Monday, 26 May 1986 Madam SPEAKER (Hon. Joan Child) took the chair at 2 p.m., and read prayers. Madam SPEAKER —On Friday the honourable member for Calwell (Dr Theophanous) raised a point of order in relation to the matter of public importance, claiming that it breached the anticipation rule. Leaving aside the fact that a matter of public importance is not brought forward unless the Speaker has made a determination that it is in order, I want to say that we have a system of matters of public importance in this House which is quite different from that which has evolved in other major parliaments with which we have links such as the parliaments in the United Kingdom, Canada and New Zealand. In the House of Representatives discussions are held almost every sitting day and an important feature of them, in a general sense, is that they are of immediate and current public interest. In approving Friday's matter, which related to capital gains and fringe benefits tax proposals, I was well aware of the fact that there are Bills before the House which also relate to capital gains. Standing order 82 gives the Speaker a discretion in relation to the anticipation rule in that I have to take into account the probability of the matter anticipated being brought before the House within a reasonable time. In my view this discretion should be used in its widest sense where a matter of public importance is involved if our system is to continue in its present form. The possibility that the Bills may be debated later this week had to be weighed against the immediacy of the matter put forward for discussion. I intend to continue to exercise my discretion in respect of the anticipation rule, as it relates to matters of public importance, in a very wide sense. Mr ROCHER —My question is addressed to the Treasurer. Does he agree with the Minister for Veterans' Affairs who suggested a three-point plan to solve our trade deficit problems-increasing tax, limiting company takeovers and introducing value rather than volume quotas on car imports? Mr KEATING —There are a lot of views about how one ought to respond to the terms of trade problem. For my part-and I think I am reflecting the Government's view here-the building of quantitative restrictions on imports is not something which I would encourage the Government to do. I believe it would only further contract and diminish the quality of the multilateral trading system. A free and open system is in Australia's clear best interests. Therefore, this is not a prescription that I would adopt. On the more general point of the issues involved here, I believe that this is a long term problem that Australia has had and I have said this in the House on many occasions. I remind our colleagues in the Opposition that they had a 6 per cent current account deficit in 1981-82 and that the problem has been here for a long time with the decline in our traditional sectors, our lack of competitiveness through the 1970s and the loss of traditional markets. We have been used to importing goods which have been paid for by our exports. The fact is that now, to a lesser and lesser extent, our exports are paying for those goods and this requires internal adjustments which I am sure the Australian community well understands and appreciates. Madam SPEAKER —Order! I inform the House that we have present in the gallery this afternoon members of the Pacific Island branches of the Commonwealth Parliamentary Association who are on a study tour of Australia. On behalf of the House, I extend to them a very warm welcome. Honourable members-Hear, hear! Mr GAYLER —I address my question to the Minister for Aviation. I refer to the progressive international air freight policy implemented by the Government. Can the Minister inform the House how successful this policy has been and what results it has achieved? Mr PETER MORRIS —I thank the honourable member for his question. The issue he raises is one of very great importance to the far north of Queensland. He, along with the honourable member for Herbert, has been largely instrumental in pushing forward some of the principles that have been incorporated in that proposal. Mr Katter —What about me? Mr PETER MORRIS —I was going to go on to refer to a Katter other than the one who has just interjected. The policy provides for primary produce charter flights and for mixed consignments to be shipped to any destination and for primary produce to be picked up from more than one of our smaller international airports. It provides also for outbound flights, as part of the overall journey, to be allowed to carry the high yielding inbound freight, which assists the revenue aspect of the charter flights. Livestock flights can also carry a mixture of primary produce and livestock on the outbound journey, and that has also enabled considerable expansion in available capacity. I am pleased to say to the honourable member and to the House that since the implementation of the new policy in November last year there have been some 65 flights approved. In those terms the policy clearly has been successful. It offers the greatest opportunity ever for primary producers to develop their external markets by the use of international air freight. One has to mention also that, once the excess capacity from inbound passenger flights is mixed up on inbound flights that carry other cargo, which is the higher yielding cargo, profitability depends upon the value of the product being exported and upon the type of freight that can be carried because effectively what is happening is that inbound high value freight is cross-subsidising outbound lower value freight. As I have said, the policy clearly has been successful. It offers the greatest opportunity ever for exporters to develop new markets by the use of air freight. There is one aspect of it, however, which has been quite negative and which naturally has been promoted consistently by the National Party of Australia. I refer to north Queensland and to the actions of the Minister for Northern Development or, rather, I should say, the Minister for non-development in Queensland. That Minister has all the trappings of a ministry, all the money that goes with a Ministry. I am told that in the far north he has a staff of a public relations officer, a steno-secretary and an appointments secretary. It seems that his major role is to put down the efforts of progressive policies such as this air freight policy rather than to promote the genuine opportunities that are available to primary producers in the north. For instance, recently he made the claim that there has been some sort of deal between Qantas and Air Nuigini to prevent freight being carried out of Cairns to New Guinea. The fact is that there is an air service agreement between Australia and New Guinea. We approved the scheduling of cargo flights from Cairns to Port Moresby but that was subsequently rejected by the Government of New Guinea. That is its right. It is not something that was a decision of Qantas but rather it was a decision of the Papua New Guinea Government. In addition to that, he made the ridiculous statement that freight out of Brisbane and Sydney was cheaper than freight out of Cairns. The fact is that the rate out of Cairns is some 89c per kilo for uplifts of 250 kilos or more and $1.03 per kilo for uplifts of less than 250 kilos, whereas the rate out of Sydney or Brisbane is $1.25 per kilo. Along with the actions of the Minister for non-development in Queensland there has been, regrettably, action by some elements of the Townsville Daily Bulletin to highlight the negative approach put forward by the Queensland Government on air freight opportunities and to deny opportunity for statements to be made by this Government to update the policy announcements which have been made here on occasions by myself and by the local members. I draw the attention of the House to that fact. What has happened is that, because the Townsville Daily Bulletin and elements within it are denying the information that is available on the new policy, they are retarding opportunities for primary producers in the far north of Queensland. Mr Sinclair —Come on! If you want to make a statement, do so. Mr PETER MORRIS —I know that the right honourable member is not interested. His Party operated the most restrictive international air freight policy ever seen in this nation. This Government has done something about it. He is not happy with that. He and his Party want the primary producers of northern Queensland not to know about it. They do not want primary producers in the far north of Queensland to have the opportunities that are available. Just as the National Party has turned its back on the cane growers of Queensland, it is trying to turn its back on the primary producers in the far north who do have opportunities under the policies available from this Government. We are not going to go along with the National Party policy. The National Party is not interested in the people of Queensland. It wants to put them down, as it wants to put down the cane growers and primary producers of the far north of Queensland. The policies we are presenting and practising will provide the greatest opportunities ever for those producers to develop their export opportunities and markets in the period ahead. Mr SHIPTON —My question is addressed to the Minister for Employment and Industrial Relations. Does the Government respect the independence of the Australian Conciliation and Arbitration Commission, and will the Government support the Commission's judgment when handed down in the national superannuation productivity and national wage cases? Mr WILLIS —Of course the Government supports the independence of the Commission and respects its independence and its right to make the decision that it thinks fit. I regret that some statements I have seen recently from the Confederation of Australian Industry indicate a lack of preparedness by that body to have the same view as the Commission. It is deplorable when the chief employer body in this country, the Confederation of Australian Industry, says in a public statement at the weekend that, if employers do not get the decision they think appropriate from the coming wage decision, they will perhaps boycott the Commission in the future. That kind of reaction from what I would have regarded previously as a responsible body is deplorable. It comes from the hype that has developed about this case and the apparent desire of the CAI not to be seen to be weak by some of its more militant elements or perhaps by militant elements outside the CAI. I hope that it does not occur again. I stress that all parties should respect the right of the Commission to make the decision it sees fit and should live by and abide by that decision. Mr BRUMBY —Is the Minister for Local Government and Administrative Services aware of complaints by local government in Tasmania concerning the new financial assistance arrangements for local government? Is the Commonwealth Government discriminating against local government in Tasmania? Mr UREN —I am aware that there is some concern in Tasmania about the new arrangements for local government finance. Local government in Tasmania will continue to do well under the new arrangements. Local government in Tasmania in 1985-86 received $17.5m under the old Act. Under the new arrangements it will receive at least $18.3m in 1986-87, and at least $18.6m in 1987-88. I stress the words `at least' because these payments are geared to the States. In other words, there is an agreement that over the next two years local government will receive at least the same as the States, although it has been given a guarantee, unlike the States, that it will not get less than the previous year. These figures show that there will be no cut in funds to Tasmania. However, it is true that Tasmania's share of total funds will decline. This outcome is a reflection of the recommendations of the National Inquiry into Local Government Finance, and advice subsequently received by the Government. The inquiry recommended a review of State shares and suggested the involvement of the Commonwealth Grants Commission. The Grants Commission advised the Government that the results of such a review would not justify the time and effort involved. In these circumstances we took the advice of the National Inquiry that interstate shares should be equal to population shares. The Government has decided to phase in the new shares over a period of three years, so that adjustments can be made gradually in regard to the new interstate relativities. There will be some criticism, and some States will receive less under these arrangements, but the solution on the whole is a good one. It is true that even New South Wales will receive slightly less than it does under the present scheme. The two States that will gain substantially out of this arrangement will be Victoria and South Australia. Let me stress, in a very tight budgetary context, that all members on both sides of the House know that local government has done particularly well. Local government is pleased that there is a continuity of untied funds not only in the next two years but over, at least, the next five years. Mr KATTER —I do not propose to use my right of reply to my good friend the Minister for Aviation. I address my question to the Treasurer. I refer to today's estimate by the Livestock and Grain Producers Association of New South Wales that the fringe benefits tax on farm housing, produce and power alone will cost farm employers $152m per annum. In light of the Treasurer's statement on Friday that the Government is seeking to ensure that these taxes are not unduly harsh, will he revise the application of the fringe benefits tax to farm employers who are suffering record low real incomes, small businesses, small mining interests and all those involved? Mr KEATING —We are now witnessing a lot of extravagant statements made about the fringe benefits tax by various industry groups. As I indicated during the week I do not see the tax being a burden in respect of farm employees for the reason that, if we are talking about the rental value of accommodation provided on farm, the level of rents is very low. Some are in the region of $40 a week-some may be more, many may be less. We take 60 per cent of that value, which would be some number in the 20s, less what is paid by the employee; and 49 per cent is charged on that. It may end up being only a few dollars a week. So it is not a burden of the kind that is reflected by the comments in the honourable gentleman's question. The other issue of concern which emerges here is that many homesteads are owned by companies. They were put in the name of companies at a time when death duties applied so as to minimise the death duties and enable the property to be transferred to members of the company rather than from a parent to children, and hence be subject to full duty. Some farmers who merely have their residence in the name of a company are concerned about whether they have to pay the fringe benefits tax on the value of the accommodation. The answer to that is no, they do not. The issue here is that the tax is levied only on the rental paid in respect of employment, not on the residence as such. Lest the concern may go, if you like, to the child of a farmer who may work intermittently on the farm, obviously housing for that child is provided because he or she is a member of the family and not because he or she is an employee. Of course, some farmers whose homestead has been in the name of a company may have been deducting the costs of their private residence against the company. In other words, deductions for paint, repairs or maintenance are not available to taxpayers for their own homes, but there could be a case where deductions have been taken by farmers for their households or homesteads in the name of companies, in which case they would be acting against the law. Of course, if that were happening the application of the fringe benefits tax on that homestead would be defensible. If that is a concern, I would suggest that it is something about which the people involved should examine their own taxation position. To the more general point, let me repeat: If the Government under this rule takes 60 per cent of whatever is the rental value of the on-farm benefit to the employee and then taxes the amount at the rate of 49 per cent after the actual rental is deducted, it is not at a rate which should lead to the kind of concern implicit in the honourable member's question or the comment he offered by way of substantiation of the claims made by the Livestock and Grain Producers Association. Mr O'KEEFE —My question is directed to the Minister for Social Security. Is the Minister aware of Derryn Hinch's article carried in the weekend Herald calling for a bounty hunter to track down what he terms as welfare bludgers? Can the Minister inform the House of measures the Government has taken to detect overpayments and deliberate defrauding of the social security system and to preserve the integrity of the system? Can the Minister also comment on claims that social security overpayments have reached scandalous proportions and the use of the estimates described as `good sources' to substantiate those claims? Mr HOWE —The honourable member's question refers to Derryn Hinch's article in Saturday night's Herald. It is clear from that article that Hinch not only has a contempt for the courts of this country but also has contempt for millions of Australians who through no fault of their own have found themselves in financial difficulty. This highly paid spokesman for the average weekly earner-- Mr Peacock —Madam Speaker, I take a point of order. Mr Duncan —Bounty hunter. Mr Peacock —If the honourable member will just hear me he might understand. The Minister may not be aware of this. On Thursday of last week the man referred to was found guilty of contempt by the Supreme Court of Victoria. He is awaiting sentence. The hearing is before His Honour on Wednesday in regard to sentence. I think that, by using words such as `contempt' and so on, the Minister is transgressing that hearing which is still before the court. Madam SPEAKER —Could I suggest that the Minister does not refer to the case again. Mr HOWE —I was not going to refer again to Derryn Hinch except to say that if he showed something of the same concern for the unemployed as he might expect for himself-- Madam SPEAKER —Order! The Minister will leave the whole topic aside. Mr HOWE —Let me go to the substance of the question, which went to the Government's measures with respect to overpayments. During the last 18 months we have introduced a number of significant steps in this area. They have included a range of high technology, management and staff development procedures for the detection of fraud and overpayments. Rather than indulge in heavy-handed hysterical claims about dole bludgers and cynical single mothers, this Government has done more than any other to tackle the overpayments issue and to ensure that its resources go to those most in need. Even our greatest critic, Peter Sawyer, author of the yet unpublished manual Dole Bludgers for Beginners, concedes: The DSS can and will investigate everything they can about you. The staff there are highly trained and proficient at ferreting out embarrassing things about you, like the fact that you have a . . . job, or that you have $50,000 in the bank. This is the most accurate point I have found in this book, and our system of detection is better now than when it was originally written. The Department of Social Security now has the fifth biggest public sector computer network in the world, ensuring more foolproof methods of overpayment, detection and calculation. A personal computer network has recently been established to calculate overpayments. It is now being piloted in four States and will shortly be introduced nationwide. We have moved to keep our clients better informed about not only their obligations but also their entitlements. The first batch of plain English advice letters, clearly setting out a client's entitlements and obligations, was sent out in May. State directors report an excellent response from pensioners concerning changed circumstances which will lead, in some cases, to a reduction in entitlement. The introduction of direct deposits for pensions, family allowances and unemployment benefit last year is estimated to save more than $30m in both fraud and operational costs. Progress reports indicate that 94 per cent of unemployment beneficiaries, 92 per cent of pensioners and 96 per cent of those receiving family allowances now use this method of payment. Only 49 per cent of pensions and family allowances were previously paid by direct deposit. The computerisation of overpayment recoveries by withholding a portion of a pension or benefit has dramatically improved the rate of overpayment recovery. Last financial year $23.7m was recovered, compared with $10.5m in 1981-82, an increase of more than 100 per cent on the recovery performance of the previous Government. New tough proof of identity procedures are now in place, requiring pension and benefit applicants to produce three proof of identity documents from three different sources. This makes it far more difficult for dishonest applicants to successfully receive a pension or benefit. Furthermore, we have introduced, as part of our overpayments strategy, new computerised selective reviews of those on unemployment, sickness or special benefit. A similar review of pensioners is about to begin. The theory behind that review is that, whereas in the past many of the methods used to seek to detect overpayments were first somewhat comprehensive and then superficial in scope, better targeting of reviews is likely to achieve a higher rate of detection of overpayments and more effective recoveries. We are reaching the end of the amnesty which the Government announced in February. That amnesty will mean that quite a large number of people who were not guilty of fraud but were in a situation in which they were receiving more than they were entitled to will be able to correct that situation with the Department of Social Security. Arising out of that exercise will be the detection of significant overpayments. I think it is extremely unfortunate, with respect to the issue of overpayments, that there is so much sensationalism of the type that I referred to at the beginning of my answer. It would seem that, every day, people invent figures about the level of overpayments. Very often there is no foundation at all for those figures. Derryn Hinch, in his article on Saturday night, could not even get the figure right. He talked about $300 a month being quoted in the report of the Joint Select Committee on an Australia Card, whereas the figure quoted in that report was on an annual basis. Furthermore, he suggested that the Committee had made some investigation. Of course, the Committee had made no investigation at all. If one wants to look for the source of that particular amount, one needs to look at the area of the Australian Federal Police and its association, which is seeking to add to Federal Police staffing resources. As we know, the Australian Federal Police has very little interest in social security fraud, which represents a very small area of its concerns. The concerns of the Federal Police are much more on the revenue side of the Budget than on the social security side. It seems to me that in the discussion of social security overpayments it is important that people preserve some rationality and detachment in terms of the figures that are thrown around. One does not want to have the kind of hysteria which was generated during the period of the Fraser Government and which produced the Greek social security case. The Government will be considering, in the next week or so, the Roma Mitchell report about compensation. Something like six years later we are still dealing with the consequences to the Greek community of the kind of irresponsibility that was generated at that time. Mr HOWARD —I refer the Treasurer to the answer he gave to the first question asked today in which he spoke of the deep-seated problems of the Australian economy. Does the Treasurer agree that those problems go directly to the national interest as well as raising legitimate issues of partisan political debate? In view of the national interest which is involved, will the Treasurer assure the House that he will, before Parliament adjourns for the winter recess, make a full and comprehensive statement to the Parliament about the current economic situation, thus facilitating a full parliamentary debate, so that at the very least the Parliament can be as well informed of the Treasurer's current views about the economy as will the participants in the special economic summit to be held early in June? Mr KEATING —I have given my views about the state of the economy freely and volubly, both inside and outside the House. The only commitment I can give the Leader of the Opposition about a definitive statement on the portents of the economy is that it will be done in the Budget statement in August. Mrs KELLY —Has the Minister for Health received representations in relation to the high cost of the drug dilantin, which I understand is used for the treatment of epilepsy? Can the Minister explain the reasons for these high costs? Dr BLEWETT —I thank the honourable member for her question. The concern that she shows about the increase in the prices patients have to pay for dilantin is reflected on both sides of the House and is certainly shared by the Government. But that concern should be directed back to the body responsible, that is, the manufacturer Parke Davis, for the quite unwarranted and unjustified increases in the price of dilantin. The prices for dilantin were increased last July on an average of 11 per cent across the board. That increase was granted. Early this year, in March, the manufacturer Parke Davis unilaterally decided to raise the prices by a further 25 per cent. This price increase was rejected by the pricing bureau, which, I point out, includes representatives from the consumer organisations and manufacturers. When we were faced with this unilateral price increase from Parke Davis we could have done three things. First of all, we could simply have granted the manufacturer that 25 per cent increase. However, we as a government have a responsibility to maintain a pharmaceutical benefits scheme that produces a subsidised drug scheme without placing high demands on taxpayers themselves. Therefore, simply to grant this 25 per cent unilateral increase in our view would have provided quite unacceptable increases in costs for taxpayers generally. Besides, it would have set a precedent for other drug companies to make the same charges for unique products. That was the first option-simply to agree to the price. The second option was to delist the product which would have meant that the patient would have to pay the full cost, which would have been between $13 and $14. We believed that that option was also unacceptable. Since July last year we have had a third option-a more flexible option-and that is to subsidise the drug up to the agreed price. That would mean that the patient would have to pay that marginal extra cost. Mr Porter —Why didn't you negotiate a price increase like you did with every other drug? Madam SPEAKER —Order! Mr Porter —Why didn't you negotiate with them. Madam SPEAKER —Order! I warn the honourable member for Barker. Dr BLEWETT —We regret that this was the option that the Government had to choose but the two other options-that is, accepting this unilateral price increase or simply delisting the product-were not ones the Government would choose. Therefore we adopted the more flexible option. I realise that that means an additional cost of between $1.11 and $1.75 for that extra month's supply. I hope that members of this Parliament and members of the public will direct their concern to the body responsible-that is, Parke Davis-following this quite unjustified unilateral price increase. Madam SPEAKER —I call the honourable member for Petrie. Mr HODGES —Thank you, Madam Speaker. I have been trying to get your eye for weeks. Madam SPEAKER —I point out to the honourable member for Petrie that I have been able to see him but others, on the front bench, have been rising. Mr HODGES —Madam Speaker, I was beginning to believe that my diet was too successful. Is the Treasurer aware that, through the introduction of the assets test, thousands of pensioners feel cheated out of their entitlements; through the abandonment of parity pricing, motorists feel cheated on petrol prices; through the abolition of negative gearing, pensioners and low income earners feel cheated because of higher rents; because of the fringe benefits tax, hundreds of thousands of farmers and small businesses feel cheated; because his policies have, in his own words, pushed us towards a banana republic, Australians generally feel cheated; any delay in tax cuts will result in taxpayers feeling cheated; and is he aware-- Madam SPEAKER —Order! Will the honourable member come to the point of his question? I did not realise that he was going to make a speech. Mr HODGES —Thank you, Madam Speaker. It is all question. Is the Treasurer aware that, because of these actions and others, he is commonly being dubbed Mr Cheating? Mr KEATING —If the honourable member, a former Minister of the coalition Government, had had any semblance of understanding about the principles of equity and fairness in the tax and social security systems, we would not have had the appalling mess that this Government inherited. The fact is that receiving a pension regardless of means is not an entitlement. Negative gearing is not pushing up rents; any formerly negatively geared property is grandfathered in; it is still protected by the negative gearing arrangements, as the honourable member overlooked in his discourse. The fringe benefits tax is a taxation of benefits provided to employees outside the taxation system, and the coalition governments have had 30 years to do something about it. But apparently honourable members opposite, in representing their constituents, feel that most of them should carry the burden of other people's tax liabilities while those people can have the benefits of credit cards and motor vehicles and the like. Rather than reflect on me, the question reveals a reflection of the lack of principle, consistency, understanding and decency which pervaded a succession of coalition governments and which is still engrained in the attitude of honourable members opposite that tax breaks should be given to some people but not to others, and that they should be given to those people at the expense of everyone else. Mr Robert Brown having addressed a question to the Treasurer- Madam SPEAKER —Order! The honourable member's question is out of order. Mr STEELE HALL —Is the Attorney-General aware that over the last three years Mr Holmes a Court is believed to have submitted a number of statutory declarations to the Australian Broadcasting Tribunal, declaring that he was an Australian citizen? Is the Attorney aware that Mr Holmes a Court in fact became an Australian citizen within the last several weeks? Is he also aware that a number of sections of the Broadcasting and Television Act provide that if declarations are proven to be false, conviction for offences as a result could attract penalties as high as $5,000 cumulatively per day for the time in which the offences occurred, as well as activate the question of suitability to hold a licence? Will the Attorney investigate this matter to ensure that the law is applied equally in relation to Mr Holmes a Court as it would be to any other citizen within the Australian community? Mr LIONEL BOWEN —I have noticed Press reports on a hearing before the Broadcasting Tribunal in which there was some uncertainty as to whether Mr Holmes a Court was an Australian citizen. I am not aware of any declarations that might have been made. If they have been made the law could follow them up and establish whether or not they were made falsely. I am also aware of the fact-I noticed this in a Press report-that Mr Holmes a Court, when appearing before the Tribunal, gave an explanation that as he was a British subject who had come here some time ago he was of the view that he was entitled to Australian citizenship. I think a number of people might legitimately think that. That is the real issue. The matter is before the Tribunal and it will be decided on the merits and the veracity of Mr Holmes a Court's testimony. Mr ROBERT BROWN —My question is addressed to the Treasurer. Did Mr John Valder, the National President of the Liberal Party, in his Westpac video interview in July last year refer to fringe benefits as a disease and indicate a desire to see Labor do the hard tasks and get into trouble as a result? Has the Leader of the Opposition consistently refused to commit a future coalition government to the repeal of the fringe benefits tax? What are the implications of this situation to the Government's fringe benefits tax policy, and what would be the results of a withdrawal of that tax policy? Mr Rocher —Madam Speaker, I take a point of order. The honourable member appears to be asking the Treasurer to express an opinion. Under standing order 144-- Madam SPEAKER —Order! The honourable member's question was out of order beforehand because the Minister to whom it was directed is not responsible for what the Liberal Party President has to say. The first part of his question is irrelevant. The last part of the question is the part that the Treasurer will answer. Mr KEATING —The answer to the two questions implied in the preface to the question is definitely in the affirmative. To the balance of the question, let me say this: It is true that Mr Valder referred to the whole question of fringe benefits as a disease in his well-publicised interview, and said: Well that is why I would like to see them- that is, the Australian Labor Party- do the very hard things that they are going to get into trouble about. Because electorally, that is the fact of the matter. They are not easy to do. So I have said many times, you know, let the Labor Party get on implementing the more necessary, but perhaps less popular parts of our policy. And let's hope they get them into place and promptly lose office. And I think that would be a very good scenario, don't you? It is very interesting that those comments, juxtaposed with the comments of the honourable member for Mackellar and the Leader of the Opposition-the comments that they would not necessarily repeal the fringe benefits tax legislation, but they will use every opportunity to frustrate, attack and score from it as it goes through the House of Representatives and the Senate-indicate perfectly the hypocrisy of the coalition parties. The President of the Liberal Party of Australia can come out and say something as clear as he has about the necessity of changes to the taxation system and the creeping paralysis and disease of fringe benefits, yet the Leader of the Opposition can get up and state at the National Press Club that he would not give a categorical assurance that the fringe benefits tax would be repealed. The Opposition will score from it all the way through. Today we had the mindless Press statement from the Leader of the Opposition about how the Government was gutless in not applying the existing tax-the tax which existed in all of his years as Treasurer. Talk about shooting yourself in the foot! The fact is that this Government has made it quite clear, because the existing law goes to the value of the fringe benefit to an employee, that every tax that may be implemented under that law would need to be assessed on the basis of the particular value to every separate taxpayer in the community. Hence it has always been the view of the Commissioner of Taxation that those provisions could not be applied, and that is why we need a broad, clear mandate from the Parliament in terms of a specific fringe benefits tax. The total hypocrisy of the Opposition parties is shown by the fact that they will not support what is an overdue repair to the income tax system, so that the burden of taxation on some people will be reduced and a more fair and equitable burden will be placed on other people who have been avoiding it. It seems to me that the Liberal and National parties, as major parties in this Parliament, should hang their heads in shame at the prospect of opposing the tax. What sort of country do they expect Australia to be if this is the level of leadership and indication of propriety in laws that they are prepared to provide? I shall read two paragraphs from the leader in the Sydney Morning Herald of last Saturday, because it says volumes about the problem: Employers say wage earners should accept a real wage cut to help solve Australia's balance of payments problem. But how do Australia's managers behave when they are asked to make a small sacrifice? They rant about how the fringe benefits tax will stifle enterprise, they call on each other to break the law, and they babble about Boston Tea Parties. Edifying stuff: wage earners must make a sacrifice, but not us. It really is no wonder wage earners treat arguments for wage restraint as trickery by chiselling employers. Just ask yourself what, exactly, Australia's managers are being asked to give up? Well, first, they are being asked to pay their tax. Of course, there will be compensations: the top marginal tax rate will drop from 60 per cent to 49 per cent (people on high incomes who have been paying their tax will get a very big tax cut); the double taxation of company dividends will be abolished, at a cost to the taxpayer of about $250 million a year. Bob Ansett and Ian McLachlan and their supporters want all the benefits, they just want to shirk the cost. `Well said', I say to the leader writer of the Sydney Morning Herald. Many other employers, of course, are prepared to do the right thing and pay their fair share of the burden. I would not want to think that those comments go to every employer; obviously, they do not. But it is an indication of people who wish to have an exalted position in the eyes of this community-and that goes for McLachlan and Ansett-but who, whenever they are asked by the public to observe the law in respect of what has been a national debate about fringe benefits, urge people to break the law. Considering the lack of principle on the part of the Opposition in opposing this measure and looking at attitudes of the kind referred to in the Sydney Morning Herald, is it any wonder that ordinary Australians should start to wonder about the quality of the leadership and the sense of decency pervading in all sections of the community, including political parties, about Australia's future? They may well ponder the behaviour of the coalition parties in this place and their supporters in private business who want all the pluses but none of the negatives. The Clerk —Petitions have been lodged for presentation as follows and copies will be referred to the appropriate Ministers: To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The petition of the undersigned citizens of Australia respectfully sheweth that persistent rumour suggest that the Hawke Government intends to reduce Government expenditure by contracting or eliminating programs for war veterans and war widows. Your Petitioners humbly pray that the Hawke Government honour its commitment and that of previous Governments to ex-sevicemen 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 Blunt,Mr Halverson,Mr Reith and Mr Ruddock. To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. This petition of concerned Australian Citizens respectfully points out: That, for our survival, an effective Worldpeace 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 per cent 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 Dr Blewett,Mr Gorman and Mr Grace. To the Right Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The humble petition of the undersigned citizens of Australia respectfully showeth that: 1. We are completely satisfied with the design of the existing Australian national flag. 2. We are aware it properly reflects the immutable characteristics of Australia, namely: The Union Jack-itself the creation of 3 Christian crosses-represents the nation's historical origin, and the source of its language and law. The Southern Cross on an azure blue background signifying its place in space. The large star depicting the advent of Federation in 1901. 