. Here is the man who promised us no capital gains tax. We have got a capital gains tax. Here is the man who promised us reduced interest rates. We have got the highest interest rates since the Depression. Here is the fellow who promised us lower inflation. Our inflation rate is three times that of our trading partners. Here is the fellow who promised us a healthy economy and is giving us a banana republic. Here is the man who on 19 September last year promised us tax cuts and is taking them away from us. He is robbing people on $400 a week of $79 over the next three months by not keeping his promise on tax cuts. That is not all of it. Whilst this delay is going on the Treasurer is moving ahead apace with his other taxes. The worst of these for the moment is the Keating fringe benefits tax. Purely and simply, this is another business tax. It is the most complicated payroll tax ever devised by man. The legislation was given to us in a great rush a couple of weeks ago, before we went home on Friday night, and we had to debate it the following week. We were given 139 pages of legislation and 176 pages of explanatory memorandum. The Treasurer's tombstone booklet that is going out to every taxpaying business throughout Australia, every farm and office, is 56 pages, and I have just discovered another 38 pages of instruction on the substantiation provisions. Can honourable members imagine every small business in the country receiving this piece of gobbledegook? For God's sake! There is page after page of closely written stuff, page after page of how to keep log books and formulae. I cannot understand half of it, even with the help of cost accountants. The Treasurer's office does not understand it and he will not even give us a briefing on it. The reason is that those people do not understand it. All the questions that have been coming from tax accountants into his office and into the Tax Office have been swept aside because they did not have a full understanding of it. No wonder he would not give the Opposition a briefing on this tax. In case people think it will not hit them-if they have not yet got their tombstone booklet through the mail or at the post office; maybe they will not get their 38 pages of additional information about substantiation until next week-they might just have a look at this full page advertisement in this morning's Press by the employees of the Fury Group of Companies. There was a saying in 1975 by certain people in the then Opposition: `Maintain the rage'. All I can say, after reading this advertisement, is that I hope the staff of the Fury Group of Companies will maintain their fury over the fringe benefits tax. Let me read what this group of employees have said, having raised $11,000 between them of their own money to put these advertisements in the newspaper. This is what they said: The Hon. P. J. Keating, M.P. Treasurer Parliament House Canberra ACT 2600 Dear Sir, We are a concerned group of employees who have all contributed to the cost of this letter to you. Our concern is not with the company we work for, our concern is with you and what you are doing to our company. Our boss started the company in 1977 with 52 employees. Over the past 9 years, with his guidance and our hard work, we together have built this company to where it is today and The Fury Group of Companies now employs 264 people. We know that you, and all politicians, have cars provided, which we as taxpayers pay for. Why then, do you feel that no other company in Australia should be able to give their employees this same benefit? Mr Keating, we have a very real reason to feel worried, because as you know, in our business, nothing happens until someone purchases a vehicle. Under you, interest rates have risen dramatically, the Australian Dollar has fallen drastically, especially against the Yen and now you are going to put the final nail in our coffin with the fringe benefits tax on motor vehicles. Mr Keating, we want to keep working, but if you keep penalising our business, many of us will be retrenched, and the only person we will blame, is you. Yours sincerely, The Staff The Fury Group of Companies Fury Ford Fury Mitsubishi Fury Bobcat Fury Engineering P.S. If you don't believe us, the new car sales figures for the last quarter compared to the same period last year, show a drop of 20%, and this is before your fringe benefits tax. The names of all the employees who collected $11,000 from their own earnings after tax are all at the bottom of this advertisement. If the Treasurer yawns in boredom at this piece of information, as he is doing across the table, may I say that this morning I rang the Managing Director of this company, Mr Ross Halpin, just to ask him what the background was. Mr Halpin told me that in the nine years since the formation of this company, which has been a successful company and one that also indulges in engineering and in exporting, it has had no retrenchments. With the combined effects of the policies of this Government-that is, the massive interest rates, the devaluation of the dollar, which I pointed out quite clearly in yesterday's debate came entirely as a result of the policies of this Government, and the ultimate nail in the coffin, the fringe benefits tax on motor vehicles-Mr Halpin is in a position where he will be forced to retrench employees in his business. This is a good example of the kind of business we need in Australia-not just those who do an ordinary job but those who build up a business in a number of areas, including manufacturing and exporting, obviously with good spirit amongst the employees. Let me tell the House more about the spirit of the employees. Mr Halpin said to me: `We have these three big imposts on us and those in themselves are enough for me to consider for the very first time putting off employees. I know that other motor dealers have already gone broke. What I cannot look at now, surely, is the 2.3 per cent increase in the present national wage case, the 3 per cent productivity case which the unions are going to insist that we bring in at the beginning of the so-called phase in period'. Do honourable members know what happened last week? The employees in Mr Halpin's business who are members of the Vehicle Builders Union, the VBU, received a letter from their union requiring them to take a 24-hour strike the next week in order to protest against the delay in the national wage case hearing. For God's sake, what lunacy have we got? Here is a business which is threatened directly by the policies of this Government, not just by the fringe benefits tax-this rotten, stinking tax that is embodied in this tombstone booklet-but also by high interest rates which the Treasurer is responsible for in his policies and the drop in the dollar value. It is hit with all these things and then a group of lunatics come in and say, supported I might say by the Australian Council of Trade Unions: `We'll have a 24-hour strike because the wage case is being delayed'. The very delays that might save people's jobs the ACTU is out there protesting against with a strike. At the very same time the President of the ACTU, Mr Crean, said business will not invest. What a nonsense. Mr DEPUTY SPEAKER(Mr Leo McLeay) —Order! The honourable member's time has expired. Mr KEATING(Blaxland-Treasurer)(3.12) —I could just imagine the phone call, and the tears flowing from the honourable member for Mackellar (Mr Carlton). One could sell him the town hall clock. He is on the end of the line and they are telling him about the industry. Did they tell him that the motor vehicle sales last year were 717,000, up nearly 200,000 from where they were in 1983? Did they tell him that this Government put the sales at 717,000? Did they tell him that the so-called 21 per cent decline is 21 per cent of 717,000-a record? Mr Carlton —They know that. Mr KEATING —If they know that, they know that this Government gave them the 717,000, because in 1983 the number was 553,000. So what is the honourable member saying? Is he saying that a 21 per cent decline from 717,000 is a national disaster but the Opposition's 553,000 was okay? Why does not the honourable member for Mackellar at least have the good sense to say: `Wasn't it a record level last year? Weren't sales at this record high of 717,000? Is it true that the conversion to unleaded petrol is making a change in the sales? Is it true that there is the effect of the depreciation on sales? Is it true that the Government actually induced a slowing in demand by lifting interest rates because it wants fewer sales, less house building-less everything-to slow the economy'? Did those thoughts ever enter the honourable member's mind in this conversation? If they did, would he not have said: `Isn't it a fair go? The Government has got you the 717,000. It's going to take the number down a bit because it needs to, but you won't be at anything like 553,000; indeed, the industry estimate is 600,000 for this year and isn't that a fair outcome?'. No, what he says is `the fringe benefits tax', which he alleges does this, to use the honourable member's words, `is a rotten, stinking tax'. He is saying to the fellow working on $18,000 or $19,000 a year, with three kids and a 1965 Holden, paying his way, earning his keep, receiving no fringe benefits, no entertainment allowance, no American Express Club or Diners Club cards or anything else, with no education fees being paid for his kids, no hostess allowance, no other damn rort, that he ought to carry the lot. The honourable member for Mackellar is saying that that individual can carry everyone else's obligations, including his own, while the Opposition protects other income earners from paying their fair rate of tax. As I said at Question Time, I do not know where any moral basis of government in the Liberal Party of Australia has gone. I just do not know. How the Opposition can think that there is some virtue in the political argument that some Australians should pay more than their fair share of tax while others can exploit a system of remuneration outside the tax system is simply beyond me. How can it have thought that as a party in government, which it has been? How can it think that as a party in a parliamentary system such as this? We need a decent tax system with some broadening of the base. It is unbelievable to me that the honourable member for Mackellar, as a representative of a major party, should describe as a `rotten, stinking tax' a tax which repairs the income base and that he should imply some sort of jeopardy for the motor vehicle company which he mentioned when he fails to do the decent thing and say that the Government has given the motor vehicle industry record levels of sales. He also fails to acknowledge the impact of the depreciation. The domestic industry will sell more vehicles because the depreciation will force up the price of Japanese and European vehicles, giving the industry a 20-odd per cent protection in the market-place for Australian vehicles. No doubt that thought never crossed the honourable member's mind either in his conversation with the employees of the Fury Group of Companies. All I can say is that they ought to turn their fury to a little bit of rational observation of and argument about their industry. If they want to go back to the coalition's policies, they will go back to 553,000 sales a year, not the 717,000 sales which the Government gave them last year-that figure will be diminished this year, but it will be well ahead of the 553,000. All I can say is that they should have saved their money and concentrated on the real argument, which is getting the Australian motor vehicle industry more efficient and selling more local vehicles rather than having this resort to imports. If we are about basically seeing a better import competing performance in this country, of course the depreciation, which this Government has provided, will help the Australian motor vehicle industry enormously. The honourable member for Mackellar talks about the fringe benefits tax as it relates to motor vehicles. Let me make a point about that. I will seek leave to have this table incorporated in Hansard, but before doing so let me make this point: For a motorist at 15,000 kilometres-that is what would be called basically private mileage, about 9,000 miles on the old scale-the implied business use under the Government scale is 38.9 per cent. What we are saying is that, even though we know that there are basically no business miles at 15,000 kilometres, we will let the motorist have 38.9 per cent as implied business use. For 25,000 kilometres, where there might be some business use-hardly big kilometres-we are letting the motorist have 63.6 per cent implied business use. That is, if the motorist does not want to keep a log book he can fall back to a scale which gives him 63 per cent implied business use at 25,000 kilometres or 38.9 per cent at 15,000 kilometres. Is that pernicious? That is savage! How are they going to survive that? Mr Carlton —Well, go and ask them. Mr KEATING —The honourable member has the temerity to say that this is unreasonable, that the Government ought to let people who have no business miles write off 100 per cent of a vehicle, but every other taxpayer can carry the cost in his pay packet, every other taxpayer, going home, hanging out of the train and watching the cars travelling on the road beside him can say: `I'm paying for that one down there and that one over there'. That is the honourable member's standard of morality. Has he ever seen them on the trains, packed, hanging out, on the way to Bankstown or Parramatta in Sydney? Mr Carlton —They are the ones out of work. Mr KEATING —No, they are the ones in work, going home, on the train-the ones who have gone to work with a brown paper bag full of sandwiches. They come home watching people drive beside them in the Commodores and the up-market vehicles with all the options. The honourable member says there should be a 100 per cent business deduction for the people driving those cars. That is what the honourable member opposite stands for. He mentioned me wasting my time on the last debate. Does he really think I ought to come in and argue this case when it is so self-evidently reasonable? The Government has already made the scale concessionary. Just by the way, in respect of this argument about the motor vehicle industry-I will address some remarks to the other chamber-let me say to anybody- Mr Carlton —What about Bannon? Mr KEATING —The Premier or anyone-that 717,000 sales last year was an unsustainable level and that the Australian domestic industry, by having a higher level of protection through the exchange rate, will sell more cars. The decline-apparently there is a number out today which shows a pick-up in sales for this month, but I have not tracked it down-reflects the fact, as we thought, that there was a push forward of sales into October and November because of the unleaded fuel problem. The Government sat down with the Federal Chamber of Automotive Industries and other industry groups when we were putting this tax together at the time of the tax statement and we introduced this very concessionary scale; but now that is not enough. Apparently we are supposed to have a scale where at 15,000 kilometres, without any log book, a person gets 60 or 70 per cent implied business use. We know what people are doing. They drive out of their homes and drive 20 or 30 kilometres away, put it in the old garage and drive back home. It is all private mileage-to and from work is private mileage and there is no business mileage. We have given them 40 per cent at 15,000 kilometres and 63 per cent at 25,000 kilometres, but they say, `No, that is not good enough; this is a pernicious, savage tax'. What about the poor blighters who have to pay the full marginal rates of tax and who get no relief? What about the joker copping $18,500 a year with three kids and who has some beat-up Holden to drive home? What does the honourable member say to that fellow? Honestly, honourable members opposite make me puke. Mr Carlton —What does he say when he sees your car go by? Mr DEPUTY SPEAKER(Mr Leo McLeay) —Order! The honourable member for Mackellar continues to interject across the table. Mr KEATING —I do not know how one can take Opposition members seriously. The whole thing about the tax debate is that the Opposition fails to understand what the tax reform is about. These measures are about taking these provisions or loopholes out of the system so that everybody should have a more general lower rate of tax. Rather than some people carrying an enormous rate of tax and others carrying very little, we are saying: `Let us take all these rorts out and give everybody a more general lower rate of tax'. That is where the lower marginal rates come from. That is where the tax cuts come from. But the Opposition opposes all the measures to do it. The Opposition is now talking about the timing of the tax cuts while at the same time it opposes all of the measures which will broaden the tax base to lower the rates. Mr Carlton —We supported you on the main one and you could not get it through. Mr KEATING —I just do not understand where the Opposition would see this as coming. Mr Carlton —You flunked it. Mr DEPUTY SPEAKER —I warn the honourable member for Mackellar. If he continues to interject across the table, he will be dealt with. Mr KEATING —The Opposition thinks there is some sort of magic pudding, that one can cut off a slice and if one goes back, the pudding is still there. The Opposition thinks that the Commonwealth can just fund up money-that it is all billions, that it is like paper money. That is the notion the Opposition has-that there is no disciplined economic management, the Government will find a bit more, let us oppose the measures they can give the tax cuts anyway and lower the marginal rates. No government in the world has a tax reform package of this scale in the offing. This is just about complete. We have rate reductions here which will be law. They are not some imaginary plan on some under-secretary's desk. They are going to become the law of the land. This is the most successful major tax reform exercise in the world. It will broaden the tax base, making it cleaner, better, fairer and more decent for every Australian. That is what it is all about. The Opposition, instead of saying, `we sat there for years and let the paper schemes go berserk, we let a lot of accountants advise people to get into these evasion and avoidance schemes and we were only hooked up by the McCabe-Lafranchi and Costigan reports. We were finally made to answer for it all and then at the last moment we tried to legislate to change it. At least this mob have come along and have tried to do something about it', even thinking in terms of its own self-interest, because it seeks to be the Government of this country, it should say: `At least this crowd has cleaned the system up. That ought to be good. We will leave it there'. Oh, no. The Opposition always takes the view that it have a system like a colander-full of holes for its mob to slip through. The high income earners should not pay because they are born to rule and run the place, so the rest of us have to carry the load. They can slide through while all the other poor devils out there pay more than their share of tax. Mr Hodges —You didn't have the guts to put it on the employee, did you? Mr KEATING —The honourable member for Petrie is talking about putting it on the employee. Why did he not do that? He was a Minister in a Commonwealth Government. Why did he not tax the employee? It was because he could not do so. He knew he would have massive industrial disruption, and he was incapable of doing it because that Government had no intestinal fortitude. It was the most gutless government the Commonwealth has ever had. It had a mandate in 1975. Mr Hodges —You are the Government. Why didn't you do it? Mr DEPUTY SPEAKER —I warn the honourable member for Petrie. Mr KEATING —The present Opposition had a mandate in 1977. It had control of both Houses of Parliament. What did that Government do? It did not do a thing with anything. It let the economy fall to bits and it let the Australian tax system become a laughing stock around the world. What we saw, of course, was the Valder approach. John Valder said it all when he said in an interview last year that he wants Labor to succeed with all the fair and rational policies it can, he wants those policies in law so that they can be in place forever, but in the process of bringing them in the Liberals will pursue total and extreme political opportunism and hitch their wagon to every vested interest they can find. In other words: `Let Labor do the hard stuff, the real stuff, and the honest stuff; we will sit back and attack everything and when we get there we will keep the fringe benefits tax, the capital gains tax and all the changes in the tax system; we will keep the lower marginal rates-the 49 per cent and the 40 per cent-and all the rest; but in the meantime we will not give the Government a hand and at every chance we get in the Parliament and everywhere else we will kick the Government to death. While we are doing that, we will say that we will wipe the lump sum tax out, we will oppose the prescribed payments system on the cash economy, we will wreck the wine tax, we will repeal other tax measures, we will repeal all the numerous anti-tax avoidance measures, and we will repeal the superannuation tax. We will do all of those things as well'. In other words, not only will Opposition members not support the tax package but they will undo all the things the Government has done in the last three years as well. The fact of the matter is that there can be no decent debate in the Parliament about these things. The Opposition talks about companies but it is always silent on the great revolution in company tax reform-the abolition of the double tax on dividends, the imputation system. It is the second full imputation system in the world, but at a corporate rate of 49 per cent, whereas the other system, in Germany, is at a corporate rate of 56 per cent. The Opposition says nothing about that because it is not even decent enough to give the Government credit for that-something which the business community has wanted eternally and which the Opposition had years of opportunity to give it but never did because it had no fiscal discipline. But, no, I am supposed to get in here and answer these pumped up stupid matters of public importance proposed by the Opposition. I would not mind if they were decent and sensible instead of this sort of stuff. It is only a parliamentary courtesy I do the Opposition to come and answer. If honourable members opposite have listened they might have learned something. Mr DEPUTY SPEAKER —Order! The Minister's time has expired. Mr IAN ROBINSON(Page)(3.27) —The Treasurer (Mr Keating) has failed miserably to defend his fringe benefits tax measures. There is no question at all but that he is right on the wrong track, and he knows it. There is no question at all but that he is in such a state of absolute shock over where the whole thing has drifted to that he has no real answers. His claim, for example, that fringe benefits are for specially privileged people-what hypocrisy! He told us this afternoon that is defending those whom he sees on the train travelling home from work who are envious of those they see riding in a Commodore with a write off of 100 per cent on their tax returns for that purpose. What hypocrisy when he tells us that that is the situation. Who is this tax to be extracted from? Not from the workers whom he has challenged, but from the employers. He totally ignores the effect of that. What has he then said? He has challenged the Opposition about its assertions on the whole range of the tax structure and tax reform. There has not been one word in this debate about spending cuts or the need to alter the Government's strategy on the economy. There has been no reference to that at all. Then he asserted, of course, that there will be tax cuts. But the challenge is there. How can he deliver the tax cuts unless he does restructure and unless he does succeed in getting his colleagues in Cabinet to agree to a Budget that will allow that to happen? If he does not succeed, it is total disaster for this country. If he fails, it means that we continue on this horrific track of spending out of loan funds, of running up a further deficit situation, not only an internal deficit but the very dire consequences of an external deficit-external for the very reasons that this great issue, this great challenge that faces the country today, blew up on the Treasurer last week. It blew up because he was undoubtedly relying on the assurances of certain advisers in his Department, no doubt hand picked by him for political reasons, that he would be able to do these things. Suddenly, the Treasurer found out a week ago that he was off course. He lost control completely. He made public statements which revealed very clearly that the Government is in trouble. I think he chose that time as the best moment he could hope for to reverse this undertaking about tax cuts. There is no question at all about the situation. The Treasurer has had the message, whether it be from Tokyo, Beijing or wherever else, that he has to stick to his tax cuts. His panic of last week has now produced the circumstance wherein he has had to defend in this House a measure that will raise in revenue less than $600m, which will do nothing but impinge upon small business-and large business, for that matter-impinge upon prospects for employment, hurt the individual and create chaos for every section of the community. He has made no defence of that at all. He has merely rambled on about disparity and tax equity and used all sorts of spurious arguments to defend the course upon which the Government is set in this diabolical exercise of introducing tax changes after nine months of waiting. I ask honourable members to remember the National Economic Summit Conference, which was held in this chamber, and the proposals that were put to it. Ninety per cent of those proposals were rejected by the trade union movement. So a deal was done down the road-not here in the chamber and not during the National Taxation Summit. Back came the Treasurer, who satisfied the Prime Minister (Mr Hawke) and the Australian Council of Trade Unions, and we had a new tax package. That package was made known in this House last September. Then we received in this House no more than a fraction of the legislation required to implement the tax package. The Treasurer held on month after month to the real details of what was proposed, certainly in the fringe benefits tax area. What else has the Treasurer held on to? A matter that he is still holding on to today but is delivering threats about is, of course, the capital gains tax. What will the small print tell us about that tax when