3. We know the flag has been a source of inspiration to generations of Australians in peace and war. 4. We recall that millions of native-born Australians and newcomers to these shores from other parts of the world have become united under its proud symbolism. 5. We are certain that any change to the flag will produce division in the Australian community. Your petitioners therefore humbly pray that your honourable house will: Propose and pass a motion that ``the existing Australian national flag remains sacrosanct from change.'' And your petitioners as in duty bound will ever pray. by Mr Blunt and Mr Rocher. 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 and Mr Ruddock. To the honourable the Speaker and Members of the House of Representatives in Parliament assembled. The humble petition of the undersigned citizens of Australia respectfully showeth 1. That we the undersigned are totally opposed to the introduction of a $2.00 fee on prescription drugs for pensioners; 2. That the impact of such a fee will be particularly felt by the chronically ill elderly who will be faced with a $2.00 burden with the purchase of each Pharmaceutical Benefit Scheme drug; Your petitioners therefore urge the House of Representatives and the Government of the Commonwealth to ensure that prescription drugs continue to be provided to the pensioner population without the $2.00 fee on each prescription. And your petitioner as in duty bound will ever pray. by Mr Halverson and Mr Reith. To the honourable, the Speaker and the Members of the House of Representatives in Parliament assembled. The humble petition of the undersigned citizens respectfully showeth that your petitioners are gravely concerned at the failure of the Government to honour its election promises to pensioners. In particular those promises relate to the following commitments: 1. That within three years of its election to office, a Hawke Labor Government would raise the level of the standard pension to 25% of Average Weekly Earnings; 2. That the lag time between the announcement of the Consumer Price Index figures and the subsequent adjustment of pensions would be reduced to one month, and 3. That the disproportionate tax burden borne by low income earners would be lifted. None of these promises has been honoured to date. Your petitioners are extremely angry at the failure of the Government to live up to its commitments and as in duty bound will ever pray that these serious omissions will be given the attention they deserve. by Mr Nehl and Mr Webster. To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled: The Petition of the undersigned showeth that there is widespread public concern about the provisions of the Bill of Rights, and especially the dangerous powers to be vested in the Human Rights and Equal Opportunities Commission, and the failure to protect vital rights such as the right to own private property. Your petitioners therefore humbly pray: (i) that the Hawke Labor Government not proceed with the Bills enacting the Bill of Rights and the Human Rights and Equal Opportunities Commission; and (ii) that we the people be given the opportunity to express our opinion on the Bill of Rights in a referendum. And your petitioners as in duty bound will ever pray. by Mr Donald Cameron. To the Honourable the Speaker and Members of the House of Representatives assembled in Parliament. The petition of certain citizens of Australia draws to the attention of the House of Representatives their concern at any change to the Australian Flag without first holding a Referendum to assess the opinion of the citizens of Australia. Your petitioners therefore pray that no changes be made to the Australian Flag without reference to the citizens of Australia in the form of a Referendum. by Dr Harry Edwards. To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The petition of certain citizens of Australia respectfully showeth: That the Australian flag symbolises the continuity between Australia's past, its present and the future; That the presence of the Union Jack on the flag represents not a subservience to Britain, but a reminder of our inheritance of the fruits of hundreds of years of struggle for individual liberty against the forces of tyranny and oppression; Nonetheless recognises the rights of Australians should they wish as a people to change the design of their flag. Your petitioners humbly pray that no change be made to the Australian flag except with the consent of the people in a referendum. And your petitioners, as in duty bound, will ever pray. by Mr Ruddock. To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The humble petition of the undersigned citizens of Australia showeth that whereas: 1. They are completely satisfied with the design of the existing Australian national Flag. 2. They are aware it properly reflects the immutable characteristics of Australia, namely: (a) The Union Jack, itself the creation of three Christian Crosses, represents the Nation's historical origin and the source of its language and law; (b) The Southern Cross on an azure blue background signifying its geographical location on this planet Earth; (c) The large star depicting the advent of Federation in 1901. 3. They know the Flag has been a source of inspiration to generations of Australians in peace and war. 4. They recall that millions of native-born Australians and newcomers to these shores from other parts of the world have become united under its proud symbolism. 5. They are certain that any change to the Flag will produce division in the Australian community. Your petitioners therefore pray that your honourable House will: Propose and pass a motion that ``the existing Australian National Flag be changed only with the approval of the Nation as expressed in a Referendum''. And your petitioners as in duty bound will ever pray. by Mr Shipton. To the Honourable the Speaker and the honourable members of the House of Representatives assembled the humble petition of the undersigned citizens of Australia showeth that whereas: 1. The present Australian national flag is not distinctively and uniquely Australian and is confused with other national flags. 2. The people of Australia have never had an opportunity to express their views on an appropriate Australian national flag in a referendum. 3. The present Australian national flag does not properly represent Australia as a sovereign, independent nation. 4. The present Australian national flag falsely proclaims Australia as a colony, homeland, protectorate, dominion or government department of Great Britain. 5. The first condition in the flag competition of 1901 required that the design should show Australia's loyalty to the British Empire. The British Empire no longer exists. 6. A public opinion poll held in 1984 using the Gallup Method revealed that 52% of Australians surveyed wanted a competition for a new design for the Australian flag. 7. There is no inherent link between Australia proclaiming a unique and distinctive flag and the political issue of Australia moving to a republican form of government. 8. The adoption of a truly Australian national flag would serve as a focal point for Australia's bicentennial celebrations in 1988. Your petitioners therefore pray that your honourable House will: (a) Appoint a Committee of the Parliament with representatives from both Houses and all parties to invite and consider proposals for the design of a new Australian national flag, and (b) Require that Committee to make recommendations on the form of a minimum cost referendum at the time of the next general elections, in which the electors will be given the opportunity to vote for a flag from a selection of at least three designs which will include the present Australian national flag and the winner of the Ausflag-Bulletin-2MMM.FM competition of March 1985. And your petitioners as in duty bound will ever pray. by Mr Everingham. To the Honourable the Speaker and members of the House of Representatives in Parliament assembled. The humble petition of the undersigned citizens of Australia respectfully showeth: That in the light of the Labor Government's failure to act to correct the many anomalies in the Assets Test on pensions brought to its notice, the Labor Government's legislation should be repealed before it has an unduly unfair impact on pensioners. Your petitioners therefore humbly pray that the House of Representatives in Parliament assembled should immediately seek the repeal of the Labor Government's iniquitous and unfair Assets Test. And your petitioners, as in duty bound, will ever pray. by Mr Hawker. To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The Petition of certain citizens of Australia respectfully showeth: that the Bill of Rights is a dangerous piece of legislation which gives us no new legally enforceable rights That the Bill of Rights leaves out vital rights such as the right not to belong to a trade union, the right to own private property, the right to a private education that the Bill of Rights gives dangerous new powers to a Federal Government Commission to investigate in private, without legal representation and with criminal penalties for refusing to co-operate that the Bill of Rights deals with our rights; therefore we, the people, should say whether we want it by a referendum. Your petitioners therefore pray that you will oppose the Bill of Rights, support Liberal amendments to improve it in case it is passed, and pledge to repeal it should it become law. by Mr Hawker. To the Honourable, the Speaker and Members of the House of Representatives in Parliament assembled The humble Petition of the undersigned respectfully showeth: That the Flags Amendment Bill, 1984, as presented to the Senate and passed, which ensures that the Australian Flag cannot be changed except by referenda, be brought before the House of Representatives. Your Petitioners humbly pray that the members of the House of Representatives in Parliament assembled Will ensure that the Flag Amendment Bill, 1984, will be presented to the House of Representatives at the earliest possible time and your petitioners, as in duty bound, will ever pray. by Mr Hodgman. To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The petition of the undersigned respectfully showeth: We most strongly oppose the process of Food Irradiation by radioactive Cobalt 60 or any other radioactive substance. We oppose the introduction of regulations that will facilitate the food irradiation process by State Governments. We express our deep concern at this attempt to extend the use of radioactive substances and exposure of workers to radiation. We call on the Government to immediately ban the importation of radioactive Cobalt 60 or other radioactive substances and to immediately disallow the regulations that permit the irradiation of food here in Australia. 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 Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The petition of the undersigned citizens of Australia respectfully showeth that we strongly oppose the introduction of the `Australian Card' or any other form of National Identification Numbering System. We believe that the introduction of a National Identification Numbering System is not only totally unnecessary but is a severe threat to our civil liberties and privacy. We condemn the Government's actions on this matter, particularly as no reasonable nor responsible justifications for the proposal have been forthcoming from the Government. We humbly pray that the House of Representatives, in Parliament assembled, should reject any proposal for a National Identification Numbering System. by Mr Kent. To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The petition of certain citizens of Australia draws the attention of the House to the fact that the lack of a Medicare Office in Wyong is seriously inconveniencing the residents of Wyong Shire. Your petitioners therefore request that a Medicare Office is established in Wyong as soon as possible. by Mr Lee. To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The petition of concerned Australian citizens respectfully points out: The deterioration of the total global environment is continuing at an increasing rate; that important environment resources vital to human livelihood such as trees, soil and water are decreasing at an alarming rate; that there is a need for educating all people to assume a greater responsibility for the conservation, sustainable use and maintenance of vital resources, that dynamic and active initiatives are needed to conserve and renew the total environment, and that protecting, conserving and repairing the Earth can unite all people and nations in co-operative action for survival. Your petitioners therefore humbly pray that your Honourable House will: Propose to the United Nations General Assembly at its 41st Session in September 1986 that 1988 be proclaimed the `First International Earth Repair Year' (FIERY) as a vital action to ignite global co-operation for Worldpeace. And your petitioners as in duty bound will ever pray. by Mr Lindsay. To the Honourable the Speaker and the Members of the House of Representatives in Parliament assembled. The humble Petition of certain electors of Australia respectfully 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 the Speaker and Members of the House of Representatives in Parliament assembled. The humble petition of the undersigned citizens of Australia respectfully showeth: That we strenuously object to the proposal that the Post Office at Marsfield be closed. The Post Office serves a community need and we would be seriously inconvenienced by having to travel to another centre for our postal and banking requirements, or even to collect registered, certified letters and parcels. Many of us are pensioners and the cost of such travel would be an unnecessary imposition. The nearest Post Offices are about 2kms away with no convenient public transport. Also for those of us who work during the week, this is the only Post Office open on Saturday mornings where we can collect our parcels, do our mailing and other services it provides. We maintain that the purpose of Post Offices should be to serve the public for the variety of services they offer, and that they should not be closed merely to save money or help Australia Post make a profit. Your petitioners therefore humbly pray that the House should take all possible steps to prevent the closure of Marsfield Post Office. And your petitioners as in duty bound will ever pray. by Mr Ruddock. To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled; and to the Australian Government. This petition of concerned Australian citizens respectfully points out that a comprehensive ban on all nuclear weapon tests in all environments for all time would be a vital first step towards: inhibiting the addition of more and more sophisticated and destabilising nuclear weapons to the world's arsenals; arresting the extension of the arms race to outer space; upholding the provisions of existing treaties and agreements. Your petitioners humbly pray that: 1. The Australian Government-(a) take new initiatives to encourage all member States of the United Nations-especially the Governments of nuclear weapon states-to conclude at an early stage a treaty banning all nuclear weapon tests in all environments for all time, (b) call on all nuclear weapon states to declare an immediate moratorium on all nuclear weapon tests pending conclusion of a CTB. 2. All Federal Members of Parliament and Senators make strong representations to the Australian Government to act towards these goals. And your petitioners as in duty bound will ever pray. by Mr Tickner. To the Honourable the President and Members of the House of Representatives of the Commonwealth in Parliament assembled. The humble petition of the undersigned citizens of Australia respectfully showeth: That they oppose the construction of any additional nuclear reactor at the Australian atomic energy establishment at Lucas Heights in N.S.W., or any other site within Australia. Your petitioners therefore pray that the Government of Australia will not construct an additional nuclear reactor at Lucas Heights or within Australia. And your petitioners as in duty bound will ever pray. by Mr Tickner. To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The humble petition of the undersigned citizens of Australia respectfully showeth: That we, the loyal citizens of Australia firmly express our strong opposition to any proposals to remove or undermine the importance of the place of God and/or the Queen in our national life, and democratic institutions. Your petitioners therefore pray: That the Parliament assembled reaffirm our nation's total dependence on God the Creator in accordance with our Australian Constitution, which commences with the words ``Humbly relying on the blessing of Almighty God'', and the Standing Orders of both the Senate and the House of Representatives which prescribe that Parliament each day shall open with a special prayer to Almighty God and the Lord's Prayer. We also call on the Parliament assembled to reaffirm our genuine loyalty to our Head of State, the Queen of Australia, Elizabeth II-`God save the Queen'. And your petitioners, as in duty bound, will ever pray. by Mr Webster. 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,Mr Grace and Mr Price. To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The humble petition of the undersigned citizens of Richmond electorate respectfully showeth that: The Hawke Labor Government's productivity-superannuation accord with the ACTU and its support of the superannuation claims of the trade union movement will create an imbalance in industrial power and distort the future development of the Australian economy. Your petitioners humbly pray that the House of Representatives, in Parliament assembled, urge the Government to: Reject the superannuation claim of the trade union movement, and allow superannuation to develop without trade union domination. And your petitioners as in duty bound will ever pray. by Mr Blunt. To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The humble petition of the undersigned citizens of Cowper electorate respectfully showeth that: The Hawke Labor Government's productivity- superannuation accord with the ACTU and its support of the superannuation claims of the trade union movement will create an imbalance in industrial power and distort the future development of the Australian economy. Your petitioners humbly pray that the House of Representatives, in Parliament assembled, urge the Government to: Reject the superannuation claim of the trade union movement, and allow superannuation to develop without trade union domination. And your petitioners, as in duty bound, will ever pray. by Mr Nehl. To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The humble petition of the undersigned citizens of Richmond electorate respectfully request that: The world's resources be redirected to the relief of human suffering, starvation, poverty and disease. Your petitioners humbly pray that the House of Representatives, in Parliament assembled, urge the Government to: Stop spending taxpayers money on self promotion through high cost high profile but superficial policy on nuclear disarmament and make a genuine bi-partisan commitment to positive and practical policies designed to achieve progressive world-wide nuclear disarmament. And your petitioners, as in duty bound, will ever pray. by Mr Blunt. 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 Human Rights and Equal Opportunity Commission. 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. And your petitioners, as in duty bound, will ever pray. by Mr Braithwaite. To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The petition of certain citizens of Victoria respectfully showeth: That all legitimate business expenses incurred in earning or producing assessable income should be allowable deductions. That the proposed Capital Gains Tax is an unwarranted burden on the rural sector, which will severely affect its long-term viability. That the delay by the Government in introducing the legislation into Parliament is causing confusion and hindering farmers in the organisation of their affairs. Your petitioners humbly pray that the Government introduces the Capital Gains Tax legislation without delay and that the Australian Democrats join with the Opposition to defeat the proposed legislation. And your petitioners, as in duty bound, will ever pray. by Mr Hawker. To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. This petition of the undersigned shows: That certain residents of Alice Springs wish to draw to the attention of the House the unnecessary intrusion into peoples lives by various provisions of the Bill of Rights Legislation. Your petitioners humbly pray that the Hawke Government withdraw the Bill of Rights. And your petitioners, as in duty bound, will ever pray. by Mr Spender. Petitions received. 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 false argument of the Government that income tax cuts are dependent on the passage of the fringe benefits tax legislation. I call upon those members who approve of the proposed discussion to rise in their places. More than the numbers of members required by the Standing Orders having risen in their places- Mr CARLTON(Mackellar)(2.58) —Today the Opposition wishes to take up the argument that has been put about by the Treasurer (Mr Keating) that unless the notorious fringe benefits tax is passed by both Houses of Parliament there will be either no tax cuts or a serious delay in those cuts. I wish to expose today quite clearly the fallacy in the argument that there is necessarily any link whatsoever between the promise made solemnly by the Treasurer in his statement of 19 September last year and the passage of the notorious fringe benefits tax through this Parliament. The first point that we notice is that there is no equality of argument in the sums involved. The tax cuts promised on 19 September amount to $2 billion-$2,000m-beginning on 1 September this year. This House wants to make it quite clear that it still expects the $2,000m in tax cuts to be effective from 1 September. If those cuts do not come then, it will be another clear breach of promise by this breach of promise Treasurer. A total of $2,000m is involved in the tax cuts, but how much exactly is involved in the Treasurer's estimates of the fringe benefits tax in the first year? The answer is exactly $330m. So, first of all, the Treasurer is saying that $2,000m worth of tax cuts is potentially in jeopardy because a fringe benefits tax, based on his estimates to be worth $330m, will not be passed by the Senate. That does not add up. Only one dollar in six of the proposed tax cuts for next financial year would come from the fringe benefits tax, even if that tax netted what the Treasurer said. Mr Hunt —How much? Mr CARLTON —Only one dollar in six. Mr N.A. Brown —Where is the Treasurer? Mr CARLTON —The question has been rightly asked: Where is the Treasurer? He has been listed to speak in this debate. Honourable members are waiting once again for the Treasurer to come into this House. Here he is; here he comes sauntering in again, treating the House, as usual, with arrogance and contempt. But at least he is here. The second point I wish to make about the inequality of the argument is that in the first full year-in 1987-88-the Treasurer has promised tax cuts worth $4,500m. How much of that amount will come from the fringe benefits tax? The Treasurer estimates that only $540m will come from that tax. So, in the second year, which is the first full year, on the Treasurer's estimates-and I assume that he is right-only one dollar in eight of the promised tax cuts will come out of the fringe benefits tax receipts. Clearly the Treasurer's arguments to the Australian public that the tax cuts are in jeopardy because of threats to the fringe benefits tax are a total nonsense. In the first year only one dollar in six will come from the fringe benefits tax and in the second year only one dollar in eight will come from that source. Therefore, it is a total nonsense to suggest that if the Senate-as it should do-cuts off this miserable, rotten tax we will lose our tax cuts. Another point about these tax cuts that we are promised is that basically they are not real tax cuts at all. If one examines the figures one finds that the tax cuts are merely a correction for fiscal drag. What is fiscal drag? Let us take this term and explain exactly what it means because every taxpayer recognises the effects of it. It means that as inflation goes up-and under this Government inflation is currently 9.2 per cent or three times that of our trading partners, three times that of the Organisation for Economic Co-operation and Development-and as wages rise, people move into higher tax brackets. Consequently, without altering a tittle of the taxation law, this Treasurer can drag in, as he has done over the past three years, a great deal more tax. Without his doing a thing, more and more tax is taken from individuals and companies throughout the land because of fiscal drag. I must say that the unions are awake to this. They are demanding that this Treasurer meet the tax cuts on the promised date because they know as well as everyone else around the country that if those tax cuts do not come in as promised, people will be denied a relief from the effects of inflation. Even if the tax cuts come in on time, 50 per cent of all taxpayers will still be paying a top rate of 40c or more in the dollar. That is even with the tax cuts. Indeed, even with the tax cuts, the average weekly earnings of an average taxpayer will be taxed at a higher rate. The average rate of tax he pays currently is 22.73 per cent and, even after the promised tax cuts, the rate will increase to 24.48 per cent. In other words, even with the promised tax cuts, the average weekly earnings taxpayer will be paying a higher average rate of tax by the time the full package comes in, if it comes in. Therefore, the Treasurer must meet this tax commitment just to try to stop people from going backwards. They will go backwards anyway with the package, but they will go backwards even further if he does not meet his commitments. Therefore, it is essential for the Treasurer to introduce his tax cuts, not just to counteract the inflation effects, but also because his union pals will cut up rough if he does not honour the deal he has done with them under accord mark 2. Then he will be in major trouble. The Treasurer asks where the money will come from. First of all, in the first year five-sixths of it will not be dependent on the fringe benefits tax. In the second year seven-eighths of it will not be dependent on the fringe benefits tax. If the Treasurer needs $330m in the first year, why does he not cut spending by that amount in addition to what he has already planned? This is the big spending Treasurer. Over the past 12 months he has gone around trying to kid people that he has been a careful spender. He has said that this Government has done more than any other government-and he said this the other day, which was quite astonishing-to cut back on government expenditure. We all know, because we have looked at the books which were actually supplied by him and his Treasury, that his Government has spent taxpayers' funds at more than twice the rate of the Fraser Government, averaging its seven years of office. In the seven Fraser years the average increase in spending after inflation was 2.1 per cent. Under this Treasurer it has been an average over the three years of 5.5 per cent. Why does the Treasurer come round to us and ask us where we would find the money? He has already spent it. He spent up big in years one, two and three of his administration and now he comes screaming to us and asking us where we would find the money. Well, we say this: Five-sixths of the money in year one is not dependent upon fringe benefits tax, seven-eighths of the money in year two is not dependent on fringe benefits tax and the rest of the money-$330m in the first year and $500m in the second year-he must get from cutting government spending. If he does that he will have the additional benefit that he will be doing something about his disastrous banana republic problem of the balance of payments. As a first step, the most important thing the Treasurer can do to start reducing the deficit and the current account and to start reducing this terrible balance of payments problem is to cut government spending, and to cut it deep. If he does that, he will have the money to pay for what he will lose on this lousy fringe benefits tax. If he does not drop the fringe benefits tax, he is going to be in more trouble than any Treasurer in the history of this country. Will the tax actually raise what the Treasurer says it will raise? This depends on whether one believes him, particularly in relation to the fringe benefits tax on motor vehicles, or whether one believes Senator Button, Mr John Bannon, the Premier of South Australia, or the Vehicle Builders Employees Federation of Australia, because all those people have broadly the same view on the effects of the fringe benefits tax on the motor industry. On my calculations based on their figures, if this tax is imposed the Government would lose about $300m in taxes and revenue and this industry would be destroyed. That is based on the figure of his colleague Senator Button, who even over the weekend repeated the fact that he totally disagrees with the imposition of this tax on the motor industry. Senator Button disagrees with him publicly. Once again we have two senior Ministers in conflict over this matter, yet the Treasurer doggedly sticks to this tombstone despite the fact that it is ruining the motor industry and it is going to have a serious effect on other industries. The other point, of course, that the Treasurer makes is that he is an extremely moral person, that he is concerned about the morality of taxation, that by comparison with the previous Government he is a model of rectitude and that it is quite immoral to allow certain existing things to go on without taking some action. People are starting to have their own views about the particular remedy that he is proposing. This little purple booklet on the fringe benefits tax has now gone out to all employers. They are all reading it and day by day they are seeing the quality of the Treasurer's solution to this supposed problem of immorality. Where is the morality in this? This morning I had drawn to my attention a particular case put forward by the Australian Hotels Association. The Treasurer will rubbish this Association, I may as well warn it. If people have the effrontery to put up a well argued case, the Treasurer will say that they are one of these narrow vested interests, that they cannot be listened to and so on. But let the Treasurer deny what the Australian Hotels Association says in its case. Let him deny that clause 27 of the Fringe Benefits Tax Assessment Bill 1986 makes it clear that the fact that an employee, in residential accommodation provided by the employer, provides some sort of service such as being on call to make sure that burglars do not get into the pub is not taken into account in the levying of the tax. Clause 27 says that it does not matter if, in the course of occupying that accommodation, one has other duties such as being sure one is there all the time to make sure that the pub is not burgled. It gives this particular case-it is a real case-where an employee licensee in an inner city hotel in Melbourne, who I might say in Victoria is required to be there by law, runs an extended trading licence to 3 a.m. and has to undertake a stocktake at the close of trading every night. He lives on the premises in a unit which is not particularly attractive but which is valued at $180 per week by the Taxation Office because of its prime location. It is in an area where much more luxurious units rent for over $250 per week. The taxable value of this employee licensee who stays on the premises all the time and who makes sure that burglars do not come in and who has to do a stocktake after 3 a.m. is $135 per week. That is the value, under the legislation, for the fringe benefit. Case two is a middle management merchant bank executive. Of course, the Treasurer does not like merchant bank executives. He hates them. They are the people who allegedly put down the value of the dollar by trading. Honourable members will recall what he said about them. He does not like these people. Nonetheless, under this arrangement he has given them a benefit which he has not given to the other people. A middle management merchant bank executive who lives in a quality unit in the suburbs to which he can return to each evening to relax has the rent of $135 a week paid for by his employer as the unit is part of the employee's remuneration package. Its taxable value of $135 is exactly the same as that for the fellow in the downtown pub who has to do the stocktake and look after the premises late at night. Where is the morality in that? Is that a way of getting at the problem of equity in taxation? Is that a way of getting at benefits which ought to be taxed? I think that is hardly a solution. When one looks at a farmer who provides lodging, perhaps a sheep or two, firewood from dead trees, the use of a farm vehicle to drive the kids to the school bus and all these sorts of things hidden under the fringe benefits tax, where is the morality? Are we really impressed by that? What is the morality in putting a fringe benefit on a charity, on a religious body or on a non-profit organisation for a few miserable uses of a car or another vehicle by an employee whose main job is to look after the people that that charity is supposed to look after during the day? On the books already is legislation that this Treasurer could have used to deal with this question of equity and morality. Legislation is already on the books which he could have used but which he has failed to use. Where is the morality in profligate spending, after all? Where is the morality in increasing spending by an average of 5.5 per cent in real terms over three years and then squeezing farmers and charities? Where is the morality in that? Just where is it? Where is the morality in pretending to people that if they do not pass the fringe benefits tax they cannot get tax cuts, where the fringe benefit money is only one-sixth or one-eighth of the total sum the Treasurer is talking about? If he wants to have a debate about morality, we will have it any day at all. We will examine it case by case and the Australian people will examine it case by case as they turn over every page of this 56 pages of fringe benefits tax nonsense. He will live with this and he will regret it. Mr DEPUTY SPEAKER(Mr Leo McLeay) —Order! The honourable gentleman's time has expired. Mr KEATING(Treasurer-Blaxland)(3.12) —The Opposition is stunned by the charge of immorality in the tax system, and well it might be, because for years it presided over the degradation of the Australian taxation system. The Opposition watched it fall to pieces. It watched the criminal paper evasion schemes proliferate. It did nothing about them until it was a national scandal. The tax losses revealed by the Costigan Royal Commission on the Activities of the Federated Ship Painters and Dockers Union and the McCabe-Lafranchi report put the losses in relation to the size of our tax system way ahead of every other country in the world. It was on a scale of five or six times tax avoidance in the United States of America in the years of the Howard Administration. The fact is that the coalition Government was just totally unprepared to do anything about the degradation of the tax system, even the blatant criminal paper evasion schemes, much less the rutted-in avoidance schemes and avoidance practices, of which fringe benefits is one. It left this Government with a Taxation Office with its morale shot to pieces as the Taxation Office had written to the then Treasurer, Mr Howard, for years urging action but was rebuffed. Its staff and resources diminished enormously over the years. When one gets up and reminds the Opposition of its disgraceful stewardship of the tax system, honourable members opposite spring up trying to bring up some obscure circumstance about the fringe benefits tax. Even in the presentation we have just heard about the rent paid by the hotelier on the accommodation in the hotel for the person doing the stocktake, the honourable member for Mackellar (Mr Carlton) omitted to say that that hotelier would have the double tax on dividends removed by the same package-it is a package of measures, one impacting upon the other-that the tax which would be paid, which is now paid at the company rate and then paid on a personal basis on the distributed earnings of the company, will now be abolished and will be paid only once. That is a massive advantage for companies. If, in the case mentioned, the hotel is privately owned and is not incorporated, there will be a reduction in the marginal rate from 60 per cent to 49 per cent. That is not mentioned in the one-sided, biased recital of the statistics and argument just given by the honourable member for Mackellar. He understands that this is a package-on the one side to make the system fair, clean and decent and on the other to give all the revenue, every penny, back in reduced marginal rates of tax; it also includes the eradication of the double tax on dividends in companies and the development of a full imputation system. The Opposition made no mention of the package approach. We have had just a selective indignation about the way in which the scheme operates. More than any other of these matters of public importance in recent days, this one illustrates the woolly-headed, Magic Pudding thinking of the coalition-that there is money to be plucked from anywhere. In fact the Leader of the Opposition, in a Press statement issued yesterday, said: Any revenue shortfall from defeat of the fringe benefits tax could easily be made up by the Government slashing its own spending by another $300 to $400m in 1986-87. That is it, it is so easy; we just take a decision to cut off another $300m or $400m. The Opposition has to be joking. This comes from a Party which now has $5 billion of outlays and tax expenditure commitments since the last election and keeps piling them up. It comes from a Leader of the Opposition who, as Treasurer, was unable to cut more than $250m in the celebrated razor gang exercise of his years as Treasurer. The fact is that this Government has cut over $3.5 billion out of expenditures and outlays in three Budgets and will go on into this fourth Budget. To say `There is $400m, do not worry about it, just add it to the deficit' is the kind of nonsense which every serious person watching the economy in this country regards as a total sham and in no way an answer or solution to the problem. The reality is that the Government has never said that the income tax cuts are solely dependent on the introduction of the fringe benefits tax. So the central premise of the matter of public importance is wrong in the first place. Obviously the revenue raised by the fringe benefits tax makes an important contribution to income tax cuts-it is all money. But we have never said that the income tax cuts are solely dependent on the introduction of the fringe benefits tax. At least I welcome this recognition by the Opposition of the fact that the tax measures are part of an overall package involving impacts upon the Budget, which the Opposition has not recognised up until this time. The fringe benefits tax exists and stands in its own right because it is designed to make the tax system fairer, to flush out the rorts and ramps that have flourished under the previous Government, and to get to a position where all taxpayers will feel that the system is fairer and that some taxpayers, ordinary taxpayers, are not carrying a burden which they know they are shouldering on behalf of somebody else. Mr Hodgman —Let us have an election on it. Mr KEATING —The last thing the honourable member would ever want an election on is tax decency. In terms of tax decency the coalition would not have a leg to stand on. It would not last an hour in the first day of the first week. Whether it was credit cards for free meals in restaurants or private use of vehicles written off at 100 per cent business use, it meant that the average taxpayer had to carry the burden of those costs by higher levels of taxation, while they have not enjoyed these fringe benefits. That is why Mr Valder, the Federal President of the Liberal Party, agrees with the Government that the existence of fringe benefits is a disease. In the face of these steep marginal rates of tax which the coalition Government gave Australia, the propensity to minimise tax and use fringe benefits avenues has increased. All the more reason why now in reducing the marginal rates of tax there is a case for dealing with these fringe benefits. We have dealt with them in the most fair-minded and balanced way a government could ever hope to do. The difference between the Government and the coalition is that this Government has had the guts and decency to do something about the problem, instead of sweeping it under the carpet, knowing that one body of Australians pay their fair share of tax and the others bludge on them. The Opposition now knows that this Government is not prepared to sweep it under the carpet, and that we have had the decency and moral strength to do something about it, despite the fact that the Opposition is baying at our heels raising opportunist propositions like this in the Parliament. Yet Opposition members want respect. They strut around the corridors as if people should respect them as parliamentarians, with a position in politics and public life. Their position is immoral, as this debate reveals. They are not entitled to any corporate respectability as a Party holding these views. That is why they have been held in contempt by the Government and by the country as a whole. We are not about to cave in to some opportunist claim by the Opposition that we should drop the fringe benefits tax proposal, that it is some unreasonable impost. We hear nothing from the Opposition about a full imputation system, the eradication of the double tax on dividends and a reduction in the rates of marginal tax. The Opposition opposes all the revenue raising measures but supports the tax reduction. What a joke! Mr Blunt —Tell us about fiscal drag. Mr DEPUTY SPEAKER(Mr Leo McLeay) —Order! The honourable member for Richmond will cease interjecting. Mr KEATING —He is more to be pitied than despised, Mr Deputy Speaker: Do not worry about him. The fact is Opposition members oppose all the measures that would raise the revenue to reduce the tax. One would think they would have enough sense to say: `We never did it and we know that we should have. At least the Government has come along and has taken a punch on the chin on this or that, but this ought to be done. At least let us support it and then we will not be pressed to take it away when we are in office. Even if we support it, the Government will bear the burden of it, if there is any burden to be borne'. Opposition members are so aware of their own self-interest and not cognisant of any consideration of decent public policy that they are not even sensible enough to support that line. When the Leader of the Opposition was asked whether he would repeal these measures he replied: `Well, I am not going to lock a future government into some rigid formula'. Then he gives the National Press Club the line of argument that he will not say that he will repeal the fringe benefits tax, but just that he will oppose it everywhere. He will oppose it in the House of Representatives; he will oppose it in the Senate; he will attack it on radio programs. When he is pressed to answer the question `If it is that objectionable, Mr Howard, will you repeal it?' he says: `Oh, no, we will not repeal it; we cannot lock ourselves into something like this'. Really! Then the honourable member for Mackellar comes along with another pedestrian performance rattling out half truths, distortions, exaggerations, mixed up views, fiscal lunacy-the whole lot. Mr Blunt —This is a long way off your best. Mr KEATING —I do not have to rise to any occasion here; do not make under any mistake about that. I could beat this argument staying in bed. I would not even have to come here to roll this little case. It is a complete sham. The other case Opposition members put is that the Government has the power under the existing law. Mr Howard believes that the Government is gutless in not exercising existing law. Well, why did not Mr Howard exercise it in 1983, 1982, 1981, 1980, 1979 and 1978? Was he gutless for five years? Opposition members are nodding approval, so he was. The Opposition is well aware that section 26 of the Income Tax Assessment Act provides that the value to the taxpayer of all allowances, compensations and benefits given in respect of employment, whether in money, goods or services, is assessable income. The problems with the administration of the section are long standing, which the Opposition well understands. They have become rutted into the system and are now virtually impossible to solve without firm legislative measures. The Opposition knows that although those provisions have been there, they are dormant and useless and have to be addressed directly by legislative change. The main problem in the existing legislation is that as a tax on employees there are very substantial compliance problems and valuation problems, more particularly because the section relates to the value to the employee, and a highly subjective case by case assessment becomes necessary. One cannot ask the Commissioner to look behind the value, or what is regarded as the value to the employee, in respect of seven million taxpayers. It is not viable. This is largely unworkable because subjectivity will lead to a flood of objections and appeals which involve massive bureaucratic costs to resolve. That is why something legislative had to be done. The cost to revenue of tax evasion in this area was estimated in the draft White Paper at $700m. The fringe benefits tax will recoup most, though not all, of this loss. The decision to impose the fringe benefits tax on employers has clear advantages as it will introduce objective rather than subjective tax rules, which the Opposition well understands. It is administratively cheaper because the total number of taxpayers is less. Group certificates and monthly pay as you earn arrangements, which would have involved massive paperwork burdens on business, are avoided, and the chaotic results of the sorts of measures tried by the Opposition in 1980 in taxing the Queensland coal miners on a discriminatory basis are avoided. The fact is that members of the Opposition make this cheap point, never having been prepared to administer these provisions themselves as a government, knowing that it was incapable of such administration. It now says that this Government ought to fall back to those provisions, when it knows that there is a clear legislative need for clear rules to be brought in to deal with the problem of fringe benefits. All we have is the usual obfuscation, double standards and lack of any shred of moral position in the state of the Liberal and National parties in this Parliament in respect of fringe benefits. The coalition opposes most of the changes to the tax system to make it cleaner and better. It wants reductions in marginal rates. It wants the full imputation system which this Government will give business-the greatest single reform to the corporate taxation system since its inception-which it was asked to give by a succession of business communities in 20 or 30 years and refused. It mentions nothing about that. It will have all the goodies but none of the baddies, and the baddies are okay anyway. That is the Opposition's attitude. If that is its attitude, let public opinion be a judge of the veracity of its views and opinions and the moral standpoint it takes. We on this side of the House take the view that those people who have been paying more than their fair share, the families with children on $18,000 or $20,000 a year, trying to battle along, pay mortgages and run a second hand vehicle and all the rest, should not be loaded up with tax while the people the Opposition represents escape through the tax net by having their tax liabilities diminished. The Opposition will get no change from me or from the Government. We think its position is groundless, immoral and opportunist. It could do the decent thing and support these measures, but while it persists in its current frame of mind it will get no change or support for its position from us. Mr BLUNT(Richmond)(3.27) —Earlier today I heard the Treasurer (Mr Keating) referred to as Cheating Keating. If he gets away with the line he is trotting out on this tax that name will be very appropriate. The Treasurer and the Minister for Finance (Senator Walsh) earlier intimated that income tax cuts are in jeopardy if the fringe benefits tax does not go ahead. What a lot of arrant nonsense. In fact, the Treasurer knows that it is arrant nonsense. He came into this place a minute ago and came on with a whole heap of rhetoric-no logical argument, no figures, no facts, nothing to support his position. Mr N.A. Brown —Now he has walked out. Mr BLUNT —Of course, he has just walked out. He is not prepared to stay here and listen to an analysis of his position on tax, the facts about the fringe benefits tax, and the way it interacts with the supposed income tax cuts. The Treasurer has suggested that if the Opposition combines with the Australian Democrats in the Senate to block this iniquitous, unfair, expensive and excessive tax on fringe benefits, income tax cuts for Australians will be in jeopardy. What a lot of absolute rubbish. The Treasurer's own estimates for fringe benefits tax for 1986-87 are that it will raise $330m; but in the same year he is proposing that his income tax cuts will be some $2,000m, and that the total revenue raised by fringe benefits tax in the years 1986-87 and 1987-88 will be about $870m. The total cost of income tax reductions proposed by this Government in that year is some $6,500m. That is, 17 per cent, or $1 in $6 of the proposed income tax cuts will be coming from fringe benefits tax revenue. What the Treasurer has not said is that the income tax cuts themselves are illusory. They are being supplied by his old mate fiscal drag, because this Treasurer has refused to do anything to reduce the impact of inflation on income tax scales. In fact, it is as a result of his policies that we will have a greater impact from fiscal drag than perhaps we have seen for many years. This Treasurer has given the Australian people an inflation rate of 9.4 per cent. That means that every year all Australian workers will be moving into higher and higher income tax brackets. It means that by the time these tax cuts come into effect the average Australian worker will be paying more tax than he is at present. This man has the nerve to come in here and talk about morality, about consistency, but refused to talk about the numbers behind his tax policies. He knows that he is in trouble, he knows that he cannot keep the promises, and he knows that he has to run for cover. He also knows that he is in trouble with the factional politics of the Australian Labor Party. Frankly, the Expenditure Review Committee he was relying on to cut back expenditure is just not working. A brawl is going on inside the Labor Party amongst the magnificent seven. We have a member of the magnificent seven sitting at the table, the Minister for Primary Industry (Mr Kerin). To the people who want to keep spending money the Treasurer says: `Please do not spend any more money because I cannot raise it fast enough'. The Treasurer says this notwithstanding the fact that he is running a record high tax revenue Budget, notwithstanding the fact that he has government receipts at record high levels. He knows that he is in trouble because there is no way he can keep within the guidelines of that fundamental tenet laid down by the Prime Minister (Mr Hawke), the trilogy. The trilogy has gone out the window. It is absolutely nonsense. Even in the first year the Government could not comply with the parameters of that trilogy. As everybody knows, the trilogy committed this Government to not increasing tax receipts, outlays or the Budget deficit as a proportion of the gross domestic product above the 1984-85 levels, a year in which tax receipts were at an all time record level. This year tax receipts will be ahead of the 1984-85 level. They will be, on current estimates, $1,000m over the Budget estimate. If this Treasurer goes ahead with the line he is trotting out that if the fringe benefits tax is stopped he will have to postpone income tax cuts, and if he postpones them until about December this year it will add about another $600m to government revenue. So again, this Government will break the trilogy. No one in this chamber, no one in the gallery, and no one listening, should be at all surprised that the Government will break another promise because this Government probably has broken more promises than the Treasurer has had hot breakfasts. One only has to go back to see what the Prime Minister said in his 1983 policy speech to understand how valueless this Government's words are. The Prime Minister, then the Leader of the Opposition, in 1983 said: `I am not, and the Labor Party is not, in the business of making promises that can't be kept'. It has not kept a promise since that date. It has not kept the promise about the capital gains tax. We have a capital gains tax here; we are about to debate that legislation. It has not honoured the promise to increase pensions to 25 per cent of average weekly earnings. What about fuel prices? The present Prime Minister said in 1983: `As soon as I am elected, fuel prices will drop 3c'. They did not drop 3c, they just kept going up and up. Even when the world price of oil did fall because of economic circumstances, what happened to the poor Australian motorists? They still got fiddled. This Government pulled the greatest swiftie of all time. The ultimate bowser bandit, the Treasurer, who is not even in the chamber any more, took them for a ride. The Australian people know it, and they know that he is about to take them for a ride again on tax revenues. There is no way this Government will survive the impact of its iniquitous fringe benefits tax. What it has not done is examine the impact this tax will have on the Australian economy. We already have a situation where business in Australia, for the first time in our history, is talking about a revolt, about disobeying laws passed by this Parliament. Can anyone blame them? When we look at what this Government's tax will do we see that it will affect some 60 per cent of the Australian work force. About three million Australians receive fringe benefits, and this Government proposes to tax them in the hands of the employer. I do not believe that this Government has done any work to ascertain exactly what this tax will cost the Australian farm sector. The Livestock and Grain Producers Association has estimated that the tax will cost the farm sector $152m. It is appropriate that the Minister for Primary Industry is at the table because, quite frankly, I do not think he is doing his job very well. In circumstances where the average farm income is $4,000 or a bit less he will allow the Treasurer to impose a fringe benefits tax on things such as firewood from dead trees, or using a station vehicle to take the kids to the farm gate so they can catch the school bus. He will allow that tax to be imposed and it will cost the average Australian farmer about $1,000 in a year when the average farm income is just less than $4,000. I wonder whether the Treasurer has been told by the Minister for Primary Industry that, unlike a lot of other businesses, farmers are not in a position to pass on this extra cost, and that they will have to wear it. It is going to reduce their income, profitability and viability and will put more people off the land. The Minister is oblivious to the impact of these policies. He was supposed to have set up a section within the Department of Primary Industry to look at the impact of government policies on the farm sector. I will tell you what; it must be sitting there looking at its navel because it certainly has not said anything about the impact of the fringe benefits tax on the farm sector. I just cannot understand this Government. What it is really seeking to do is continually to increase tax revenue rather than address the real problems of Australia at present. There is an overwhelming need, accepted by everybody in Australia, except the people who occupy the benches opposite, to reduce government expenditure. In fact, this need is even accepted by some members of the Government. Only last week the Minister for Finance spoke about the need to control the social security system. The good senator-a man of some intelligence and some capacity to analyse figures, including the figures put up by his ministerial colleagues-has said that the amount of cheating going on under the Labor Administration in regard to the unemployment benefit has increased. In fact, he mentioned the figure of $100m. Quite frankly, if the Government did something about cheating in regard to the unemployment benefit and tightened up the social security system it would have $100m of the money it needs or proposes to raise through the fringe benefits tax. Of course, Senator Walsh went on to talk about supporting parents' benefits. Of course he addressed the problem of the non-collection of maintenance. He addressed the fact that we are currently spending $1.2 billion on the supporting parent's benefit, which spending is increasing at the rate of 10 per cent a year. Seventy per cent of maintenance orders are not complied with. What has this Government done in three years to do anything about that? Absolutely nothing. No wonder the Government has to contrive new taxes to impose on Australian business, which is having the greatest difficulty in the history of this nation in competing internationally. Everybody in this country, with the exception of the Treasurer, recognises the problems. Only last Saturday an article in the Melbourne Herald talked about this Government's records. The Government likes to talk about its records but only selectively. Let us talk about some of the other records of this Government. The writer of the column `Martin's Place' in the Melbourne Herald states: . . . The Government's policy of record interest rates, a record relative inflation rate-- Mr DEPUTY SPEAKER(Mr Leo McLeay) —Order! The honourable member's time has expired. Mrs KELLY(Canberra)(3.39) —This debate has been very worth while because for the first time in this whole tax debate the Opposition has started to address that fundamental question of where the money is coming from. On the one hand the Opposition says: `We must reduce marginal tax rates' and on the other hand it says: `However, we should not bring in a fringe benefits tax'. This is the first time that the Opposition has ever been able to address the question of what it would do, of where it will get the money from. I am interested in the simplistic view that the honourable member for Mackellar (Mr Carlton) and the honourable member for Richmond (Mr Blunt) have on the subject. They say simply: `Oh, there is no problem-there is no problem at all. We will just reduce government spending'. But what is the record of honourable members opposite in reducing government spending? Mr Carlton —Better than yours. Mrs KELLY —It is not a good one. The honourable member for Mackellar interjected: `Better than yours'. What about the Budget deficit the former Government left us with? The Liberal-National Party Government presided over a huge blow-out in the deficit in its last year of office. What record do honourable members opposite have in cutting deficits? It is not good at all. What would the Opposition do if it were in government? Would it have the equivalent of another Lynch razor gang, that exercise which did not raise very much revenue? If the Opposition is serious about cutting government expenditure, where would it make those cuts? The Opposition has to address that matter. The honourable member for Richmond started to touch on some of those points. He was a bit more specific and took it a step further. He said that one of the ways the Opposition would achieve this objective would be by moving in on social security benefits. He said that a coalition government would stop the dole cheats. I wonder what else he would do? Where would he draw the line? Everyone had better watch out if this mob gets into power. What areas is the Opposition looking at? Is it addressing areas such as the family allowance? I suppose the Opposition will once again come up with the old perennial proposal of cutting back the Public Service. The Opposition is always good for that one-it comes up in the lead-up to every Budget by the Opposition. This is the sort of line that the Opposition puts forward. On the one hand it says: `Okay, we will go ahead with this proposal to cut back the marginal tax rates and we will get the money by cutting government spending'. However, its record of doing that is absolutely appalling. I do not think anyone in the Australian community would be prepared to accept that simplistic alternative to the view that we have put that we must have a proper reform of the taxation system. When we talk about morality in tax we have to look at the area of fringe benefits. We have to do so in isolation from how much revenue we will get from this type of taxation and where that revenue will go. We have to look at the morality of whether a fringe benefits tax should be part of the Australian taxation system. It is my view, and the view of this Government, that such a tax should be an integral part of a fair and equitable taxation system for this country. It is also interesting to note that tax reform inquiries conducted in other countries have all come to the unanimous view that there must be a fringe benefits tax. This matter was addressed recently by Mr John Kay, a noted British tax economist, who put this whole debate into international perspective. He compared reports on tax reform in the United States of America, Canada, the United Kingdom, New Zealand, Ireland and Australia and found the reports to be strikingly similar in the broad thrust of their recommendations. He illustrated this by focusing on several main areas, including choice of tax base, treatment of fringe benefits and rate structures. I will not go into all the details but, in relation to fringe benefits, Kay observed: . . . there is no subject on which there is such clear agreement. I repeat: Speaking about all the inquiries that were conducted all over the Western world into the sorts of tax reform proposals that should be introduced, Kay said that there was no other subject on which there was such clear agreement. So even if we take out of this whole debate the question of how much revenue one is going to get from the fringe benefits tax and how that money is to be spent, we still have to address the basic question of tax morality, of whether we should have a fringe benefits tax. Although the Opposition says no to that, it does not quite say no. It says that we should not have this sort of legislation. However, we are not given any clear answer when we ask the basic question whether it would abolish the tax if it ever got into government. We have not heard an outright cry of `yes, we will'. I notice that the honourable member for Mackellar, when interviewed last week on a local Australian Broadcasting Corporation radio program, did not make any categorical statement that he would make sure that this tax was abolished. We have heard what Valder said about it. I understand that the Leader of the Opposition (Mr Howard) would not give a categorical assurance when he was asked at a Press conference whether he would abolish this tax. So where are we left? On the one hand the Opposition says: `Okay, we do not support this legislation. However, we are not prepared to say that we would make sure that this tax is abolished'. On the other hand, it is saying: `Do not worry about the revenue you could gain from that because you can just reduce government spending'. However, we have to remember that the Government has made a commitment that the revenue gained from this tax shall be returned to the taxpayers of Australia. That is an integral part of the tax cuts. We are talking about the collection of in the vicinity of half a billion dollars in 1986-87 and about the same amount in 1987-88 as a result of the fringe benefits tax legislation. That is a lot of money. A lot of cuts would have to be made if one were to get that same amount of money in other ways. That money will go back into the pocket of the honest Australian taxpayer. This legislation will enable a reduction to be made in the amount of tax all wage and salary earners pay. Even in the 60c category there will be a cut of 11c. In the 48c category there will be a cut of 8c and in the 46c category a cut of 6c. That money is going directly towards funding these tax cuts. The Opposition also raised the matter of tax morality. The morality that it has and that it is espousing in this Parliament is based on the adage `Make me pure but not yet-make me pure because the Opposition believes that we must change marginal tax rates but let us not go into the details of how we do it'. The Opposition does not want to make any major sacrifices. It does not support the fringe benefits tax. The Opposition says that the only way to get the revenue to finance these tax cuts is by cutting government spending. What the Opposition is doing by advocating that the Senate reject the fringe benefits tax is abandoning the principle of tax reform. If one starts down that slippery slope, where does one stop? What sort of fringe benefits tax does the Opposition believe we should have in this country? If it does not believe in a fringe benefits tax on cars, what about a fringe benefits tax on education or on restaurants? Where does the Opposition stop? Our tax base has been so dramatically eroded by fringe benefits and how they work in practice that this Government had to address the problems of tax reform and the erosion of the tax base. If the fringe benefits tax legislation is rejected in the Senate it will be a victory for the power of lobbying over the principle and rationale of tax reform. If this Government loses this opportunity to bring about a fair and equitable tax system it will lose the opportunity for a whole generation. We may never have that opportunity again. It is a disgrace that the Opposition does not present any real alternative to the tax proposals we have brought forward and that it is not looking seriously at ways to stop the erosion of the tax base which has occurred in this country and which it presided over. Mr DEPUTY SPEAKER(Mr Leo McLeay) —Order! The discussion is concluded. Motion (by Mr Kerin)-by leave-agreed to: That Dr Theophanous be discharged from attendance on the Publications Committee, and that, in his place, Mr Dubois be appointed a member of the Committee. Mrs KELLY(Canberra) —I present the 245th report of the Joint Committee of Public Accounts entitled `The Selection and Development of Senior Managers in the Commonwealth Public Service-Response to report 202, which contains the Department of Finance minute on the Committee's 202nd report. Ordered that the report be printed. Mrs KELLY —by leave-The Committee's 202nd report on the selection and development of senior managers in the Commonwealth Public Service was tabled in Parliament on 28 October 1982. The objectives of that inquiry were to foster improved selection and development methods for senior public servants and to enhance the productivity and performance of the departments and agencies of the Commonwealth Public Service by improving the standard of senior management. This report-the 245th from the Committee-sets out the response to the Committee's findings in report 202 and its comments on that response. The most significant result from the Committee's point of view was that in December 1983 the Government issued a policy paper entitled `Reforming the Australian Public Service'. The proposed reforms addressed the increasing complexity of government operations and also the need for an increase in managerial ability and accountability. The reforms also reflect the perceived requirement for increased responsiveness by senior public servants to ministerial requirements. Many of the issues and recommendations raised in the 202nd report were addressed in that policy paper and implemented by several pieces of legislation, the most significant of which was the Public Service Reform Act 1985. The Public Service Reform Act, among other things, provides for the appointment of secretaries for fixed periods, the establishment of the Senior Executive Service, Senior Executive Service vacancies to be open to applicants from outside the Australian Public Service, greater mobility within the Senior Executive Service, the regular appraisal of work performance and staff development needs, the establishment of a temporary assignment pool, no appeals against promotions to the Senior Executive Service, and the provision of improved staff development opportunities on the basis of assessments of the needs of individual officers. A number of other personnel policy initiatives have also been addressed, specifically the development of equal employment opportunity and industrial democracy initiatives, the establishment of permanent part time employment through the Australian Public Service and more departmental emphasis and resources to be devoted to the development of internal management development programs and management training for senior staff. Although the Committee was satisfied with the overall response to the 202nd report, it felt that a number of the recommendations were not responded to adequately and sought further details from the Public Service Board. The Committee recommended that a committee of senior officials be established to identify Second Division and Third Division officers who had exceptional potential on the basis of nominations by departments and suggested assignments to enhance their development. The Public Service Board, while accepting the principle of the recommendation, has varied the mechanism by which that objective could be achieved. The Committee sees merit in this varied mechanism and the response indicates the Board's view that the intent of the recommendation will be achieved. Nonetheless, the Committee is disappointed that no special arrangements have yet been put in place to identify officers who have exceptional potential for promotion. The Committee notes that a pilot staff appraisal program is to be introduced into six departments by the Public Service Board. This scheme will seek to identify suitable appraisal criteria. It may be that when this is fully developed the proposed scheme could go a long way towards identifying potential promotees. The Committee recommended the establishment of a task force to investigate selection criteria for a written senior staff appraisal scheme and to report within 12 months to the Minister Assisting the Prime Minister for Public Service Matters. However, that task force has not been established and no report has gone to the appropriate Minister. The development and implementation of the staff appraisal scheme is being undertaken by the Senior Executive Staffing Unit, which is also yet to report in any form to the Parliament or to the Minister. The Committee therefore regards the report as necessary and requires a progress report from the Public Service Board giving an indication of when completion and implementation of the staff appraisal scheme will take place. The report was a milestone in the Committee's bipartisan approach to the achievement of the goals of economy, efficiency and effectiveness in public administration. I recommend this report to honourable members and honourable senators. Mr RUDDOCK(Dundas) —by leave-I am only a recently appointed member of the Joint Committee of Public Accounts. I would like to acknowledge briefly the experience and expertise of the honourable member for Canberra (Mrs Kelly) and the honourable member for Bradfield (Mr Connolly), who was formerly a member of the Committee and also its Chairman. He was very much involved in the development of its 202nd report on the selection and development of senior managers in the Commonwealth Public Service. Through his numerous contributions to debate on these matters he has demonstrated the extent to which he has been able to play a very meaningful role, not only in the development of the Committee's report and recommendations, but also in the Public Service policy area generally. It was in that context that I, along with other members of the Committee, looked at the 202nd report and the response from the Department of Finance via its minute which indicated to us the way in which the Government, after discussions with the Public Service Board, had responded to the Public Accounts Committee report. As the honourable member for Canberra has said, the Public Service Reform Act 1985 has put into place many of the proposals that were recommended by the Public Accounts Committee in its report. As the honourable member for Bradfield has commented on a number of occasions, the report has been a considerable milestone in the terms of the reform achieved through the medium of the committee system of the Parliament. My concern, however, as a member of the Committee was about the extent to which the recommendations of the Committee had not been picked up in the specific reforms in the Public Service Reform Act or by administrative arrangements which were reported on in the Finance minute. The report highlights some of those areas. The honourable member for Canberra has mentioned two of them. If one reads the report one will find that, in paragraphs 1.9 and 1.10 on page 2, two of those matters are dealt with. The first matter concerns the recommendation of the Public Accounts Committee that a committee of senior officials be established to identify Second Division and Third Division officers of exceptional potential. The second matter concerns the recommendation of the Committee that a task force to investigate selection criteria for a written senior staff appraisal system be established, to report within 12 months. Those two matters, which were significant reforms in the context of the Committee's proposals, have not been implemented. The honourable member for Canberra has mentioned the Committee's reservations about that. I want to highlight that other aspects of the original report still have to be dealt with by the Public Service Board. In this report the Committee is somewhat scathing in its criticism of the Public Service Board for the way in which this matter has been dealt with. In paragraph 1.12 the Committee comments on its recommendation