it emerges? If the introduction of that tax will mean a further inroad on the viability of business, including every small business in this country-and it undoubtedly will-the effect on employment will be horrific. If the Government delivers the tax cuts without reforming the whole of the structure of the economy, which is the responsibility of the Treasurer in particular, and certainly that of his Government and his Prime Minister, and if that leaves us still going down the same road of spending beyond our means, the ultimate consequences will be horrific for every man, woman and child in this country. Yet we have heard nothing that answers questions relating to those aspects of the issue that confront us today. There is no doubt at all that as the fine print in the fringe benefits tax measures becomes recognised by the wider community and as their effect begins to bite, as it will, we will see all of the implications referred to by those who spoke in this House in that limited debate two weeks ago. That debate was deliberately restricted to, I think, six speakers on each side to try to keep out of the light of day as long as possible the real consequences of the fine print of the fringe benefits tax measures. The Government wishes to deliver as late as possible the details affecting every person in this country who will have a responsibility to return a form of some kind. We have yet to see those details. I imagine that when they come out most businesses will be placed in a position of real embarrassment. They will not know which course to take and which decisions they must make in many matters-decisions that will be irreversible once they are made. Then there is the self-assessment requirement. A person has to decide what tax he must pay and then send off a cheque with his tax return. None of this money will be deductible in his final tax return from the income of his business. This requirement is a slug that will impinge very heavily on the cost structure of many businesses in this country. All of that is to occur in the few short weeks between now and 1 July. Honourable members can imagine the army of inspectors that will be required and the dilemma faced by the Australian Taxation Office in trying to set up the mechanisms to handle the paperwork and the processing of the self-assessment returns. For the first nine months, according to the fine print in the little booklet that has been issued, these returns will be a nightmare for everyone who has to handle them. Let us think of the kinds of things that the fringe benefits tax measures will affect. Reference has been made to their effect on the vehicle industry. That is a big issue. Let us go beyond that. So many businesses in this country have been put together in a way that employees are part and parcel of them, with special benefits to encourage employees to work and to give their efforts in the interests of productivity and the promotion of employment. Employees are offered lower levels of interest. Expenses are paid to reimburse special kinds of effort and work put in. Employees are given living away from home allowances and discounts in a number of directions. Are these perks? Are these benefits for the big wealthy people to whom the Treasurer tries to allude? Of course they are not. They are for middle class Australians who see a future for themselves and their families. They will be hurt, and hurt extensively, by the measures which have gone through this House but which I hope certain parties in the Senate, with a little bit of ingenuity, will recognise should not pass into law. If they do become law, it is for us on this side of the House to give hope and encouragement. This is not the Australian way. It is not the free enterprise way and it is not the way that will get Australia out of the economic hole that it is in. I support the proposition put by the honourable member for Mackellar, and I deplore the response from the Treasurer this afternoon. Mr GRIFFITHS(Maribyrnong)(3.37) —At the outset, let me comment upon the conclusion in the speech by the honourable member for Page (Mr Ian Robinson) wherein he incited certain members of the Senate to oppose the fringe benefits tax measures. That ought not go unchallenged. The reality, whether or not this discredited Opposition is prepared to accept it, is as follows: In terms of the fringe benefits tax, a fundamental reform of the Australian taxation system, this Government is the only government since Federation that has gone to the people of this country in an election campaign and sought and received a clear and unequivocal mandate for reform of our taxation system. If the honourable member for Page is going to incite those in the Senate to overturn those measures in that undemocratic chamber, he ought to be censured for so doing. The Opposition comes to this debate with dirty hands. It does not approach this issue with any degree of credibility. One needs only reflect very briefly on the history of the Opposition parties in the context of tax reform issues. The honourable member for Mackellar (Mr Carlton) adverted histrionically to this Government's `robbing people'. Let us just reflect for a while on the performance of the Opposition when it was in Government. The first point that I make is in another context. The Opposition opposes the fringe benefit package, but it will not repeal it. I challenge-- Mr Tim Fischer —Mr Deputy Speaker, I take a point of order. The honourable member referred to another place, namely the Senate, as `that undemocratic chamber'. I point out to you that under standing order 75-- Mr DEPUTY SPEAKER(Mr Leo McLeay) —I did not hear that. Did the honourable member for Maribyrnong say that? Mr GRIFFITHS —I most certainly did, Mr Deputy Speaker. Mr DEPUTY SPEAKER —The honourable member for Maribyrnong will withdraw, because the Standing Orders provide that a member shall not reflect upon either chamber. Mr McGauran —Apologise. They are duly elected people. Mr GRIFFITHS —Mr Deputy Speaker, I am not sure whether the honourable member for Gippsland-- Mr DEPUTY SPEAKER —Order! The honourable member will withdraw. Mr GRIFFITHS —I withdraw, Mr Deputy Speaker. Members of the other chamber are elected on a totally different basis from those in the House of Representatives. I draw anyone's attention to precisely how those elections come about and question whether people throughout this country are represented on a one person one vote basis. One can draw one's own conclusions. I get back to the issue causing so much consternation in Opposition ranks. The House, no doubt, will not need to be reminded of the infamous fistful of dollars campaign. Talk about credibility on tax matters. In the 1977 election the Government that was represented by those on the opposite side of the House ran on the basis of handing out large tax cuts. What did that Government do? Immediately the ballot papers had been counted after the 1977 election in came the tax surcharge and the money was grabbed back. For goodness sake, those opposite have no credibility whatsoever. It took until 1982-83 for the 1980 promises to be brought in. What did we see then? Substantial tax cuts were offered by the Fraser Government in the order of $2.35 billion. Let us look at precisely how they came about. This House will not need to be reminded that the money to finance those tax cuts came from the Australian taxpayers in the following ways. There was an increase in existing sales tax rates of 2.5 per cent, with a revenue yield of about $500m. Taxation at 7.5 per cent was placed on certain goods previously exempted, with a further revenue yield of $150m. The Fraser Government removed the excise exemption on off-road distillate, with a revenue yield of $304m. Those opposite should tell that to their farmer friends and remind them how their Government grossly abused the farmers' circumstances. Those opposite increased excise on motor spirit and distillate by about $214m. There was a tobacco excise of $125m and an excise on beer of $135m. When we add up those amounts we come to about $1.6 billion. That is the sort of record of those opposite. Let us forget for the moment the rorting of the tax system, the succour offered by this Opposition to the tax thieves and rorters in our community and the increased burden that was thereby placed on the shoulders of the ordinary pay as you earn taxpayers. Let us go to where the Opposition is now. The Treasurer (Mr Keating) has adequately and eloquently canvassed the reality of the debate surrounding the car industry. I will not go into that unless I have time later. The Opposition adverted to some industrial disputation. The honourable member for Mackellar, quoting from a letter, adverted to the possibility of industrial action. It was very embarrassing for the Opposition that on the very day that it released its industrial relations policy it was reminded, not by this Government but by the non-partisan Australian Bureau of Statistics, that the latest figures showed that we had the lowest incidence of strikes since 1967. I will invest my confidence in the arbiter, the non-partisan statistician, on these issues. I believe that the Australian people will also do that. Another matter to which I will advert, albeit briefly, is the Opposition's promises. Another document has fallen off the back of a truck. It came into the possession of the Minister for Primary Industry (Mr Kerin) today. I will be very interested to see the costings that emanate from that document. Until a few weeks ago the Opposition's promises totalled about $6 billion. In the fringe benefits package-- Mr Reith —Tell us about the tax cuts. Mr GRIFFITHS —These comments hurt the Opposition. That is why those opposite are so inspired in their response. With the $1 billion revenue that will be derived from the fringe benefits tax package, we have a sum of $7 billion already. This is before the Opposition goes into an election campaign with all the promises that will accompany it. Where will this money come from? This Opposition has absolutely no credibility because while it knocks every tax reform that this Government has brought in it has not had the intellectual honesty to put before this House what it would do instead. It simply will not achieve any degree of credibility. That is manifestly reflected in the sorts of responses I get out in the community on issues touching upon the Opposition's credibility. If the Opposition is to have tax cuts it will have to nominate expenditure cuts. Some of the rednecks are talking about attacking the soft targets. They want to attack single mothers. For goodness sake, single mothers and their children will be the targets of this Opposition. It will cut back expenditure in the health area-but where? It will need to nominate the areas of expenditure cuts to attain any credibility with the electorate. Many other family programs and so on will obviously be the target of this sort of cutback if and when the Australian people are unfortunate enough to suffer under a government led by this discredited Opposition. We might also recall that in 1982-83, when we came to office, we were ceded, courtesy of this discredited Opposition, a deficit of about $9.6 billion. There has been much debate in this House about the deficit but it is worth reflecting that when those opposite talk about nominal deficit levels they very rarely embrace the appropriate definition for comparative purposes; that is, real levels of deficit as a component of gross domestic product. The reason that those opposite do not want to embrace such a comparison is that they know that they are on very shaky ground. My time is just about to expire so I conclude by saying that I believe that the Australian electorate fundamentally understands that where one has a fundamental tax reform any government will experience difficulties. Quite frankly, I have been very surprised by the large measure of acceptance of this fringe benefits package in the community. Those businessmen who will be the beneficiaries on 1 July of the abolition of double taxation of company dividends will applaud the package as will all the PAYE income earners who will have their marginal tax rates substantially reduced and who will see for the first time in a long while that those who have traditionally rorted this tax system are for once, under this Government, having to fight for every rort they get their hands on. Mr DEPUTY SPEAKER(Mr Leo McLeay) —Order! The time for the debate has expired. Mr N.A. Brown(Menzies) —With your indulgence, Mr Deputy Speaker, may I raise a brief matter of privilege. Mr DEPUTY SPEAKER —The honourable member may proceed. Mr N.A. Brown —Mr Deputy Speaker, I suggest, with respect, that you might refer this matter to the Speaker and invite her to consider it. It relates to the response given by departments, in this case the Department of Foreign Affairs, to requests made by members of Parliament under the Freedom of Information Act. I have just received a letter from an officer in the Department of Foreign Affairs in response to a request I made under the Freedom of Information Act. The response was very late. In fact, it took two months for the officers to agitate themselves into action on this matter. I have now received a letter which constitutes the breach of privilege. Mr Deputy Speaker, I have a copy of the letter for you. The basis of the letter is that public servants-and this particular public servant in the Department of Foreign Affairs-appear to have embarked upon a course of intimidating members of Parliament to prevent them from performing their proper functions. They take the view that members of parliament must pay charges levied under the Freedom of Information Act, with the intention that they be discouraged from using the Freedom of Information Act, which, after all, is a law of the Commonwealth and available to members of parliament as it is to others. The breach of privilege is contained in an extract from this particular snooty letter I have received from the Department of Foreign Affairs. It says that the officers have advised the Minister for Foreign Affairs (Mr Hayden) to reject my application for dispensation from paying the fees under the Freedom of Information Act. The letter stated: The Department's advice to the Minister was that any information on this topic that could be disclosed in the public interest (as distinct from public curiosity) was available to anyone interested in asking for it without doing so under the Freedom of Information Act. Further, as a Member of Parliament you have additional avenues of access to information not available to the general public. If you choose-- This is the significant part- to take the Freedom of Information route for legal reasons, and before you have tried other (less demanding and time-consuming) means, you must be prepared to pay the normal fees levied in accordance with the Freedom of Information Charges Regulations. Of course, in the first place it cannot be said that any other method would be less demanding and time consuming because the Department would have to dig out the papers anyway. Secondly, the substance of what has been put to me in this, as I say, snooty letter is that one should not use the Freedom of Information Act. The people who wrote that letter are saying: `We are endeavouring to discourage you from using that Act. If you have the gall to use it then we will levy charges on you and we will advise our Minister that you should not be given any dispensation'. Members of parliament make particular use of the Freedom of Information Act. They have a right to do so. It is the public law. It is an important part of the armoury of a member of parliament to be able to use that piece of legislation. This letter, regrettably like a number of other similar statements to members of parliament, really is nothing more than an attempt to intimidate and deter members of parliament from using the Freedom of Information Act. For that reason it constitutes a breach of privilege. Mr Deputy Speaker, I simply table the letter and ask you to consider this matter in consultation with Madam Speaker. Mr DEPUTY SPEAKER(Mr Leo McLeay) —I shall refer the matter to Madam Speaker for her consideration and report to the House. Bill presented by Mr Lionel Bowen, and read a first time. Mr LIONEL BOWEN(Kingsford-Smith-Attorney-General)(3.53) —I move: That the Bill be now read a second time. The purpose of this Bill I am introducing today is to amend the Copyright Act 1968 to significantly strengthen the anti-piracy provisions of the Act; increase access to copyright materials for the handicapped, and for libraries, archives and their clients; extend fair dealing; make clear that broadcasts via satellite are subject to the Act; and provide for costs in Copyright Tribunal matters to be taxed on the Federal Court scale. Background Most of the amendments are the outcome of a review by my Department of the provisions of the Act dealing with audio-visual items. This term means sound recordings, including compact discs and audio cassettes, as well as vinyl records; cinematograph films, including videos; and radio and television broadcasts. Audio-visual items contain works, such as lyrics, music and scripts, which are also subject to copyright. Copy-right owners submit that their rights are threatened by new communication technologies, in particular readily available, low cost equipment, much of which can also copy at high speed. New technologies have made audio-visual items an increasingly important part of entertainment and education in the community. Extensive consultations took place in the course of the review, not only with record, film and broadcasting interests, and representatives of writers and publishers, but also with representatives of users of audio-visual items, including consumers, schools, universities, institutions assisting the handicapped, libraries and archives. As a result of continuing technological innovations in Australia, there is a need to review and update copyright law to ensure the benefits of this technology are fully realised. In so doing it is necessary to have regard to the laws of other countries, and to the Berne and the universal copyright conventions which govern copyright internationally. It is important to remember, when considering the laws in other countries, that Australia-unlike, for example, the United States or the United Kingdom-tends to be a net importer of audio-visual materials. For example, during the review it was estimated that the sale of Australian records-by which I mean recordings by Australians or of Australian material-was, on average, 20 per cent or less of all retail sales. That situation is gradually changing, not the least in part because of the support the Government gives to the Australian arts, through measures such as the Australian content requirement in broadcasting, and tax assistance to film makers. Clearly we need copyright laws which support Australian artists and producers and which take account of the significant position of overseas materials in the market, consistent with our international convention commitments. Content of Bill Anti-Piracy Provisions The unauthorised copying of records and videos for commercial purposes, more commonly known as `piracy', appears to be a growing problem worldwide for the legitimate record and film industries. Australia is clearly not one of those countries in which pirate products represent the majority of the material available on the market. Nevertheless, industry representatives inform me that piracy, particularly of video material, is increasing in Australia, and could represent as much as 10 to 20 per cent of material available. When the audiovisual review was commenced in 1981, copyright piracy was not one of the major issues. It only became important towards the end of the review largely because the spread of home videos resulted in a huge demand for new titles and new technology enabled unauthorised commercial copying to meet that demand. I refer now to the specific anti-piracy amendments in the Bill which will combat this growing and serious problem. As many copyright owners have said, the proof of subsistence and ownership of copyright is an expensive and technical procedure. Some defendants unfairly take advantage of this. Suggestions have been made that subsistence and ownership of copyright should, in all cases, be presumed to exist as claimed by the plaintiff or prosecution in affidavit evidence. This would, in effect, place the burden of proof on the defendant in these issues. Suggestions have also been made for introduction of a copyright registration system to enable the relevant proof by certified copy of the registration record. There is an argument that such a registration system may, technically, breach our commitments under the Berne Copyright Convention. In any case, it would seem to undermine a basic principle of the Convention that the effective operation of copyright should not require any formality. Another proposal for an amendment to give `full faith and credit' to certificates of registration from countries which do have registration systems would clearly discriminate against Australian copyright owners. The solution in clause 18 of the Bill is proof by affidavit of subsistence and ownership of copyright, with discretion remaining with the court as to whether or not the deponent to the affidavit should be called to be cross-examined before the affidavit becomes admissible. This provision should make copyright proceedings easier, without the disadvantages of the alternative proposals. Copyright owners have also submitted, with some justification, that the current knowledge element in copyright offences is too difficult to prove, as it requires a court to be satisfied, beyond reasonable doubt, that the accused knew he was dealing with infringing copies. It has been suggested that accused persons should be presumed to have known that they were dealing in infringing copies, unless they could prove they did not. This would involve a shift of the burden of proof to the accused, which cannot be justified in offences of this nature, particularly given the proposed new high penalties. In circumstances where pirates are making copies which look very much like the real thing, so that even those who are experienced in dealing with the product are not easily able to recognise a pirate copy, it would be unfair to require a lay accused to prove he or she did not know it was a pirate copy. Nevertheless, the Government wishes to ensure that unscrupulous dealers are not able to rely upon technical arguments to avoid proper liability. The proposed introduction of the words `or ought reasonably to know' is intended to make clear that a person will not escape criminal liability by disregarding circumstances which would lead any reasonable person to conclude that the copies with which he or she is dealing are pirate copies. The new knowledge test will also apply in the new offences created by the amendments in clauses 15 and 18. The Government has been concerned that the Copyright Act offences do not afford owners protection at each point at which they are vulnerable to commercial piracy. The new offence of possession of an infringing copy for commercial purposes, and the new and restructured offences of causing infringing public performances of copyright material, are intended to meet this deficiency. This is contained in clause 15. Finally, on the topic of the anti-piracy amendments, I refer to the proposed significant increases in penalties. The penalty structure set out in clause 16 of the Bill is summarised in the explanatory memorandum. Those penalties have the following important features: A person who commits an offence involving video piracy runs the risk of going to gaol for a period of up to two years for a first offence; the same person, on a subsequent offence, could go to gaol for up to five years; the maximum penalty payable per offence involving more than one infringing copy is significantly increased from $1,500, in a court other than the Federal Court, to $10,000 in the case of a natural person, and $50,000 in a case of a body corporate; a body corporate could pay up to $7,500 per infringing copy when films are involved and $2,500 otherwise; it will be possible to charge a body corporate in the Federal Court and obtain a maximum penalty, in relation to a single offence comprising the appropriate number of infringing copies, of $250,000; and the current uncertainty as to when maximum penalties are payable will be removed, and clear provision will be made that the maximum penalty is payable, as is usual, per offence and not in relation to a group of offences. The amendments do not alter the position in the Act that penalties are paid per infringing copy, not per title copied. In deciding upon the new penalty structure, the numerous submissions of the video industry, in particular, were carefully considered. The penalties proposed in the Bill were determined having regard to the nature of these offences under the Copyright Act; penalties for like offences in other countries; penalties payable for other `commercial practice' offences in Australia, such as those under the trade practices legislation; the need to limit penalties which can be imposed by lower summary courts; the desirability of structuring penalties so as to reflect the status of the defendant as a natural person or a body corporate, and whether there are any prior convictions; and the fact that a gaol sentence is more likely to be a meaningful deterrent where the primary threat of monetary loss through civil action apparently is not. Taking into account the range of penalties proposed, the new rates will be up to 33 times higher than those introduced in 1981. Although it is difficult to make any direct comparisons with rates in other countries because of the different penalty structures applying, the new penalties are, on the whole, more than compar- able with other countries, including the United States. In addition to the loss suffered by the copyright owner, piracy activities cause harm to the community by undermining the work of creators and innovators. There is also lost tax revenue when copyright material is traded in an underground market. Further, it is often not in consumers' interests to obtain pirate copies-the pirate is unlikely to be willing to comply with normal commercial rules concerning warranties and so on. I should draw attention to one implication which could be seen to arise from the introduction of these amendments at this stage. In September 1983, my predecessor established the Copyright Law Review Committee, chaired by His Honour Mr Justice Sheppard of the Federal Court. One of the matters which the Committee was asked to inquire into was the prohibition in the Act against `parallel importing'. This term refers to the importation for commercial purposes of legitimate copies of, for example, books or records, by someone other than the Australian `territory' exclusive licensee. Under the civil remedy provisions of the Act which are being considered by the Committee, a copyright owner or the exclusive licensee of an owner may take legal action against unlicensed importers, and against people who sell or otherwise deal in parallel imports, as well as against unlicensed copying and dealing in unlicensed copies. The importers and dealers may also be liable under section 132 of the Act for a criminal offence. Parallel importing is treated, under the Act, in the same way as importing a copy made without the copyright owners's permission-the so-called pirate copy. Parallel imports are, however, clearly very different from pirate copies. In the case of parallel imports the copyright owner has received royalty payments from the licensed manufacturer and dealer in the territory from which the copies are imported. In the case of pirate copies imported or made in Australia, of course, the owner has not received such a royalty. The Committee was asked to look at parallel importing because of this difference, and because it had been submitted that some local licensees do not exercise their exclusive rights, and so deprive the Australian public of overseas material which others would be willing to import. These and other issues were set out by the Committee in its paper on this topic, released earlier this year. The Government has not adopted any position in relation to those issues and will do so only after the Committee has completed its report. The Committee recently conducted public hearings in Sydney and Melbourne on this issue and expects to complete its report to me by late this year. In order not to cut across the Committee's work, none of the civil remedy provisions which it is examining will be amended by this Bill. However, the Government is concerned to take action quickly to stem the recent growth in illegal commercial copying and trading in pirate copies. For this reason it was decided to proceed with amendments to the criminal offences and reforms on proof of subsistence and ownership of copyright without drawing any new distinction between parallel imports and pirate copies. These amendments do not change the provisions now being considered by the Committee. The amendments will result in it being easier to prove in a criminal than in a civil case that the person knew he was dealing in infringing copies. The highest standard of proof required in criminal cases will still make civil actions preferable. Nevertheless, I emphasise that as soon as the Committee's parallel importation report has been received, urgent consideration will be given to it. Subject to any overall reforms which the Government may decide are necessary as a result of the Committee's report, it is my intention to take early action to bring the knowledge test in the civil infringement sections, so far as they relate to piracy, into line with the criminal offence amendments in this Bill. I emphasise that the central issue before the Committee does not relate to the issue of knowledge but, as I have mentioned, only to the question whether the prohibition against importation of otherwise legitimate material should be relaxed for the benefit of Australian consumers. From what I have said about the Committee's reference it should be clear that while the parallel importing issue remains unresolved copyright licensees should not take the amendments in this Bill directed at piracy as an endorsement for prosecution action in relation to parallel imports. Increased Access to Copyright Material for the Handicapped The United Nations Educational, Scientific and Cultural Organisation and the World Intellectual Property Organisation have been concerned with the issue of access by handicapped persons to copyright materials since 1981. The new statutory licences proposed in the Bill for operators of radio stations for the print handicapped and for institutions assisting the intellectually handicapped are consistent with this concern, which the Government shares. The new statutory licences set out in clause 6 and 26 of the Bill are based, to the extent appropriate, on existing statutory licences introduced in the Copyright Act in 1980. These licences already enable educational institutions to photocopy works-section 53b of the Act-and institutions assisting the print handicapped to make Braille, large print copies, and `talking book' versions of works-section 53d of the Act. In order to take advantage of the statutory licences, the beneficiaries need to make certain records of copies taken and to comply with other regulatory requirements in the legislation. Some educational representatives have complained that the record-keeping requirements they must meet under the existing section 53b statutory licence are onerous, particularly given that copyright owners have not, to date, in some cases, inspected the records kept. It would seem that the requirement to inspect may be a costly burden for copyright owners. I am concerned about these complaints, although it should be noted that the existing provisions of the Act allow owners and users to agree on less onerous terms and conditions, and provide for the sending of records to a central authority, so avoiding the burden of retaining records for the prescribed period of four years. Representatives of the handicapped institutions have indicated that, in return for the access they will require, they do not mind keeping records. In addition, given the very limited market for the materials which would be broadcast or copied under the new licences for the handicapped, indications are that the cost to the institutions of their new licences is likely to be minimal. In these circumstances it seems appropriate to continue the existing basic structure for the new statutory licences. Many of the onerous aspects of statutory licensing could be overcome if the beneficiaries did not have the possibility of dealing with every single copyright owner whose material is subject to the statutory licence. In practice, at the moment, a claim for equitable remuneration from Copyright Agency Limited-which was established as a collecting society by some copyright owners for the purpose of the sections 53b and 53d statutory licences-is very likely to be the only claim made. Nevertheless, the institution cannot assume this. The CAL has no statutory authority to represent all copyright owners who have the right to seek remuneration under the licence. As CAL has now commenced inspections and claims for remuneration it would not be appropriate to alter the statutory licensing structure at this stage. In the event of a continuing failure by the relevant parties to agree on less onerous arrangements, it may be necessary to consider providing statutory recognition for only one collecting society to make claims based on copying and to which all records of copying would be sent. The Act currently provides certain limitations on copyright control of works for the benefit of libraries, archives and their users, and for the purposes of criticism or review and for reporting news. The Bill will extend these limitations to include audio-visual items-clauses 10, 11 and 12. It is intended to allow libraries and archives to copy unpublished records and films for the purposes of research or study or with a view to publication, and to copy records and films for preservation, provided certain conditions are met. The new provisions are not, of course, intended to limit the copying rights which a library or archives may negotiate with particular copyright owners. The provisions are intended only to set the minimum which libraries and archives may do, without seeking the permission of copyright owners or paying any fees. The fair dealing provisions proposed in the Bill for the limited purposes of criticism or review and of reporting news, are in the Government's view appropriate limitations on copyright control. As in the case with the existing provisions in relation to literary, dramatic, musical and artistic works in sections 41 and 42, no attempt is made in the proposed amendments to define what would constitute a `fair dealing' in an audio-visual item. The purpose of the provisions is to ensure that people who, in the community's interests, disseminate news and provide legitimate criticism and review for the benefit of consumers and audiences may use copyright material without risking infringement action. Satellite Broadcasting Clause 5 of the Bill is intended to ensure that broadcasts via satellite are broadcasts under the Copyright Act. Under section 91 of the Act, copyright subsists only in broadcasts made from a place in Australia. A point-to-point transmission, under the present provisions, whether originating from a terrestrial transmitter and received by a satellite-an `uplink'-or made from satellite to satellite, is arguably not a `broadcast'. Whilst the `downlink' from a `direct broadcasting satellite' is a broadcast, it is not apparently from a place in Australia within the meaning of the Act. The result is that a broadcast which would otherwise be subject to the Copyright Act, but which goes via satellite, does not enjoy copyright protection. In addition, owners of copyright in a work or audio-visual material may not be able to enforce their exclusive right to broadcast against a person who makes an unauthorised broadcast via satellite because presently only acts done or authorised to be done in Australia may constitute infringements. Consistent with international opinion in relation to this issue, which was set out most recently in the report of the WIPO-UNESCO Group of Experts on the Copyright Aspects of Direct Broadcasting by Satellite, broadcasting via satellite ought to be dealt with under the Copyright Act in the same way as other broadcasts. Costs in the Copyright Tribunal Proceedings in the Copyright Tribunal have significant commercial impact on the parties, and are often lengthy and involve considerable cost. At present, the Act provides, in most cases, that the Tribunal may make an order for costs. The Bill will amend the Act by making it clear that, in taxing those costs, a taxing officer shall have regard to the Federal Court rules, including its scale of costs. Other Matters The impetus for the review by my Department was home taping, but during the review it became clear that commercial piracy was also a problem. Home taping remains an important issue. The remedy most favoured by copyright owners-namely, a levy on blank recording media in return for a right to copy audio-visual material-would seem appropriate from a copyright policy point of view, because it would be a payment for use of copyright owners' exclusive right to copy. Whether a levy would be the most appropriate solution to the problem in the Australian context remains to be seen. Several countries do have such a levy: West Germany, France, Austria, Portugal, Hungary, Finland, Norway, Iceland and Sweden. In some of those countries the levy is collected as a tax, with only part of the proceeds going directly to the copyright owners, the remainder going either into general revenue, or to the general welfare of copyright artists. In its April 1986 White Paper, the United Kingdom Government announced its intention to introduce a levy on blank audio tape in return for unrestricted home taping. It was also stated in the White Paper that a levy on blank videotape was not justified at this stage. Both the House of Representatives and the Senate in the United States are considering Bills which propose a levy on blank audio tape. My consideration of this issue to date has been on the basis that a blank tape levy would be a tax. If this proves to be the case, there are problems for government taxation policy, including the costs and structure of such a scheme. One other matter deserves close consideration in this context. It may be that the losses suffered by copyright owners through home taping could in some way be offset by a rental right. Both the United States of America and Japan have such a right for records and cassettes. A rental right could become increasingly important with the advent of compact discs, which may be a highly viable rental proposition because of their durability and high quality sound. My Department is continuing to examine all these issues, in the light of international developments. Another reason for the commencement of my Department's review was the call by educational institutions for increased access to audio-visual items, in particular to non-commercially available material broadcast on television. Last year my Department developed a proposal for a statutory licensing system, in return for equitable remuneration, which would have provided that access on terms arguably more favourable than those of the existing photocopying licence. The proposal was supported by tertiary institutions and copyright owners, but opposed by schools' representatives, largely on the basis that there would be an increase in costs which, they considered, was not justified. In these circumstances, the Government decided not to proceed at this stage with any reforms in the area of educational use until further consultations and work can be undertaken. Educational institutions need to negotiate copying rights privately either on a one-off basis, or by blanket licensing arrangements. Given that copyright owners are often not in a position voluntarily to grant such rights, even when they want to do so, it would be desirable for the difficulties with a statutory scheme to be overcome. It seems from recent discussions with schools representatives that common ground is being found. I am pleased to say that schools have acknowledged that the use of that material does require payment. This follows on the important concession from most copyright owners that, because of the social importance of education, they are prepared for their right to withhold their material to be removed and not to have the benefits of payment under a statutory scheme without joining an approved collecting society. In the course of the review, submissions were made to the effect that the term `performance in public' ought to be defined in the Act to take account of the fact that new technologies enable performances before small groups of the public. These `performances', which are usually film or video showings in motels, are to the commercial advantage of the person holding the performance. The decision of the Supreme Court of New South Wales in what is known as the Rank case in 1983 clarifies the issue. As the dissemination and use of copyright material becomes easier because of innovations in communications technology, both owners and users may have to accept a greater degree of orderly collective administration, perhaps via statutory schemes, subject to Copyright Tribunal review. Such trends appear to be evident overseas and increasingly appear relevant also in Australia. Financial and Regulatory Impact Statement The Copyright Amendment Bill will have no direct impact on Commonwealth revenue or expenditure. Any indirect impact on expenditure which may occur will be minimal, and will depend on applications being made to the Attorney-General or to the Copyright Tribunal to exercise powers under sections 10a and 149a respectively, which this Bill will slightly extend. A favourable indirect impact on Commonwealth tax revenue may be expected, as the strengthened anti-piracy provisions reduce untaxed illegal dealings in copyright materials, and encourage sales in legitimate product on which sales tax is payable. The position of the copyright industry can, therefore, be expected to improve as a result of the anti-piracy provisions, though the extent of this is difficult to quantify. I commend the Bill to the House and I present the explanatory memorandum to the Bill. Debate (on motion by Mr Spender) adjourned. Debate resumed. Mr DEPUTY SPEAKER(Mr Blanchard) —Before the debate is resumed, I remind the House that it has been agreed that a general debate be allowed, covering this Bill and orders of the day Nos 5 and 6. Mr LAMB(Streeton)(4.19) —Before the suspension of the sitting for lunch, I was agreeing with the honourable member for Groom (Mr McVeigh) that we would like to see Australians buying more Australian sourced products and services. I also agree with him that the workers in Australia-the ordinary men and women in salaried and wage positions-should not have to bear alone the burden of any economic recovery or readjustment of our balance of payments situation. I am sure people will understand and accept that if they are fully aware that over recent years, due to the accord, whilst workers have had their salaries indexed to a certain extent, they have not received an increase for about 12 months, and that the sharing of our national income has shifted to the profit makers. We have seen prices increase, leading to an overall drop in purchasing power or, to express it in another way, the standard of living, perhaps, of working people, of some 7 per cent to 8 per cent. We cannot expect working people to bear any greater burden of the readjustment that the Government will be tackling to correct our balance of trade situation while continuing the satisfactory growth and stability of our domestic economy. The honourable member for Groom decried the increasing foreign debt faced by Australians, and he spoke of that overall debt in terms of the interest load on every new citizen, let alone existing citizens. That has been largely due to a couple of factors. Simple arithmetic shows that the devaluation of the Australian dollar of, say some 25 per cent, over the last 15 to 18 months, has resulted in a one-third increase in our foreign debt. However, the recent spate of corporate takeovers by Australian management has seen the import and borrowing overseas of between $2 billion and $3 billion. I think we should be conscious of the profile of foreign debt and why it is increasing. The increase has not been solely due to government; it has largely been due to private borrowings. I promised the honourable member for Groom that I would say one other thing about the content of his speech. In these Supply Bills we are talking about $8 billion-worth of recurrent expenditure and some $2.1 billion in capital expenditure and payments to the States. The Bills contain two significant items-some $36.5m to cover increases in education allowance levels approved for 1986 and increased participation levels in both secondary and tertiary education; and $35.5m for the carry-over effects of new employment training programs begun in 1985-86 and for their continuation next financial year. I have quoted those two expenditure items in the Supply Bills to point out that rather than decry the state of the nation into which the honourable member for Groom's grandchild was born last week-I recall that he announced that it was a granddaughter-that grandchild is actually facing increased opportunities and an enriched life. For this small 2.3 kilogram babe, now a week old, he should rejoice in the knowledge that education will be made a greater option for her and that she should at least enjoy a greater opportunity in post-secondary education. In addition, with the growth of the economy and the production of 650,000 or more job opportunities in Australia, she can look forward to an enriched working life. However, the honourable member introduced a sour note when he said that chill winds swept over Canberra last week. I want to mention some colder and chillier winds that passed over a town in the western district of Victorian some months ago. I refer to the city of Horsham in the Wimmera, the city where I was born and bred, which felt the chill winds last month when once again the threat and spectre of blocking Supply was raised by the Leader of the National Party of Australia (Mr Sinclair). The right honourable gentleman made some comments, to which I will refer, which seemed very similar to those uttered by the then Leader of the Opposition in 1975, one Malcolm Fraser. The Leader of the National Party said that he intended to go down what was described by the honourable member for Boothby (Mr Steele Hall), then a Senator and a former Premier of South Australia, as the sleazy road to power-that somehow the Opposition would use its numbers in the Senate to block the Supply Bills and as a result the Government would not be able to continue. I need not remind the House of the constitutional crisis into which that perfidious action by the then Opposition plunged this country. A government is elected to govern and to carry out economic management for the full three years of its elected term. This is something which is right and proper and expected by the people, especially after such resounding victories as this Government received over the last two elections. Referring again to chill winds, the Leader of the National Party said: A climate is likely to be created where that-- he meant the blocking of Supply- may well be an alternative. I suggest to the House that what he is trying to do is to talk down the economy. He is trying to be a gloom and doomsayer about our economy. He is trying to manufacture and construct, quite falsely, the climate that suggests we are going down a slippery road to ruin. He said that the earlier an election is held the better. I think we need to remind ourselves that this is not the first time that the threat to withhold Supply has been raised. It was raised just before the 1984 election at which this Government was so resoundingly re-elected. Members of his own party in Queensland and, in fact, the then Leader of the National Party, said that it would be right and proper for the Opposition to block Supply should new taxes be introduced. New taxes are a right and proper economic management tool for any government to introduce. The Leader of the National Party felt that just because the Opposition does not like what we are about to do-although the public has endorsed our intentions-the Opposition could legitimately threaten to block Supply. I think the response from the Leader of the Opposition (Mr Howard) is interesting. When pressed by the media as to whether he supported the Leader of the National Party, he gave no unequivocal statement to the effect that he did not agree. He failed to rule out or dismiss the blocking of Supply as a way of forcing an election. He refused to stand by and support the accepted convention, which existed for some 74 years before 1974 and 1975 and, one would hope, has existed since that calamitous period. This stands in stark contrast to the position of the former Leader of the Opposition, the honourable member for Kooyong (Mr Peacock). When statements about the blocking of Supply were made prior to the 1984 election, the then Leader of the Opposition ruled out of order, contradicted, and repudiated the statements of the Leader of the National Party and said that while he was Leader of the Opposition a duly elected government, such as the Hawke Government on this side of the House, had every expectation to remain on the government benches for three years, the constitutional term for governments, and to carry out its job and mandate. I put it to this Parliament that it is only when an Opposition lacks leadership, alternative policies and credibility in itself that it must resort to this sleazy road to government. The Leader of the National Party, speaking at Horsham on the 18th of last month, said: . . . I think that in a climate where a Government is unable to govern, where it is unable to give leadership, people lose confidence in the ability of the Government to address pretty fundamental economic and social problems in this country. What he is saying, of course, is a mirror image of reality. The boot is on the other foot. He actually should have said: `Because we as an opposition lack leadership, because we as an opposition lack alternative policies, we are forced to try to muddy the waters, talk down the economy and point out all that is bad'. Honourable members opposite do this instead of recognising the successes of this Government in restoring our economy from the pitiful state it was in under the conservatives to a growing domestic economy in which the rate of inflation has stabilised and is definitely under the double digit figures that were common under their government. The Government has created 650,000 or more jobs and has brought about a 6 or 7 per cent growth in the economy. But the Opposition ignores those facts and talks down the economy by pointing to one troublesome spot. This Government recognises that spot. However, this Government also recognises that it does not have the ability to do something magic about a matter which is largely beyond its control. The honourable member for Groom recognised that the burden must be shared equally and should not be expected to fall further on the shoulders of the working men and women of Australia. Not only should we be concentrating on the content of the Supply Bills and the programs funded by them, but also we should recognise the threat that hangs constantly over a government twice a year when the Opposition will not recognise the conventions of Westminster parliamentary democratic government. I ask the House and the people of Australia to beware of those opposite who lack policies, leadership and credible alternatives and seek the sleazy road to government. Mr BEALE(Deakin)(4.31) —Before making some remarks on the Supply Bills, I refer briefly to two matters raised by the honourable member for Streeton (Mr Lamb). He dismissed our increasing overseas debt as arising because of the devaluation of the Australian dollar. He said that our overseas debt had gone up because the Australian dollar had gone down. I point out to the honourable member that the reason that the value of the Australian dollar has gone down is that the Government is mismanaging the economy. He also said that the grandchild of the honourable member for Groom (Mr McVeigh) would have `increased opportunities' in the years ahead. Does the honourable member for Streeton think that youth unemployment of 24 per cent represents increased opportunities? That is an example of the Government's mismanagement and not just one trouble spot to which he referred. The three Supply Bills now before the House seeking the appropriation of moneys for expenditures in respect of the year ended 30 June 1987, give the Opposition the opportunity to draw to the attention of the people of Australia the appalling way in which the Government is mismanaging the Australian economy. Our concern about the Government's performance is reflected in the wording of the amendment which has been proposed by my colleague the honourable member for Mackellar (Mr Carlton) and is now before the House. The Supply Bills are even more relevant because they reflect the first pass at government expenditure for