of the establishment of permanent part time work, which was seen as an important recommendation: While the delay in implementing this Recommendation is regrettable, the Committee notes that the Public Service Board has now announced that permanent part time work is now available in Commonwealth Government employment. The Committee required the Public Service Board to make a progress report within 12 months and was most disappointed not to receive such a report. It then makes the point that it still expects that information. In paragraph 1.14 the Committee comments: The Committee further required the Public Service Board to provide it within 12 months proposals for involving senior officers in determining and receiving management training for senior staff. That was recommendation No. 31 of the original report. Paragraph 1.14 continues: The Committee has not yet received these proposals and finds the response to the Recommendation inadequate and unsatisfactory. It ought to be understood that the Committee's commendation of the work that has been achieved has to be measured against the extent to which recommendations of the Committee were not followed up or implemented and the extent to which the Public Service Board has failed to provide information or, more to the point, to convince the Committee that its original judgment was wrong. I counsel the Public Service Board to examine further the Department of Finance minute on the original report and to ensure that the matters that have been commented on unfavourably are picked up and responded to fully, otherwise the Board's outstanding record will have to be measured also against its failure to respond to specific recommendations in a satisfactory way. Mr CONNOLLY(Bradfield) —by leave-As the previous Chairman of the Joint Committee of Public Accounts responsible for the tabling of the 202nd report on `The Selection and Development of Senior Managers in the Commonwealth Public Service', naturally I am very interested to see the response which has just been tabled by my colleague the honourable member for Canberra (Mrs Kelly). The 245th report contains the responses of the Public Service Board and departments to the recommendations made by the Committee. I commend the comments made by my colleague the honourable member for Dundas (Mr Ruddock). I am delighted to see that with my departure from the Public Accounts Committee my position was so ably filled by him. The honourable member for Canberra, who was very closely involved with me in the development of the recommendations in the 202nd report, has continued her very close association with Australian Public Service reform. I compliment her for it. The honourable member for Canberra drew attention to a number of very important matters in the response of the departments to the report. In particular she noted that, while the recommendations by the Committee were, generally speaking, accepted by the Hawke Government and included in its initial White Paper entitled `Reforming the Australian Public Service', a statement of the Government's intentions made in 1983, nevertheless a range of other reforms recommended by the Public Accounts Committee have not to date seen the light of day. More importantly, some have not been the subject of worthwhile investigation by the Public Service Board or relevant departments. I join the honourable member for Dundas in stating my concern. This is not a new phenomenon; it apparently permeates all governments: Recommendations of the Public Accounts Committee, like those of most other committees of the Parliament, can be simply put aside for another day. The responsibilities of the Government in relation to the efficiency and effectiveness of its public servants and, in particular, in relation to the success or otherwise of the machinery of government in administering policies is of the greatest importance to all of us. For too long there has been a tendency for members of parliament, in particular, to imagine that they can dream great dreams which by some extraordinary osmosis will be turned into reality. The fact is that the reality and effectiveness of any policy depend on not only the logic but also the basis upon which the policy was determined in the first place. Equally important is the administrative machinery in place to ensure that the policy can be implemented in the most cost-effective manner possible. It is in that area in particular that there has been a tendency for members of parliament, perhaps on all sides, to fall somewhat short of the ideal, which is to understand the principles of public administration and be able to appreciate fully the extent to which the machinery of government can be appropriately used to achieve the objectives of policy. In this context there have been changes in recent years which are a matter for concern. Whilst the Opposition-I was the spokesman at the time-supported the general thrust of the Government's reforms to the Public Service Act the manner in which some of those regulations and changes were implemented has caused some concern. Whilst the Labor Party talks about the need to maintain a cost effective and apolitical Public Service, there is a belief in the Public Service today-particularly in the Senior Executive Service which, I must interpolate, was one of the reforms recommended in the 202nd report and accepted by the Government-that we do not have a truly apolitical Public Service, as has been the tradition of the past. Especially as a result of what is called the MOPS Act, the Members of Parliament (Staff) Act 1984, it is now possible for public servants to find a fast track to promotion. This means that a public servant who may have certain political beliefs relating to one government or the other hitches himself to a rising star in the Parliament, gets on to the staff of a Minister, remains there for two or three years and then is parachuted back into the Public Service, into his old department, at a significant higher promotion. The area where this has been of most concern has been my old Department, the Department of Foreign Affairs. As I understand it, the Department of Foreign Affairs currently supplies in excess of a dozen officers to the staffs of various Ministers around Parliament House. There is not the slightest doubt that all of those officers, at the conclusion of their period of service, will expect to go before the Reappointments Review Committee and receive with reason, because so far every person has achieved this objective, a higher promotion upon their reintegration into their former departments. I do not need to emphasise that this is causing considerable ill will among officers who, through no fault of their own, have not been given the opportunity of parliamentary service. They believe that, for some reason better known to those who make the decisions, they are being seen as somehow inferior to those officers who had the advantage of parliamentary service. At least in theory the whole emphasis that the Government has placed on selection and promotion involves merit on the one hand and the belief that promotion must be seen to be fair at all times on the other. Unless the Public Service Board is able to determine that an officer has been promoted because he or she is the best person for the job, we are quite clearly opening up a situation in which others will question the veracity of and basis for those decisions. That is what is happening today. If we have a position where an officer who is in a line management position is unable at least to appeal or have his or her merits compared with those of the officer who has been selected following ministerial or parliamentary service, clearly that person is right in saying that the concept of promotion on merit is at best questionable and that possibly, in reality, such appointments may not be made on merit at all. I would go so far as to suggest that over a period of two or three years-the present Government is now in its second term-possibly hundreds of public servants would expect to go back to their departments on promotion, and the officers with whom they are competing will have no access whatsoever to the machinery which determines at what level those people will be reappointed. As a result of representations my colleague the honourable member for Mayo (Mr Downer) and I made on this matter, an additional officer from the department to which the promotion is to be made has been appointed to the review committee. That is some improvement, but it is not enough. We suggest that the Government consider seriously an amendment to the MOPS Act which will ensure promotion on merit. Promotion to the Senior Executive Service in particular from ministerial staff must be seen by all as fair and subject to appeal. Another matter to which I would like to draw the attention of the House, in relation to the efficiency and effectiveness of government, is the growing belief in the Public Service that the Parliament and government do not appreciate the extraordinary administrative costs which new programs can introduce, and makes the application of policy so much more difficult. I wonder, for example, whether anyone has really considered the number of review mechanisms now in place which effectively negate the ability of the most competent Public Service managers to make decisions and be responsible for what they do. Every decision made by a manager is subject to the freedom of information legislation, the Administrative Appeals Tribunal, appeals to the courts, the review process of the Parliament and the Auditor-General, and last but not least the ever present problems of unions, and staff associations. I would go so far as to suggest that there is no prospect of departmental managers having the freedom to act to any degree comparable with a manager in even the most inefficient private sector concern because of the number of reviews we have permitted through the Parliament, the Department of Finance and the Public Service board, in addition to the requirements in various legislation. Is it any wonder that at the end of the day a senior manager in the Public Service can honestly say: `You do not give me the power to make the decisions, and without that power they simply will not be made.'? Therefore, it is incumbent upon the Government, essentially, to ensure that in its efforts to protect both the pubic purse on the one hand and human rights on the other it also takes into account the fact that we must have in place an approach to public administration which means that officers who are responsible for making decisions are capable of doing so, and if they make the wrong decisions their future in the Public Service of course must be considered in that light. I regret that the recommendation in the 202nd report which has been taken up-that members of the Senior Executive Service should not see tenure as guaranteed-has not been extended to the Third Division as recommended by the Public Accounts Committee. I am surprised and saddened that the Government did not have the courage when it introduced that reform to apply the same principle in relation to tenure to the entire Public Service, not just to the Senior Executive Service. Another point raised by the honourable member for Canberra which is worth noting is that we are concerned that the staff appraisal program has not been put into place as recommended some four years ago. It is perfectly clear to me that as a result of trade union activity, especially that of the Administrative and Clerical Officers Association, the Government so far has been frightened away from what is quite clearly a logical and correct path, that is, requiring a performance measurement on all public servants, especially those who are involved in the administration of programs and whose responsibility therefore involves the cost effectiveness of the programs administered by specific departments. The failure of the Government to grasp the reality of an effective staff appraisal system is not acceptable to me or the Opposition. The Public Service Board's introduction at last into six departments of a staff appraisal pilot program is merely a means of delaying for yet another few years effective action in this direction. Finally, I draw attention to another point raised by the Committee. That is my concern in relation to the approaches taken by the Government in regard to questions of industrial democracy. Honourable members may be aware that last week a Commissioner of the Public Service Board, a Mr Glenn, in an address to an industrial relations seminar, made the point that he was particularly concerned about the impact of industrial democracy in the Public Service because he saw that as being yet another area for possible disagreement with the trade unions involved. He believed that the trade unions were now seeing industrial democracy questions as a means by which they could effectively infiltrate the decision-making processes of departments. I want to make it absolutely clear that the Opposition will not tolerate a distinction of this nature, where the trade unions are encouraged to believe that they have a locus standi in the employer-employee relationship, standing between the Government on one hand and its public servants on the other. Their responsibility relates to terms and conditions of employment. They should not be involved with the decision-making process within departments. I warn the Government that, unless it is prepared to constrain this continuous and insidious growth of trade union activity in the Public Service, it will not simply have a situation such as we have at present where the public sector is possibly the most highly unionised group in the Australian work force, but will have a worse situation, as we experienced two years ago when we had a range of strikes across this country over salaries. The ACOA in Victoria explicitly stated that its object was to take from government the control of the Government's own work force. The Government may be prepared to tolerate that sort of behaviour, but the Opposition is not and I am certain neither are the Australian people who are required through taxation to pay for the salaries of these people who under certain circumstances, often unjustifiably, are not prepared to work. I welcome the report tabled by the Public Accounts Committee today and I endorse the observations made by the honourable member for Canberra. I note with some concern the fact that the Government has not gone as far as it should have in relation to the recommendations contained initially in the 202nd report, and I trust some speedy decisions will be taken on the outstanding matters. Consideration resumed from 7 May. Senate's amendments- No. 1-Page 7, clause 25, lines 15 to 17, leave out the clause. No. 2-Page 7, clause 26, lines 18 to 21, leave out the clause. No. 3-Page 7, clause 27, lines 22 and 23, leave out the clause. Mr BARRY JONES(Lalor-Minister for Science and Minister Assisting the Minister for Industry, Technology and Commerce)(4.15) —I move: That the amendments be agreed to. The Government will not oppose the amendments requested by the Senate to the Customs and Excise Legislation Amendment Bill 1986. On 6 May 1986, the Senate, in Committee of the Whole, voted to delete clauses 25 to 27 of the Bill. These clauses referred to the compulsory maturation provisions for spirits. The deletion of these clauses is described curiously as a request by the Senate to the House of Representatives. I might mention, however, that our acceptance of the amendments at this time does not necessarily mean that we will not pursue the removal of compulsory maturation from the Spirits Act at a later day. The Government remains of the view that that Act is no longer the appropriate medium for this type of control; nor is it convinced by the arguments presented in the Senate for the retention of compulsory maturation. The opposition in the Senate to the removal of compulsory maturation appeared to be centred on two issues: One, the need to provide for adequate labelling of spirits to ensure consumer protection; and, two, the need to ensure that imported spirits do not disrupt the domestic market. I am pleased to say that the government has already introduced initiatives which, when complete, will satisfy the objection on this issue. First, on the question of labelling I am advised that the Minister for Health (Dr Blewett) has completed negotiations with his State and Territory counterparts on a co-operative agreement to adopt uniform standards applicable to food and beverages sold in Australia. I understand that the draft agreement has been circulated to Premiers, with a view to early implementation. Implementation of this agreement will mean the application of a single, uniform standard throughout Australia which will require labelling of spirits in such a way as to ensure consumer protection. With regard to the question of imported spirits disrupting the market, the Government announced in its economic and rural policy statement on 15 April 1986 that a working party is being convened to consider compliance with Australian standards by imported food and beverages. This working party will aim to develop appropriate arrangements to ensure uniformity between imported and locally produced products, including spirits. I therefore give notice that when the Government is satisfied that the Opposition's concerns have been met, the amendments to the Spirits Act to remove compulsory maturation will again be introduced. Mr MOORE(Ryan)(4.18) —The Opposition notes that the Senate rejected the Government's initiative with regard to the compulsory maturation provisions for spirits. I take note of what the Minister for Science (Mr Barry Jones) said about the Government's propositions-that the major objections, as he saw them, would be taken into consideration by the working party referred to in the primary industry statement, and would be answered. It is to be hoped that that will be done, because many of the promises put forward by the Government in its various programs are not always met-they are let go and broken in various ways. I do not think the Minister answered one of the major objections, which was that it was not possible to determine the exact maturation period of certain imported spirits, and this was a matter of concern. I think we freely admitted that if Australian-produced spirits were said to have a maturation period of one year, two years, five years, eight years or 10 years, that would be understood and accepted by the consumer. No doubt, those spirits would have appropriate differences in prices. At the time of the discussion on this point members of the Opposition were concerned about it. The honourable member for Barker (Mr Porter) and the honourable member for Wakefield (Mr Andrew) pointed to the fact that one could not determine the maturation period of imported spirits. That was a major point, and I do not think the Minister addressed himself to it. Mr PORTER(Barker)(4.19) —I am very pleased that the Opposition and the Australian Democrats in the Senate have forced the Government to reconsider this issue and that the Government is now taking into account the real and genuine concerns raised by me and by other members who have brandy manufacturers in their electorates and by members from electorates in which whisky and rum are produced. I do not think that whisky production was a major concern, but certainly there were rum manufacturers in Queensland who were genuinely concerned about this issue. As I said when we opposed the introduction of the Customs and Excise Legislation Amendment Bill, we thought we understood the Government's objectives and in fact we did not question them. The point was that, in hastily introducing these changes, the Government left the domestic industry open to unfair competition from overseas. I also expressed concern at the time that unless we had proper labelling requirements, people could attempt to sell unmatured brandy as the real product and consumers would not know that they were buying what could be considered an inferior product. I understand from the brief statement of the Minister for Science (Mr Barry Jones) that both these issues are being taken up by the Government and that the Government will reintroduce this legislation when the matter has been reconsidered and action taken on the two points raised by the Opposition. That being the case, let me say that I am certainly very pleased that the Government is now taking account of the points raised by the Opposition and, in due time, we will certainly review any further legislative proposals the Government has. Question resolved in the affirmative. Mr BARRY JONES(Lalor-Minister for Science and Minister Assisting the Minister for Industry, Technology and Commerce)(4.21) —Consequential upon the acceptance by the Committee of the amendments made by the Senate, I move: (1) Clause 2, page 2, line 8, omit sub-clause (6). (2) Part VI, page 7, line 14, omit the heading. (3) Title, page 1, omit ``, the Spirits Act 1906''. Amendment (3) simply proposes to delete from the Bill-it is quite an orwellian exercise-any reference to the Spirits Act. It is as if it never existed. To take up the point made by the honourable member for Ryan (Mr Moore), he said that in my brief and to some extent unexpected speech this afternoon I had not referred to the question of imported spirits. A certificate is required in respect of imported spirits, but to check these certificates we would need an army of overseas investigators. To some extent, we have to accept a certificate on the face of it. If a spirit is said to be matured for five years, it would be a bit difficult in these days of financial stringency in government expenditure really to check it out. Therefore, the certificate of compliance tends to be accepted. One does not really go behind the certificate. To take up the point of the honourable member for Barker (Mr Porter), as he will recognise, the working party that is being set up following the statement on economic and rural policies on 15 April to look at compliance with Australian standards will also look at labelling requirements. So we believe that that area will be covered. Amendments agreed to. Title, as amended, agreed to. Resolutions reported; report adopted. Debate resumed from 8 May, on motion by Mr Barry Jones: That the Bill be now read a second time. Mr MOORE(Ryan)(4.25) —The Bounties Bill 1986 is an attempt by the Government to update certain procedures by which bounties are administered within Government decisions. It might be useful to the House to recall the broad process under which bounties are payable. Firstly, a reference is made to the Industries Assistance Commission, which presents a draft report, followed by a full report to the Government through the Minister for Industry, Technology and Commerce, who is responsible for the IAC. The IAC looks at the industry concerned-its problems, commitments and expectations for the future-and makes recommendations to the Government as to how the future of that industry would best be handled. As long as Australia has been a federation the debate on free trade versus protectionism has been alive and well. We have heard about things called wets and dries today. The original political parties in Australia were based on free traders or protectionists, so our ancestors are well represented by their product. I am sure that the Minister for Science (Mr Barry Jones) would understand that; he has a great interest in that subject. The Bounties Bill is quite a challenge to the ghosts who stalk the corridors of Canberra, because it is an attempt to take the recommendations of the IAC to Cabinet; for the Cabinet to make a decision; and for that decision to be brought into effect not by the Parliament as such but by ministerial gazettal. The Opposition opposes that concept. We will move amendments to the Bill in the Senate to bring certain changes and will oppose it at the second reading in this House. We find that the Government's proposition not to follow the ordinary parliamentary processes is not acceptable. It is a long time since it attempted to bypass the powers of the Executive Government and the powers of the Parliament as blatantly as this. A sense of history comes to the fore in relation to the role of the Executive Government. As a former member of an Executive Government, I have no doubt that the trappings of the back bench and parliamentary committees can be wearisome. The processes of the Parliament can be slow and arduous, but every one of us is elected to do a job; to represent our constituency, to have the ability to put a point of view in this House and to know what goes on in relation to IAC reports and the responses to them. The debate on protectionism versus free trade has not drawn packed houses here for a long time. It is not the area it used to be, but there are more names on the speakers list today than there used to be. Members of parliament have a renewed interest in the question. How one goes about the maintenance of Australian industry, the development of industry policy, the infant industry argument, the general protectionist argument and the development of various lines are things which ought to be debated in this House, not subject to gazettal by the Government. I find, from experience in the former Executive Government, in Opposition and as a general businessman before I came here, that it is more beneficial to the nation as a whole to encourage debate in this whole area rather than to use the Parliament as a rubber stamp process on the assumption that members of parliament are not interested in the matter and therefore to take away the essence of parliamentary control, as this Bill in essence will do, as I see it. The time taken up in debate in Parliament is well worth it. I do not find the retrospective action referred to in the Bill to be of great concern. If a Government decision is announced, following an IAC report, that bounty will be payable from a certain date, and an amending Bill goes through the House, I fail to see why commercial concerns ought to be materially concerned about that. I am sure that the usual commercial decisions will be made on the basis of the decision that has been announced. That is what has happened in the past; therefore I do not see any great necessity to bring in these new propositions. It is worth noting that the explanatory memorandum refers to four principal provisions contained in the Bill. The first is a facility to introduce new bounty assistance schemes by bounty notices declared in writing by the Minister, to which I have referred already. The second is a facility to amend bounty schemes by regulation in limited circumstances. In other words, without reference to the Parliament, a scheme can be changed by gazettal. I do not believe that that is appropriate. Funds are voted by this House for things and this proposal is a way in which responsibility for those funds can be bypassed. The amendment may be trivial or short term; nevertheless, the Parliament has a responsibility which ought to be met. Thirdly, there is a facility to revoke bounty notices. I will refer later to some considerations in relation to that, because it is apparent that the facility to revoke is inhibited by this legislation, in the sense that both Houses must act to recoup, which is not the most appropriate way of administration. With the proposed process the administration would be allowed to run a bit, instead of the Minister being badgered to bring in the various revocation notices. Fourthly, there is a range of administrative powers and requirements designed to standardise the administration of bounty schemes. Frankly, having been the Minister responsible for those areas, I know that the amount of legislation that comes through is considerable, but that is no excuse for the Minister responsible to say: `Look, let us slam it into the Gazette-she'll do, boys. If they want to revoke it, they can revoke it in the normal way'. The procedure outlined is not appropriate. I wish to make a few points in relation to those procedures. Part II of the Bill provides that the Minister may, by notice in writing published in the Commonwealth of Australia Gazette, specify a scheme in accordance with which bounty will be payable on the production of goods. A scheme may be retrospective for no more than six months and it may be modified, extended or restricted by regulation or revoked by notice. Under clause 10 schemes would be subject to disallowance in the same manner as regulations, except that the relevant statutory period for giving and resolving a notice of motion would be reduced from 15 to seven sitting days. Under clause 11 all or part of the bounty paid under a disallowed scheme would be repayable only if both Houses of Parliament so determined. Although the provisions for disallowance of a notice would give each House a power of veto over any bounty scheme, the Bill would severely restrict parliamentary control over such schemes. Only a whole section could be disallowed. The Bill is drafted in such a way that each House would be forced to accept or reject the whole of the scheme. As a minimum requirement for proper parliamentary control the Bill should be amended so that any part of a scheme can be disallowed. There would be no power of amendment, whereas at present each House may amend a bounty Bill. Under this Bill the House would not be able to pass an amendment to a scheme and would be forced to disallow any defective provision, even if disallowance of part of a scheme were permitted. Consideration should be given to an amendment to the Bill to give effect to any amendment of a scheme agreed to by both Houses. That will be the subject of one of the Opposition's amendments in the Senate. The House would be inhibited in disallowing an existing scheme. By the time the House is able to disallow a scheme it may have been in operation for months and large amounts of money may have been paid out. In these circumstances, the House may well feel inhibited to exercise its powers of disallowance. The consent of both Houses would be necessary for reclaiming the payments. Once a scheme had been disallowed by one House, the consent of both Houses would be required to reclaim all or part of any of the payments made under the scheme. This would be a further inhibiting factor in the exercising of due parliamentary control over the public purse. Disallowance may be circumvented. There are a number of methods by which a government which is determined to put a scheme into operation may circumvent the disallowance provisions. I would say that it would have to be bloody-minded in relation to it. The scheme may be brought into operation perhaps at the beginning of a long adjournment or recess and then revoked or replaced by a scheme the same in substance before either House has a chance to disallow it. The Houses may be powerless to veto a short term scheme. Revocation and replacement of a scheme by a single notice, or a single provision in a notice, would force a House to accept either the new or the old scheme because the disallowance of the new scheme would have the effect of reviving the revoked scheme. The latter problem can be overcome by an amendment requiring that a notice of revocation contain only the revocation. Because of these factors, which would also apply to alterations of schemes by regulation, the Bill would significantly reduce parliamentary control over bounty schemes. Because of those factors, which are given in some detail, the Opposition is opposed to the Bill. We like to see and to encourage in this House, as I have said before, a full debate on questions of bounty, of tariffs and of quotas. They are as relevant today as they were in 1901. The question of the balance of payments has recently been addressed as a major problem. The answers were addressed by a senator who is a Minister in a way which harked back to the old protectionist days. In the House at Question Time today, the Treasurer (Mr Keating) said that that was not his view. So, right up to today, there is a conflict about the more open approach to economics, and the more contained and protectionist approach is burying its head in the bosom of the Government as much as it is in the whole of Australia. Because of that, debates in relation to the bounty should be encouraged, and not discouraged as the Bill attempts to do, and the interests of the public of Australia should be encouraged through these debates in the future. I would hope, as I am sure the Minister would, that more members of this House will take a role in these debates than do at present. Mr PRICE(Chifley)(4.38) —I find myself in the position of endorsing some of the remarks of the honourable member for Ryan (Mr Moore) in that I believe that industry policy is one of the key areas of concern for the nation. To some extent, I regret that it is only recently that I have taken to the habit of speaking about industry policy. However, I say to the honourable member that industry policy does not provide some of the more stimulating or scintillating debates. What is the Bounties Bill about? As the honourable member for Ryan has suggested, the Government is changing the way that bounties will be introduced. It will no longer require legislation, but we shall be effecting, through this Bill, a ministerial notification process. It is important that I should repeat some of what was said in the second reading speech. The first bounty legislation was introduced in 1907 by Act No. 12 of 1907, and provided for bounty assistance on the production in Australia of a variety of agricultural products and of fish. Since that time a considerable number of schemes have been introduced covering a wide range of Australian industry. Generally, this has been done with the bipartisan support of the Parliament. There are currently 18 bounty schemes in operation, the most recent being that for metal working machines and robots, effective from 1 July 1985. Invariably, each parliamentary sitting deals with three or four pieces of bounty legislation, with a majority operating retrospectively. But the big thing that this Bill will achieve is that those who are in receipt of a bounty will have probably six months cut from the period that they wait to be paid the bounty that has been agreed to, because of lags. I want to comment briefly on the Industries Assistance Commission. Each bounty which comes before this Parliament arises from an IAC report. Indeed, under the new arrangement it will still arise from the same source. It is appropriate, therefore, that I make a few remarks about the IAC. The prime reasons for the establishment of the IAC were to assist the Government to develop policies for improving the allocation of resources amongst industries in Australia, to provide advice on those policies in an independent and disinterested manner, and to facilitate public scrutiny of those policies. Whilst these are very worthwhile tasks and have some efficacy, we ought to look at just how well the IAC has done its job. I am one who would be a little critical of its performance. The IAC interprets its guidelines as meaning that, over time, measures aimed at increasing efficiency will improve the economy's capacity to supply goods and services and thus improve the general welfare of the Australian community. The IAC has a major dependence on market forces to ensure that resources relinquished by one firm or industry are absorbed by competing firms or industries. It is fair to say that we have a pretty major current account problem that has come to recent public prominence. I pay tribute to Mr W. D. Ferris and his report to the Parliament, `Lifting Australia's performance as an exporter of manufactures and services'. I seek leave, Mr Deputy Speaker, to incorporate in Hansard a table included in that report concerning the balance of payments. Leave granted. The table read as follows- Table 9 BALANCE OF PAYMENTS (BOP) Financial year to 30 June Exports Imports Trade balance Current account Net private capital inflow Net govt. capital inflow BOP $m $m $m $m $m $m $m 1971... 4,217 - 3,790 427 -802 1,473 -69 602 1972... 4,719 - 3,791 928 -343 1,905 -83 1,009 1973... 5,991 - 3,808 2,183 715 422 -60 1,006 1974... 6,709 - 5,754 956 -909 432 53 -425 1975... 8,442 - 7,652 790 -1,219 779 -18 -458 1976... 9,446 - 7,922 1,524 -1,404 430 -45 -1,009 1977... 11,446 -10,350 1,096 -2,432 1,700 242 -491 1978... 12,006 -11,150 856 -3,043 998 1,505 -540 1979... 14,072 -13,386 685 -3,676 2,190 1,962 -114 1980... 18,589 -15,829 2,760 -2,003 1,737 -35 -301 1981... 18,718 -19,169 -451 -5,456 -6,653 -48 1,149 1982... 19,083 -22,379 -3,296 -8,831 9,705 463 1,304 1983... 20,656 -21,610 -954 -6,185 7,808 813 2,416 1984... 23,720 -23,494 223 -6,711 8,137 424 1,850 1985*... 26,200 26,400 -200 -8,200 5,500 1,200 -1,500 Source: ABS * Estimate by AIDC Mr PRICE —The table shows that Australia's historical balance of payments structure has been one of a current account deficit offset by capital inflows. Traditionally the current account deficit has comprised a surplus on the trade account and a deficit on the invisibles account. Where capital inflow is put to productive uses, such a balance of payments structure is considered to be of benefit to the economy as a whole. In recent years, however, the balance of payments has undergone a significant change. Firstly, the trade account, after being in surplus in almost every year over the past two decades, has now moved into deficit, and this raises the general issue of how good Australia's export performance has been. I am sorry to say that the answer is not good at all. Department of Trade research shows that, during the period 1973 to 1983, Australia's share of world trade declined from 1.79 per cent to 1.25 per cent, a fall of some 30 per cent. Whilst world exports grew at 12 per cent, Australia's exports grew at only 8 per cent. Australia's penetration of world markets declined. Of the 65 countries for which data is available, Australia's share decreased in 48 while increasing in only 17. The growth in exports over the period was insufficient to arrest a decline of 10 per cent in the real level of imports that could be purchased by Australia's exports. Because of the severe collapse in our terms of trade, the situation has worsened since then. As regards the performance of the IAC, I seek leave to incorporate in Hansard a table showing the percentage of people employed in manufacturing over 20 years. Leave granted. The table read as follows- Per cent employed in Manufacturing Over 20 years August 1966... 25.5 August 1967... 25.6 August 1968... 25.0 August 1969... 25.1 August 1970... 24.5 August 1971... 