next year. The Opposition believes that government expenditure has been running at far too high a level and that the major economic difficulties the nation faces can move closer to resolution only by a reduction in the level of government expenditure and by the introduction of additional flexibility into the labour market. The Treasurer (Mr Keating) continues to argue, against all the facts, how strongly the Australian economy is performing. It is ludicrous that he should continue to make this assertion in the face of numerous economic indicators which demonstrate that the Australian economy is running into real difficulties. I draw the attention of the honourable member for Streeton to the fact that inflation in Australia is now at 9.2 per cent and rising, while inflation in our major trading partners, and particularly Japan, West Germany and the United States of America, is trending downwards toward zero per cent. For the Treasurer to argue that relative inflation rates are independent of relative economic performance is ludicrous. Furthermore, unemployment in Australia is now around 8 per cent and, given the downturn in private investment which is currently occurring, is likely to rise. As I said earlier, youth unemployment is this country is a disgrace. The Government, as we all know, has been pursuing a policy of high interest rates in order to protect the value of the Australian dollar, which last week fell to a record low level against the trade-weighted index. Mr Cleeland —You are being negative. Mr BEALE —I remind the honourable member that we are not managing the economy. His Party is managing it, and the Australian dollar is now at a record low against the trade weighted index. This high interest rate policy is now biting hard in the community. It has already caused a marked slow-down in the housing and automobile industries and figures announced yesterday show that retail sales growth slackened in the March quarter. The high interest rate policy and the Government's punitive taxation regime have caused private investment to slow down, even to the point where the President of the Australian Council of Trade Unions is blaming business for this state of affairs, rather than criticising the Government's economic policies. Further evidence of the Government's poor economic management is given by the April balance of payments figures. This whole matter has been the subject of much comment in recent days, but the stark fact remains that during that month, Australia slipped a further $1.5 billion into debt with overseas interests. The gross debt number is a difficult target to identify because it has been accelerating so rapidly in recent months, but it is now likely to be of the order of $80 billion. Further deterioration in the value of our currency will push that number even higher. Furthermore, in order to fund its own excessive expenditure and to finance its elusive, if not illusory, tax cuts, the Government has resorted to a whole series of punitive taxation measures which, firstly, are unlikely to raise nearly as much revenue as the Government thinks and, secondly, will have a further dampening effect on private investment. The Government has for far too long been relying on monetary policy as its main economic instrument, rather than giving attention to wages and fiscal policies. The Opposition's industrial relations policy, announced just over a week ago, has been widely acclaimed by economic commentators and business groups. If the Government follows its usual line, it will read the policy very carefully and then select and implement appropriate pieces of it which will, of course, be for the benefit of all Australians. If, however, as a result of ACTU domination of the Government, such a step becomes too difficult, then the rigidity of the Australian wages system will continue to contribute significantly to our being uncompetitive internationally, so adding further to our overseas debt woes. The Supply Bills enable us to focus attention on the Government's fiscal policies. Much has been made by the Government of its restraint in expenditure, but that is far from accurate. For example, the annual growth in real terms during the last three Budgets under this Government has been over 5 per cent, compared to just over 2 per cent in the seven years of the previous coalition Government. I am pleased that the Minister for Housing and Construction (Mr West) is present because I want to draw attention to the proposed expenditure under the Treasury Department of $65.1m dollars on savings banks deposit interest subsidy. This gives effect to the Government's deal with eligible savings banks for the estimated July 1987 and October 1987 instalments under the deposit interest subsidy arrangements to be implemented following the Government's decision on housing finance. I remind the House of the background concerning the grant of this subsidy. The Government's high interest rate policies, coupled with the ceiling on housing loan interest rates, have led to a sharp deterioration in housing starts over the past eight months. The combination of these two factors has meant not only that the cost of money for housing loans rose sharply, through such devices as cocktail loans, but also that housing loan funds availability dried up dramatically. The Prime Minister (Mr Hawke) at his 2 April Press conference admitted that housing starts next year would fall below 100,000 units-a decrease of more than one third-from the level of 153,000 housing starts in 1984-85. This extraordinary revelation was followed by a further disclosure that the Government had done some kind of deal with the savings banks under which, in exchange for the lifting of the ceiling on new home loans and the payment of $120m in subsidy subsequently increased to $145m, the banks would apparently guarantee to lend $6 billion to home buyers over the next year. The banks also appeared to give some kind of undertaking on low start loans. The Minister for Housing and Construction subsequently announced that this whole transaction between the Government and the eligible savings banks would be the subject of legislation. But in fact this legislation has not yet seen the light of day and a number of meetings called between the Government and the savings banks designed to settle the terms of the verbal agreement between them have been postponed. The Opposition partly acknowledged the Government's decision on the lifting of the interest rate ceiling on new home loans because it partly implemented the coalition's policy. Our policy on housing loans is that we will deregulate the interest rate ceiling on home loans for new borrowers. Like all subsidies, this subsidy involves discrimination and in this case the subsidy discriminates against the building societies and non-house-buying taxpayers who pay part of the subsidy. Such discrimination against other members of our society is unwarranted and unjustified. I draw the attention of honourable members to an answer that the Treasurer gave this afternoon in this chamber. When questioned about the fringe benefits tax, he said: `Why should the others who cannot benefit pay for this?' In other words, the Treasurer was also saying that the kind of discrimination that exists with the housing loan package is unwarranted and unjustified. Furthermore, as has been noted, the subsidy represents an increase in government expenditure. Further increases to government expenditure will add to the government deficit, lead to increases in interest rates, reduce the amount of funds available for private investment purposes and as a result contribute to a further reduction in the level of housing loans. It is not clear to what extent other lenders to home purchasers, particularly the building societies, are discriminated against, but there is no doubt that discrimination has occurred. The Chairman of the Government's Indicative Planning Council, which is the key advisory body advising the Government on the housing industry, admitted this at the housing industry conference in Brisbane a few weeks ago. Furthermore, it is still not clear whether this subsidy to the savings banks will be paid, or how much of it will be paid. The Minister has implied that payment will not take place until the necessary legislation is enacted, and details of that legislation remain to be resolved. What this suggests is that the Government's housing policy is still in confusion and that the confusion is unlikely to be resolved in the short term. In the circumstances it seems entirely inappropriate that the subsidy funds should be included as part of this legislation. The confusion surrounding the housing industry is also compounded by the Government's punitive taxation measures, and specifically those relating to the abolition of negative gearing and to the capital gains tax. It is now clear that the introduction and the proposed introduction of these measures are leading to a rental crisis in Australia's capital cities. Vacancy rates are moving downwards sharply and rents are starting to move upwards sharply. As a result lower income groups will suffer because those groups have the most to lose by higher rents and by the lack of private rental accommodation. This is particularly noticeable in my electorate covering the Nunawading and Waverley areas of eastern Melbourne. Not only is the subsidy to the savings banks causing discrimination against building societies and non-house-buying taxpayers; but also the Government's punitive taxation measures are causing discrimination against low income earners. It is remarkable how a single line in one of these three Supply Bills can demonstrate so clearly signs of a confused and discriminatory housing policy as well as underline the Government's poor economic management of this country. It is now time for the Government to face up to some hard economic decisions. It is time for the Government to rely less on monetary policy and more on wages and fiscal policies. It is time for the Government to take a leaf out of the Opposition's policy book and introduce more flexibility into the labour market. It is time for the Government to curtail its expenditure. Only when the Government takes these steps will our overseas balance of payments start to be brought under control; only then will interest rates come down, thus stimulating private investment and so creating wealth for the whole community. With the breaking of the drought, the effects of the price-wage freeze and the recovery of the international economy, this Government has had a dream run in the last three years. But it has squandered the community's hard-won gains and it is leading us towards a major economic crisis. The Government must now face up to the tough decisions and implement them in the interests of all the people of Australia. Mr FITZGIBBON(Hunter)(4.47) —What a dreary recital we have just been forced to listen to. I guess we could call it the litany of lamentation. It is rather surprising that in the last two days the Opposition has brought out its so-called heavyweights. They have tried to assail the Government's policies. The Treasurer (Mr Keating) and Government speakers have repeatedly debunked their mish-mashed economic policies and thrown them back on their ears. Now we have had the honourable member for Deakin (Mr Beale) come in here and try to give us the economic solution to Australia's ills. It is a wonder that the Leader of the Opposition (Mr Howard) and the Deputy Leader of the Opposition (Mr N.A. Brown) do not step aside and let the honourable member for Deakin solve all the ills of this country. I suggest that he would probably be as successful as the Opposition generally is proving to be. Today we are debating Supply Bill (No. 1) 1986-87, Supply Bill (No. 2) 1986-87 and Supply (Parliamentary Departments) Bill 1986-87, which provide for the appropriation of funds for the purpose of maintaining Government initiatives and services for the period 1 July 1986 to 30 November 1986. I wish to comment briefly on certain aspects of these Bills. Supply Bill (No. 1) seeks appropriation of $36.5m to cover increases in education allowance levels approved for 1986 and increased participation levels in both secondary and tertiary education. No one can deny that this Government has a proud record in the field of education. The Government recognises that education is essential to national development and economic growth. The skills, capabilities, flexibility and experience of the work force depend heavily on the quality of the education and training that the work force has received. Therefore, education is an essential element in the Government's strategy for economic development and social progress. Inherent in this strategy is the raising of standards and expanding opportunities in education. As all honourable members are aware, the Government started a thorough overhaul of school funding. In August 1984 it announced a funding package unprecedented in its range and scale. General recurrent funding levels were set in legislation for the four years 1985 to 1988 as part of an 8-year funding plan. This was the first time schools have had this degree of funding security. For the first time a common basis for funding government and non-government schools was established. Government objectives have been addressed through special programs such as the participation and equity program, with changes to increased participation in education, particularly by the most educationally disadvantaged groups. It also introduces greater equity in providing education. The basic learning in primary school programs provides extra assistance for primary school children in basic learning. This program was allocated $21m over the three years 1985 to 1987. In addition, the computer education program was allocated $20m over 1984 to 1986, and that program has been remarkably successful. Many schools in the Hunter electorate have gained improved computer opportunities as a result of that program. Those initiatives have already shown results. Participation in the final, non-compulsory years of school has increased markedly and, as foreshadowed in this Bill, is expected to increase even further. In April 1986 the Minister for Education (Senator Ryan) said that the Government would intensify its efforts to encourage young people in rural areas to participate in senior secondary education. There is a relatively low participation in senior secondary education by rural youth at present. While governments have worked to improve education services in rural areas, this Government accepts that still greater effort is required. The Government therefore has allocated $388,000 to implement several initiatives to improve the access to information on Commonwealth education assistance schemes. I am sure that this move will be welcomed by rural families who have been worried for a long time about their children's access to adequate educational opportunities. Mr Jeff Buckland, the principal of Merriwa Central School, would have no hesitation in confirming the definite requirement for senior studies in isolated areas. He is disappointed that Merriwa Central School is not classed as disadvantaged as he believes it should be because of its geographical location and isolation and I agree with him. Nevertheless, the principal believes that his high school has a relatively high student participation in secondary education compared with other country schools with larger numbers of students. Merriwa has approximately 206 students in secondary education; 46 in year 10, 18 in year 11 and 12 in year 12. There is room for improvement, and I welcome the Government's initiatives in encouraging and making it easier financially for more students to participate in years 11 and 12 and, hopefully, to proceed to tertiary education. Another isolated school, also at Merriwa, is St Joseph's Catholic School. It recently received a grant of $76,000 towards the cost of new toilets, a canteen and a shelter area for the school. The parish has had to contribute approximately $50,000 towards this $120,000-plus project. It is wonderful that the people of Merriwa were prepared to give generously to assist this important project for the school. St Joseph's Primary School also received a small grant of $1,000 to enable the school to employ an integration aide to work with a student who has muscular dystrophy. This small grant enables the integration aide to attend the school for four mornings each week to provide an individualised program of instruction for the student, to teach the child fine motor controls which involve the use of a typewriter. Unfortunately, these grants are rather small, but if they do not continue children who suffer physical or mental disability will be disadvantaged. I am confident that the Minister will see fit to continue these grants, which are giving disadvantaged children a new lease of life. Other schools within the Hunter electorate are receiving special grants also. I will be striving to continue to gain such grants to help children who are so sorely afflicted. This year is the centenary year for the Maitland Technical and Further Education College. At present Maitland TAFE operates out of a splendid historical building and about 12 annexes, and currently has a student intake of 2,800. After years of being ignored by conservative governments, the Maitland TAFE has received from this Government a grant of $10m for stage one of a new college building. Mr Tim Fischer —Where do you stand on the Maitland High School? Mr FITZGIBBON —That is a State matter. If the honourable member had any sense at all, he would know that we have no jurisdiction over State matters. However, the principal at the TAFE, Mr Len Cusack, seems confident that he will be able to operate out of the new college in time for the February 1987 school year. Incidentally, the stage one component covers only five of the 12 disciplines offered by Maitland TAFE college. I remind the honourable member for Farrer (Mr Tim Fischer) that this is a Federal responsibility in which I have become very interested; I have struggled very hard to improve the lot of my constituents. More funding will be sought to enable Maitland TAFE to achieve its full potential. Maitland College's history over 100 years has been rather fragmented, due to being ignored by conservative governments, but I am sure that in the next century, with the continuance of Labor administrations, the people of Maitland will get the type of technical college to which they are entitled and which they certainly deserve. Eventually, Maitland TAFE hopes to have places for 4,500 students. This Government has injected coherence, purpose and direction into Australian education by increasing resources and ensuring that they will be used efficiently and productively. Education policy underpins and consolidates the Government's wider economic and social objectives. Cessnock Technical College has been greatly improved as a result of substantial grants from this Government. I thank the Minister, Senator Ryan, for her co-operation, while reminding her that Singleton Technical College needs expenditure to provide improved opportunities for its students. Provision is made in Supply Bill (No. 1) for an appropriation of $35.5m for the carry-over effects of new employment training programs which were begun in 1985-86 and which will continue in 1986-87. This Government has implemented an economic strategy which gives priority to increasing employment opportunities and reducing the level of unemployment. As a result of the Kirby Inquiry into Labor Market Programs the Government accepted the thrust of its recommendations and has set in train a number of initiatives. Perhaps the most important of these is the Australian traineeship scheme, which ushered in a new system of structured vocational training for young people, especially those who leave school before year 12. The introduction of the traineeship scheme involves the combination of training and work and is the Government's main response to the employment and training needs of young people as identified in the Kirby report. Although the traineeship program got off to a much slower start than anticipated it is gaining momentum now with more and more young people and business organisations becoming involved. Other initiatives include adult training and re-training assistance programs designed to meet the skills and individual training needs of job seekers and employers. The underlying aims are to help industry meet its requirements for skilled labour and to support individuals who, without training or retraining, would be at a disadvantage in obtaining stable and rewarding employment. This Government has implemented a range of labour market programs aimed at promoting expanded employment opportunities for unemployed people, particularly the long term unemployed. This Government has honoured its promise to reduce unemployment and has exceeded its target by creating 670,000 new jobs, a record which speaks for itself and lends weight to the Government's determination to increase employment opportunities across all age groups in the community. The Government has also directed its attention to the most disadvantaged job seekers in our society, including women, disabled people and Aborigines. I now turn to Supply Bill (No. 2), which contains an appropriation of $12.4m for increased assistance to rural producers following the Government's recent economic and rural policy statement. That policy statement is the most significant government rural policy document formulated in recent political history. Biased critics-there would be a couple of them from the National Party in this House-say that the Government has not done enough, but I stand as a firm supporter of the package. A rational examination will reveal that the Government has responded in a positive way to the difficulties being experienced in the rural sector. Even the Land newspaper praised the package. It said: A thorough reading of the package reveals that Mr Kerin has put a huge effort into tackling farmers' problems. Mr Michael Tooth, President of the Livestock and Grain Producers Association, commented that for the first time ever a Federal government had attempted to address some of the fundamental problems facing agriculture-not band-aid methods but long term viable solutions. Those comments are correct. The Minister for Primary Industry (Mr Kerin) put a huge effort into tackling the problems, and it is the first time that any Federal government has attempted to address some of the fundamental problems facing the agricultural sector. This statement on economic and rural policy is not a panacea for all the ills facing the farming community, but it goes a long way to addressing many problems out there. As the Minister said, it is indeed an historic document. No government has ever been so active in promoting the revenue concerns of Australian agriculture. While we are working in a way that will positively benefit people, we have the not even muted bleatings of those on the other side trying to criticise every beneficial thing we do. I have talked before in this House about the opposition to our solutions to the rural problems. The Deputy Leader of the National Party, the honourable member for Gwydir (Mr Hunt), came out with a 14-point policy program that will solve the ills of rural Australia. That has been improved upon. I guess the Leader of the National Party, the right honourable member for New England (Mr Sinclair), is Leader because he does not need so much time as his deputy. He has reduced his deputy's policy statement down to a seven-point plan. As I explained before, it is all right to give a gift bag of promises, but it has been calculated by the Government that that bag of promises would add $6.3 billion to the deficit. That will cost the farmers dearly in the higher interest rates that would exceed any illusory benefits resulting from the fatuous National Party promises. Mr Deputy Speaker, my time has elapsed. I have great pleasure in commending these Bills to the House. Dr HARRY EDWARDS(Berowra)(5.05) —Supply Bill (No. 1), Supply Bill (No. 2) and Supply (Parliamentary Departments) Bill, which are before the House, provide for moneys anticipated to be expended over the period 1 July to 30 November, when the 1986-87 Appropriation Bills will have been passed. This is a suitable opportunity to comment on the Government's economic policies or, rather, the inadequacies of these policies, as set out in the amendment to the Bills proposed by my colleague the honourable member for Mackellar (Mr Carlton)-inadequacies which have recently been highlighted by the much publicised comments of the Treasurer (Mr Keating). I will not be referring to expenditure on education, as stressed by the honourable member for Hunter (Mr Fitzgibbon), which is a very important matter for our children and young people and a fundamental factor in the long term development of the country. While the Prime Minister (Mr Hawke) was in Tokyo last week dutifully peddling the Government's persistent disinformation line about the Australian economy-that the economy presented a pretty rosy aspect-the Treasurer was telling John Laws that Australia ran the risk of becoming a `banana republic' and a `third rate economy' if it did not face up to the challenge posed by the balance of payments deficit. The contrast in those statements underlines a point that needs to be hammered. The Hawke Government and the Treasurer in particular are not going to be allowed to forget the way in which they have consistently misled the Australian people and the Parliament, and, I suspect, the Labor Party Caucus, about the Australian economy and, in particular, the way they have consistently played down the yawning, and still growing, deficit in the balance of payments. That is, the way payments for imports and other payments overseas-most notably the mounting interest bill on the massive borrowings Australia has had to engage in to meet the deficit, with the country's overseas debt on course for $100 billion, outdoing Mexico and other like countries-are exceeding earnings from exports. The Government and the Treasurer have, day in and day out, played down the nation's parlous position of spending overseas in excess of earnings, like a borrowing spendthrift, to the tune of $1,000m a month, or $30m on tick every day. Honourable members might think of it this way: The Government finds $100m for the anti-drug campaign, a most important and urgent objective. I doubt that what the Government is doing is the best way to spend that money, but then, so what? That $100m is just three days borrowing overseas! I am personally particularly conscious of this disinformation process because as recently as last Friday fortnight, 2 May, I put to the Treasurer a question without notice focused on this key point of the balance of payments deficit. I admit that there was a certain degree of hilarity because of my use of a word that was ruled unparliamentary, having the implication that in this matter the Treasurer was having himself on. As I now suggest, perhaps it was a rather more culpable matter of consistent, deliberate misinformation. I asked: When will this . . . Government face up squarely to the reality of Australia's yawning balance of payments deficit amid rising inflation . . . That last point is important. I urged the Treasurer to recognise that: He has to do something radical in the wages area, ideally a freeze . . . or substantially cut the `social wage' . . . A term used frequently by members of the Labor Party to refer to what people receive by way of benefits such as Medicare, education, and so on through the Budget: such as via the leaked proposal for a $1.4 billion cut in Budget spending. In a serious but bland reply, with plenty of rhetoric about the former Government's alleged failings of policy, which have nothing to do with the case, the Treasurer referred very complacently to the depreciation of the Australian dollar, as if the Government had initiated it by way of purposeful policy. He lauded the wage outcome of the order of 6 per cent per annum-compare that with latest figures from other countries: Japan 4 per cent, the United States of America 2.7 per cent, West Germany 4.1 per cent with inflation over 12 months at 0.1 per cent-without a hint of the seriousness of the situation stated in my question. Yet less than a fortnight later the country is on the way to becoming a `banana republic' or a `third rate economy'. Did this path to ruin open up in just the two weeks between 2 May and 15 May? It is true that the balance of payments deficit for the month of April, announced on the preceding Tuesday, was not the average $1,000m but $1,500m, that is $50m spending on tick every day rather than the average $30m for the past 12 months or so. That difference, serious though it is, does not excuse the Government or the Treasurer persistently disguising the gravity of the situation the country has been in. The Treasurer has been misleading the Parliament, his own colleagues and the Australian people. I make that point so that the Australian people will know the sort of Government they are dealing with. But, in doing so, I do not in any way want to trivialise or diminish the gravity of the issue confronting the country and the importance, the imperative of significant-`radical' was the word I used in my question the other day; `drastic' is the term I note that leading journalist Mike Steketee used in the Sydney Morning Herald yesterday-changes in policy to meet the situation. The starting point for that is a correct, valid appreciation of the nature of the difficulty and how the country got there. Notwithstanding what I have said, or rather its having been said, one can only welcome the Treasurer's new-found determination to let Australia know `truthfully, honestly, earnestly, just what sort of an international hole Australia is in', to quote the Treasurer when speaking to John Laws last week. A useful start in the area of honesty would be to drop this garbage about there being a `healthy', `robust', domestic economy and a `problem', `difficult', `sick' external one, whatever that might mean. For the Treasurer, health is equated to growth. That is the one measure-an important one, it is readily conceded-of health the Treasurer always resorts to. Even that has a question mark. Growth under the Hawke Government has been fatally flawed because it has been largely growth on tick, with the country manifestly living beyond its means-this is reflected precisely in the balance of payments deficit that we are focusing on-with the Government's succession of massive budget deficits being the most visible and culpable manifestation of that. Mr John Brown —I beg your pardon. We have halved your deficit. What are you talking about? Dr HARRY EDWARDS —I am saying that the country is manifestly living beyond its means, with the Hawke Government's succession of massive budget deficits, especially the profligate 1984-85 Budget in which I think the Minister for Sport, Recreation and Tourism (Mr John Brown) received an increase of 60 per cent-good for him but not good for the overall welfare of the country-being the most visible and culpable manifestation of this. The fact is that growth is only one indicator. The ill health of the economy has shown up in other aspects: First, the very yawning deficit we are talking about. It is like an individual spend-thrift who looks prosperous but the true situation is shown up in his overdrawn account-there comes a day of reckoning. Second, there is the 30 per cent devaluation of the Australian dollar, visited on us by the international community-not by purposeful policy as the Treasurer represents it, save to the extent that sustained high interest rates have been engineered to hold the devaluation to only 30 per cent. Third, there are the sustained high interest rates-the highest real interest rates since the Depression have prevailed for many months now. The recent easing stemming from certain favourable overseas influences, especially the widespread fall in inflation-towards zero-overseas, is likely to be shortlived. Fourth, there is inflation, high and accelerating, at 9.2 per cent, with Australia singled out for special adverse mention in the tables in the journal the Economist. Contrast that with Japan's recent 12-month rate of 1.2 per cent, West Germany's 0.1 per cent-so Australia's rate is 92 times worse than that of West Germany!-and the United States' 2.3 per cent and prices actually falling. All this is the very opposite of what is required if we are ever to work our way out of the adverse trade position. Fifth-I am passing over persistent high unemployment-there is the low level of business investment, the lowest as a percentage of gross domestic product for many years. It is `abysmal' according to Simon Crean, President of the Australian Council of Trade Unions. It is the very reverse of what is required if the reduction in living standards being taken now is ever to be restored and the rise in living standards resumed. Mr Adermann —They have nothing to invest. Dr HARRY EDWARDS —Well, maybe, but the business community is not investing for a variety of reasons connected with this Government's policies. I interpolate that I do know about the terms of trade difficulty which has been around for about two years now. I noted that in an adjournment speech the other night. I stress that it has been around for two years, and that it is not a wholly external thing, independent of policy in this country. On the import side in particular-the Australian dollar price of imports-it is importantly influenced by the very devaluation which, as I have said, has been visited upon us by the international community, not independently of the Government's inadequate policies. In conclusion, I revert to what has to be done. As the text books set it out, there are some six policy options, alone or in combination that the Government can adopt. First, a further purposeful devaluation-but that is not recommended because the supporting measures to make it stick are not on for this Government. Second, there is a radical change in the wages area. Of course, I would not anticipate anything as effective or realistic as the coalition's wages and industrial relations policy. Just the same, a significant change here is the best option. It would increase competitiveness and lift the incentive to investment in new capacity, thus leading to a genuine lift in living standards. The third option is a substantial cut in the `social wage', as I referred to earlier, via the Budget; that is, the mooted $1.4 billion of cuts in government spending. It is most important that that be made and kept in place and not traded-off in some way in the coming discussions. Fourth, there is the theoretical possibility of a hike in taxes with a view to reducing private spending. That is certainly not recommended by me to this biggest taxing government in history. Fifth, there is the option of sustained high interest rates discouraging investment and lending to recession. I would say that that option is almost exhausted. The sixth, the last resort, and one definitely not recommended, would be across the board restrictions on imports and maybe on some money flows. As I said in my question to the Treasurer earlier, when one looks at the array of options it boils down to drastic solutions in the wages and Budget areas. I earnestly urge the Government, in the interests of all Australians, to get stuck into that job. Mr DUNCAN(Makin)(5.18) —I listened with interest to the contribution of the honourable member for Berowra (Dr Harry Edwards), who has just resumed his seat. He seemed to say in effect that the solution to all the country's problems was to cut wages and to cut welfare. As far as I am concerned, the wage earners and the welfare recipients of this country are about the last people who ought to be made responsible for the problems that currently confront us. I do not want, as a mere back bencher, to get into the high flying business of proposing major solutions to the country's problems. I think I can be much more effective in dealing with a particular aspect of the-- Mr Hollis —Don't be so modest. Mr DUNCAN —I thank my friend. He describes me as modest. It must be the first time that has been thrown at me. I do not want to get into the details of specifically dealing with the macro aspects of the exchange rate problems, the terms of trade and the like. In the few moments available to me this evening I would like to raise a particular problem for a very important section of the Australian people that has been caused by floating the Australian dollar-a problem which to date has not been resolved, or as far as I am aware even considered in any great detail by the people who make decisions about these things. I am referring to the effect that the floating of the Australian dollar has had on people who receive pensions from foreign countries, people who have served in military forces in the United Kingdom or in Italy, for example, or people who are entitled to old age pensions from those countries. These people, under the system that operates at the moment, are being terribly inconvenienced and disadvantaged because on a day to day basis they can find that their pension entitlements are either cut or increased and that they can lose the fringe benefits they are entitled to. It seems to me that this is absolute madness. When one thinks of the enormous amount of bureaucratic work that must go into keeping a check on those pensioners who, because of the difference in the exchange rate, are now in excess of the income means test and therefore have to lose part of their Australian pension and the work that must go into keeping a check on those pensioners who, because of an increase in their overseas pension value in Australian dollars, have to lose their fringe benefits, one appreciates that this must be driving thousands of people who are on pensions absolutely mad and must also be causing great headaches and great bureaucratic nightmares within the Department of Social Security and within the Department of Veterans' Affairs. Apart from the administrative costs involved, the way in which ordinary Australians who are on pensions are being drastically inconvenienced by this situation is, in my view, quite appalling. I have had numerous letters from individuals who have complained to me about the way in which they almost constantly, or frequently at least, receive letters from the Department of Social Security and from the Department of Veterans' Affairs saying that: `We note because of the increase in the value of the Australian dollar that your overseas pension is now a certain amount and as a result of that we ask that you forward within 14 days your health benefits card. We note that your overseas pension now takes you beyond the means test and accordingly we are reducing your Australian pension by a certain amount'. Mr Tim Fischer —What solution do you propose? Mr DUNCAN —The honourable member will note that I have 15 minutes to go and if he will restrain himself-- Mr Shipton —You just tell us the solution; come on. Mr DUNCAN —I will, in good time, have something to say about the solution, because there are clearly solutions that can be implemented. I have contacted the Minister for Social Security (Mr Howe) about this matter as I think there are solutions that can be put into place. In particular, I mention the fact that not only is this a bureaucratically costly exercise but also this is costly in terms of time, transport, telephone calls, letters, et cetera, for the pensioners. Mr Tim Fischer —You are a member of the Government doing it. Mr DUNCAN —The honourable member seems to think that because I am a member of the Australian Labor Party and because we are the Government, I should in some way be muzzled from raising in this House the concerns of my constituents. I can tell the honourable member that I place the interests of the people of Tea Tree Gully and Salisbury in South Australia above all else, and that is what I am doing this evening. I certainly will not be muzzled or gagged by the members of the Liberal Party of Australia or the National Party of Australia. I want to emphasise the fact that a change in the value of the Australian dollar of as little as a cent could, in fact, mean that a person is denied fringe benefits. It seems to me that this situation is just absolutely dreadful. If a person were receiving $105.99-which was the case with one of the persons who has written to me-and the Australian dollar were to increase the value of his overseas pension in Australian dollars to $106, he would lose the fringe benefits. This situation, as I keep saying, seems to be quite absurd. Aside from that, once the fringe benefits and the health benefits are withdrawn, the person then has to pay the Medicare levy of 1 per cent. (Quorum formed). Sometimes when I am speaking in this House and quorums are called it really makes me wonder what the Opposition is on about. It is always complaining that it does not have enough time to debate these sorts of things. We are debating Supply Bills. It is quite extraordinary. I was planning to go on for only about four of five minutes in order to conserve time so that honourable members opposite would be able to take part in this debate. There seems to be no purpose in this now, so I may as well take the full time because I am dealing with a matter that affects ordinary Australians and a matter which should be the subject of considerable debate in this Parliament. The sort of slanging that emanates from members of the Opposition all the time and the esoteric nonsense in which they indulge is all very well, but it takes the time of the House, it does not make real sense and it certainly makes no sense to the ordinary Australians who are interested in what goes on in our Parliament. The way that ordinary Australian pensioners in receipt of pensions from foreign countries are inconvenienced by the floating exchange rate is an important matter and is a matter which ought to be the subject of concern and consideration by members of this Parliament. By interjection, I was asked earlier what sort of solutions I saw to the problem of pensioners being inconvenienced by advances or declines in the value of the Australian dollar. I think that there are a number of options that could be pursued. I think they need serious consideration so that ordinary Australians who are on pensions can be relieved of the inconvenience and the worry this causes them, in some cases almost on a weekly basis. In the first place, I think that ordinary people on pensions who are subject to these fluctuations should be able to retain their pensioner medical cards, once they have been issued for a period of, say, six months without having them withdrawn. That would go a great deal of the way towards assisting this situation which, as I have said before, must surely be a bureaucratic nightmare within the Department of Social Security and the Department of Veterans' Affairs. In the second place, I think some margin of, say, $5 or $10 above the allowable earnings or above the means test level ought to be allowed to ensure that people do not have their pension rate altered or their fringe benefits withdrawn almost on a daily basis, depending on the whims and fancies of the international money markets. I think that sort of a solution would be possible. It might cost some little amount of money, but I think that within the overall Budget of this Government we ought to be able to take steps to ensure that pensioners-the most disadvantaged people in our community-can be protected from the sort of worry that goes with changes in the value of the Australian dollar and, therefore, the value of their pensions. As is the case with taxation, it may be possible to organise an arrangement whereby individuals could receive their pensions throughout a year. Some adjustment could be made at the end of the financial year and it could then be worked out whether a pensioner owed money or the Department owed the pensioner money. That could be arranged in a way similar to the way in which we deal with taxation. If we can do it for the well-to-do under our taxation system, we ought to be able to do it for the disadvantaged-the pensioners of our country. Implementing these sorts of suggestions would be well worth- while. They would have the desired effect of ensuring that many thousands of people throughout the nation are not disadvantaged in the way they have been by the floating of the dollar. I conclude by saying that one person has come to me and said that he feels that he needs to make arrangements for some non-urgent surgery on the basis of when he thinks he is likely to have a pensioner medical card. To think that ordinary Australians in our society are actually having to make arrangements for medical treatment according to the whims and fancies of international financiers playing the international money markets just makes me sick in the guts. I do not think that we should cop that for a moment. Something needs to be done to relieve ordinary pensioners in this country of this worry. I have raised this matter this afternoon to make sure that it is brought to public attention and to the Government's attention. Hopefully, something can be done, possibly along the lines of the suggestions that I have made, to ensure that ordinary Australians are relieved of this worry at the earliest possible time and that pensioners who are receiving overseas benefits which they have earned and to which they are entitled are able to receive them free of the worry that exists at present because of our fluctuating dollar and the floating exchange rate. Mr ADERMANN(Fairfax)(5.34) —I listened with interest to the speech of the honourable member for Makin (Mr Duncan), who preceded me. He raised a very serious problem that is known to us. I was interested in the suggested solutions that he presented. Although I do not often agree with him, I commend him for making those suggestions. They are worthy of very close examination. I support the amendment moved by the honourable member for Mackellar (Mr Carlton). It is an irony indeed that this Government, with the economy out of control and unable to tell the nation where we are going, has brought before this Parliament three Supply Bills to provide funds for the period up to November this year. We understand that at this time of the year, as the Budget will not be brought down until August and the accompanying legislation will not be passed until some months later, it is necessary to seek Supply for the initial months of the new financial year. However, we expect that when these Supply Bills are brought before the House the Parliament will be afforded the courtesy of being informed of the policies and measures proposed by the Government to deal with the disastrous economic situation into which it has blundered. That is not my view alone. Has not the Treasurer (Mr Keating) himself, once extolled as the world's best Treasurer, expressed fears that we are on course to becoming a banana republic and going down the gurgler? Despite all of this the Government elected to govern and always claiming some mandate-we heard of it again today-has no idea of what to do with that mandate, and no plan for recovery. Mr Peter Fisher —It is good at personal abuse; that is all. Mr ADERMANN —That is possibly right. Let us get down to the government of this country. The Government's solution is to call yet another meeting with the Australian Council of Trade Unions to get riding instructions and to try to lock big business into some sweetheart deal. Small business, of course, going to the wall and loaded with costs and additional new or increased taxes that it cannot absorb, will be neither consulted nor considered. Last year the Government trumpeted loud and long about its package of tax reform. What does it mean by tax reform? What was this package to comprise? We were told it would mean significant tax cuts for all Australians but that there would need to be some redistribution. So in came a host of new and increased taxes. The Government is now assured of substantial extra tax revenue. There was no chance that the first part of the promise would ever be honoured-not by this big taxing Government. The trade-off-the tax cuts-are now to be put on the table, wherever that is. As I have predicted a number of times since that famous tax statement, there is extreme doubt as to whether the tax cuts will be of the quantum promised and even greater doubt as to whether they will come in on time. They will most certainly be deferred. As we look at our balance of trade we contemplate a disaster of proportions never before experienced in this nation. We are living massively beyond our means. The Treasurer tells us that business in Australia has record growth and profits; yet the nation is broke. He tells us that the problem is that we are doing too well and that the economy is over-healthy. Not only do we sit next to Argentina at United Nations conferences; it seems that we may shortly be in its company going as mendicants to the world's bankers seeking to gain concessions and terms of arrangements to service our huge overseas debt. The Treasurer says that the problem is that commodity prices have fallen. Our mineral and farm outputs have all experienced price downturns. I concede that that is part of the problem, but we have had that situation before, not once but many times. On those occasions it has been a hiccough and not the disaster we now face, which has every prospect of getting worse and not much chance under this Government of getting any better. This Government is most anti-rural. It is the most anti-rural Government in our history. It has put such a set of hobbles on our primary producers that they are struggling to survive, let alone export. How can we ever expand our exports of primary produce when this Government's policies are designed to bring about the demise of primary industry? That must beggar description and understanding. The fundamental problem, of course, is not the dropping of overseas prices but the great and ever increasing burden of costs which has been loaded on to our export industries. These costs include escalating taxation. This Government is the highest taxing government in Australian history. Not only the quantum of taxes, but also their discriminatory and regressive direction are of concern. Primary industry, perhaps more than any other section of business, will feel the crippling impact of the capital gains tax. Primary industry will bear much of the burden of the fringe benefits tax. Primary producers in particular reeled under the fearsome interest rates which were the result of deliberate policy decisions of this Government. Primary industry suffered because the Government abrogated its promise to pass on in full the benefit of reduced world fuel prices. Now this Government has the effrontery to wash its hands of all responsibility and to blame the present situation on falling prices. It is a blessing that sugar prices have taken a slight upturn, because this Government is not interested in ensuring that that industry does not collapse. The small provision in these Bills for assistance to the sugar industry is far too little and far too late. How long will small business be able to survive and provide the jobs that the Government is parading as evidence of its success while new taxes and costs and unmanageable interest rates are bequeathed to them by this Government? The statement by the Treasurer at Budget time was that consumer price index increase based wage claims should be depreciated to the extent of the devaluation of the Australian dollar. He was told very quickly by the ACTU that this was not acceptable in the September round-perhaps next year. The Government not only accepted this but connived in the ACTU demands now being heard not only for wage increases that are only partially discounted but also for a spurious productivity claim of at least 3 per cent. Nor is there any indication from statements by the ACTU in the last few days that it will show any responsibility. There is no way that it will agree to anything less or any delay, whatever the result for small business; it has said so. The ACTU, bleeding employers dry, now has the colossal gall to claim that the problem is caused because business will not expand its investment. How can this be done? What capacity or incentive business has left to invest is not explained. The Government has neither the courage nor the responsibility to do what this nation has a right to expect of it. No resolute action is taken by it. It has made no new submission to the Australian Conciliation and Arbitration Commission. There has been no statement from the Prime Minister (Mr Hawke) or the Treasurer indicating any will or capacity to deal with the matter. There has just been an unbelievable announcement that the Government will have another conference, summit, tea party or something with the ACTU. Already the ACTU has said that it will not reduce its demands. It will not change its course or renegotiate the accord. The Government would do better to save the considerable cost of calling this conference or summit and get down to making responsible decisions and governing this country. Quite clearly, simply and without any room for contradiction, we have priced ourselves out of many world markets. We are just not competitive. Our manufacturers cannot absorb the costs of taxation, labour and interest which are the legacy of this Government. Surely the answer is to cease the cost load. In all these areas-taxation, wage rates and interest rates-the Government has the capacity to cut those costs. But taxes are increased; the Government encourages wage and productivity increases; and interest rates were increased as a deliberate policy. That means that the Government is going in exactly the opposite direction from that required to restore our economic situation. If ever a government deserved the name of an F Troop government this one does but even the indians cannot help, because the Treasurer has ensured that they do not have anything left to help with. Let us not forget the other solemn commitment of this Government and look at the likelihood of its being honoured. The covenant was a massive cut in government expenditure which we were assured would be met in the Budget. Not only is the left wing determined that there will be no cuts but it is also calling for an expansion or an increase in expenditure. Seven of the big spending Ministers have served notice that they will neither provide the reassessments in priority arrangements sought by the Prime Minister nor agree to any cut in their spending. They want to spend more, not less. If anyone has to cut, they say, let it be the Minister for Defence (Mr Beazley). Perhaps they do not think that this nation is worth defending because nobody would want to take it. No wonder the Treasurer, the spokesman, the great promiser, wrings his hands and says that we are going down the gurgler. There is no way that deficits will be reduced, inflation controlled, or interest rates fall and there is no way that the financial markets of the world will have any regard for the Australian dollar unless this profligate Government massively cuts its spending. Once again the Government has neither the wit nor the will to take the hard but necessary decisions. It just cries out to the Opposition: `What would you cut?'