24.7 August 1972... 23.7 August 1973... 23.9 August 1974... 23.5 August 1975... 21.6 August 1976... 21.7 August 1977... 21.3 August 1978... 19.9 August 1979... 20.2 August 1980... 19.7 August 1981... 19.3 August 1982... 18.8 August 1983... 18.1 August 1984... 17.7 August 1985... 16.7 Mr PRICE —I thank you, Mr Deputy Speaker, and the House. Although the table covers the years 1966 to 1985 and Australia had a peak employment in manufacturing of some 30 per cent, if one looks at the years since the Industries Assistance Commission was established in 1973 one will see that employment has declined from 23.9 per cent to some 16.7 per cent in 1985, which was the last year that figures were available. I believe that these are the sorts of things by which we should judge the IAC. It is presiding over a continually declining-(Quorum formed) Here we have the complete irony. The Opposition spokesman, the honourable member for Ryan, says that there should be more involvement in industry assistance measures and that more honourable members should speak on this matter and then the honourable member for Wakefield (Mr Andrew) walks into the chamber and his great contribution to the people and the workers of this country is to call a quorum. That is the level of his contribution and his sincerity in this matter. Mr Downer —What is wrong with that? Mr PRICE —The honourable member was not in the House when the shadow Minister was speaking. He came in late. Perhaps we should have a score card for the IAC. How well has it performed? I had already spoken about the figures relating to our exports and now I have incorporated the figures which show the decline in our manufacturing industry. If the people of Australia are concerned about that, let me point out that as far as the Opposition is concerned that decline is not fast enough. Opposition members are not satisfied with 16.7 per cent. Their policies would amount to the slashing of wages and a complete disruption of industry, which would result in an even lower level of employment in manufacturing industry. Mr O'Neil —Scandalous! Mr PRICE —It is scandalous. In fact, Opposition members have been largely responsible for the massive decline in employment in manufacturing from 30 per cent in the 1950s to 16.7 per cent today. After all, they have been in government and they have been the ones who have failed to take the necessary and hard decisions. The Government has been faced with some rather difficult decisions in industry policy. It had to put together-and not with the benefit of an adopted IAC report-a steel industry plan and a car industry plan which have saved those industries for Australia. The Minister for Industry, Technology and Commerce (Senator Button) will shortly bring down a heavy manufacturing industry plan. Mr O'Neil —Another excellent plan. Mr PRICE —Yes, it is another excellent plan and I am pleased that the honourable member agrees with me, as do most honourable members on this side of the House. It is pleasing to see that the Minister has even made the concession of putting some targets and performance factors in that plan. When has the IAC planned and brought down reports for the growth of manufacturing industry in Australia? Where are its reports for developing plans around growth industries? Where are its reports about key industries? What is the hidden level of employment for which the IAC is aiming? I cannot find it in the reports, but I believe that any commission, such as the IAC, should have a target. It is just not good enough to bring down reports which suggest a loss of jobs or restructuring without having the benefit of an overall target, plan or viewpoint. This is one of the great difficulties in industry policy-there are something like 26 or 27 different departments, quangos and statutory authorities all operating in this field. Notwithstanding the talents of our present Minister for Industry, Technology and Commerce, it must be a real problem trying to co-ordinate policy. A lot of defenders of the IAC will say that it is a very fine professional body of men and a very fine independent group. It may be professional and it may well be independent but I notice, for example, that it is replete with economists and accountants. Not that it should not have those professions represented on it, but where are the marketeers and where are the people of real experience in manufacturing who are able to deliver reports rather than pontificate and who would enable manufacturing industry to restructure and grow? As for bringing down independent reports, what is the value of such reports if they are not operated on? These reports may not be operated on for a variety of reasons, but I cannot see the virtue in having an organisation that does not target its own success or have some measure of how it should be successful. The last criticism that I wish to make during the short time available to me because of the unfortunate and disgraceful intervention of the Opposition is the fact that-(Quorum formed) Not one Liberal Party of Australia member from New South Wales, a traditional manufacturing State, is in here to make a contribution to the debate. The only contribution has been negative-that is, to call two quorums. That will not deter me from letting the people of Australia know the real state of affairs. I was talking about the Industries Assistance Commission and I want to refer to something I call unctuous umpiring. If one looks at the way the Industries Assistance Commission operates, it is not possible to get the tripartite approach-that is, the joining together of business, industry, unions and government about a common problem and resolving that problem. The very nature of the IAC-its unctuous umpiring, its draft reports, its overly formal hearings and its delivering and pontificating of its final reports-militates against that. If there is anything critical in industry today it is the real need for management, unions and government to sit down together and work through problems for the future of our industries. This Government has a proven record of promoting industries and, in fact, of taking some of the more difficult decisions that needed to be taken. On the other hand, it is regrettable that the Industries Assistance Commission has not brought down a report on key industries or sunset or sunrise industries. I hope in the future that it will address what I believe is a serious anomaly. In conclusion, the people of Australia and the workers of Australia can be guaranteed one thing, that if those miserable members opposite who have now called two quorums in less than 15 minutes were in power, we would see even more job losses and we would see industry with no future at all. Mr DOWNER(Mayo)(4.57) —I am glad the honourable member for Chifley (Mr Price) has drawn attention to the decision of the Opposition to call quorums because when the honourable member for Chifley was speaking earlier there were only two members of his side of the House present to hear his speech. I think there were more members present on this side of the House. It was thanks to the action of the honourable member for Wakefield (Mr Andrew) that more people were brought into this chamber to listen to this important debate on the Bounties Bill 1986. I join with the honourable member for Chifley in saying that these industry issues, whilst not very popular as agenda items for honourable members, are certainly extremely important issues and deserve more attention from the House than traditionally they seem to have received. The honourable member for Ryan (Mr Moore) made the point, which I support, that the Opposition has strong reservations about the workings of this particular piece of legislation. Even though I feel positive about at least the intentions of the Bill, it seems to me to have two really broad intentions. First, it has the intention of speeding up the administrative process for the introduction of bounties. I do not think there is any need to tell the House that that process needs to be accelerated. Secondly, the implication of this Bill is that the Government prefers the system of bounties to the system of tariffs as a form of industry assistance. That is not spelled out, of course, in the legislation. It would be a horrifying thought to contemplate that the Government was taking the view that it should extend the operation of bounties and retain the levels of tariff protection that Australia already has as a form of industry assistance. To be honest, and I always endeavour to be that, I do not think it is the intention of the Government to pursue industry policy in quite that way. There is certainly a broadly based argument that I think is now becoming accepted in the community that bounties are a preferable form of industry assistance to the tariff where, of course, budgetary considerations will allow a government to choose the option of bounties over the option of tariffs. Although bounties were first introduced into Australia in about 1907, traditionally Australian governments have preferred the tariff as a form of assistance rather than bounties. However, there is a growing realisation now in industry, commerce and throughout the Australian community that tariffs are the worst kind of assistance that can be given to industry. Tariffs wrap industry up in cotton wool and militate against the essential process of restructuring-a process that Australian industry has not gone through sufficiently and which is one of many reasons why Australian industry has failed to meet international competition in the way that it should have. If the Government, the Parliament and the community take a view that certain industries should be encouraged and assisted, my contention very strongly is that where it is possible in budgetary terms to make a choice, the choice should be in favour of bounties rather than tariffs. There are three basic reasons for choosing bounties over tariffs. First of all, in the case of bounties the cost of the industry assistance is explicit. It is written into the Budget. There is a clear statement of the cost of that assistance. In other words, the community can readily understand, if it chooses to look at the figures, what the costs as well as the benefits, should there be any benefits, of the industry assistance really are. In the case of tariffs there is no visibility in the form of assistance given. Those costs are hidden. Because those costs are hidden, often we fail to appreciate the damage that protection through tariffs can do, and thus only look at what apparently and simplistically are seen to be the benefits. It was a former member for Wakefield, Bert Kelly, who brought these arguments so forcefully to this chamber and, indeed, to the Australian community. He did a great service by ensuring that people in Australia understood these simple arguments much more clearly than had been the case before. It is a tribute to him that his arguments are now so broadly accepted by members of this Parliament, including people on the other side. As I said, there is a great deal to be said for the costs of assistance through bounties being visible rather than being invisible in the form of tariffs. The second argument in favour of bounties over tariffs is that bounties avoid a `consumption distortion', as economists would say. When tariffs are introduced they increase the prices to consumers of the goods which are imported into Australia. In other words, by increasing that price clearly one will distort consumption patterns which should normally be set by the processes of supply and demand in the market-place. It does not just distort consumption patterns in favour of domestically produced products which, of course, is the intention of the tariff, but also distorts consumption patterns in favour of other goods and services altogether and away from the good that may be protected by way of the tariff. In other words, resource allocation is being seriously influenced by government decisions and not by the operation of the market-place. Where one intervenes in that sort of way, it must be understood that the long term consequence of that decision is ultimately to reduce the standard of living of the Australian people and Australian consumers. Where tariffs are used as a form of assistance and consumption patterns are distorted, the effect is for the Government to intervene in the interests perhaps of management and perhaps of employees in particular firms but not to intervene in the broader interests of the community and in the interests of the consumers. It is my contention that it is the broader interests of the community and the consumers which should be put well before the interests of certain vested interest groups. The third argument in favour of bounties is that when tariffs are introduced as a form of assistance they increase costs to the downstream consumers of those goods which are imported. This is a point which is repeatedly made by the National Farmers Federation and by Australia's rural community. Their contention is that the operation of the tariff system in Australia is increasing costs on Australian farms by, on average, $9,000 per farm per year. Farmers are forced to import various pieces of equipment, pay high levels of tariff and protection on them, which in turn substantially increases their production costs, and they cannot recoup that cost through the domestic market-place by increasing prices. They have to go out into the world market, where they are not able to pass on the increased costs resulting from the tariff. In many respects the emphasis on tariffs has made Australian industry uncompetitive, whereas bounties would eliminate much of the cost to downstream users. Although those costs would be borne by taxpayers, by the use of bounties we would be giving the broader interests of Australian industry the opportunity to compete, which it is having the greatest difficulty doing, as everyone in Australia must, by now, know. The use of bounties, though preferable to tariffs, must not detract from the simple fact that any form of assistance, be it through the taxpayers' pocket or through additional costs to consumers by way of the tariff, is less preferable to a government taking hard decisions which would make our industries more competitive. That is the bottom line. That is what government industry policy should concentrate on, not just new and imaginative ways of propping up industries which are not able to compete. These arguments have been well canvassed in this Parliament over the last three years. There is no doubt that the failure by government to take the hard decisions to make Australian industry more competitive is one of the reasons why investment in Australia is now depressed and we are having great balance of payments difficulties. A recent survey produced by the Business Council of Australia shows why there has been such a fall-off in investment in Australia and, in turn, says something about the failure of Australian industries to compete. If our industries were more competitive, naturally there would be considerably more investment in them. Members of the Business Council have pointed to a number of different factors which are discouraging investment. First, they point to labour costs. They argue that Australian industry, particularly Australian manufacturers, are paying labour bills which do not bear any relationship to their capacity to pay those bills, and indeed, equally importantly, the international circumstances in which those industries operate. The Government argues that the growth in wage costs has not been very great during its term of office but, as members of the Business Council have been pointing out, wage inflation in Australia has been substantially higher than the level of wage inflation in a number of major countries. If wage inflation and labour cost structure are higher than in other countries, one will have major difficulties in being able to compete. The Business Council has also pointed to the very great burden manufacturing industry is now carrying because of the extraordinary escalation in the cost of borrowing money-in other words, in the level of interest rates. As the Council has said, the level of interest rates is `a major barrier' to investment in our industries. Further, the Business Council has pointed to the very high level of taxation that business must pay in Australia and the fact that that taxation burden is only increasing under the tax package put to this Parliament by the Treasurer (Mr Keating). The new fringe benefits tax will militate against a whole range of industries in Australia. The tax will be borne by our car industry, which will lose production and jobs as a result. The capital gains tax, which was introduced only recently, again will impose further costs on Australian industry. Also, the level of company taxation has been increased from 46 to 49 per cent at a time when our major trading partners are actually reducing their levels of company tax-in the case of the United Kingdom to 35 per cent and in the United States of America to 33 per cent. The fiscal cost of capital for Australian business is very much higher than the fiscal cost of capital in other major competitor countries. That cost has been made all the higher in the last 12 months by the Government's decision to abolish the investment allowance. Hard decisions are needed to try to reduce this cost structure-not just bounties and tariffs, which has been the traditional method we have chosen to avoid making those hard decisions. Hard decisions have got to be made to reduce the tax burden, to reduce the level of interest rates, to get our labour cost structure into some order so that it bears some relationship to the capacity of the economy to compete in the international market-place. Though I welcome the general Government emphasis towards bounties and away from tariffs, my disappointment is great that the Government has not taken the hard decisions it really needs to take. When the Government introduces measures to impose bounties or increase tariffs, it is very important that the Parliament scrutinise that legislation, and that the representatives of the people are able to understand what costs the Government is placing on them as well as any benefits that may flow from their decisions. This piece of legislation-this is why the Opposition so strongly opposes it-severely restricts parliamentary control over the whole bounty system. I make a couple of brief points about how that happens. The new system of bounties will operate on the basis of notices placed in the Commonwealth of Australia Gazette by the Minister. Of course, the Parliament will have the power of disallowance, as it does in the case of regulations, although the period where those notices lie on the table will be substantially shorter than in the case of regulations. This raises a whole series of issues which need to be canvassed. First, it should be pointed out that under this legislation only a whole notice-not part-can be disallowed. The Bill is drafted in such a way that each House, the Senate and the House of Representatives, should be forced to accept or reject the whole of any scheme. As a minimum requirement for proper parliamentary control, the Bill should be amended so that any part of a scheme may be disallowed. Under this legislation one only has the option of disallowing the whole thing, whether it or parts of it are good or not. Secondly, and related to that point, under this legislation there is no power of amendment. The Parliament cannot just amend a particular bounty scheme. It either has to accept it all or accept none of it whatever. Once more that provides an obstacle to parliamentary control, scrutiny and rectification of poor legislation, or in this case poor notices and proposals. Thirdly, the Houses-the Senate and the House of Representatives-will be inhibited in a number of ways from disallowing an existing scheme. By the time a House is able to disallow a scheme, the scheme may have been in operation for months and large amounts of money paid out to the beneficiaries of the bounty. The House may well feel inhibited from exercising its power of disallowance if large amounts of money have already been paid out. I do not think anybody could argue with that. Fourthly, the consent of both Houses of Parliament will be necessary under this legislation for reclaiming payments. Once a scheme has been disallowed by one House, the consent of both Houses will be required to reclaim all or part of any payments made under the scheme. This will be a further inhibition on the use of the disallowance power. There are some very real restrictions here on the power of the Parliament, which traditionally has been responsible for the introduction of bounties and other forms of industry assistance. The Opposition is deeply concerned about the way in which the Government is, in effect, determined to circumvent that traditional power of the Australian Parliament. After all, under the Westminster system Parliament's power initially came through its power over the purse strings. The English civil war was fought over that very issue. It is rather ironical that in the case of this legislation the Australian Government, a Labor Government, to use the analogy of the English civil war, is taking the role of the King by giving the Executive additional power over the power of Parliament, the body that represents the people. It is extremely ironical that the Labor Party, which always professes to be the party of the people, should for some reason or other choose to distort decision-making, in this case in favour of the Executive and away from the people. There is no better example of that than clause 54 of this legislation, which relates to the provision of funds for the payment of bounties. Under clause 54 money for bounties is automatically appropriated. That gives the Executive the power to appropriate by delegated legislation. I do not think that any members of this Parliament, if they seriously thought about this legislation and if he understood this legislation, could condone a decision by a government to force upon this Parliament the appropriation of funds without proper parliamentary consideration. There are two aspects to this. On the one hand, there is decision-making by the Minister, by the Executive, and not by the Parliament in relation to the provision of assistance to Australian industries. That, I would have thought, should be a matter properly debated in the Parliament and considered by the representatives of the people. On the other hand, under this legislation, the Executive-the Minister-is able to appropriate funds, once more without referral in each individual case to the Parliament. Whilst I can understand the desire of the Government to accelerate the procedures for the introduction and payment of bounties, I could never condone a government which chooses to undermine the power of Parliament, which is ultimately the power of the people of Australia. Their representatives are being cast aside by this legislation and those powers are being rather ruthlessly taken over by the Executive. I would be very disappointed if some members of the Labor Party were not to join with the Opposition in opposing this legislation, bearing in mind the long tradition of the Labor Party in supporting the whole system of parliamentary democracy. Mr BRUMBY(Bendigo)(5.17) —I rise to speak in support of the Bounties Bill. I do so for a number of reasons. It needs to be said at the outset that under existing bounty arrangements bounty assistance to industry can be introduced only by way of an Act of Parliament. It needs to be emphasised that many changes to bounty assistance are what we could call quite non-contentious, and enjoy bipartisan support. It is in this sense that the Government believes that too often a very lengthy, inordinate amount of time is spent by the Parliament discussing measures which, as I have said, in large part enjoy bipartisan support, are straight forward and are non-contentious. It is to this end that the Bill before the House proposes that the introduction of bounty assistance should be made through a ministerial notification process. The process would ensure-and I stress this point-parliamentary scrutiny through the provision for a general disallowance right by the Parliament. That function of the Parliament is safeguarded, but on the other hand these provisions will save the Parliament considerable, often unnecessary and inefficiently spent time debating numerous Bills and amendments to Bills which have to do with bounties. Part II of the Bill proposes that bounty schemes be implemented by bounty notices which would be declared in writing by the Minister for Industry, Technology and Commerce and published in the Commonwealth of Australia Gazette. Such schemes would, of course, be introduced only following receipt of an appropriate report from the Industries Assistance Commission on the particular industry or industries concerned. The new arrangements proposed by this Bill will eliminate-this is one of the great advantages of this Bill-the need for what is, in effect, the retrospective operation of bounties. There is a real problem with the current arrangements in that they often provide for bounties to be paid in what can be called a retrospective way. That is a point which was well illustrated by the Minister for Science (Mr Barry Jones) in his second reading speech when he referred to bounties on metal-working machines and robots. The legislation to implement those measures was introduced in this Parliament on 11 September 1985. It received royal assent on 22 November 1985. But because it operated from 1 July 1985 there was a delay of nearly six months before the bounty could be paid and those Australian producers in receipt of that bounty could gain the benefit. One of the major benefits, as I see it, of this Bill before the House is that it will remove entirely that element of what could only be called retrospectivity, where there are delays in the passage of the legislation through this House and as a result a decision to pay a bounty is held in abeyance for many months to the detriment of the industry concerned, and in that sense all Australian industry. In many ways this is a very important Bill for Australian industry and I know that it will be welcomed by those industries which in the future might receive bounty assistance. In addition to the changes I have already mentioned parts III, IV and V of the Bill will standardise the administrative provisions for all bounty schemes, making for a much more efficient administration of bounties and a much better delivery of benefits to the respective industries. Clause 8 of the Bill will also improve the operation and the efficiency of bounty programs by enabling changes in implementation to be made on the basis of changes which have occurred for technological or economic circumstances. Again, the Minister in his second reading speech provided a very good example of the book bounty introduced in 1969. That industry has seen many and varied technological changes, with the result that the original bounty provisions in many ways are exceedingly complicated and in some ways no longer relevant to that industry. The effect of this legislation in the future will be to simplify those procedures and to allow the Government, through a government bounty program, to keep up to date with changing technology and economic procedures. The new procedures which are proposed in this Bill highlight the role of bounties as a key instrument in industry policy. As I have said, the new proposals will ensure that the introduction and amendment of bounty programs are undertaken in a much more effective and efficient way. In this sense they should enhance the very crucial role that bounties play in providing direct support to Australian industry against import competition. It is worthy of note that there are currently 18 bounty schemes in operation in Australia. The most recent of those was that for metal-working machines and robots which became effective, as I said, from 1 July 1985, being passed by this Parliament in November 1985. It has to be said that, as a mechanism for providing protection and/or incentives for Australian industry, bounties are in many ways preferable to tariffs. That was a line of argument taken up by the honourable member for Mayo (Mr Downer) in his contribution. There are a number of reasons why bounties are preferable to tariffs. The first of those is that bounties actually have to be paid for out of Budget appropriations. That means that they are obvious, identifiable and subject to regular review. Over time they must continue to be relevant and necessary, and that makes them considerably superior to tariffs, which can be hidden away unbeknown to the public as a hidden form of protection. The second reason I think bounties are preferable to tariffs is that bounties relate the national interest in a sense directly to the cost of protecting or providing incentives to the industry in question. In comparison, a tariff selectively adds to the cost of goods which are imported to Australia whereas, with a bounty, assistance is given to an industry but the cost of providing that assistance is not selective or sectoral, but is spread throughout the Australian community through a Budget appropriation. The third point that needs to be emphasised, and it is one made by the honourable member for Mayo, is that bounties in their operation often have a deflationary or price reducing effect on the economy, whereas tariffs are most frequently inflationary in their effect on the economy. Bounties reduce the cost of production to Australian industry and hence often enable the price of a product to be reduced when it hits the markets. Tariffs, by their very nature, add to the cost of goods and hence provide opportunities and incentives to add to the price which a consumer or retailer eventually pays. The fourth and final point about bounties and tariffs is that tariffs in so many ways simply represent a tax on exports. The clearest example of the way in which tariffs tax exports from this country is to be found in the operations of primary producers, a major exporting group who are contributing close to 40 per cent of total export income. As the honourable member for Mayo remarked, many of the direct and indirect inputs into agriculture in Australia are heavily costed because of tariffs on imports into this country. Some of the obvious examples in relation to the tariff question in the farm sector-the question of taxing inputs and then taxing exports-relate to such things as farm chemicals, agricultural machinery and farm tractors. I will come back to the question of agricultural machinery, implements and tractors because this Government has in fact taken a number of initiatives to reduce tariffs on those inputs and replace those tariffs with bounties, thereby reducing costs to the Australian primary producers and allowing our exports to be more competitive on the export market. It needs to be said that since coming to office this Government has implemented a wide range of measures to assist Australian industry, and I will touch on some of those in a moment. Included amongst those measures is the provision of bounties to selected industries. We have introduced bounties to assist industries to become more efficient and be able to compete better in the domestic market and, in the long term, to export. We have introduced bounties in respect of the computer hardware and software industries. We have extended the shipbuilding bounty. As I said before, we have introduced a bounty for metal-working machine tools and robots. We have introduced bounties on agricultural machinery and grain harvesters. The last two bounties have been of great assistance to primary producers. As a member who represents a rural and provincial seat in this Parliament, I have been particularly pleased at the progress which this Government-the Hawke Government-has made in replacing the tariffs on agricultural inputs. I have mentioned farm machinery. In the recent major economic statement to this Parliament, the Minister for Primary Industry (Mr Kerin) announced that the Government would be providing a bounty on agricultural machinery. That decision will cost some $39m a year. It is a decision, as I have said, which will be of particular benefit to Australia's cropping industries-industries such as the wheat industry, the rice industry and the sugar industry, all of which are presently finding it difficult to compete on international markets. All of those industries appreciate the steps which this Government has taken to substitute tariffs on imports with the provision of bounties to domestic producers and manufacturers. As previous speakers have mentioned, this Bill opens up the whole question of industry policy, the effectiveness of industry policy and the broad question of bounties versus tariffs. Since coming to office, this Government has endeav- oured, through a range of policy initiatives, to revitalise manufacturing industry in this country. I must say that we have done that with some degree of success and we look forward to further success, further strength and further economic and employment growth in manufacturing industry. We have given manufacturing industry such a high priority in the programs and policies of this Government because manufacturing industry is crucial and will be even more crucial in the future to our ability to compete on world markets. It is crucial to our ability to balance our balance of payments and to boost our export returns, which for so many years in this country have relied virtually totally on the commodity market-on primary production, iron ore, coal and so on. Mr Price —What did the Opposition do about it? Mr BRUMBY —The honourable member for Chifley raises the question of what the Opposition ever did about manufacturing industry or the balance of payments. The answer is that it did not do very much. In fact, if we look back over the last 30 years, of which the Liberal and National parties were in government for 27, we will see that our international trade performance, particularly the performance of our manufacturing sector, was deplorable. In fact, it was probably second to none of every other country. We were the poorest performer in trade terms. In the last 30 years-I have mentioned that 27 of those years were under the policies of the Liberal and National parties-our share of world exports has slipped from 2.6 per cent to 1.2 per cent of world markets. In other words, it has more than halved, and that has occurred in the last 30 years. Whereas back in the 1950s we used to be ranked eighth in terms of exports, we now rank twenty-third or twenty-fourth. The reason for that is that we never had proper policies in place in this country. We had a cargo cult sort of mentality. We thought we would always survive on the back of the sheep or on the back of the grain harvester or by digging coal out of the ground. Our contribution in terms of exports from the manufacturing sector was absolutely abysmal. It is no wonder it was abysmal because manufacturing industry was never encouraged by the macroeconomic setting in this country. In fact, it did quite the opposite. We suffered enormously from high protection and high tariffs. The old McEwen and National Party view was that we could always survive under a highly protected industry and that wool, wheat, sugar, coal and iron ore would pay the way. As a result, our standard of living has fallen. Mr Barry Jones —We never developed an expertise that was exportable. Mr BRUMBY —I thank the Minister for Science for making the very valuable point that we never in this country developed any expertise, technology, brain matter or services which could be exported. We were always prepared to rely on what we could simply dig up or grow. It is worth making a comparison of the results. Whereas in the last 30 years other countries-and I mention North America, Japan, Europe and the Organisation for Economic Co-operation and Development as a whole-have increased their manufacturing export performance by 50 per cent, ours has actually declined. Of course, this is the main reason why we are today suffering what I consider to be serious problems in our balance of payments. That is why this Bill and questions of industry policy are crucial to Australia's ability to compete in the future. I have mentioned that we have taken measures and introduced bounties and so on to reduce the cost of inputs to commodity industries. We have assisted those industries. However, as I said, we have to do a lot more to assist manufacturing industry directly in this country. I just want to run through some of the things that we have done. Let me outline what we have done to assist manufacturing industry development in this country. We introduced and developed the highly successful steel plan. That is something which is contributing to Australian exports at the moment. We have developed the motor vehicle plan, which over time will produce a more efficient and more export oriented Australian motor vehicle industry. I have mentioned the range of bounty assistance that we have brought in for computer hardware and software, metalworking machine tools, robots and so on. We have also developed a growth strategy for the communications industry, and that is crucial as we change the focus of that industry from the domestic to the international market-place. We have put in our new sectoral plan for the heavy engineering industry. These are just some of the things we have done for industry development. What about the crucial question of technology and business efficiency? I want to highlight some of the measures in this area and perhaps the Minister for Science, who is in the House, may comment on some of them when he is summing up the second reading debate. We introduced the 150 per cent tax deduction for research and development expenditure. I am pleased to say that that is something which has taken up pretty vigorously by Australian industry. More than $100m of concessions will be provided this year in an area in which Australia has been sadly lacking in the past. We have always been prepared to rely simply on the government research dollar and the private sector has not been putting the dough into research and development so that we can pick up export markets. So we have taken action to lift Australia's low level of research and development. We have also provided additional funds to Australia's industrial research and development incentives scheme. We have increased funding to the Australian Industry Development Corporation