. If that is the philosophy and approach of those opposite they should vacate the treasury bench forthwith and let a government that will set about restoring our wrecked economy get on with the job. This Government should be flushed down the gurgler, not the nation that it has betrayed. Once again, the Government's master, adviser and mentor-the good old ACTU-has the answer. Mr McVeigh —Simon says. Mr ADERMANN —Yes, Simon says: `Do not cut expenditure. Do not take the pressure off small business. The answer is to pour more money into subsidy and support'. The ACTU says that the motor vehicle industry, the Broken Hill Proprietary Co. Ltd and the engineering industry should all receive more and bigger handouts and that that will provide jobs and boost the economy. A little consideration will show that this again is the very reverse direction from that which we should be taking. The ACTU's queer economic theories do not come up with the right answer. The Government should cut costs and regulation and get off the back of business, giving it room and capacity to move. That is the simple answer. Instead of grasping and putting both hands in the till, the Government should be looking to incentives and encouragement. Business will then invest and look to expand. It will provide jobs and get back the confidence that it has lost. This Government and the ACTU are killing all the incentive, confidence and capacity of business to survive and prosper. Let us ensure that there are real productivity gains, not illusionary inflation based paper figures, before making productivity claims. Increases with which business has been saddled over recent years well and truly cover any productivity gains. The ACTU is well ahead; make no mistake about that. Mr Milton —Business is making record profits. Mr ADERMANN —My colleague says that business is making all time high profits. How can that be when the Treasurer admits that this nation is fast going broke? It is time that this Government faced reality. For a brief moment it seemed that the Treasurer had received some Damascus road vision but it faded away into another summit-another fiasco. What a tragedy that this country, once called the lucky country rich in resources, should face the awful situation which we face today. Time is running out. In three years this Government has succeeded in suppressing that great spirit of entrepreneurship and endeavour for which we have been famed and has replaced it with confusion and despair. It has damped down all incentive to roll up your sleeves and get down to the job. Its course has been predictable and its socialistic designs deliberate. It is no wonder that those opposite want to change our flag. Is this the nation over which that flag has proudly flown for so long? This Government has failed. It has betrayed Australia. Without a scintilla of remorse or any indication that it has the will or desire to pull us back from the brink of bankruptcy-they are not my words, they are the Treasurer's-it cheerfully trundles in three Supply Bills and pretends that all is well. All is not well. Apart from those in the Government, every Australian knows that all is not well. It will be a very long time before the Australian people will entrust the government of this country again to the Australian Labor Party. I want to raise another matter. The Government said recently in this House that it had made an agreement with the banking industry on housing interest. The banks did very well out of that, thank you. I do not think that the banks were making any real sacrifices. They made an agreement that all existing loans would be pegged at 13.5 per cent if the ceiling were taken off. I do not believe the banks are honouring that agreement. I would like the Government to look at this. I have written to the Minister about a specific case in my electorate. a constituent built a home on a bank loan of $25,000 at 13.5 per cent interest. Soon afterwards the bricks started to crumble. The brick company denied that the bricks were faulty so the constituent sought an independent expert opinion. The brick batch was faulty and it all had to be replaced. The brick firm agreed only to replace the bricks. My constituent could get no redress through the Bureau of Consumer Affairs. Therefore, he was faced with another $14,000 in costs for a builder to replace those bricks. Last November or December he went to the bank and finally sought an additional $14,000 loan. The bank said that that would be fine and that it would accommodate him. However, the bank would not extend his existing loan at the rate of 13 1/2 per cent. The people concerned at the bank said: `No, we will give you a new loan which will run concurrently with your old loan. That new loan will be at 15 1/2 per cent'. That was the attitude of the bank. There were to be two instalments side by side. That was impossible, and the bank knew it. My constituent was told by the bank: `Well, we can cover that. We will write a new consolidated loan for $39,000'. That covered the $25,000 at 13 1/2 per cent and the new $14,000 loan. Did the bank average the interest? Not on your life! The bank was charging an interest rate of 15 1/2 per cent on the whole $39,000. My constituent is using the same passbook and the same loan number. The borrower had Buckley's choice. He could not sell the house and he could not afford to rebuild it without the loan. I believe that in spirit the bank has found a devious way to get around the agreement. I believe that it is not honouring the commitment it has given to the Government. I wrote to the Minister quite some time ago. I hope he will get around to answering me for I will be most interested in the answer that he provides. Mr LINDSAY(Herbert)(5.52) —Just over three years ago the Hawke Government promised a new direction for Australia and a new vision for the Australian people. In March 1983 Australia was in deep crisis. Our nation was dispirited and crippled by the worst recession in its history. Hundreds of thousands of Australians were jobless; bankruptcies had soared to record levels; our standard of living had fallen; and national production had sunk to an all time low. There was a collapse in public morality because tax evasion, avoidance and cheating had become a way of life for countless thousands of Australians. The nation was heading for bankruptcy. The Hawke Government, an authentic Australian government, has given our nation new direction and fresh hope. The turn around since March 1983 has been dramatic. This Government's policies are succeeding. The Supply Bills are further written evidence of the Hawke Government's determination to regain Australia's position as one of the great nations of the world. North Queenslanders are grateful to the Hawke Government for beginning the enormous task of rebuilding Australia's defence forces after seven years of destructive neglect by the previous Liberal-National Party Government. The program of new capital equipment acquisition and increases in pay for service personnel have been long overdue. There has been a substantial increase in defence expenditure devoted to capital equipment and capital facilities. Real growth in defence expenditure has far exceeded that of the Fraser Government. The increases will allow continued steady progress in the formidable task of rebuilding the Australian defence forces to deal with any challenges in the decades ahead. The $2.6 billion new construction submarine project is an urgent priority of the Hawke Government. It represents the largest sum of money ever committed to an Australian naval building program. (Quorum formed) In early 1987 the Government will announce its choice of a new submarine for the Royal Australian Navy. Not only will all the submarines be built in Australia but also the establishment of industry skills during construction will enable all repair and maintenance requirements of the submarine fleet to be carried out in Australia. The FA18 fighter program is proceeding as planned. Australia is acquiring 75 of these magnificent aircraft of which 73 will be assembled in Australia. Again, the acquisition of industry skills during the period of assembly will place at the disposal of the Royal Australian Air Force full facilities for the maintenance and repair of these high technology aircraft. Work is proceeding on two new FFG-7 guided missile frigates being built in the Williamstown dockyard. Earlier this year the Hawke Government made a decision to acquire new small arms for the Australian Defence Force. An initial requirement of 3,240 light machine guns and 67,000 rifles are to be manufactured under licence in Australia. The Government is concerned that the Australian taxpayer should be aware of the content, priorities and rationale of defence spending. Mr Paul Dibb, on behalf of the Government, has prepared a report advising which capabilities are appropriate for Australia's present and future defence requirements. A public version of the report is expected to be tabled in this house in the near future. I hope that there will be a wide ranging discussion in the Australian community on the recommendations contained in the report. It is essential to the future security of Australia that there be a sound understanding within the Australian community of the need to ensure not only that sufficient funds are devoted to Australia's defence needs but also that the Australian Defence Force is organised and equipped to defend Australia successfully. Personnel costs now represent more than 40 per cent of defence expenditure. The Hawke Government recently announced a series of measures designed to improve substantially the provision of housing for service personnel. Recently, the Minister for Defence (Mr Beazley) announced the creation of an interim housing authority to continue the Government's positive steps to redress the incompetence and total neglect of housing for service personnel by the Liberal and National parties. This Government is committed to a funding program of more than $750m during the next decade to bring the housing stock up to standard. The group rent scheme is to be preserved but rents on some categories of housing are to be modified to reflect better the variations in the quality of the housing. There has been some misunderstanding within the service community on the matter of housing rents for defence personnel. I wish to assure service personnel that this Government's policy on service rents is fair and equitable. For example, under the Hawke Government rents paid by service tenants in defence housing in my electorate are less than half the rents paid by tenants in non-service housing. I will endeavour to ensure that this remains so. The Hawke Government has come to grips with the need to support fully the living conditions of service personnel, particularly service wives and their children. The decision of the Minister for Defence in December 1985 to appoint Ms Sue Hamilton to undertake a study of the problems of service families is a clear indication of this Government's commitment in this regard. Ms Hamilton has recently reported to the Minister that the main problems she has identified are poor communications between the Services and service families, lack of extended family and other community support systems for those families, poor employment opportunities for them, low self-esteem among the spouses of service people, family stress caused by disruption to children's education because of frequent postings and dissatisfaction with the standard of service housing, housing maintenance and removal of personal effects. The Minister for Defence is committed to rectifying this situation, which unfortunately has been a legacy of many years of Liberal-National Party neglect. The Hawke Government has turned the economy from a situation in which it was actually shrinking to one in which there has been nearly 15 per cent growth since we came to office. Australia has the fastest growing economy in the world. Industrial disputes are at a record low. Profits are being restored to the levels of the late 1960s and the 1970s-the sorts of levels that make it worthwhile for employers to re-invest and create more jobs. Simultaneously, the Hawke Government has brought unemployment down from record levels. New jobs have given hope and security to the victims of the disastrous years of the Fraser Government. We still have a long way to go-30 years of Liberal-National Party Government of this country has deeply scarred our will to challenge and succeed. Those wasted years must never be repeated. Mr Rocher —Mr Deputy Speaker- Motion (by Mr Humphreys) proposed: That the question be now put. Mr Rocher —I raise a point of order, Mr Deputy Speaker. I was on my feet and it is normal for the Chair to give the call to an honourable member on this side after an honourable member on the other side has just resumed his seat. You have the advantage of the speakers list and you made an arrangement with the Government Whip. I wonder whether that is proper practice in this House. Mr DEPUTY SPEAKER(Mr Leo McLeay) —The honourable member will resume his seat. He knows that there is no point of order. Question put: That the question be now put. The House divided. (The Deputy Speaker-Mr Leo McLeay) Ayes . . . . . . . . . . . 67 Noes . . . . . . . . . . . 51 —— Majority . . . . . . . . . 16 —— 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 Keogh, L. J. 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. 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. Snow, J. H. Griffiths, A. G. Staples, P. R. Hand, G. L. Theophanous, A. C. Hollis, C. Tickner, R. E. Howe, B. L. West, S. J. Humphreys, B. C. (Teller) Wright, K. W. Jacobi, R. Young, M. J. Jakobsen, C. A. Adermann, A. E. Hicks, N. J. (Teller)Aldred, K. J. Hodges, J. C. Beale, J. H. Jull, D. F. Blunt, C. W. Katter, R. C. Brown, N. A. McArthur, F. S. Burr, M. A. McGauran, P. J. Cadman, A. G. MacKellar, M. J. R. Cameron, Donald Miles, C. G. Cameron, Ewen (Teller) Millar, P. C. Cameron, Ian Nehl, G. B. Carlton, J. J. Peacock, A. S. Coleman, W. P. Porter, J. R. Connolly, D. M. Reith, P. K. Conquest, B. J. Robinson, IanDobie, J. D. M. Rocher, A. C. Downer, A. J. G. Ruddock, P. M. Drummond, P. H. Sharp, J. Edwards, Harry Shipton, R. F. Everingham, P. A. E. Sinclair, I. McC. Fife, W. C. Slipper, P. N. Fischer, Tim Spender, J. M. Fisher, Peter Sullivan, K. J. Goodluck, B. J. Watson, D. J. H. Hall, Steele Webster, A. P. Halverson, R. G. Wilson, I. B. C. Hawker, D. P. M. Hurford, C. J. Shack, P. D. Hayden, W. G. Smith, W. Cohen, B. Lloyd, BDarling, E. E. Tuckey, C. W. Question so resolved in the affirmative. Question put: That the words proposed to be omitted (Mr Carlton's amendment) stand part of the question. The House divided. (Mr Deputy Speaker-Mr Leo McLeay) Ayes . . . . . . . . . . . 67 Noes . . . . . . . . . . . 51 —— Majority . . . . . . . . . 16 —— 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 Keogh, L. J. 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. 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. Snow, J. H. Griffiths, A. G. Staples, P. R. Hand, G. L. Theophanous, A. C. Hollis, C. Tickner, R. E. Howe, B. L. West, S. J. Humphreys, B. C. (Teller) Wright, K. W. Jacobi, R. Young, M. J. Jakobsen, C. A. Adermann, A. E. Hicks, N. J. (Teller)Aldred, K. J. Hodges, J. C. Beale, J. H. Jull, D. F. Blunt, C. W. Katter, R. C. Brown, N. A. McArthur, F. S. Burr, M. A. McGauran, P. J. Cadman, A. G. MacKellar, M. J. R. Cameron, Donald Miles, C. G. Cameron, Ewen (Teller) Millar, P. C. Cameron, Ian Nehl, G. B. Carlton, J. J. Peacock, A. S. Coleman, W. P. Porter, J. R. Connolly, D. M. Reith, P. K. Conquest, B. J. Robinson, IanDobie, J. D. M. Rocher, A. C. Downer, A. J. G. Ruddock, P. M. Drummond, P. H. Sharp, J. Edwards, Harry Shipton, R. F. Everingham, P. A. E. Sinclair, I. McC. Fife, W. C. Slipper, P. N. Fisher, Tim Spender, J. M. Fisher, Peter Sullivan, K. J. Goodluck, B. J. Watson, D. J. H. Hall, Steele Webster, A. P. Halverson, R. G. Wilson, I. B. C. Hawker, D. P. M. Hurford, C. J. Shack, P. D. Hayden, W. G. Smith, W. Cohen, B. Lloyd, BDarling, E. E. Tuckey, C. W. Question so resolved in the affirmative. Amendment negatived. Original question resolved in the affirmative. Bill read a second time. Mr DEPUTY SPEAKER(Mr Leo McLeay) —Is it the wish of the House to proceed to the third reading forthwith? Mr Connolly —No, Mr Deputy Speaker. The Opposition believes that in view of the fact that some 19 members of the Opposition-- Mr DEPUTY SPEAKER —Order! If the honourable member for Bradfield wishes to ask for a Committee stage debate-- Mr Connolly —Mr Deputy Speaker, we wish that the Bill be taken to a Committee stage. The Bill. Mr ROCHER(Curtin)(6.16) —It may not be generally understood by those outside the Parliament, and even by those on the other side who dwell on my every word, that these Supply Bills authorise expenditure from the public purse from 1 July until the Government's Budget, to be brought down in August, is passed by the Parliament probably some time in November. In all, the Bills authorise expenditure of in excess of $10.1 billion. Although not conclusive evidence of the Government's spending intentions during the coming financial year of 1986-87, fears of continuing extravagance will not be quelled when it is noted that expenditures anticipated in Supply Bill (No. 1) will escalate by 11.2 per cent; in Supply Bill (No. 2) they will escalate by 20.8 per cent; and the comparatively insignificant Supply (Parliamentary Departments) Bill will increase spending by some 9.2 per cent or $1.8m over that for the same period last year. Of course, it can be claimed that these vast increases stem from an ambit claim mentality which is ever present with this big-spending, big-taxing socialist Government. Nevertheless, it remains true that expenditure over the first four months of 1986-87 is to rise by nearly $1.8 billion. When it is remembered that spending this year could exceed budgeted targets by a massive $1.3 billion-it is $1.3 billion for the benefit of the honourable member for Menzies (Mr N.A. Brown)-it is something of an understatement to observe that the portents for a disciplined approach to spending are indeed dismal. Despite the hype and the propaganda, there is nothing on the budgetary horizon that gives any confidence that the Hawke Government has found the necessary courage to flout the excessive demands for its masters in the Australian Council of Trade Unions and exercise either restraint or the decision-making power given to it by the Australian electorate. Nerve and courage are qualities notably lacking in this apology for a government. It has to resort to trickery and subterfuge. The Hawke Government has made an art form out of one of the sicker versions of the bad news, good news technique that it resorts to so often. Most honourable members on both sides of the chamber have twigged to it. It involves selectively backgrounding some journalists, sometimes topped up by an inspired leak from the Budget Cabinet. Horrendous intentions are signalled to the public in these ways and when the Budget is finally brought down and the Government's intentions are merely disastrous and not catastrophic as planted earlier in the public's mind, there is almost a universal sigh of relief. Well, the ploy has worked well enough for the Hawke Government so far in that public perceptions have been manipulated in this and other ways. But the chicken hawks are coming home to roost. Not only has the value of our dollar dropped but also so has the penny. The Minister for bad news, commonly known as the Treasurer (Mr Keating), can no longer get away with deliberate obfuscation; nor can the Prime Minister (Mr Hawke). Truth telling time is upon them. Perhaps the Treasurer can even be persuaded to accept publicly the views of his ministerial colleague Senator Button, who said on 13 March: I don't know who invented the- expletive deleted- J-curve but I tell you it wasn't an Australian who learnt about the Australian economy. More pressing and almost equally unlikely, the Treasurer should act on the suggestions made by the Leader of the Opposition (Mr Howard) weeks ago. The coalition's six-point plan is still the way to go. If the Government had adopted the Leader of the Opposition's six-point plan, even now, in the short time available, the world's allegedly best Treasurer could go about drafting a mini-Budget significantly to reduce government spending. Such an approach is needed, supplemented by an assault on the costs of employment and a reversal of attitude towards the productivity-cum-superannuation farce. If that were done, there would possibly be a coherent and less interventionist monetary policy, abandonment of the anti-business and anti-rural bias in new tax measures and an easing of restrictions on foreign investment, as we have spelt out so often. If these proposals had been put in train when the coalition parties first made them in the interest of the well-being of all Australians, we would have reason to feel a little more confident about the future. They were not, because the Treasurer and ever decreasing numbers in this socialist Government's ranks believe in economic miracles and the elusive J-curve. We have not heard much from the Treasurer about that fairy tale over the past week, have we? All the jargon has been trotted out as our economic performance has fallen away. Some scribes have even encouraged the Government's follies, talking of fine tuning associated with monetary policy. The only fine tune to be heard by this Government is the one it must dance to coming from the Australian Council of Trade Unions. This must be the most easily influenced Government in Australia's history. It has sold its soul to big unions and pretentious unionists in a disgracefully unparalleled way. Evidence of this abdication of the responsibility to govern in the best interests of all is to be found in many developments. Nowhere, though, is it more apparent than in the Government's pig-headed refusal to produce a May mini-Budget, when everyone knew that the terms of trade and balance of payments were already under stress of a type not experienced in this country in living memory. We all remember the fanfare that accompanied the announcement that $1.4 billion was to be cut from spending next financial year. Not surprisingly, we were not told that expenditure this year was already known to have blown out by $1.3 billion. That is called robbing Paul to pay Paul. The truth is, therefore, that the proposed $1.4 billion spending cut would only be cutting spending back to this year's unacceptable high budgetary level before the blow-out. Since then, of course, we have come to learn that even that targeted reduction is unlikely to be met in the next Budget. I suppose we can be grateful that the Government did not do what the Treasurer did last year. It will be recalled that the effect of last year's mini-Budget and subsequent decisions was to cut some $1,290 million from spending and add on $1,459 million, to give a net increase in spending of $169 million. The Treasurer had the gall to try to sell that as a spending cut. The Government said in the last Budget Papers that expenditure in 1985-86 was going to be 29.8 per cent of gross domestic product. It looks as though this will blow out to about 30.3 per cent of GDP. Contrast that with the coalition's approach to spending when in government. The average of outlays as a proportion of GDP for the three Hawke Budgets will be something like 30.5 per cent compared with an average of 28.2 per cent over the seven Fraser Budgets. Mr Webster —Much less. Mr ROCHER —Ours was much less, as my friend reminds us. If the Government is really serious about cutting expenditure this year, it should aim to cut expenditure to something in the region of 28.5 per cent of GDP. This would still be above the average of the seven Fraser years. The real problem is: Even if the Government says that it will cut expenditure, can we trust it? Not only did it add more spending than it cut this financial year, but it did not follow through with all the cuts announced in the May 1985 mini-Budget. For example, in that mini-Budget, child care funding was to be cut by $30m in a full year. Six months after that, in November, the Government announced that actual savings would be only about $10m. Another decision that has not yet been acted upon is the handing over to the private sector of the administration of the defence service home loans scheme, which move was supposed to save $120m in a full year. There is no sign of this happening. Dr Harry Edwards —Useful privatisation. Mr ROCHER —Yes, but the Government has gone to water on that too. There is also no sign of the $25m reduction in incorrect welfare payments. Of course, it is far from clear how the amnesty that was announced will help to reduce welfare fraud. The DEPUTY CHAIRMAN(Mr Drummond) —Order! The honourable member's time has expired. Dr THEOPHANOUS(Calwell)(6.27) —I just want to reply briefly to the comments of the honourable member for Curtin (Mr Rocher) and to say that it is quite clear that the conservative forces in this country have learned nothing about economic management and continue to put