to ensure that a capital base exists for the expansion of Australian industry. In conclusion, I would like to refer to some of the things we have done in the overall industry environment. The Minister for Industry, Technology and Commerce (Senator Button) has set up new machinery to review business regulations. We are starting to get to a stage where business regulations in Australia, which are excessive at the moment, can be reduced. The Minister has approval to remove State purchasing agreements. This has been overdue in this country for many years. We have seen the establishment and the extension of management investment companies in this country, and again that has been vital to the high-tech, brain power area where job growth and exports will be so important in the future. We have improved the anti-dumping procedures. I think that we could probably go a bit further. However, we have made some improvements and I hope that we make some further improvements in the future. I conclude by saying that we have done these things in the industry environment. In the macro-economic environment, we have provided a framework in which manufacturing profitability and manufacturing employment in this country have now recovered. They need to recover further. We have employment levels back to where they were before the 1981-82 recession. I know from my own electorate of Bendigo that very strong investment and employment growth is occurring in manufacturing industry in that electorate. That is occurring because of some of the benefits which the accord has given to producers in this country. We have seen industrial disputes at their lowest level in Australia for 19 years. That is not a bad record of achievement and it is a pity that the Opposition does not acknowledge it. We have seen the strongest employment growth in Australia for 20 years. That is not a bad achievement either if one looks at it objectively. We have seen the restoration of profit shares in this country to levels which were left behind back in the 1960s. The profit share is there, so companies can invest, put money into research and new technology, employ more people and pick up export markets. Perhaps most importantly, through the accord we have seen real labour unit costs reduced to their lowest level for 10 years. That has set the framework. Manufacturing industry is largely taking up that challenge and that will be to the long term benefit of Australians, Australia's export performance and Australia's standard of living. Mr DEPUTY SPEAKER(Mr Keogh) — Order! The honourable member's time has expired. Mr HODGMAN(Denison)(5.37) —I believe in Australian manufacturing; I believe in Australian products. I am one myself-made, assembled in Australia and delivered on 16 November 1938. I am proud that every item of clothing I wear every day-every item of clothing that I am wearing in the chamber right now-is made in Australia. I am wearing an Anthony Squires suit. Mr Brumby —Made in my electorate. Mr HODGMAN —It is made in the honourable member's electorate. The honourable member should have said a few more things about our manufacturing sector in his speech. I am wearing a Van Heusen shirt made in Australia. I am wearing an Austico company Advance Australia tie made in Australia. I am wearing John Brown socks made in Australia. I am wearing Julius Marlow shoes made in Australia. If honourable members want to know, I am wearing Liberal-blue Jockey underpants made in Australia. I am wearing the Australian coat of arms on my cufflinks and the Australian Government flag on my lapel. I believe in the Australian manufacturing sector. The question I put to this Parliament today is: Does the Parliament really believe in the Australian manufacturing sector? This debate on the Bounties Bill gives us the opportunity to speak about where this country is going. I say at the outset that, regardless of whether I am regarded as a protectionist, on one occasion described as so wet that I was a submarine in political terms-I am proud of that-in the late 1960s, 25 per cent of the Australian work force was employed in the Australian manufacturing sector. What is the situation today? Some 14 per cent of the Australian work force is employed in the manufacturing sector. Do honourable members want the figures in employment terms? Five years ago 1.25 million Australians were employed in the manufacturing sector; today the figure is one million. Whilst we debate the Australian manufacturing industry we debate it with the ghosts of 250,000 Australians who had jobs in our manufacturing sector five years ago but who do not have them today. I think for them the whole debate about bounties and tariffs is a little academic. They had jobs. They do not have them now. The Australian manufacturing sector has declined and is declining in an accelerating fashion under the twisted, tortured, economic mismanagement of the Hawke socialist Government. Let me bring it right into perspective. This is a Government which put together a passenger motor vehicle plan-the Button plan-which I and many on this side of the Parliament supported very strongly. It was a very good plan. What is the Government doing with it now? The fringe benefits tax will rip the guts out of the Button plan and with it the guts of the Australian motor manufacturing industry. Mr Deputy Speaker, when we talk about the Australian motor manufacturing industry remember that we are talking about something that is not just the production of cars, trucks and buses. We are talking about an essential, vital and critical element of Australia's defence capacity. I happen to believe that Australia needs two fundamental things in order to have any defence capacity: One is an Australian indigenous steel industry owned by Australia for Australia and the other is a passenger motor vehicle manufacturing capacity which can be utilised for the defence of this country. Here we have it: The Parliament has gone dry on both sides of the House, pursuing economic purity which I think is politically wrong and is also about the worst thing this country wants at this point in time. Why is it that we have to clothe ourselves in the white robes of economic purity while, as a result of the misguided policies emanating from this Parliament, thousands of our fellow Australians are losing their jobs? Let me bring it into context because if ever there were a timely announcement to be made in this debate on bounties-- Mr DEPUTY SPEAKER(Mr Keogh) —Order! I remind the honourable member for Denison that this is not a general debate on manufacturing industry. Mr HODGMAN —I accept that. Mr DEPUTY SPEAKER —It is bounty legislation which is currently before the House. While I expect the debate may be far-ranging I suggest to the honourable member that he should not use this as an opportunity to debate other measures that might be coming before the House. Mr HODGMAN —I accept that, Mr Deputy Speaker. I thank you for the direction. We have sat here today and heard it proclaimed, as though it were holy writ, that bounties are preferable to tariffs. That is the essence of this Bill because it produces what is effectively a streamlined bounty provision which will by-pass the Parliament and which will tilt the scales heavily in favour of bounties and against tariffs. I want to use an announcement made today to bring into context precisely why this reasoning needs to be questioned and why some of the statements made under this reasoning need to be brought into context. It is clear beyond doubt that the Prime Minister (Mr Hawke) left this country knowing that this bounty legislation was in the pipeline. It is clear beyond doubt that the Prime Minister left Australia on his overseas trip knowing that while he was away, and hopefully before he got back, this bounty legislation, which the Opposition is opposing, would be coming before this Parliament. In that context, I refer to two statements which appeared in our national Press today because it seems that either our Prime Minister has been stricken with jetlag or, alternatively, something has gone radically wrong-- Mr DEPUTY SPEAKER —Order! I trust that those statements are related in some way to the bounty legislation. Mr HODGMAN —Absolutely. You, Mr Deputy Speaker, will pick it in one; some duller members of the Hawke socialist Government will still be scratching their heads three hours later. On page 1 of today's Australian is an article headed `Hawke promises less market protection'. That is relevant to bounties, Mr Deputy Speaker, because we are told that this legislation is effectively to protect Australian manufacturers. However, listen to what the Prime Minister said from Manila, no less, as reported by Paul Kelly. I will read just two paragraphs which state: The Prime Minister, Mr Hawke, promised yesterday to reduce protection for the footwear, clothing and textile industries and give imports more of the market while also announcing a joint Australia-China ministerial committee on trade and economic relations. A little later the article states: The existing program for the footwear, clothing and textile industries, which was introduced by the Fraser Government, provides for a gradual and automatic reduction in protection- that is tariffs, and I will come back to them in a moment- and Mr Hawke, by his promise, has signalled that in the post-1988 scheme his Government will continue this process. What news is that for industries already decimated by a previous Labor administration? Will the Minister for Industry, Technology and Commerce (Senator Button) say that the protection currently afforded to Australia's footwear, clothing and textile industries will now be by way of bounty? Why do we have that situation when the Government still has before it an Industries Assistance Commission report which talks about 20,000 jobs being lost in the textile, clothing and footwear industries? For the benefit of the Hawke socialist Government, which says that it believes in equal opportunity and affirmative action, most of the jobs lost are those of female workers, 80 per cent of whom are ethnic female workers. Are those workers going to be supported by a bounty? Is the proposal that we move from a tariff situation? That eight-year textile, clothing and footwear industries plan was brought in by a Liberal Government, not a Labor Government. Mr McGauran —And National Party, too. Mr HODGMAN —The National Party of Australia was involved right up to the hilt, and rightly so. On 15 August 1980 that very great Australian, the Rt Hon. Sir Phillip Lynch, announced the eight-year program for the textile, clothing and footwear industries. From 3 November 1980 until 9 March 1983, a dark day, when the Hawke socialist Government took over, I was honoured to be the Minister assisting Sir Phillip Lynch in the industry and commerce portfolio. I was further honoured to chair on his behalf both the Textiles and Apparel Industry Advisory Council and the Footwear Industry Advisory Council. My colleague and very good friend the shadow Minister and honourable member for Ryan (Mr Moore), who is at the table, will remember those days. When we brought in that plan we said to one part of the Australian manufacturing sector: `Here is an eight-year plan for you to get your house in order, to become efficient and to be able to compete. We want you to have that plan in time to go ahead'. We did not say that, at the end of eight years, protection was going to be reduced. I believe this is relevant, Mr Deputy Speaker, because how do you link together a Bill which the Government says is to give bounties to support Australian manufacturing a prime ministerial statement made in Manila saying that the footwear, clothing and textiles industries can look forward to having their protection cut out? It is relevant that I try to bring these two themes together. We are told that we cannot have tariffs. I do not know why tariffs are so unfashionable these days. Tariffs were not so unfashionable to Chifley. They were not so unfashionable to Menzies. They were not so unfashionable to McEwen. Tariffs applied when Australian manufacturing industry was providing employment for between one-quarter and one-third of our total work force. Today, in this dry madness, this dry mania, which seems to have overtaken the entire political scene we say: `Economic purity first, jobs second'. We are told: `We want you to buy Australian'. How are the Australian footwear, clothing and textile industries to survive in terms of the massive competition from cheap imports, which this Australian Prime Minister, this man who prides himself on his patriotism, has told us to look out for? The Prime Minister is saying that if the Hawke socialist Government gets another term of office-and it will not-he will cut all protection for Australian footwear, clothing and textile manufacturers. That is it in a nutshell. The Government wants Australia to become a net importer. It wants Australians to be running around in imported clothes, with imported shoes on their feet and driving imported motor vehicles. I have not yet seen the figures, but I will be very interested to do so, of car sales in Australia which were due to come out today. I will be particularly interested to see how the Button plan is working. It is part of the inconsistency of this Government that when that car plan was introduced-which, I repeat, was supported on both sides of the House-and before it has had a chance to do its job, the idiots opposite in the Hawke socialist Government, and their Treasury zealots, are going to tear it out and destroy it with a fringe benefits tax which is the last thing this country wants now. Mr DEPUTY SPEAKER(Mr Keogh) —Order! I remind the honourable member once again that we are discussing bounty legislation. Mr HODGMAN —Yes, we are. There is great hilarity opposite from the ranks of Moscow corner because they do not give a damn about Australians being out of jobs. They do not give a damn about a manufacturing sector which employed one in four Australians five years ago whereas today 250,000 ghosts of unemployed manufacturing industry workers are in this chamber right now listening to this debate. It is the bona fides of the Government that I am challenging. The Government brings in legislation which it says-pie in the sky-is bounty-plus legislation. Bounty decisions will be made more quickly and more efficiently. The Minister will decide. They will will not be subject to a parliamentary debate but Parliament will have the right to disallow. Honourable members should countenance that for a moment in the present context. Under this crazy legislation, which this Opposition is rightly opposing, the final fate of every bounty decision will be in the hands of the Australian Democrats. Is that not an interesting example of where we are heading? The power to disallow in the Senate effectively will be in the hands of the Democrats. Without being critical of the Democrats, if their position on bounties is the same as their position on the fringe benefits tax, then heaven help Australian manufacturers. It goes to the core of whether the Australian Labor Party genuinely believes in manufacturing, and it does not. The Minister for Science and Minister Assisting the Minister for Industry, Technology and Commerce (Mr Barry Jones) has the best will in the world. He is keen and enthusiastic. I can remember when I tried to get a micro-electronic industry for Canberra, which would have employed 1,500 people and would have been a $100m investment for the Australian Capital Territory. The Minister went on television and opposed it. The National Semi-Conductor Corporation-- Dr Charlesworth —You're not going to believe this, Barry. Mr HODGMAN —Well, he is an old friend. I have no axe to grind with my old friend Rasputin but I have to say that things are different today. I want to know how all these jobs will come from the high technology sunrise industries we are to get. What the Government is doing at the moment is crucifying the Australian manufacturing sector, so I suggest that the Bill is of doubtful value. I would like the Minister to spell out in reply what industries in particular the Government has in mind for bounties. He should tell us now who is to get the bounties, who are to be the beneficiaries of this legislation. It is one thing to say `tariffs are out' and `tariffs are bad'. I suggest that the footwear, clothing and textile industries are a classic example of where tariffs are appropriate. If the Minister does as the Prime Minister said in Manila he will do, namely, chop out all assistance to the footwear, clothing and textile industries, he will go close to beating the massive loss of jobs in those industries which was brought about by the Prime Minister's predecessor Mr Whitlam back in 1974 when he fiddled with the tariffs-- Mr McGauran —Slashed them. Mr HODGMAN —He slashed them across the board by 25 per cent and 90,000 Australians lost their jobs. Mr McGauran —Overnight. Mr DEPUTY SPEAKER(Mr Keogh) —Order! I remind the honourable member for Gippsland that he is not in his correct seat in the chamber. Mr HODGMAN —My word, Mr Deputy Speaker, even though he is not in his correct seat, he is an ornament to this House. I predict a very bright future for the honourable member for Gippsland, and wish I were his age and had his ability. The legislation is bad legislation for two fundamental reasons. The first reason is that it bypasses the Parliament on an important issue such as bounties. We have been told-and this is relevant to the argument-that bounties are better than tariffs because firstly, they are cost explicit, secondly, they avoid a consumption distortion and, thirdly, tariffs increase costs to downstream users and consumers. So we are going to go down the bounty way. But what do we do? We make it a bounty system which the Parliament will not have an opportunity to debate as it has had the opportunity ever since bounties were introduced in 1907. That is just before the honourable member for Bendigo (Mr Brumby) was born. The Parliament is told to take it or leave it. It cannot amend bounty schemes. It is all in or all out. Effectively that means that it is all in or all out according to the whim of our friends the Australian Democrats in the Senate. What right will any honourable member have to get up and speak effectively on bounties? He will not even have the right to vote if he thinks the bounty is too low in one area or too high in another. He will be told: `Shut up; it is being done by the Executive. Trust me. Throw away your calculators and trust me'. That is the sort of J-curve banana economics we are getting in the Parliament now from a Party which proclaims that it believes in the Parliament. Yet it moves to bypass Parliament. It will not even give the Parliament the option to amend. Is that what a Parliament is about, Mr Deputy Speaker? I appeal to your wisdom and the wisdom of others. This legislation is wrong. When this Government puts something in place as effective as the car manufacturing plan and then tears it to pieces, it is no wonder that Senator Button said, as he said at the weekend, that he did not actually agree with what the Treasurer (Mr Keating) was saying. Senator Button is in good company, because 99 per cent of Australians do not agree with what the Treasurer is saying now. The plain fact of the matter is that this Government does not have any consistent approach to the Australian manufacturing sector, and I do not believe that this legislation will be the benefit to Australian manufacturers or be the protector of Australian jobs that it has been made out to be. I have to say that whilst I am a protectionist to my boots, and I will be all my life, I do not believe in voting for legislation which is bad. I therefore will be voting with other members of the Opposition-all of us-against this legislation, and hopefully in the Senate the Australian Democrats and Senator Harradine can also be persuaded to toss it out. The Parliament should not be bypassed. The Parliament is entitled to know what is proposed in the way of bounty assistance to Australian manufacturers. The Parliament is entitled to debate these issues and vote upon them. We are Canberra, not Moscow. Talking of Moscow brings to mind that booklet on the fringe benefits tax that has been sent around the country. It has 56 pages, but the legislation has not even been passed. Will the Government do the same on bounties? Mr DEPUTY SPEAKER —Order! I have repeatedly reminded the honourable member for Denison that he should not be endeavouring to get around the ruling of the Chair by the method he is employing. The legislation before the House at the moment is bounty legislation. Mr HODGMAN —Mr Deputy Speaker, I have sat with you on an excellent committee; I have come to admire you, and I even have some affection for you. You cut me off before I asked whether the Government would do the same thing on bounties. That is the point. Will we have little booklets coming out on a bounty for this and a bounty for that; on bounties that will not go through the Parliament and cannot be amended? If it is good enough for this Government to put out a fringe benefits tax handbook when the legislation has not even gone through the Parliament, I ask how long will it be before we get the little bounty handbook? If ever I have seen a tailor-made scenario for cronyism, pork barrelling and other favouritisms which the Hawke socialist Government delights in, it is this. Mr Leo McLeay —What about Tasmania? Mr HODGMAN —You hate Tasmania; we know that. It is bad legislation, defiant of the Parliament, and denigratory of Australian manufacturing. I will vote against the legislation and I commend our shadow Minister and those who have spoken against it. I trust that it will be defeated in the Senate, because that is the fate it richly deserves. Mr BARRY JONES(Lalor-Minister for Science and Minister Assisting the Minister for Industry, Technology and Commerce)(5.57) —in reply-In a perfect world, if we had all the time we wanted to debate measures, perhaps legislation like the Bounties Bill would not be needed. The fact is that on one hand we have to weigh up the desirability for greater flexibility and greater speed in getting the bounties applied and, on the other hand, the pressures on parliamentary time. In fact, we devote a considerable proportion of our legislative time to bounty and customs and excise Bills. A table thoughtfully provided by the Clerk points out that of 225 Bills dealt with in 1985, 16 were devoted to this area-that is, 7 per cent. In 1986, so far the figure is 5.4 per cent of the 93 Bills introduced. Mr Moore —It is dropping. Mr BARRY JONES —It is only half a year. So 21 of the 318 Bills debated in 1985 and 1986 have been devoted to bounties and customs and excise, or 6.6 per cent. These are always areas that inspire members to logorrhoea. We take up considerably more than 6.6 per cent of the time. I think there is something to be said for the United Kingdom system, where some legislation is referred to standing committees of the House of Commons organised on party lines, where debate on specialised issues like this can be carried out at length. Members can devote as much time as they like to the matters and, having debated them, can report back to the full House. Mr Moore —Would you volunteer for the committee? Mr BARRY JONES —Yes, I would take my turn. Instead of having the situation now where we have only seven or eight hours debate in the course of a day, with that system there could be as much as 20 or 25 hours a day of serious deliberation, often in committees at which the actual number of members who turn up might be no less than the numbers in the plenum of the House. So that has to be taken into account. I want to deal first with some of the points made by the honourable member for Ryan (Mr Moore). He is concerned that Parliament is to be bypassed by the Bill. He went into some detail about the disallowance of bounty notices. The Government is proposing a `fast track' method of introducing bounty assistance, similar to the way that tariffs are introduced. We are not proposing a bypassing of the Parliament. I draw the honourable member's attention to clause 10 of the Bill, which provides for bounty notices to be subject to disallowance in the same way as regulations. I am sure honourable members opposite will acknowledge that this procedure, which has been in place for many years, preserves Parliament's ability to scrutinise legislation without imposing inordinately upon its time. Of course, it will be said that it does place a heavy responsibility on members of the Opposition to raise matters that they think need to be ventilated in the Parliament. If that is not done, the responsibility is very largely theirs. I regret to say that members opposite do not appear to have read my second reading speech with the careful scrutiny that it deserved. That is a cause for concern. I referred several times to Parliament's ability to disallow bounty notices and to the need to introduce bounties quickly. There have been some delays in the introduction of bounties in the past. Those delays have placed burdens on local industry, which had to continue to compete with imported products while waiting for the assistance. If I can give a couple of examples of such delays, it took eight months to pay Kelvinator Australia Limited on its production of room air conditioners and there was a delay of about five months in paying the Commonwealth Steel Co. Ltd on its production of steel products. This caused cash flow problems and the industries were critical of the delay. The `fast track' method will speed up the process. On the other hand, the procedure for tariffs allows them to be introduced immediately. The Bill therefore proposes a similar procedure for bounties to that applying to tariffs, and I believe that the procedure will certainly be welcomed by industry. The honourable member for Mayo (Mr Downer) noted that the disallowance right of Parliament does not allow for partial disallowance. It is acknowledged that the disallowance right applicable to regulations does not permit partial disallowance at present. The Government is reviewing whether or not there should be partial disallowance of regulations, and this might equally apply to bounty schemes. It is also noted that disallowance, as it applies to regulations, does not permit recovery or removal of rights from the date of commencement of the regulation; rather, only from the date of the disallowance. This Bill, however, will allow on disallowance recovery of bounty paid from the date of commencement of the bounty scheme, where both Houses of Parliament deem that appropriate. In regard to appropriation, the honourable member is under the mistaken impression that the scheme will appropriate moneys for the payment of bounty under the scheme, again claiming that this would bypass Parliament's crucial role in appropriating moneys. The honourable member should be aware that clause 54 of the Bill specifically requires bounty schemes to be funded from moneys appropriated by the Parliament on an annual basis unless their appropriation is specifically permitted by the Parliament as a standing appropriation from Consolidated Revenue. The honourable member for Denison (Mr Hodgman) asked what industries would be nominated to receive an appropriate bounty. As he will understand, this will go through the Industries Assistance Commission mechanism, and the IAC will be recommending industries for bounties. It will be done in an arm's length way, as in the past. I think the personal assistance given by the honourable member for Denison to Australian industry is applauded by all, although I must say that I was stunned to learn that he was buying so much from the mainland. I assumed that his purchasing policy would be `Buy Tasmanian first'. Mr Hodgman —All bought in Tasmania. Mr BARRY JONES —All bought in Tasmania but not Tasmanian made. It is true that to a large extent, it is up to this country, to determine its pattern of demand. There is a rising enthusiasm for a `Buy Australian' policy. If that policy were adopted generally, we might not need the high levels of assistance which appear to be necessary. However, I think that many of the concerns about industry not being able to compete will be met by the Bill. We will be able to provide immediate assistance by bounty, as we already do by tariff. Industry will not have to wait for the assistance. However, there is a certain lack of realism in what the honourable member had to say about the history of Australian industry. Manufacturing employment in Australia reached a plateau in 1947, with just one-quarter of the labour force, and stayed there for virtually two decades. With high tariff protection and under the forceful leadership of Sir John McEwen in various trade ministries between 1949 and 1971, Australia pursued a line of import substitution, obtaining rights for products which had originated overseas and making them here, while concentrating export efforts on developing our abundant raw materials. Under `McEwenism' manufacturing employment reached its high point in 1965, with 27.6 per cent of the labour force. McEwenism was politically popular in its time, strongly endorsed in the electorate and supported broadly by the labour movement, because of its short term job creating potential. However, in retrospect, McEwen can be seen as the architect of our present manufacturing malaise, and the formulas which seemed so appropriate in the 1950s and the 1960s became increasingly anachronistic in the 1970s and thereafter. Sir John was a frankenstein who created an increasingly helpless monster. Australian industry was programmed not to specialise and not to excel in particular areas of expertise except in the one area that the honourable member for Ryan nominated sotto voce earlier on. We were encouraged to become mere assemblers, duplicating products designed by people cleverer than ourselves. Australian management has to develop industrial strategies of its own and to employ inventors, researchers and technological innovators who can do the sorts of things that other small nations such as Switzerland and Sweden have been able to do. As the honourable member for Bendigo (Mr Brumby) pointed out, while McEwenism, as it applied to mineral development, actually worked out very well for us in the 1950s and 1960s, when the whole pattern of world trade started to change and when there was a demand for different types of goods-goods that we were not very good at producing-our share of world trade declined very significantly. I thank honourable members for their contribution to the debate, and I trust that the measure will receive the support of the House. Question put: That the Bill be now read a second time. The House divided. (Mr Deputy Speaker-Mr L. J. Keogh) Ayes . . . . . . . . . . . 68 Noes . . . . . . . . . . . 51 —— Majority . . . . . . . . . 17 —— Baldwin, P. J. Jones, BarryBeazley, K. C. Kelly, R. J. Beddall, D. P. Kent, L. Bilney, G. N. Kerin, J. C. Blanchard, C. A. Klugman, R. E. Blewett, N. Lamb, A. H. Bowen, Lionel Langmore, J. V. Brown, John Lee, M. Brown, Robert Lindsay, E. J. Brumby, J. M. McHugh, J. Charles, D. E. McLeay, LeoCharlesworth, R. I. Maher, M. J. Chynoweth, R. L. Mayer, H. Cross, M. D. Mildren, J. B. Cunningham, B. T. (Teller) Milton, P. Dawkins, J. S. Morris, AllanDubois, S. G. Morris, PeterDuncan, P. Mountford, J. G. Edwards, Ronald O'Keefe, N. P. Fatin, W. F. O'Neil, L. R. T. Fitzgibbon, E. J. Price, L. R. S. Free, R. V. Punch, G. F. Gayler, J. Saunderson, J. Gear, G. Scholes, G. G. D. Gorman, R. N. J. Scott, J. L. (Teller)Grace, E. L. Simmons, D. W. Griffiths, A. G. Snow, J. H. Hand, G. L. Staples, P. R. Hayden, W. G. Theophanous, A. C. Howe, B. L. Tickner, R. E. Hurford, C. J. Uren, T. Jacobi, R. West, S. J. Jakobsen, C. A. Willis, R. Jenkins, H. A. Young, M. J. Adermann, A. E. Hodgman, W. M. Aldred, K. J. Hunt, R. J. D. Andrew, J. N. (Teller) Jull, D. F. Beale, J. H. Lloyd, B. Blunt, C. W. McArthur, F. S. Brown, N. A. McGauran, P. J. Burr, M. A. MacKellar, M. J. R. Cadman, A. G. McVeigh, D. T. Cameron, Donald Macphee, I. M. Cameron, Ewen Millar, P. C. Cameron, Ian Moore, J. C. Carlton, J. J. Nehl, G. B. Coleman, W. P. Peacock, A. S. Connolly, D. M. Porter, J. R. Conquest, B. J. Reith, P. K. Dobie, J. D. M. Rocher, A. C. Downer, A. J. G. Ruddock, P. M. Drummond, P. H. Sharp, J. Edwards, Harry Sinclair, I. McC. Fischer, Tim Spender, J. M. Goodluck, B. J. Sullivan, K. J. Hall, Steele Watson, DavidHalverson, R. G. Webster, A. P. Hawker, D. P. M. White, P. N. D. Hicks, N. J. (Teller) Wilson, I. B. C. Hodges, J. C. Cohen, B. Everingham, P. A. E. Humphreys, B. C. Tuckey, C. W. Darling, E. E. Cobb, M. R. Duffy, M. J. Smith, W. Campbell, G. Slipper, P. N. Question so resolved in the affirmative. Bill read a second time. Message from the Governor-General recommending appropriation announced. Leave granted for third reading to be moved forthwith. Motion (by Mr Barry Jones) proposed: That the Bill be now read a third time. Mr HODGMAN(Denison)(6.17) —I wish to ask the Minister for Science (Mr Barry Jones) whether he will see that the amendments for partial disallowance will be looked at and put to the Senate. It was gracious of him to accept the fine suggestion of the excellent honourable member for Mayo (Mr Downer). If possible, I ask that the Government have those amendments when the Bounties Bill goes to the Senate. Mr BARRY JONES(Lalor-Minister for Science and Minister Assisting the Minister for Industry, Technology and Commerce)(6.18) —in reply-I will see that it is looked at before it goes to the Senate. Question resolved in the affirmative. Bill read a third time. Debate resumed from 8 May, on motion by Dr Blewett: That the Bill be now read a second time, Mr PORTER(Barker)(6.20) —The Health Legislation Amendment Bill comes before the House at a time when the Government is spending a record amount on the delivery of health services. Under the Australian Labor Party the health portfolio has rocketed to the lead as one of the really big spenders of taxpayers' funds. The Department of Health now ranks No. 2 behind the Department of Social Security as the biggest spending department. Not only has the Government broken all records in increasing government expenditure in this area, but also the rate of growth in expenditure continues at an uncontrollable and alarming rate. This year alone the rate of increase in medical, hospital and drug expenditure is likely to be around 70 per cent higher than was provided for in the Budget. The real disaster is that, whilst the Government's health policies are absorbing more and more of the taxpayers' dollars, the standard and quality of service being provided are getting worse and worse. The record rates of government expenditure have been matched by record increases in the number of people waiting for urgently needed hospital beds. Only those who can afford to pay private health insurance premiums over and above the high rate of taxation and the Medicare levy have guaranteed access to hospital treatment when they need it. Pensioners, the unemployed and low income earners are all now consigned to a long queue when they need hospital treatment. The Minister for Health (Dr Blewett) stands condemned for imposing a Medicare health policy which is costing more and more and at the same time has allowed the standard of service to decline so that, tragically, those most in need of government assistance for health services are being denied that assistance. Little wonder that polling indicated that health issues are the second greatest issue of concern for Australians today. There are two fundamental reasons why we are paying more for health care and getting less. Firstly, the Government set about strangling the private health insurance market and private hospitals by substantially increasing the cost of private health insurance. Whilst forcing people to give up private cover, the Government has failed to provide an effective health care delivery system in the public sector to cope with the increased demand. The results have been that we are now paying more through an enormous government bureaucracy and the standard of service has declined. In other words, the Government is in the process of gradually replacing a lean, efficient, competitive private health delivery system with an expensive, bureaucratic, inefficient government health delivery system. The second significant reason why we are paying more for health and getting less is that the Government has instituted a system of reimbursement for medical services which encourages fraud and overservicing. When the present Minister for Health was in opposition he used to criticise the then Government for fraud and overservicing and he promised to fix those problems. In Government, far from fixing existing the problems he has exacerbated them. Fraud and overservicing are now major contributing factors to the uncontrollable blow-out in the Medicare budget. The Minister started by doubling the staff and the amount of money allocated to the fraud and overservicing section of the Department of Health. About a year later he said the section was over-bureaucratic and he decided to transfer the function to the Health Insurance Commission. During the recent Senate Estimates Committee debate I proposed questions as to whether the transfer was in fact working and how much money had been recovered in the area of overservicing. I have now been advised that the answer is nil. In the first half of 1985-86 the HIC employed some 217 people at a cost of just over $4m to stop fraud and overservicing. During that period, in the area of fraud they stopped payments worth $325,000 and recovered $48,000. In the area of overservicing they recovered nil. So for every dollar spent on the detection of fraud and overservicing only 9.5c is being saved. With this sort of government investment, no wonder the country is going broke. I refer particularly to overservicing. It is a national scandal that, instead of preventing overservicing, the Government has encouraged it and at the same time has been unable to recover any money from those who are at fault. Under the bulk billing or direct billing system doctors are encouraged to send the account for medical treatment directly to the Government without the patient being required to audit the account. The Government claimed that its central computer system would be able to identify doctors who defrauded the system or who provided more services than appropriate, considering the medical condition of the patient. This was to be achieved by the setting of parameters on the allowable