forward the kinds of solutions that would have been out of place in the nineteenth century, never mind the twentieth century. They obviously have learned nothing about how one runs a modern economy or how to deal seriously with the kinds of problems that we have before us. It is absolutely extraordinary to me that the kind of economic advice coming from the Opposition forces is so useless and fails to come to grips with the real fundamental problems such as those of the balance of payments and the balance of trade. Anyone who supposes that these problems are simple or that they can be resolved with simplistic formulas is completely mistaken. If we take away all the rhetoric and all the jargon and look at the remedies being suggested by the Opposition, to the extent that there are any, what do we see? We see the most simplistic solutions to complex problems. For example, we are told that if we reduce wages and massively cut government spending we will be able to resolve the current account deficit problem. No explanation is given of, firstly, the consequences of adopting an approach of that kind or, secondly, what it might lead to in other areas of the economy. No empirical evidence is given of how this will impact on the current account and on the trade imbalance so as to resolve the problems. We do not have any explanation of those matters from the Opposition. Of course, cutting the wages and the standard of living of workers is the traditional remedy always thrown up by conservatives whenever there is an economic problem. Whenever there is any economic problem, the poorest sector of the community, the working people of this country, are told that their wages and conditions have to be cut. These are the conservative solutions that have been thrown up by the Opposition. Of course, unfortunately, those conservative solutions are also shared by sections of the bureaucracy in this country-indeed by the Treasury. It seems to me extraordinary that, when those sorts of remedies have been tried and failed in other countries, most notably in the United Kingdom, they should reappear here in this chamber and indeed in the media as solutions to the current account crisis and to the trading situation. They are the so-called solutions and remedies which have proved a failure in the United Kingdom and other places-the supposed remedies that are said to be the ones that will resolve our difficulties. There is a very indirect chain between the kinds of conservative measures that have been suggested and the improvement in the current account and trading positions. To suppose that it is a simple matter of cutting wages, which will result in a situation in which somehow we will see a turnaround in the trading position and industries in Australia will boom, is clearly nonsense. Anyone who has been involved in industry planning or in a study of industry planning would know that it has not worked in other countries and will not work here. It is nonsense to suppose that it will automatically be the case that as a consequence of the supposed reduction of costs through cutting wages we will automatically have a situation where manufacturing industry will suddenly boom, import replacement industries will suddenly come up and the balance of payments and balance of trade will automatically improve. The measures required are much more complex and need to be looked at. I find it extraordinary that substantial advice is not being given to the Government and the Opposition by the bureaucracy as to a range of possible alternative measures to the normal conservative measures that have been thrown up in the media over and over again. We ought to be looking at a number of alternatives. We ought to be wondering how we will come to grips with this difficult problem that faces the nation. We should not be thinking that we can resolve this in terms of simplistic formulae. A number of things can be done in relation to the trading situation. The Opposition has suggested a strategy which would effectively bring on a recession in this country by massive cuts in not only the public sector but also the economy. Those sorts of massive reductions in economic growth would result in a situation where we were faced with the possibility of a serious recession of the kind imposed in 1981 and 1982. How would that situation resolve our problems? Would it result in a reduction in our imports? There might be some slight reduction in imports, but the price that would have to be paid would be a massive cut in the growth in the economy in order to achieve a small reduction in imports. A highly inefficient approach to take to the whole question of growth and economic management is the Opposition's claim of massively reducing government spending and cutting back the economy. The Opposition has suggested that we should deregulate the wages system in such a way that wages would be reduced dramatically. The Opposition believes that that would result in an improvement in competitiveness, as if there has not already been an improvement in competitiveness in Australia. Improvements in competitiveness alone do not achieve overseas markets, exports and the creation of replacement industries. Other measures need to be taken, such as industry planning and incentives to domestic manufacturing production, if those sorts of problems are to be resolved. We cannot resolve our problems without further incentives and without looking at the whole question of an analysis of the nature of imports penetrating Australia. Where are they coming from? Are they in the luxury goods area? If so, can we do anything about minimising them? If they are in the domestic appliances area, can we do more to stimulate production in that area in Australia? Can we talk to the companies that are importing in such large quantities to see whether we can get them to produce in Australia? These are the sorts of concrete issues we need to face if we want to resolve our current account problems. For us to think that we can adopt the kinds of conservative solutions being put about by pundits all over this country is a nonsense and it certainly will not work. There is no question that we have a problem, but that problem should be addressed by the whole nation coming together and looking at the number and range of alternatives that can be used to resolve it. That is not what the Opposition is doing. Members of the Opposition are out to try to score cheap points in relation to the problem that has been raised, as if they have no responsibility for the problem arising in the first place. During the period of the last Liberal Government, from 1975 until it lost the election in 1983, the Fraser Government believed that it could live and bring prosperity to this country entirely from the resources sector, the mining sector and the agricultural sector. Very little was done to stimulate domestic manufacturing production-in fact, the opposite was the case. During that period, especially from 1980 to 1982, we had a situation in which many of our industries were wiped off the board; they closed up. Many factories became warehouses, and we lost all of that production. It is not an easy matter for all those industries to blossom once again. We need concrete measures; we need measures that encourage the development of those industries; and we need to encourage investment in manufacturing. We must do a number of things across the board to direct manufacturing investment in this way if we are going to get the import replacement industries and if we are going to develop the export sector we need. Without those measures we will not be able to resolve the problems. The DEPUTY CHAIRMAN(Mr Drummond) —Order! The honourable member's time has expired. Mr SHIPTON(Higgins)(6.37) —As we debate in Committee the Supply Bills, which provide the Government with revenue for the next five months, we find the nation in a state of crisis. The country needs leadership, yet we are directionless. The economy and the nation are out of control and we find that we are living beyond our means. The Parliament is sitting this week and the Prime Minister (Mr Hawke) is out of the country, travelling in China. I do not decry the need to visit that important country, but at this time when the Parliament is sitting, which is of the Government's own making, the Prime Minister chooses to leave the country directionless and leaderless. The Prime Minister decides to leave the sinking ship at a time when we have a complete failure of government policies. We have a failure of the Government's economic policies, a failure of its fiscal and financial polices, a failure of its monetary policies, with record high interest rates, and a total failure of its wages policies. The combination of all those policies has led to the disastrous situation the economy is in, with the balance of trade figures released last week. We are bereft of policies. Mr Downer —It is a scandal. Mr SHIPTON —As my colleague interjects, it is a scandal. We have a government lurching from crisis to crisis, a government out of control. We have a Prime Minister who is a lame duck caught out of the country. He has to have telephone calls and conference calls with his ministry to find out what is going on. He tries to give orders, but he cannot give orders because he cannot lead. He does not know how to lead. We have a rift between the Treasurer (Mr Keating) and the Prime Minister. We have a Treasurer who says that we are heading for a banana republic. He then tries to back and fill and say we are not having a summit. Let loose at Question Time today, he said: `It really is a summit'. Then he said: `No, it is not a summit. I did not mean to say it was a summit after all'. He had a rare moment of truth. A flash came to him on radio last week when he said that we were on the way to becoming a banana republic. Ever since then he has been trying to eat those words and back and fill because he realises the mistake he made. The factions have been set loose upon him in the Australian Labor Party. In those moments we had a complete public admission from the Treasurer to the people of Australia of the total failure of everything the Treasurer has been doing in the last three years, a complete admission of the failure of every economic policy of the Government, of its wages policy and, above all, a complete admission by the Treasurer of failure of the accord and all that means to the Government. The accord is an agreement between the Labor Party, which is in government, and the trade union movement. Do not let us ever forget that the Parliamentary Labor Party is the parliamentary wing of the trade union movement. We have this massive admission of failure by the Treasurer, and that needs to be pointed out. The policy failure is reflected in record high interest rates, which are affecting home buyers and business investment, and particularly the capacity of small business to operate. We have record inflation-9.2 per cent across the nation, 9.8 per cent in the city of Melbourne. We have unemployment on the rise. We have massive unemployment amongst young people. They are finding it increasingly difficult to get work. Approximately half of the unemployment figures are made up of the young. The last unemployment figures show that the percentage of young people who cannot get a job has increased from 22 per cent to 22.6 per cent. Whilst that is happening we have a record balance of trade deficit, as was announced last week. We have record growth in government. We have record government spending at every level of government in this nation today. The Federal Government's spending is out of control. The rate of spending under the Hawke Labor Government is double the rate it was under the Fraser Government. We have State government spending out of control. We have local government spending out of control. Every level of government in this country-the three tiers of government-is spending taxpayers' dollars as if they are going out of style, forgetting that it is the taxpayers who pay, whether through personal tax, indirect tax, land tax, rates or other taxes. People have been taxed out of existence to fund this record government spending that is going on across Australia. We have a record tax take at every level. I had it drawn to my attention in Victoria that land tax-a form of capital gains tax-has doubled in parts of my electorate in the last 12 months. We have a record growth in the bureaucracy. Every day we get more public servants and more bureaucrats for whom the poor taxpayer has to pay. Let me direct my attention back to those disastrous record balance of trade figures last week that sparked the Government's current confusion and pointed to its weaknesses-its total failure of policy and, above all, its lack of leadership. At the same time as this disastrous scenario is occuring, the Government is introducing more and more taxes on the community. Above all, it is introducing more and more taxes on the productive sector, the wealth creating sector, the sector that has to make profits-the business sector. We have the fringe benefits fiasco currently before us. On Monday I was with a car dealer in my electorate who put off six people last week because of the fringe benefits tax. People are not buying cars. There is a downturn in the automotive industry. There will be massive unemployment in the automotive industry. A capital gains tax was announced on 19 September but it has not yet been introduced. This is creating massive investment uncertainty. People managing their own affairs do not know what to do. Their accountants and lawyers cannot advise them because this Government has not yet introduced the legislation. We do not know what the legislation is. We have just seen the fringe benefits legislation. That is an incredible monster of regulation and bureaucracy. It will mean that people will have to fill in two tax returns a year instead of one. We have government by Press release, government by announcement, similar to what goes on in a South American dictatorship. We had the announcement of a capital gains tax on 19 September and the legislation has not even been introduced in this House. People in businesses cannot plan for their retirement, cannot plan their affairs. It is a totally unreasonable situation and the Government ought to be ashamed of it. The Government is taxing the productive business sector of this economy out of existence. In doing that it has got the economy into the disastrous state that it is in. We have a welfare system that has broken down. It has failed the community and failed the poor. the Government has to realise that by taxing the community more and more-by taxing individuals and companies more and more-and increasing the amount of welfare it is not going to solve the nation's problems. That solution has now passed. We have created a welfare system that encourages people to cheat and crib. We have created an economy that is out of control. There are other great problems. The public hospital system is in a state of crisis. We have the Medicare muddle. The Minister for Health (Dr Blewett) is at the table. In my State of Victoria alone, 30,000 people cannot get operations at public hospitals. The transport system is out of control and it is having record deficits. In Victoria the railways' deficit is $500m, and it is probably more than that in New South Wales. We have a transport system that has completely failed and the taxpayers are funding it more and more. There is a record high cost structure in this country that has made us uncompetitive with the rest of the world. Organised crime is growing and this Government is failing to tackle that and it is failing to give the National Crime Authority the powers that it needs. But above all-I come back to this central point-we lack leadership and direction. We need leadership from a Prime Minister. He fails to give it. We need to develop a pride in ourselves in this country at present in what we can do. We have that capacity. We are a great people and we are a great nation. We need leadership and we need people to respond to that leadership. Enough of the problems, because we have to look to the solutions and the remedies. They are there, but the Government will not bite the bullet. We have to cut the size of government spending at every level-Federal, State and local. We have to recognise that the Government cannot just fund welfare out of taxes. There need to be other solutions. We have to implement lower taxation regimes. We must lower personal tax and company tax so that individuals and small businesses can invest, create productive capacity and, by investing, create jobs. We have to get incentive back into the system. We must encourage people to be entrepreneurs. We have to encourage people to invest. We have to encourage the creation of capital, the creation of wealth and the creation of profit. Above all, we have to create the environment and the climate for the growth of small business, because it is in the small business sector, whether it is the self-employed or the small firm, where the future of Australia lies. The large companies have lost their capacity to employ people. We are going through a stage in the business cycle where, unless we create the environment and the climate for small business to grow and to prosper, we will have no growth and no jobs. To do that we have to create a deregulated and flexible wages market. We have to get more productivity and more work output per hour from the work force. We have to create the freedom to work for people. We have to curb union power and we must abandon the accord. The CHAIRMAN —Order! The honourable member's time has expired. Mr BALDWIN(Sydney)(6.48) —The Supply Bill (No. 1) 1986-87, the Supply Bill (No. 2) 1986-87 and the Supply (Parliamentary Departments) Bill 1986-87 provide an opportunity for members to talk in general terms about the state of the economy and, of course, it is particularly timely that we are having a discussion like that in the context of the current account problems that have emerged recently. The Treasurer (Mr Keating) and others have pointed out that the recent current account deterioration is largely a reflection of a recent sharp acceleration in the long term deterioration in the terms of trade. The terms of trade deterioration has the consequence that we can buy a smaller volume of imports with a given volume of exports; hence it is argued that in some real sense the national income has experienced a decline somehow or other, so the argument goes, and there has to be some form of adjustment that results in a fall in living standards. That is the line of argument that is put forward. Various adjustment mechanisms are suggested as to how that fall in living standard might be brought about-by wages policy, monetary policy and fiscal policy. Fiscal policy is now suggested as the favoured option. Of course, the Opposition is baying for massive cuts in government outlays, without at all being specific about where those cuts might be made-which is fairly typical of the Opposition. I am very concerned about the potential effects of this approach, that is, to seek to bring about an adjustment via tight fiscal policy. We are being given a rationale for a lack of growth or for the actual cuts in a range of desirable expenditure areas, and obviously welfare is one area, but there are clearly a range of other areas that we would be concerned about. I wish to make a couple of broad points about this whole argument. Firstly, I do not believe that the present situation logically necessitates actual cuts in living standards. The second point is that, while there is no doubt that the current account imbalance is a major problem that has to be addressed, I believe that the severe tightening of fiscal policy is a highly inefficient instrument to achieve the end of correcting that imbalance. I now go on to talk briefly about each of those points in turn. As to the first point, we have heard a great deal of rhetoric about what a calamitous situation we are in as a result of the terms of trade deterioration and the fall in living standards that that will necessitate. One would think as a result of much of the discussion that we are on the edge of some kind of a precipice. It is important for us to try to get some estimation of the magnitude of the problem. If we are going to say that the deterioration in terms of trade will mean a fall in real living standards, at least some attempt should be made to try to get a rough idea of how much living standards will fall. In this context, it is interesting to refer to the April issue of the Reserve Bank of Australia bulletin, which contains a detailed econometric analysis that attempts to work out the component of the current account deterioration that can be attributed to the terms of trade effect. It is also interesting to arrive at an estimate of the fall in real gross domestic product to which this deterioration is equivalent. The RBA bulletin article talks about the terms of trade deterioration being equivalent to a cut in real GDP of roughly half of one per cent. While this is obviously not to be sneezed at it does not really fit in with a lot of the rhetoric that we have heard in recent times. On the basis of that figure, one could argue that some form of cut in living standards was appropriate, and work out some equitable way of achieving that end. I just make the obvious point that over the period with which we are concerned we have seen very substantial growth in real output in the economy. In the second half of last year there was real GDP growth at an annualised rate of 6 per cent. Also, over the same period, we saw continued productivity growth. Estimating the magnitude of that growth can be controversial, but a rough estimation can be gained from the following figures: From 1982-83 to 1984-85 real GDP grew by 9.85 per cent, according to the Australian Bureau of Statistics, and over the same period employment grew by 3.71 per cent. Taking those raw numbers-it is a very rough estimate- the rate of productivity growth ends up at a little under 3 per cent a year. I acknowledge that that figure would be highly controversial and that it fails to take into account a whole range of things, but I make the point that we have had real growth in the economy during the period when the terms of trade deterioration has occurred. We have also had productivity growth. To pluck a number out of the air, that figure would not be much less than 2 per cent. To argue that, because the terms of trade deterioration has, in effect, brought about a 90.5 per cent decline in real GDP while we have had a period of substantial growth in real GDP and continuing growth in productivity, I believe, simply does not follow. While we undoubtedly have a problem with the current account imbalance, and that is something that will have to be addressed by some mechanism-to some extent, that adjustment takes place automatically as a result of a move out of the traded goods sector and into the non-traded goods sector-I think the idea that there has to be a specific policy response in that sense is sometimes overstated. Nonetheless, I do not think it follows that a fall in living standards is warranted. My second point is that to seek to correct the current account imbalance by severe fiscal tightness is a very inefficient way of achieving that result. One would be contracting the whole economy, not just the volume of imports, to achieve a result for imports. It is worth noting that endogenous imports-that is, the component of imports that can be expected to vary with the level of demand in the economy-will amount to about 13 per cent of gross domestic product. The evidence suggests that each cut of one per cent in gross domestic product will cut imports by between one per cent and 1.5 per cent. If we take a GDP figure for 1986-87 of $270 billion this approach means cutting GDP growth by one per cent-$2.7 billion-and in the process losing about 70,000 jobs. This will reduce the current account deficit by between $360m and $540m a year which, translated into monthly terms, works out at between $30m and $45m per month. In the light of the magnitude of the current account deficits that we have had recently, obviously that will not have a tremendous impact on a current account deficit of $1.5 billion. I make the point about what a blunt instrument fiscal policy is for dealing with our balance of payments problems. That underlines the advantage of dealing with the trade imbalance by more direct means. There are problems with that. Any suggestion of control over imports raises concern about beggar thy neighbour policies, our obligations under the General Agreement on Tariffs and Trade and so on. We should be looking much more seriously at those alternatives. I am pleased that the Chairman of the Caucus economic committee has expressed a similar view. Mr CONQUEST(Hinkler)(6.57) —The Supply Bill (No. 1) and cognate Bills are introduced to appropriate money from the Consolidated Revenue Fund for the services of government, expenditure on capital works and other designated purposes. As the Bills provide for expenditure of revenue it behoves every member of this place to note the perilous situation in which Australia finds itself today under the monetary and fiscal policies of the Hawke Government. No matter what the Treasurer (Mr Keating) may say to the contrary, the fundamental problem facing this nation is the indisputable fact that we are living beyond our means, demanding more and more from an economy which has no more to give unless-I repeat, unless-we are prepared to suffer the dire consequences of such an irresponsible action. This Government must address the problem of our deteriorating balance of trade deficit with the utmost urgency. It is not a sufficient excuse to blame the high subsidies provided under the agricultural policies of the European Economic Community or the export enhancement policies of the United States of America. Those policies may be condemned but there is much that the Government can do to improve our export competition potential. Since coming to office this Hawke Government has embarked on a deliberate rampage of destruction which is affecting our rural exporting sectors. It has raped and pillaged our primary producers without mercy. Since coming to office this Labor Government has stripped some $440m from the rural sector. No wonder farmers find it difficult to compete under such ill-conceived policies. What were they offered under the economic and rural aid policy delivered by the Minister for Primary Industry (Mr Kerin) in April this year? They were offered $115m, of which $25m is spread over a very long period. The policy showed scant regard for such a major export sector which can contribute to offsetting the balance of trade problems now being experienced. The recent revelation that monthly imports had exceeded our exports by $1.47 billion is a clear indication that a change of policy direction is necessary and long overdue. The cumulative trade deficit is forecast to reach about $14 billion over this Budget period. That is an unacceptable deficit. The result of this massive trade deficit will make it extremely difficult to service our massive public sector debt. According to the Reserve Bank of Australia bulletin of September 1985, the total public sector debt stood at $93 billion as at June of that year. The estimate for 1986, in the same document, is $104 billion with latest indications suggesting that this may well be exceeded. Even if we take the September forward estimate of $104 billion as being a correct forecast to June 1986 it means that for every $100 borrowed about $93 of that $100 will be required just to pay the interest on that old debt. In June 1985 we see that $85 of each $100 borrowed went to pay the interest on the debt at that time. What can we expect in the future if this Government does not act to cut back on public sector expenditure? In the eyes of the international community we are going bankrupt. As a nation we have frittered away our inheritance by spending on philosophical and ideological programs, incurring a debt which cannot be serviced and delivering to our children an inheritance requiring a lesser living standard than we have enjoyed on borrowed money. Is it any wonder that our inflation rate of 9.2 per cent and rising is so high in comparison with most other nations? Is it any wonder out interest rates are so demoralisingly high? Is it any wonder that average unemployment is up to 8 per cent with youth employment up to 22 per cent? The problems of this nation may be enunciated as follows: Firstly, there is an insufficient aware- ness of the need to be internationally competitive by those people employed in producing goods and services for domestic consumption; secondly, the expectations of the population have been raised too high resulting in a desire to consume more than is being created; thirdly, there has been an overwhelming propensity by governments to create extra taxes on the wealth producing sector; fourthly, the Government has borrowed more and more for public consumption thus threatening our ability to service the debt incurred; fifthly, the Government and the Australian Council of Trade Unions have concentrated more on redistribution of wealth than the creation of greater wealth; and sixthly, the Government has displayed a tendency to intervene too much in the private sector, resulting in increasing administrative costs. This Hawke inspired administration has been a big spending government. Reference to economic indicators shows that the average real increase over three Budgets will be 5.5 per cent. Compared with the last coalition Government, which averaged a real increase of only 2.1 per cent over seven years, we can see the gross absurdity of the Government's argument that the problem was inherited. If this Government had maintained spending increases to the level of the previous coalition Government's achievement we would have a Budget surplus rather than a $5 billion, or more, deficit. I said during the last election campaign that constituents should not be beguiled by the recurrent photographs of the Prime Minister (Mr Hawke). I told them that they should get a photograph of his hand because that would be in their hip pockets for the term of his government. How prophetic were those words as we face further iniquitous taxes and the impost of a spurious 3 per cent levy for superannuation based on a formula which is hard to understand. The 3 per cent productivity claim is based on an imprecise and misleading formula. It is based on the difference between a change in productive output and a change in labour input. One can have a 5 per cent growth in output and a 3 per cent growth in employment and deduce that a 2 per cent gain had been achieved. However, if one has a one per cent growth in output and a one per cent fall in employment one still has a 2 per cent growth in productivity. Another question which must be answered relates to the investment by business to achieve a growth in productivity which is not the result of work force influences. This productivity has been gained by incurring heavy financial liabilities. It is true also that real productivity gains are reflected in lower consumer prices. The purchasing power of wages is thus increased. In the period from 1983 to 1985-I know the honourable member for Franklin (Mr Goodluck) is very interested in this matter and that when he follows me shortly in this debate he will make another worthwhile contribution-average weekly earnings increased by 16.6 per cent. The consumer price index increased by 14.2 per cent. These increases thus delivered a real increase in purchasing power-something which has the same result as a wage increase. The perilous financial future of this nation is indeed grim if the Government does not retreat from its damaging policies. We are in such dire straits now that we should ensure that sane economic management prevails to rescue us from becoming a mendicant state. Mr MAHER(Lowe)(7.05) —Tonight honourable members have a rare opportunity to speak about any issue that is of great concern to them, so I thought I would speak about the problems faced by people in my electorate who are at home-women with pre-school age children. When I studied the social security arrangements in some of the Scandinavian countries, I was particularly interested in the position in Finland. I had been told that more than 50 per cent of children of pre-school age are in pre-school centres in that country. Then someone pointed out to me that children do not go to school in Finland until they are seven. Perhaps there are 50 per cent of six-year-olds in pre-school centres and other educational institutions in Finland. That figure seems very high. However, comparatively few five-year-olds or six-year olds in Finland are in pre-schools, whereas in Australia all such children are at school because the starting age here is five. The Finns have a system whereby every person who minds children-usually it is the mother but it could be the father if he is widowed or if his wife has deserted him-is paid an allowance. There is a universal system of allowance and the person minding the children can either use that allowance for child care facilities or literally stay at home and mind the children. I think that this is an excellent idea and I feel that a subsidy like that to stay at home and mind the children should be paid to women with pre-school age children. I realise that this is a difficult financial time, a time when there is great stringency on new ideas and programs. Nevertheless, these matters must be raised in our national Parliament. There is no subsidy in Australia if one parent stays at home with the children or if a parent works and has the children minded by a neighbour or through some other private arrangement. A Commonwealth subsidy of $16 a week for a child under three and $11 a week for a child over three is paid to any child care or long day care centre which is recognised by the Commonwealth Government; but if the parent stays at home or the child is minded privately, no payment is available. In my opinion only this group is disadvantaged-this group of people who stay at home to mind children. Once a child goes to school subsidies are paid. Suppose the child is in a secondary systemic Catholic school-and these comprise more than 90 per cent of the non-government schools. A Commonwealth subsidy of $1,338 a year is paid to the school which is, in a sense, a subsidy on the fees. The New South Wales Government pays another $546 on top of that. That means that a subsidy of nearly $2,000 a year is paid to that school. In primary schools in New South Wales the Commonwealth subsidy is $855 and there is an additional New South Wales Government subsidy of $359. The subsidy in the state schools is paid by the Commonwealth and the State, so the cost to the State and the Commonwealth of educating a child is harder to ascertain, but in 1982-83 it was about $2,002 for a primary school child and about $3,124 for a secondary school child. That is the subsidy that a parent with a child at school receives. On top of that there are capital grants, and fortunately under this Government these have been generous. I have been fortunate enough to get a capital grant of $174,000 for a little school in my electorate-St Dominic's in Homebush West-which is replacing sub-standard classrooms and buildings with a total outlay of $300,000. As a child progresses and goes to university or to a college of advanced education or even to a business college, government subsidies are paid which are not often commonly recognised. If a child is fortunate enough to enter a university, the subsidy paid is enormous. The cost to the taxpayer of a student studying medicine could be about $11,000 a year. That is a high subsidy. The parent who has a child of pre-school age really misses out. I think that many women who stay at home feel that they are being ignored. There are 1,194,000 Australian children under five years of age who are either at home or in child care. Most of those parents who are using child care-and the figures I have indicate that many people do have their children minded-have arrangements which are essentially of an informal nature. There was an Australian Bureau of Statistics survey on child care arrangements in November 1984 concerning a different group. The survey concerned children under 12 years of age, which is probably the age to which all children must be minded. That survey showed that the vast majority of the 2.8 million children in Australia were looked after informally, without any charge being made. There was no question of any payment being made. The arrangements were that relatives, neighbours or friends minded the children without charge. About 35 per cent of children who attend a pre-school are doing so essentially so that they are prepared for school. I raise these matters tonight because I believe there should be some attempt-and I hope that this is done, in the long term, in the Budget-to make up for the disadvantages suffered by a person who stays at home and minds children. It has been pointed out to me by the people who carry out research in this area that a woman or a man who stays at home and looks after children gets about $20 a week by way of family allowance and the dependent spouse rebate. The parent who works, of course, does not qualify for the dependent spouse rebate. As I mentioned earlier, such people do qualify for a $16 a week straight-out levy which is paid to the child care centre, or $11 if the child is under three years of age. Many other subsidies are paid to child care centres if the mother is working and is not receiving a high income. In all, the working mother is coming out slightly ahead, in relation to government help and subsidies, of the mother who stays at home. This situation should not exist. Some additional recognition and subsidy should be paid to the mother who wishes to stay at home or who, unfortunately, if she wishes to work, cannot get a job or is in some similar circumstance. I raise these matters tonight in the hope that the general Australian public will recognise that this is a group which is not being subsidised as are parents who have children in a state school or a non-government school. The parents of children attending university, a CAE or a technical college receive subsidies. Of course, the subsidies are much less at a technical college than at a university or a CAE. Subsidies are paid on a weekly basis for every pupil enrolled in a business college. Perhaps some parents stay at home without making any real decision to do so-they do so because they have no alternative to staying at home. At present there may be a lack of long day care facilities or no vacancies in the long day care centres. I hope that the Treasurer (Mr Keating), the Minister for Community Services (Senator Grimes) and the other Ministers who are involved in this area-particularly Senator Grimes-will examine my proposal, give it consideration and perhaps have some homework done to see whether something further can be done for those who are staying at home and who should get further encouragement and further financial aid. The CHAIRMAN —Order! The honourable member's time has expired. Mr GOODLUCK(Franklin)(7.14) —I am sure the honourable member for Lowe (Mr Maher) will support me in the remarks I want to make about funding. It seems to me that we are a bit confused at the moment. A lot of divisive things are occurring. The other night I watched a Willesee program which dealt with a French film. I thought the film was blasphemous and I believe it should not be shown in Australia. If we are going to fund the Film Censorship Board, we have to make absolutely certain that it does not allow into Australia films which may harm our children. When I saw that that fearful, blasphemous film was going to be allowed into Australia, I started to wonder what Australia was about. I might be a Catholic and I might support my faith wholeheartedly, but when I saw that sort of stuff being peddled and when I heard what was said on the Willesee show, I thought to myself: `Boy, we are in a mess.' The CHAIRMAN —Order! It being 7.15 p.m., I shall report progress. Progress reported. House adjourned at 7.16 p.m. The following papers were deemed to have been presented on 21 May 1986: Public Service Act-Determinations-1986-Nos. 20, 23, 25, 28, 29. Telecommunications Act-Australian Telecommunications Commission-By-Laws-Telecommunications (Charging Zones and Charging Districts)-Amendment No. 66. The following answers to questions were circulated: (Question No. 2787) Mr Ruddock asked the Attorney-General, upon notice, on 28 November 1985: (1) What was the cost to the Commonwealth and its agencies in initiating and defending all proceedings involving Mrs Sylvia Faulkner. (2) What sums have been paid to counsel engaged in those proceedings. Mr Lionel Bowen —The answer to the honourable member's question is as follows: (1) The Commonwealth's out-of-pocket expenses, otherwise than as mentioned in response to part 2 of the question, amount to $24,174.80. It is known that the trustee in Mrs Faulkner's bankruptcy has incurred legal expenses which the Commonwealth will be required to pay but to date no account has been received in respect of those further expenses. There is, of course, a further uncalculated cost arising out of the time and resources expended on the proceedings by Commonwealth officers. The figure given includes $1,595.55 being defendants' taxed costs ordered to be paid by Mrs Faulkner in respect of her proceedings against parties other than the Commonwealth. In the absence of detail, it has been assumed that no part of the $1,595.55 represents counsel's fees. (2) $25,670.40. (Question No. 3193) Mr Braithwaite asked the Minister for Trade, upon notice, on 14 February 1986: (1) What is the anticipated annual saving that will be achieved in each function by excluding Washington State, USA, from the territory covered by the Australian Trade Commissioner and Consul General based in Vancouver. (2) What is the estimated additional annual cost for each function of providing trade and consular services to Washington State through the Trade Commission Office in San Francisco. (3) What were the pre-existing reasons for this change. Mr Dawkins —The answer to the honourable member's question is as follows: (1) and (2) There is estimated to be little change to the combined operational costs of the posts resulting from the alteration to post territories. (3) Trade responsibility for Washington State was transferred from San Francisco to Vancouver in 1980 partly to even-up workloads at that time and partly because it adjoins Vancouver. In the event, it became clear the arrangement caused confusion to both U.S. and Australian businessmen who continued to call on the San Francisco Trade Office for advice on the North-West Region as a whole. Washington State was in the consular district of the San Francisco Consulate-General, but not in its trade district which added another point of confusion for business visitors. It is also important that marketing distribution chains and manufacturers' representatives servicing Washington State are controlled in the main from offices in San Francisco rather than Vancouver. In view of these factors it was decided to revert to the pre-1980 arrangements. (Question No. 3397) Mr Blunt asked the Minister for Social Security, upon notice, on 14 March 1986: Has his attention been drawn to a claim in the Daily News of 3 March 1986 that the overpayment amnesty has been described as a farce by persons who are defrauding his Department and who have no intention of responding to the amnesty; if so, is the position as stated. Mr Howe —The answer to the honourable member's question is as follows: Yes, my attention has been drawn to the article. The amnesty is not aimed at people who are engaging in deliberate fraud but rather at those who originally had a valid entitlement but subsequently failed to advise a change in circumstances which affects their entitlement. My department employs a range of measures to combat deliberate fraud. Stricter procedures now apply when a claimant or client is required to establish his or her identity. This is supplemented by a range of sophisticated statistical and computer techniques to highlight cases where the risk of incorrect payment is high. (Question No. 3408) Mr Conquest asked the Minister for Primary Industry, upon notice, on 14 March 1986: (1) Is it a fact that the Queensland Government has been channelling rural assistance grants into general revenue as reported in the Sydney Morning Herald on 19 February 1986; if so, which grants have been redirected and on what date was each made by the federal Government. (2) What amount of Rural Adjustment Scheme (RAS) funding was still to be distributed in Queensland at 28 February 1986. (3) What amount of federal funding has been allocated to Queensland under the RAS in 1985-86 to date. Mr Kerin —The answer to the honourable member's question is as follows: (1) The Annual Reports of the Rural Reconstruction Board which administers the Rural Adjustment Scheme (RAS) and the earlier Rural Reconstruction Scheme (RRS) show that on 30 June 1985 balances in the RRS and the RAS funds stood at $19.2 million and $19.6 million respectively. In 1982-83, $8 million was transferred to the Queensland Consolidated Revenue Fund from the RRS fund. In the same year $2 million from the RAS was also transferred to the Queensland Consolidated Revenue Fund. Under the Rural Reconstruction Scheme and the Rural Adjustment Scheme, which operated from 1971 to 1976 and 1977 to 30 June 1985 respectively, rural adjustment payments to the States were as a combination of loans and grants. It is not feasible to trace the individual sums provided each year to particular end uses. It should be noted that all funds were directed in the first instance to genuine recipients of assistance under the Schemes. States can however build up balances because of a grant element in the Schemes, differences in the timings of receipts from farmers and repayment obligations to the Commonwealth and investment of fund balances held for the day to day operations and contingencies relating to the Schemes. (2) and (3) Under Part A of the new Rural Adjustment Scheme which commenced on 1 July 1985 the Commonwealth now provides an interest subsidy equivalent to 50% of the cost of funds borrowed by the states for the purposes of the Scheme; interest subsidy may also be made available in respect of commercial loans up to 50% of their borrowing cost. The Commonwealth also provides all Part C (Household Support and Rehabilitation) assistance: The total allocation to Queensland for 1985-86 for Part A assistance under the new Scheme amounts to $0.541 million enabling subsidies to be made on loans in the order of $8 million. Part C assistance does not have a set figure allocation. At 31 March 1986, $0.196 million of this allocation had been paid to Queensland for Part A and $0.085 million for Part C. At that date Queensland had paid out Part A interest subsidies for primary producers amounting to $0.035 million while the balance was committed awaiting presentation of accounts. This amounts to a subsidy to that date on $0.38 million of loans. In addition at that date some $6.3 million of subsidised loans have been approved to primary producers on which an interest subsidy of some $0.45 million will apply. In addition, some $0.255 million for Part C assistance had been approved at that date. Under the new Scheme, the States are required to direct all funds received and generated within the Scheme, towards the purposes of the Scheme. There will at any time be balances awaiting utilisation and this will almost certainly result in any one year in differences between funds allocated and expended. (Question No. 3699) Mr Tickner asked the Minister for Social Security, upon notice, on 9 April 1986: (1) What is the time lag between the announcement of the Consumer Price Index figures and the subsequent adjustment of pensions. (2) Does the Government propose to reduce the period to one month; if so, how and when. (3) What was the time lag when the Government came to office. Mr Howe —The answer to the honourable member's question is as follows: (1) The basic rates of pension are increased automatically from the first pension pay days in May and November each year according to movements in the Consumer Price Index (CPI) over the six months to the previous December and June quarters respectively. CPI figures are published approximately one month after the end of the relevant period. As a result, indexation increases in pensions are paid some three months or a little more after the publication of the relevant CPI figures. (2) In the 1983 policy speech, the ALP promised to cut the present lag of four months to one month. This would require complex retrospective pay arrangements and is being examined by the Government. If the November 1985 and May 1986 increases had been paid from the first paydays on or after the release of the relevant Consumer Price Index figures, social security pension and benefit outlays in 1985-86 would have increased by some $270 million. (3) The same as at present. (Question No. 3718) Mr Lloyd asked the Minister for Aviation, upon notice, on 9 April 1986: (1) What is the average delay in granting the first registration of each type of aircraft. (2) What is the delay for subsequent registrations. Mr Peter Morris —The answer to the honourable member's question is as follows: (1) The time required for the first-of-type certification procedure is dependent on a number of factors. Where the aircraft is of a familiar design, is imported from a country whose standards and procedures are known, and weighs less than 5700 kg, the time required for certification could be approximately six months from first application. Where the aircraft is of an unusual design, or is imported from a country whose standards and procedures are not known, or weighs more than 5700 kg, the time required for certification could be up to twelve months. The registration of an aircraft, which involves placing the aircraft details in the Australian Aircraft Register and issuing the aircraft mark and Certificate of Registration, is usually completed in a matter of hours. (2) Following first-of-type acceptance the processing time required for subsequent certification of aircraft of that type is approximately five to ten days after arrival in Australia. The process is generally quicker for less complex aircraft. (Question No. 3766) Mr Blunt asked the Minister for Immigration and Ethnic Affairs, upon notice, on 14 April 1986: (a) What were the amounts paid to; and (b) Projects undertaken by Mr Phillip Adams and Mr Rod Cameron, their associated companies or principals of those companies for work on behalf of the Minister's Department or authorities under the Minister's control in (i) 1983-84, (ii) 1984-85 and (iii) 1985-86 to the date of answering this question. Mr Holding —The answer to the honourable member's question is as follows: (a) Nil. (b) Nil. (Question No. 3815) Mr Blunt asked the Minister for Social Security, upon notice, on 29 April 1986: (1) What would be the cost of accepting the proposal of the Australian Textile Workers Union to reduce eligibility for the aged pension for males from 65 to 60 years over a 10 year period. (2) Will the Government implement this proposal; if so, when. Mr Howe —The answer to the honourable member's question is as follows: (1) It is not possible, even on a current basis, to estimate accurately the additional cost of extending eligibility for the age pension to males aged 60 to 64 years. Not only is there a lack of data on their income and assets distribution but it is also not possible to estimate what effect a lowering of the pensionable age would have on labour force participation rates. These factors would, of course, make estimates for ten years hence even more hazardous. I can say, however, that immediate implementation of a 60-year age of eligibility for males would cost of the order of $550 million in a full year if the income and assets distribution of males in this age group were the same as for males aged 65 to 69 years. (2) It is unlikely that age pension eligibility will change in the near future. However, the Government will closely monitor developments in industry retirement requirements and will review them as they affect qualifying ages for the age pension. It is important to point out, however, that qualifying ages for the age pension in Australia compare more than favourably with overseas countries including Canada, USA, Sweden and West Germany where the age pension age for both sexes is 65. It is also important to remember that most overseas retirement schemes are contribution based whereas the Australian social security system is allocated from taxation revenue. (Question No. 3864) Mr Lloyd asked the Minister for Aviation, upon notice, on 1 May 1986: Are the costs associated with fire and rescue services at airports classed as attributable to the aviation industry and thereby deemed recoverable. Mr Peter Morris —The answer to the honourable member's question is: Yes. (Question No. 3883) Mr Wright asked the Minister for Social Security, on notice, on 2 May 1986: What Federal assistance is given (a) directly, (b) through the States and (c) through community/non-profit organisations, to persons who require access to medical aids (for example, wheelchairs, renal dialysis machines, artificial limbs, hearing aids, spectacles and AME 2 home treatment units). Mr Howe —The answer to the honourable member's question is as follows: (a), (b) and (c) The Department of Social Security does not provide any assistance of this nature.