number of services to be provided in particular circumstances. What, in fact, has happened is that some unscrupulous and unethical doctors have taken advantage of this system by maximising the number of services provided per patient, so maximising their income regardless of the patient's medical condition. An example would be of a patient presenting to an unethical entrepreneurial doctor with, say, a cold. Instead of a general practitioner consultation and perhaps a prescription being written, the person may be referred for pathology tests and maybe radiological tests and perhaps even off to a specialist. Instead of the cost of the visit being around $20, it could easily be $300. The patient, of course, thinks that all this extra attention is wonderful, especially as he has no interest in the bill and would not even see the final bill if the doctor does as he has been encouraged to do by the Government-that is, send the bill direct to the Health Insurance Commission for payment. The Government has claimed that it would be able to pick up such overservicing. However, clearly it is not doing so. Not only has the Health Insurance Commission been unable to recover any money for such overservicing, but also attempts to prevent payments being made to doctors for such overservicing have not been effective. This is highlighted by the fact that the cost of medical services is running at about $130m over that budgeted by the Government. In my view and that of the Opposition, whilst the Government maintains an open-ended direct billing system for all patients there will continue to be enormous incentive for the unscrupulous, unethical doctor to take advantage of the system. It is totally irresponsible of the Government to allow the continuation of this system, which encourages a rip-off of Medicare. Claims by the Minister that the Health Insurance Commission is able to pick up such overservicing are patently false. Not only does the rapid explosion in the medical benefits bill highlight the fact that the system is out of control, but also very serious claims have been made that the system has been infiltrated by those who seek to milk it. There are two ways in which information may be being leaked from the Health Insurance Commission. One way is by ex-employees-and we know that there are ex-employees now in the employ of entrepreneurial medical professionals-and the other way is that there is a mole or a number of moles in the HIC advising those who wish to take advantage of this system of the extent of overservicing they can undertake without being detected by the HIC computers. Recent claims regarding a mole were not immediately referred to the Australian Federal Police as one might expect. In fact, it was only after six weeks of continual pressure from myself, together with my referral of the statutory declarations and other information regarding these claims to the Director of Public Prosecutions, that the Government finally referred these matters to the Federal Police. There is an urgent need for an immediate independent inquiry into the operation of the Health Insurance Commission and its ability to control fraud and overservicing. No doubt the Government will refuse that. It will refuse to undertake such an independent audit of the system and the security arrangements pertaining to the system because it knows that the system itself is fatally flawed. There is no way the Government can guarantee, and the Minister has consistently failed to guarantee, the security of the existing arrangements. The payment mechanism provided by the Government is so open to abuse that it is no wonder that the HIC policing section is totally incapable of controlling this bureaucratic monster. The result has been that the cost of medical benefits has gone through the roof. The Government is allowing some unscrupulous and unethical doctors to have a feast on the Medicare system. The taxpayer is being saddled with higher and higher tax bills to pay for the Minister for Health's ideological commitment to a national health scheme which he cannot control. Meanwhile, those who seek public hospital treatment when they need it are unable to obtain it. Sitting suspended from 6.30 to 8 p.m. Mr PORTER —I am discussing the Health Legislation Amendment Bill which is before the House. This Bill purports to implement amendments to the Health Insurance Act to curtail fraud and overservicing in pathology. It also reduces the fee payable to pathologists for certain tests. Some years ago pathologists and others approached the Government expressing concern that there were some elements of their profession who were abusing the system. The Public Accounts Committee investigated medical fraud and overservicing in pathology and towards the end of last year the Committee made some 41 recommendations for reform. In light of the concern of pathologists and the Public Accounts Committee report, the Government thought it should be seen to be doing something and so it said it would introduce legislation in this session. So here we are in the dying days of the Autumn session of Parliament and the Government has rushed in legislation without consultation with the Australian Medical Association, the Royal College of Pathologists of Australia or other pathology organisations which have often expressed their concern and the need for government action. In addition the Government has not responded to the Public Accounts Committee recommendations, nor is this legislation a satisfactory response to those recommendations. Whilst I believe the majority of pathologists warmly welcome the accreditation provisions of this legislation, there is a deep concern that this Bill will not stop fraud and overservicing in pathology. Why has the Minister failed to consult with those in the profession who have been urging legislative change to restrict fraud and overservicing; why has the Minister failed to pick up a large number of the PAC recommendations, especially those supported by sensible elements in the pathology and other medical professions; and why did not the Minister draw up this legislation in consultation with the pathology sub-committee of the Medical Benefits Schedule Review Committee? This latter Committee is under the control of the Minister, and is chaired by an officer of the Minister's Department and its function is to advise precisely on matters covered by this legislation. That Committee has been working on these issues and its detailed report was due to be presented to government within the next couple of months. Regrettably this whole episode is yet another example of the gross administrative incompetence of the Minister for Health. Only today the Society of Pathologists in Private Practice issued a Press release from which I will quote. The society said that its members were disappointed that there had been no consultation with the profession by the Federal Government on controversial amendments to pathology services. The Press release then referred to the PAC report and its recommendations and said: Some of these would be much more effective in controlling fraud and overservicing than the legislation currently before the House. The Society's Press release said later: Unfortunately- referring to the legislation- the planned controls will do more harm to ethical practitioners who perform tests according to the patient's needs than to money-hungry operators they are designed to catch. The pathologists finished by saying: The Society remains opposed to fraud and overservicing but does not believe the current legislation is the most efficient or effective way of curbing abuse. That quotation was from the Press release of the Society of Pathologists. The Minister only deigned to see the Royal College of Pathologists last Friday. The legislation had been introduced; it was to be debated today; yet the Minister only deigned to see the Royal College of Pathologists last Friday. There is absolutely no excuse for his failure to consult with the profession and it highlights the depth of division between this Minister and those who are providing these services under his control. This is yet another step in the alienation of the providers of health care from their Government. The Bill has six major areas of interest and I shall refer to each of them. Firstly, the Bill purports to tighten the rules regarding those who can be an approved pathology provider or authority under the Health Insurance Act. Undertakings are required to be given by those seeking this status and any breach of those undertakings can be referred to a medical participation review committee whose membership can now include a pathologist. The second area covered by the legislation is the introduction of the accreditation of pathology laboratories and the limitation of the payment of medicare benefits to pathology services performed in such accredited laboratories. This move has been warmly welcomed by pathologists as a means by which it is hoped that a high standard of pathology practice can be guaranteed throughout Australia. In the States where no State accreditation authority exists, the Commonwealth, through the national association of testing authorities, in conjunction with the Royal College of Pathologists, will undertake inspections. The third major area dealt with by the legislation is the attempt made to prohibit pathology fee splitting and other forms of abuse. The Bill defines allowable pathology services as those which are necessary, not excessive, performed in an accredited laboratory owned by an APP, by or on behalf of an approved pathology provider. The Bill also prohibits reassignment of Medicare benefits and seeks to provide a more effective deterrent to fee splitting and to limit the improper activities directed at generating additional pathology services, whilst specifically prohibiting bribery or other inducements which are designed to generate additional pathology services. We shall have to wait to see whether these changes are effective and, whilst we certainly hope they are, we are concerned that as a result of the lack of consultation with pathologists, who themselves seek to address these problems, the Minister may not have introduced the most effective measures that he could. I refer the Minister to clause 47 of the Bill, which makes it an offence for a pathologist to invite additional tests. I presume the Minister does not intend this section to impact on the real role of a pathologist, which includes advising general practitioners. For example, if a patient presented to a GP with anaemia, the GP may order a full blood examination. The pathology report on that examination might say: `Severe anaemia confirmed, bone marrow biopsy advised'. In other words the pathologists would be providing to the GP a means of identifying why the patient is not making the right number of blood cells. I invite the Minister to respond to this point by giving an undertaking that the normal, accepted and ethical roles of pathologists is not intended to be and will not be put at risk by the application of this clause. The fourth area covered by the legislation is the establishment of the Pathology Services Advisory Committee. This committee will replace the existing pathology sub-committee of the Medical Benefits Schedule Revision Committee. The new Committee will be responsible for recommending the listing, delisting and changing of items on the fee schedule as well as setting prices for such items. The Committee is made up of a Chairman, who is a Deputy President of the Australian Conciliation and Arbitration Commission, three other medical members, and three other members nominated by the Minister. The AMA and other medical authorities believe that the technical, detailed, medical issues to be dealt with by the Committee ought to be dealt with by specialists in the field. In addition, they are concerned about the fragmentation of the fee setting process with the appointment of this special Committee to set fees for pathology, because to do so for every specialty could lead to a chaotic fee setting process. The Minister has not substantiated his claim that the proposed Committee will allow a more rapid and flexible approach to a wide range of fee related matters than the old pathology sub-committee which was under his control and chaired by an officer of his Department. Given the lack of explanation by the Minister and the concern of the profession, we shall closely monitor this Committee's work. One of the concerns, as I said, is that the medical issues dealt with by this Committee should be considered by specialists in the field. The proposed committee could have a majority of non-medical members, depending on the discretionary appointments the Minister may make. The fifth area I want to deal with under the Bill relates to a number of minor amendments. The legislation will allow Medibank Private to use an agent to invest excess funds. The Bill provides for an increase from $1.7m to $2.8m in the amount payable to the States for the transfer of nurse education from hospitals to colleges of advanced education. The Bill also extends the Sex Discrimination Act to various health legislation. This will extend the pharmaceutical benefits scheme to de facto spouses of pensioners and concessional beneficiaries at a cost of around $700,000. We will not be opposing these amendments. The final area of the legislation to which I want to refer is the revision of the pathology fee schedule. The Government has moved to reduce the fees for common pathology tests by 25 per cent, resulting in savings to the Government of between $46m and $47m. The Minister puts forward a number of arguments for this fee reduction. Firstly, he says that a lower hospital pathology rate applies to the tests performed in public laboratories. Generally the rate is 50 per cent of the specialists' pathology rate for these 18 items. The Minister then claims that this means there is an excessive profit component when the tests are billed at the specialist rate. That depends on whether the fees charged by these public laboratories is or is not subsidised-in other words, does it properly reflect the cost of capital, the building, the equipment, and depreciation as well as the full costs of all the recurrent inputs such as labour and materials? I have my doubts about the Minister's comparison and I challenge him to table details of the exact cost of performing these tests in hospital pathology laboratories so that a bona fide cost comparison with respect to the fee schedule can be made. The Minister also said that by international comparison the specialist pathology rate is unreasonably high. He then compares New Zealand fees with Australian fees, which indicates either the depth to which he is prepared to sink in order to try to sell this proposal, or alternatively his inability to comprehend matters economic. Mr Hodges —He could not run a corner store. Mr PORTER —That is probably right, too. Given the blow-out in the Medicare budget, perhaps it is the latter. His comparison of pathologists' fees in Australia with pathologists' fees in New Zealand completely ignores the differences in the standard of living, wage structure and so on between the two countries. The Minister then argues that the 18 tests involved in this fee reduction are high volume, and mainly automated. The Minister also claims that the tests are highly profitable because fees have not been adjusted downwards with the introduction of more productive technology. Let me then review some of the 18 items which are going to be cut by 25 per cent. Items 11-11, 11-12, 11-14 and 11-16 all relate to cross-matching of blood for transfusions. This is entirely a manual operation, very labour intensive and very often done in small batches after hours. The present fees are considered by reputable pathologists to be generally inadequate and there is no reasonable case for reducing them. Items 16-33 and 16-34 relate to blood cultures. They are not automated and not done in very large volume. They require individual processing by hand. I do not have time to go through all the items, but it is quite clear that the Minister's arguments are fallacious. The Minister claims that reducing the fees for these particular pathology tests will remove a significant financial incentive to excessive servicing and other abuses. The Minister of course does not point out why the unscrupulous, unethical practitioners will not just redirect their efforts to more lucrative tests, or increase the number of these tests ordered to make up for the lower fee. Under universal bulk billing those intent on abusing the system are likely merely to change their ordering regime. The Minister took this action at a time when he was due to receive a report from the pathology sub-committee which had reviewed these issues and was to recommend changes to the schedule of fees, including a reduction in a number of fees and changes in some of the other fee arrangements. Some of the reductions in fees that were going to be recommended by that sub-committee have not been picked up by the Minister. Instead of picking up the recommendations of that expert group, the Minister has taken an arbitrary decision to cut these 18 schedule items. In so doing he will impact on the honest and ethical pathology providers, whilst it is likely that the unethical and unscrupulous will merely redirect their efforts. This is not the way the Opposition would have handled this issue. We would have sought the expert advice of those in the field and we would have sought detailed consultation with the profession. Nevertheless, we are not a government in exile and we cannot rewrite the fees schedule. We cannot do that from the position of opposition. Whilst the arguments put forward by the Minister do not support the proposed changes, we accept that some changes are necessary. Therefore, in view of our concern and that being expressed by the Royal College of Pathologists, the AMA and honest and ethical pathologists around the country, at the conclusion of the debate we will seek an undertaking from the Minister that the proposed reductions in these schedule fee items will be the first issues considered by the new Pathology Services Advisory Committee. In conclusion, this is a fairly detailed, complex and technical piece of legislation. It has been drafted without the consultation of the profession and there are grave doubts as to whether it will achieve its goal. We will not oppose the legislation. Nevertheless, we will closely monitor its implementation, especially the work of the Pathology Services Advisory Committee, and the impact that the new fee schedules have on pathology practice. At the heart of the Opposition's concern about fraud and overservicing is the Government's encouragement of such practices by the promotion of universal bulk billing. The Opposition will act immediately to stop this Medicare rip-off by restricting direct billing to pensioners and other health care card holders. The country cannot afford to continue to carry the burden of this Minister's corrupt health system. Mrs KELLY(Canberra)(8.18) —I am very proud to support the Health Legislation Amendment Bill. Rather than criticise the Minister for Health (Dr Blewett), I congratulate him for responding so quickly to the report of the Joint Committee of Public Accounts, and for the consultations he had with the Committee during the drafting of its report. He appeared before the Committee. In my six years as a member of parliamentary committees I have never had such a co-operative Minister to work with, nor has such a rapid response to a parliamentary committee report. I thank the Minister for that. (Quorum formed) Before I was interrupted I was congratulating the Minister for Health on his timely response to the Public Accounts Committee's report on overservicing and fraud. While I am handing out bouquets, I think it also important that we acknowledge the work of members of the sub-committee of the Public Accounts Committee, some of whom are in the chamber at present. I would like particularly to extend the thanks, I am sure, of the Minister to the following members of the sub-committee: The honourable member for Chisholm (Ms Mayer), the honourable member for Calwell (Dr Theophanous), the honourable member for Mitchell (Mr Cadman) and Senators Georges and Watson. The recommendations of the Public Accounts Committee's report have been accepted almost in toto. The Minister responded very quickly to those recommendations because he saw, through the Committee's report, the extent of the problem of fraud and overservicing in the pathology area. The report, which was tabled only a few months ago, revealed what a big business pathology is-worth over $300m a year and growing every year. That has to be of concern to members of this Parliament because that is the money of the Australian taxpayer. So the Government has an important and legitimate role in supervising the expending of that money. The 236th report of the Public Accounts Committee that was tabled in this Parliament really pioneered work in the pathology area and outlined for the first time a profile of the area. It showed the concentration in the pathology area of a great majority of money being spent on a small number of companies. For example, it showed that in the first quarter of last year 25 groups received payments of $44m-in just three months. When broken down further, the figures reveal that seven groups received $23m in payment through the national health system. Honourable members can see why it is important that the Government take a strict supervisory role in how that money is being spent. Again, we must congratulate the Minister for Health on acting on this report. The report identified a number of problems in the pathology area. First of all, it pointed out the changing nature of the pathology industry and the move towards entrepreneurial medicine. The Committee was not critical of the move towards entrepreneurial medicine per se, but it profiled the industry to point out the movement of large amounts of money into a few companies. Big is not necessarily bad, but when money is being directed into such a few hands it is even more important that the Government take a very careful watchdog role. The report also dealt with the difficulties and the deficiencies in the Commonwealth's administration of the approved pathology practitioner scheme, the medical benefits schedule and other responsibilities related to the Health Insurance Act. In its report the Committee provided insights into the nature and concentrated structure of the pathology industry and discussed the consequences of entrepreneurs infiltrating the industry. It critically analysed the approved pathology practitioner scheme, examined the dominance of the high value specialist pathology payments over other ordinary low value benefit payments and recommended the immediate review of all pathology practitioners and their laboratories. All of those major recommendations have been dealt with in the legislation before the House tonight. That is why the Minister is to be congratulated. I will deal with only a couple of areas but I think that they are critical recommendations of the report. The first one is the approved pathology practitioners scheme. Before the legislation becomes law any person can become an approved pathology practitioner for $10 providing that he or she employs a medical practitioner. It is not a difficult procedure. One can post a form and for $10 one can get that status providing one employs a medical practitioner. Before this legislation comes into force, tests can be performed in laboratories without any supervision from approved practitioners. Honourable members can see that it would be physically impossible to actually supervise a lot of the tests. Table 7 in the PAC's 236th report analyses the top 25 pathology groups. They are the ones to whom the great majority of health benefits payments are made for pathology. The Committee wrote to everyone of those companies and asked them how many full time and part time specialist pathologists they employed. It is fascinating to look at the figures. Only four of them employ over 15 pathologists; one 22; one 17, one has 18 and another has 22. The great majority of the rest of them either employ one, five, seven or three: it is round about those figures. Let us remember that these are the companies-there are seven of them-that are getting up to $44m in just three months. Because of the number of full time pathologists employed it is physically impossible to supervise the tests. That was one of the key criticisms that the Committee had of the way the approved pathology practitioners scheme worked. The legislation, which is fairly complex, states that only medical practitioners or currently approved medical scientists can be eligible for APP status and a pathology service must be rendered by an APP or, if rendered on his behalf, it has to be under his personal supervision. What we are trying to do is define what is meant by `personal supervision'. In other words there has to be a reasonable level of personal control and I think that is absolutely critical to reform in this area. Also the service may be provided only in response to requests from a treating practitioner or another APP in writing or orally confirmed within seven days. Only the APP who renders the service can claim for that service either by assignment or by patient billing. This will eliminate the current practice of APPs referring tests to other APPs and claiming for those services. There have been all sorts of rorts in this industry. These changes enforce and specify the responsibilities of the practitioner APP into also determining the necessity of tests. Persons applying for this special APP status will be subject to stricter provisions than those that presently apply. As I have said, at the moment one just has to fill in a form and away one goes. The Minister will not accept an application from a person who has breached any of the undertakings. An APP's undertakings will be subject to annual review and an annual fee. So there will be much closer supervision. When the honourable member for Barker (Mr Porter) spoke on this matter he was critical of the Minister for Health for not consulting sufficiently with the pathologists. However, it is my understanding that the Royal College of Pathologists of Australia supports this legislation before the House. Mr Hodges —The fee cuts? Mrs KELLY —The fee cuts are an issue for the Government but the details, the new changes within the industry, have been the subject of considerable consultation with the College. For example, the Public Accounts Committee has been investigating this matter for four years. For four years we have had consultation. Mr Hodges —We have known about it for ten years. Mrs KELLY —If the previous Government knew about it for 10 years why did it not do something about it when it had the chance? Mr Hodges —Why didn't you do something about it three years ago if you knew about it? Mrs KELLY —I will tell the honourable member why we did not do anything about it. We were not aware of the problem. The Public Accounts Committee's 236th report is the first time in Australia's history that the extent of the problem has been revealed. The reason for that is that it is the first time we have had proper records, which we have been able to get through the health insurance system we have now set up. I hope all honourable members have read the first chapter of this report. It is probably one of the most enlightening and informative documents ever to come before this House. For the first time it has shown the nature and profile of the pathology area. Mr Hodges —It does not recommend fee cuts, though. Mrs KELLY —Obviously the honourable member has not read the report. The recommendation by the Committee that has been taken up is very important. Mr Porter —They welcomed it. I agree with that. Mrs KELLY —I am glad that the honourable member welcomed it. Why did the previous Government not do something about it, if the Opposition says that everyone knew there was a problem? It has taken the Minister for Health to do something about the matter and respond very quickly to this report. When honourable members opposite were in government they would never reply to most of the parliamentary committee reports. This Minister has taken the report seriously and acted quickly. It must be a record in terms of taking a committee recommendation through from placement before this Parliament into legislation. Mr Porter —Have you only just got here? When did you come in? Mrs KELLY —I have been here longer than the honourable member. Let us consider accreditation. Why did we have to have an accreditation system? Obviously, is was essential to provide greater control and supervision over quality in the standards of pathology services. The backyard laboratories, which currently provide very poor quality service, obviously can lead to people's lives being in danger and have to be removed. Ms Mayer —They didn't manage to do that, either. Mrs KELLY —The previous Government did nothing about it. We also wanted to ensure uniform minimum acceptable standards throughout Australia. All States, through the Health Ministers conference, support the introduction of the laboratory accredited arrangements, although some States have been reluctant to introduce the necessary legislation, as was the previous Government. So it has taken this Government to put the recommendations into practice. Again I congratulate the Minister. The Commonwealth will now operate the laboratory accreditation arrangements for States which do not have accreditation legislation. The Commonwealth will accept laboratories accredited to States with accreditation legislation, such as New South Wales and Victoria. Only pathology services performed in an accredited laboratory will attract the Medicare benefits. That is what is critical. One can get the benefit only if one delivers it in an accredited laboratory and there is some way of controlling what that service is. I will not go into any other details, except to return to the first point the honourable member for Barker made about timing and consultation. For the benefit of honourable members who were not present earlier, the honourable member for Barker criticised the Minister for Health on the matter of timing. I could not quite understand the nature of that criticism. I would have thought it would have been a matter for praise that the Minister responded quickly to a committee report which revealed such great faults in the provision of pathology services to patients. Rather than being criticised for timing the Minister, should be congratulated on it. He should also be congratulated, through his officers, for the discussion that has been going on with industry. We have not heard any criticism of the major direction of the report from the College of Pathologists. It has supported it. No doubt there will be some differences between all parties about the fee levels, but it is the role of government to set fees. It is the not the role of the industry to determine what the fee structure should be. On behalf, at least, of the Labor members of the Public Accounts Committee I thank the Minister for his quick response. In politics one spends a lot of time investigating and inquiring and often one does not see quick action in response to all the time one has put into an inquiry. The recommendations before the House tonight show that the committee system is very worth while, and again I thank all the members of the Committee for their support and assistance. I think all those who serve on parliamentary committees are aware of the contribution that staff members make, and before I conclude I would like to pay particular tribute to Mr Peter Mason, who was the clerk of the sub-committee looking at this matter. He devoted a great deal of time and energy to this inquiry and without his efforts I am sure that we would not have had this legislation before the chamber today. I again thank the Minister and thank also all members of the Committee for their support. Mr HODGES(Petrie)(8.36) —The Opposition is generally supportive of the amendments contained in the Health Legislation Amendment Bill 1986 but I would like to advise the honourable member for Canberra (Mrs Kelly) that it was the present Opposition when in government that formed the fraud and overservicing unit within the Department of Health. If anybody stands condemned for not moving earlier, it is probably those bureaucrats within the Department who were well aware of what was happening within the profession generally, and more particularly within the pathology profession, for not bringing these matters more forcefully to the attention of the government of the day. That is not to excuse my Party and the National Party of Australia in government for perhaps not acting a little earlier. We support the approved pathology practitioners scheme amendments, which limit approval to medical practitioners and some medical scientists. We support the approved pathology authority concept. We support the accreditation of pathology laboratories, although I believe that such accreditation could be carried out in a lesser time than the two years proposed by the Government. We support the prohibition of pathology fee splitting and other forms of abuse, and we support the establishment of the Pathology Services Advisory Committee. Personally-the Opposition joins with me-I condemn the Government for its present revision of the pathology fee schedule. This is the stumbling block in this legislation as far as I am concerned. It is unreasonable, it is unfair, and I would even go so far as to say that it is the evil part of this Bill. Let me refer to three of the Public Accounts Committee's conclusions. The first states: Pathology benefits are a significant and growing segment of Medicare expenditure which should be fully accounted for. I agree entirely with that statement. The second conclusion states: There is legitimate cause for concern about some aspects of the nature of the growth in pathology benefits, services and providers pre and post Medicare. The third conclusion of the Public Accounts Committee to which I want to make reference states: The Medicare fees for many pathology services may be inappropriately high, judging by the substantial discounts (e.g. 40 per cent) offered by some private laboratories to other Approved Pathology Practitioners. The operative words there, in my view, are `may be inappropriately high'. It does not state, straight out, that they are inappropriately high, but that they may be. One of the Committee's recommendations states: The procedure for revision and monitoring of the Medicare Benefit Schedule be regularly reviewed to ensure that changes to the Medicare Benefits Schedule are timely and responsive to allegations of widespread abuse, and reflect cost reductions which stem from the development of technology which underlies many Medicare Benefit Schedule items. There is no doubt that there should be regular review of many Medicare benefits schedules. I do not think there is any doubt that there has been some abuse right throughout this nation not only of pathology services that are provided but also of medical services that are provided for which Medicare benefits are claimable. I do not think anybody would disagree with cost reductions due to technology development, but was the profession consulted, as the honourable member for Barker (Mr Porter) asked in his speech? The clear answer is no, the profession was not consulted about these fee reductions. Was a survey made of private laboratories? The clear answer is that no survey was made of private laboratories. Has the Minister for Health (Dr Blewett) ever visited a pathology laboratory? I know that he has been invited to Queensland to visit one of the largest laboratories in Australia, and he has not taken up that invitation. Was a time and motion study carried out? Obviously, the answer is no. Were overheads of private laboratories considered? The honourable member for Barker made reference to these points. Were the cost of the provision of facilities-the buildings in which the laboratories are situated-the cost of the expensive equipment that is used, all the leasing costs and the total scene that is involved in the provision of pathology services considered by the Minister when he decided that the 18 most commonly used procedures were to receive a Medicare fee reduction of 25 per cent? The clear answer is no. I shall tell honourable members why those matters were not considered. Had the Minister and his Department considered them, he probably would not have had a case to slash those fees by 25 per cent across the board for all providers of services in this country. The clear answer to all of these questions is no. It is a very shoddy case indeed that the Minister puts forward. He has not substantiated his case for cutting fees by 25 per cent. What he has done is think of a figure-that figure is about $50m-and said: `I want to take $50m off the pathology bill on the Medicare benefits schedule. That would reduce the total fees payable by the Commonwealth, which amount to approximately $400m, by 12 1/2 per cent or thereabouts, and that is the figure that I will determine. To achieve that, I have to take 25 per cent off the Medicare payments for those 18 most commonly used services'. The ethical providers-there are a number of ethical providers in this country; I hope that the Minister acknowledges that-are being lumped together with the fraudulent operators and some of the entrepreneurs. The Minister ought to have directed his attention to the entrepreneurs, particularly the fraudulent entrepreneurs who have sprung up over recent years in this country. I turn to the second reading speech of the Minister. He quoted from the Public Accounts Committee report. He then said: . . . that there was data showing that at the time they were contacted by a PAC member, few of the top 25 pathology groups in Australia had many full time specialist pathologists on staff. Part time specialist pathologists were associated with 60 per cent of them. The operative statement in that quote is that few of the top 25 pathology groups in Australia had many full time specialist pathologists on staff. The word `few' must mean that some did have, but others did not. The Minister went on to say: . . . the specialist fees for those 18 pathology items appear too high . . . On what basis did the fees appear too high? The Minister said that it was because the professional premium is far more than can be justified by the specialist's professional input. He said: There is also evidence that the fees for the 18 tests, for which there is currently an HP rate, are too high. The costs for some laboratories involved in undertaking these tests are covered by the HP fee, which is currently only 50 per cent of the specialist rate. This means that there is an excessive profit component where they are billed at the specialist rate. Let me return to the Minister's statement that there was also evidence. I ask the Minister: What concrete evidence does he have-I hope he will answer this question when he responds at the end of this debate-that fees for the 18 tests that are currently charged at the hospital rate are too high? He went on and said: The costs for some laboratories involved in undertaking these tests- What an outstanding deduction it is that because some laboratories, to use the Minister's words, are getting the hospital pathology fees, which are 50 per cent of the special pathology rate, those receiving the SP rate are making an excessive profit. What absurd nonsense this is! I ask the Minister whether he or his Department carried out a survey of pathologists to confirm or deny how many full-time specialist pathologists were employed and whether he inquired whether these HP fee recipients were cross-subsidised by full fees or involved in other tests. After all, there is a lot of cross-subsidisation; a lot of propping up by the commonly used services and the claiming for those services with other services that are used infrequently. I ask the Minister: Did the Public Accounts Committee recommend fee reductions? I ask him to point out specifically where it recommended fee reductions. I submit to the Minister that fee reductions will have little or no effect on savings but will harm the health of thousands of patients. I assure the Minister that the exploiters will continue on their merry way. Let us make no mistake about that: The exploiters will soon see that those doctors who refer patients to them will refer more items that are not included in the 18 most commonly used services. I ask the Minister: Why was there not a 10 per cent or 20 per cent reduction in these fees, or even 33 per cent or 50 per cent? Where did the Minister get his information from to substantiate the 25 per cent reduction in fees for the 18 most commonly used tests? That is the question that the shadow Minister, the honourable member for Barker, put to the Minister and I think he should table that information for the information of this House, the nation and all those ethical pathologists who operate around Australia. Did the decision to reduce fees by 25 per cent result from the base cost of public hospital pathology services for in-patients and exclude all collection costs and other overhead costs applicable to private practitioners? This is a serious situation and demands a full disclosure by the Minister. Unscrupulous practices have been in operation, are in operation and will continue in the future, but why are fee reductions necessary? If a practitioner has not been involved in unscrupulous practices, for donkey's years he has been overpaid for those services. Is that what the Minister is saying? Obviously this is nonsense. There are good and bad operators in every area. There are good and bad pathology operators. But with a broad brush of fee reductions all, good and bad, are being treated as unscrupulous. I ask the Minister whether he is prepared to face some of those ethical, professional pathologists eye to eye and to say: `Yes, you have been doing the wrong thing by the system; you have not been playing the game'. Mr Hodgman —He hates them. Mr HODGES —He hates them, as the honourable member for Denison has stated. I turn my attention now to the Queensland operators, because two of the largest operators of pathology services in this country are Queenslanders. The honourable member for Canberra (Mrs Kelly) implied in her speech that because an operator is large he must be doing something wrong. That was a definite suggestion in her speech. Mr Donald Cameron —That's not right. Mr HODGES —As the honourable member for Moreton has said, just because an operator is large it does not mean to say that he is bad or wrong. The two largest operators in this country happen to be Queensland firms which operate throughout Queensland, offering services in country areas, and in northern New South Wales. In terms of turnover and services to individuals they are the largest in the nation. Big is not necessarily bad or unscrupulous, but that is the obvious connotation that the Minister and the Government are placing on big-big is bad. I reject that concept out of hand. Fees should be increased or decreased in a rational way, after proper analysis of all facts. This 25 per cent reduction is ad hoc crisis action by a stupid Minister in a crisis-ridden, incompetent government. Mr Hodgman —Dr Death. Mr HODGES —Dr Death, as the honourable member for Denison says. It is a government that is taking Australia towards-to put it in the words of the Treasurer (Mr Keating)-a banana republic. I suggest to the Minister that he ought to have waited until his advisory committee got under way to review the fees, and not made this ad hoc decision. But no, the Minister wants to save $47m-and he wants to do it now; he does not want to wait and see whether it ought to be saved through fee reductions. He just wants to get it now-probably because he has kept the rest of the specialists and general practitioners in general medicine throughout the nation happy recently by announcing some fee increases, and so he must find the money. Probably the banana republic Treasurer has said to him `Find that extra $60m that you have provided for the profession generally', and the Minister for Health has said: `Yes, I will get it for you, Treasurer, and I will get it by cutting the fees that are going to pathologists'. The two Queensland firms to which I refer are Queensland Medical Laboratory and Drs Sullivan, Nicolaides and Partners. They, incidentally, agree with the general thrust of the recommendations. Indeed, representatives of those firms of pathologists have been advocating changes to the system for many years. The Public Accounts Committee recognises that many pathologists are doing the right thing by the system. Indeed, I think that the Minister would agree that both of these firms are squeaky clean. They are playing the game by the rules. They are not ordering services unnecessarily, and they state emphatically that they will not order services unnecessarily. They are professional and ethical firms. There are about 40 professional pathologists involved in both of these firms. As I have said, the changes will save the Government $47m-it will pull $47m out of the industry at once. That is what this Government is doing. In an industry of about $400m annually, there is to be a 12 1/2 per cent fall overnight. In my view, governments must be more responsible than this. The Government should have directed attention to the problem areas, but what it is doing is throwing the baby out with the bathwater. Mr Donald Cameron —Again. Mr HODGES —Again, as the honourable member for Moreton states. The Government is saying that these across-the-board cuts will affect the ethical and the legitimate operators. That is less than satisfactory. The entrepreneurs will still flourish. As I said earlier, they will have ordinary GPs and specialists refer them patients for tests other than those included in the 18 most commonly used tests for which the Government has now reduced the fees by 25 per cent, just with the stroke of a pen-with no detailed investigation, no consultation with the industry, and no taking into consideration the profitable and unprofitable services that some of these pathologists provide. One can draw an analogy between the actions of this Government in relation to pathologists and these savage cuts in pathology fees, and the abolition of entertainment expenses and the introduction of the fringe benefits tax. Quite similar situations exist. What we have seen here in relation to the restaurant and catering industry and the fringe benefits tax is that circumstances have developed over many years, indeed decades, and yet overnight this Government, without consideration for individuals in business and industry who have built up practices and businesses over many years, has decided on these measures. I ask the Minister for Health whether he would like to have purchased a restaurant recently, perhaps, for $100,000, or $500,000, only to find that its turnover had halved or dropped to an even greater extent than that, and whether he would like to have had the introduction of the abolition of entertainment expenses only to find that his particular business was worth a fraction of what it was when he purchased it. We have that clear analogy in regard to what this Government is about. It is about hitting business. It is about hitting pathologists, hitting restaurateurs, and hitting people who are producing in the nation, producing the taxes. The public generally and business in particular should expect more from their governments than the stroke of the pen that we see and the overnight changes that occur. I wish to refer to the Minister. Earlier I asked him how he would like to be running a pathology practice at the moment-that is, a pathology practice that was run ethically and professionally, in accordance with the rules that have been set down by this Government and previous governments, in situations that have been allowed to develop for years and years. Suppose he was following established practices, charging fees for essential work, not overservicing or being involved in any unethical or fraudulent practices at all. How would he like to have some ivory tower, self-righteous Minister for Health overnight slash fees by 25 per cent for the 18 most commonly used services? I would like the Minister to answer that. In effect, these cuts will reduce pathologists' turnover by about 12 1/2 per cent-- Mr DEPUTY SPEAKER(Mr Mountford) —Order! The honourable member's time has expired. Dr CHARLESWORTH(Perth)(8.56) —As I stand here tonight debating the Health Legislation Amendment Bill, I think about the speech we have just listened to by the honourable member for Barker (Mr Porter). In the past he has told us about the extraordinary costs of Medicare and how the Government should be saving money. Tonight the Government has come to the House with a proposal which will bring about a significant change to pathology services in this country-a change which will cut some of the fat from those services and save the Government some money-yet we hear objections from the Opposition. Of course, the fee reductions are not included in this Bill, but certainly the thrust of the legislation will bring about changes in the industry which should remove any financial incentives that existed in the past. Indeed, we have heard from the shadow Minister the suggestion that unscrupulous and unethical doctors will again take advantage of this legislation in order to feather their own nests. It seems to me that he has a very poor view of the profession. Clearly, in the past the structure of pathology fees has been such that it has allowed a considerable amount of fat in this industry and there is a need to trim that fat. The suggestion by the honourable member for Petrie (Mr Hodges) that because that fat has always existed it should be allowed to continue is absurd. Certainly it is important for us to look at the decisions that are being made by pathologists. Many of them are very important in the cycle of health costs. They affect the subsequent treatment-whether it be drug therapy, surgery, further investigations or further pathology services-and many other forms of therapy are contingent upon the sort of decisions pathologists make. A great deal of training, skill and expertise is required in the pathology profession. The amendments which relate to the provision of pathology services will reward that skill and expertise while taking away some due to the cost efficiencies that have been brought about by technological change and advances in the development of productivity in that industry. The Government has a desire to improve the payment of medical benefits for pathology services and its concern has been that in the past there have been practices within the industry which, in our opinion, were less than desirable. That was confirmed by the Public Accounts Committee, and its report pointed to various forms of concern. Indeed, there was a belief that the schedule was too complex and that payments were too high. Relativities and comparisons with overseas experience indicate that. Certainly there have been significant technological changes in pathology and the encouragement of entrepreneurial practice has been one of the aspects of this high payment. The relationship between doctors and the pathological services has been a matter of concern. Inducements and financial interests were matters that were studied by the Public Accounts Committee. On top of all that, the per capita consumption of pathological services has been growing year after year. Therefore, I would suggest it is reasonable and appropriate for the Government to look at fee reductions in particular areas. Because of productivity developments and technological change and because the old structure had not been reviewed and the old structure of fee assessment had not been successful, it was quite reasonable that a small group of services and items-18 in fact-which were highly profitable, often automated, often done in multiple series and requiring very little involvement of the pathologist, should be looked at very closely. Fee reductions have occurred in those areas. It is important to remember that this legislation sets up a fee setting machinery that will be in place to effect adjustments to the schedule and allow adjustments to occur in that schedule if, in the future, those changes that have been made are seen as being unreasonable. Only the other day I listened to a representative of the pathologists on the radio and he said that he agreed that many of those services had been overly profitable, but his concern was that other procedures that were within the schedule were deficiently rewarded. Indeed, if the schedule needs to be reviewed and if it is not right, we should correct it. But it is not the case that those loopholes and advantages that presently exist should underpin the industry. This fee setting machinery which will be set in place is an important part of that review process. The cornerstone of the new arrangements within this Bill is the approved pathology practitioner scheme. This part of the Bill defines the criteria that will determine the eligibility and conduct of approved pathology practitioners. As the honourable member for Canberra (Mrs Kelly) outlined, it is important that the eligibility, supervision, assignment of benefits and review of undertakings of pathology be scrutinised. Within this Bill and within the establishment of the new scheme for approved pathology authorities all of these procedures and matters will be taken into consideration. There will be a yearly review. The corporate structure of such authorities will have to be established. Approved pathology practitioners will have to oversee the activities of such authorities. Indeed, there will be appeals to the Administrative Appeals Tribunal and the Medicare participation review committees will be able to assess any breaches which occur. Within the legislation there are a number of other measures. Item 955, which is venepuncture, for which general practitioners have received a small benefit under the schedule, has been removed. I think it is true to say that in the past this has provided a financial incentive for doctors to take blood samples and to send them along for pathology. Very often these procedures were undertaken by a nurse. So it is a reasonable and fair measure, I would imagine, for venepuncture to be deleted from the schedule. Certain pathologists' determinable services in the past have been under scrutiny. Again, within this legislation it will be within the powers of the Minister, in co-operation with the College of Pathologists, to restrict such self-determining services. I see no difficulty with that. The accreditation of laboratories, of course, is something that the Opposition supports. It seems to me that this is overdue. It is necessary for us to control standards and quality within this country and indeed the qualifications of staff working within laboratories are important. The decisions people make in these laboratories very often decide life and death matters for patients. Certainly they decide subsequent therapy, so it is important that this accreditation structure should be established. Finally, the establishment of a Pathology Services Advisory Committee is the aspect of this legislation which, for the pathologists, is the most important in determining how their schedule pans out in the future. We plan to set out a new and separate schedule for pathology services. This will allow us to establish the two aspects of pathology services-that of fee levels and that of technological information-under the one roof. It will allow oversight of movements within the schedule. The Pathology Services Advisory Committee, with that evidence and with that information, will be able to respond to those changes that occur within the schedule, respond to technology, respond to improvements and relativities and, with consultation with the industry, I imagine we will have a schedule which much more closely represents the sort of schedule that should exist in pathology. As I have said in the past, there have been significant changes in the structure of pathology in the undertaking of tests. Those changes have brought about some significant increases in the margin for pathologists. It is reasonable that the Government should take those changes into account when striking what it sees as a reasonable fee for pathology services. This legislation sets up a structure to establish a realistic fee setting mechanism for pathology services. It is clear that the relativities of the past have got out of kilter. This legislation will provide an environment to assess and determine the worth of pathology services. These very skilled and dedicated doctors will be fairly rewarded according to their skill and the tests they are undertaking. They must take the responsibility for making important decisions, and the judgments they make are based on their skill and knowledge. I am relieved that we are now finally implementing a structure that will provide a fair remuneration, that we can be fair on the taxpayers, who after all are footing the bill for pathology services, and that we can be sure that the high standards within this industry will continue. I commend the legislation. Mr DONALD CAMERON(Moreton)(9.06) —Whenever we discuss the subject of health these days, the Minister for Health (Dr Blewett) studiously avoids any reference to the fact that the introduction of his socialistic approach to health is the root cause of many of the problems. The cost of Medicare has blown out tremendously since its introduction. For purposes of comparison, I draw the attention of the House to the fact that in 1982-83, the last full year of the Liberal-National Party Government, the Commonwealth contribution to health care amounted to $1.7 billion. That covered hospital care, medical care and pharmaceutical services. The period 1982-83 is not far behind the years 1985-86, when it is estimated that the Commonwealth contribution will be $4.4 billion, minus only $1.2 billion that the Government is ripping out of people's pockets through the Medicare levy. We are seeing an additional Commonwealth involvement to the tune of about $3 billion, or if one takes off the levy about $1.3 billion additional to the figure of only three or four years ago. Labor's health program is running riot again. I was here in the period of the Labor Government from 1972 to 1975. The Minister for Foreign Affairs (Mr Hayden) has now been banished to a portfolio that takes him away from our shores, but he was the Minister who had the ideological commitment then to doing something about health and to nationalising it, as the British have done much to their sorrow. That crusader is now more in Bali, Noumea and Amsterdam than he is on our shores, but unfortunately the present Minister for Health is now allowed to carry on in much the same way. The Liberals in power had the philosophy of recognising that many people could not afford proper cover in the voluntary system that then existed. We took the view that we would look after those people and those who were above that level of income were expected to provide for themselves. The only criticism I would make of the system my Party had in place when it was in power was that there was no shading in provision. Unfortunately, and fairly viciously, one was either in or out. The trouble with the present Government is that Dr Blewett came in. People keep reminding me that he is a doctor of political science and not a doctor of health. Mr Hodgman —He is not a real doctor. Mr DONALD CAMERON —He is not a real doctor. He is one of those funny Adelaide University type doctors. Mr Porter —Flinders. Mr DONALD CAMERON —Flinders University, I am sorry. I did not mean to start a war of the universities. The doctor came in and saw the bath with the baby in it. There was some warm water in the bottom, so he lent over, picked up the whole lot and out they went. Then he brought in this system with which this nation is now being laden and the costs are running riot. People no longer care if they do not put in a component themselves. It is a bit like what happens to the stationery cabinet in this place. Two men have to guard it because one does not pay for stationery in this place. People go in there with their claws out ready to take the stationery, they have the impression it is all for nothing, so the sky is the limit. That is what has happened to Medicare, and that is what has happened to the medical system that the Australian Labor Party brought in in the mid-1970s. Another criticism I make of my own Party in power is that we did not have the guts to tip that right out, because I am sure that in 1975 when the people of Australia voted Malcolm Fraser in as strongly as they did they were saying: `Malcolm, we give you a key to do anything you like, including getting rid of that socialistic system which the Labor Government in those horrible Whitlam years brought into this country'. Ms McHugh —Fraser guaranteed it. Mr DONALD CAMERON —What a stupid guarantee to give. At least Malcolm Fraser kept his promises. The Prime Minister (Mr Hawke) guaranteed that there would be no capital gains tax. He guaranteed a lot of things, and those guarantees were worth nought. At least Malcolm Fraser, unfortunately, kept his promise on that account. That was one of the big blunders he made at that time. What we did not do was revert to the previous system which was based on people looking after themselves and being encouraged to do something towards their own health care. The Health Legislation Amendment Bill 1986 deals with pathologists. When I look at the Minister for Health, who is at the table, I wonder how he would feel if someone said: `Neal Blewett, we will pay you on performance and we will slash your salary by 25 per cent'. I wonder how all those people in his Department, wherever it is in that Canberra suburb, would feel if suddenly the Minister made a pronouncement to them that their salaries were going to be cut by 25 per cent. I wonder how the people in Australia-I know they are all in favour of cutting politicians' salaries by 25 per cent-would feel if the Minister said to them: `Right boys, belts in, we are going to slash your income by 25 per cent'. Does anyone think they would just smile at the Minister and say what a great leader they had? What an easy way out the Minister has taken: Slash, slash, the Wilkinson sword act-go in, cut them, and see what happens. I have looked at the 236th report of the Joint Committee of Public Accounts and I have spoken to the Liberal members on that Committee. They speak with commendation about the contents of this report. They say that it is a very honest and fair report. But that report does not recommend the easy way out that the Minister has taken. It recommends a lot of other approaches to curtailing the overservicing and the fraud that is going on in the arena of pathology. Furthermore, we have tonight the statement by the Society of Pathologists in Private Practice which expresses amazement and disappointment at the Minister. It says in the final paragraph: The Society remains opposed to fraud and overservicing but does not believe that the current legislation is the most efficient or effective way of curbing abuse. Even the doctors are barking. They are saying: `Yes, overservicing is on by a few out there in the community'. The Minister did not even consult those who are the specialists in their own field, who would know better than the Minister, or those who might advise the Minister how it goes on or how it is best fought. He just goes his own merry way, probably having his ears filled with the views of those people who advocated the introduction of the socialist health system, which has already gone amok, and introduces these sledge-hammer approaches. The pathologists are saying that the smarties out there are still going to get around the Minister. The Minister will go close to choking a lot of the legitimate practitioners but will still have a continuing problem. What will he achieve? All he is doing is saving the nation $47m. If I abolished his Department I would save billions of dollars, so do not smile at me like that! Socialised health is the cancer this nation is suffering from. The Minister is going about the problem the wrong way. He is so dogmatic, so single-minded, that he thinks to himself `This is the way to go', and does not even consult those who are on his side. Mr Hodges —He could not even run a corner store. Mr DONALD CAMERON —He is a doctor of philosophy or political science, or something, not a storekeeper. He probably never made it out in the private sector. I just leave those thoughts with the Minister. It is a case of throwing the baby out with the bath water. On behalf of Opposition members and on behalf of a lot of people in Australia, I ask the Minister to lay off because what he has been doing in the last couple of years has not been to this nation's advantage. The honourable member for Barker (Mr Porter) is the second shadow Minister for Health in the last few years. The honourable member for Mackellar (Mr Carlton) developed into an excellent shadow Minister for Health as he really got his sights on the Minister. The Minister for Health smiled most of all when the honourable member for Mackellar was promoted to another portfolio. This was because at that time the Minister was on the run. The honourable member understood the Minister's ideological approach and what motivated him. I also want to touch on overservicing and the zeal with which it is being pursued. I believe-and I am glad the Minister is in the chamber to hear this-that what the Minister is doing is frightening the daylights out of a lot of good honest practitioners. The bad practitioners, who might constitute anything between, say, 2 per cent and 5 per cent and no more of practitioners, are just sitting, looking at the Minister's system and working out ways of ripping it off. But in the meantime a lot of honest doctors who constitute 95 per cent of practitioners are unsettled and are worried about what the Minister is all about. A few weeks ago I conducted a survey of the southern suburbs of Brisbane-from Bulimba out into Mount Gravatt in my own electorate, through to Wynnum and South Brisbane. In all, 120 doctors responded to a series of questions, two of which are particularly interesting. One question asked: Have you been or are you under surveillance or investigation by the Health Insurance Commission because of alleged overservicing? In answer to that question, 15.5 per cent responded, yes; 56 per cent said, no; and 28.5 per cent said that they were not sure. I have already said that I believe that somewhere between 2 per cent and 5 per cent only and no more-it is more likely 2 per cent than 5 per cent-of doctors are into the system and that 95 per cent are above board. Yet here we have 15 1/2 per cent of doctors being investigated. I would now like to draw to the attention of the House a question and the answers which should cause every thinking Australian concern. I asked the following question: Do you consciously reduce the number of consultations with certain patients below that which you would otherwise believe necessary- I repeat the words `which you would otherwise believe necessary'- because of the possibility of being accused of overservicing? In answer to that question, 63 per cent said no and 37 per cent, which is more than one doctor in three, said yes. I conducted this survey to test the water as a result of what some of my constituents were telling me. I refer to some of the elderly in particular who have become dispensable in this nation. The attitude of the Minister and the Labor Government is that those who can no longer work can be safely jettisoned and the quicker they die the better. The way in which they have been treated in regard to the assets test, pensions and everything else is just a trait of the Government. According to the Government, those who are strong and virile and can work for the great motherland should be kept fed and fit but that the old should be thrown out once they reach a certain stage. I started getting calls from people who were worried about their mums and dads. I was told that the local doctor was getting nervous about calling on patients who are aged and housebound. If a doctor made a visit every couple of weeks the Department's computer would register those visits-- Mr Hodgman —Knock, knock! Mr DONALD CAMERON —This would lead to departmental officers knocking on a patient's door, just as happened with the assets test. Medical practitioners fear that a pattern would emerge that Dr So-and-so visited 87-year-old Mrs So-and-so once a fortnight. As a result an officer from the Health Insurance Commission will go to a patient and say: `I am from the HIC, the Health Department. We are here to help you lady. We want you to sit down. Dr So-and-so has been here a lot lately'. The patient will say: `I have not been well.' One can just imagine the conversation. In the meantime notes are being taken so that a case can be built up against the doctor and the doctor gets wind of this. Does the Minister for Health know what doctors are doing? Some of them are so scared of the Minister that when people ring and ask them to call, they have instructed their receptionists to write down details of that call. The Minister has really achieved a lot. His health system is blowing out in so many ways in terms of cost, but on the other side of the coin he is homing in and frightening the decent, honest members of the medical profession, and it is the aged who are suffering. I am glad that the Minister is writing notes, I hope he will apologise when he gets on his feet at the end of this debate tonight. That is what is going on under Medicare. The root cause of the problem has been that the Minister introduced a system that was easily exploited by the unscrupulous. The unscrupulous have had a ball and the Minister is now trying to rein in the costs. However, by reining in the costs he is trampling on everybody-the honest and the dishonest. I was talking at the airport the other day to somebody who is now employed by the Minister's Department. He told me that the average income of a general practitioner a couple of years ago was $37,000. By now that figure may be up to $43,000 or $44,000. The kind of medicine the Minister allows to exist in this country results in comments such as those on page 127 of the Joint Committee of Public Accounts 236th report, which reproduces an extract of an advertisement in the Sydney Morning Herald in July 1985. Remember, on average GPs earn about $42,000. The Sydney Morning Herald advertisement reads: DOCTOR-$100,000 p.a. A major group of 24-hour medical centres requires the services of additional Medical Practitioners. Mr Hodges —Bulk billing has done that. Mr DONALD CAMERON —Bulk billing and entrepreneurial medicine. The Minister has allowed medicine to develop in this country in the way it now is. The average GP earns around $40,000, yet people are advertising salaries of $100,000 per year. Another advertisement states: G.P.-PERMANENT Three (3) experienced general practitioners are required for practices in the Sydney metropolitan area. The conditions are excellent as is the remuneration package which should exceed $100,000 per annum. Only those doctors looking for a long term career in general practice should apply as our patients show considerable loyalty to their doctor and we provide a clear career and security path. This is what it is all about. The Minister has created the scene for all this to happen. I am in no position to make firm comments on the Edelstens of this world, but if suddenly someone started putting velvet around the walls of this chamber I would wonder who had his hand in the till. If soft music played instead of the voice of the Minister for Health, I would wonder what was going on. I make a plea to the Minister for Health to abandon the philosophical road he has been on. It has brought grief and cost to this country in terms of medical care and people are really starting to pay for it. I just hope that the next Liberal-National Party coalition government, which should be elected at the end of next year, with a bit of luck and a bit of determination and drive, will be able to undo a lot of the damage this Government has done in the last three years. If the shadow Minister is the next Minister for Health, I hope that he does not walk away from our philosophical views, as his predecessors then did 10 years ago when we came to office. Mr SNOW(Eden-Monaro)(9.25) —Australian medicine has come a long way since King O'Malley in this House in 1907, speaking of doctors, said `they should cure the patient or have their heads cut off'. All too often it has been the patient who has been metaphorically decapitated, not the doctor. Medicine has had its ups and downs. Health was very much down between 1975 and 1983 when the States were forced into turning back community health through a lack of Federal funding, and two million people had no health cover. The Minister for Health (Dr Blewett) has changed that. The health portfolio was long overdue for someone with his background and knowledge of economics. That is why he is very much appreciated by many members of the medical and paramedical professions, including my pharmacy profession. The Health Legislation Amendment Bill 1986 was brought about by a relatively small group of medical practitioners who have stretched the concept of a fair go beyond reasonable limits. A few entrepreneurial pathologists have harvested funds from Australia's taxpayers, business people, farmers and, above all, pay as you earn taxpayers, and directed those funds into their own pockets. No one would argue with the notion that in a modern society people should have every access to medical technology, particularly as a backup to other clinical evidence. If a patient is displaying symptoms, a caring doctor should be expected to use every test possible which modern science can provide within reasonable limits and thus remove any diagnostic guesswork. Unfortunately there are those within the medical pathology field who have taken this provision beyond its original meaning and reaped a lucrative income. Following public concern over rising costs the Joint Committee of Public Accounts investigated the industry. The honourable member for Canberra (Mrs Kelly) has ably reported on some of those investigations this evening. Among other things, the Committee found that inducements were being made to doctors to order more services than necessary, that some doctors had financial interests in laboratories, that payments were too high for many tests which had been simplified by modern technology and that in the two-tiered fee structure applicable to all but 18 tests there has been an alarming growth in the higher fee tests at the expense of lower fee tests. The Committee found that of the 25 largest laboratories, virtually all tests-between 94.6 per cent and 99.9 per cent-were charged at the specialist rates. Yet 15 of these organisations did not employ a full time specialist pathologist. This points to the question of who really has been performing the tests. I believe that the answer lies in a fact uncovered by the Committee. The Committee reports that doctors have been encouraged to overservice by means such as `providing request form pads which set out combinations of tests which the laboratories were able to perform automatically' and `performing additional tests not ordered by referring doctors'. The answer is obvious. Medical technologists, by using their modern equipment, are able to perform a great range of tests and obtain very accurate results. Technology is moving us down the path, away from specialisation and the time when a specialist was needed even for a simple blood typing which now a first year medical technician does. This leads to a possibility for the near future. We have in the community, trained in pharmacology and pharmaceutical chemistry, a medical group which is respected by the community and very accessible. I speak of community pharmacists. Could we see the time when, with the aid of a machine, a simple piece of technology, the local pharmacist could perform some pathology tests, for instance, dry chemical tests? This scheme would seem to me to benefit everyone except, of course, the current entrepreneurial pathologists. The consumers would have both a cheaper service and a quicker, and more accessible service. Doctors would be able to have multiple tests performed at relatively low cost to clarify their diagnosis. I believe it is something worth thinking about. General practitioners are in a far less lucrative field than are pathologists and it seems to me that they are far more worthy of consideration. I say to the honourable member for Petrie (Mr Hodges), who deplored what he saw as a transfer of income from pathologists to GPs, that pathologists are fair game but GPs are not. I must say that the trouble with some GPs, though, is that they are so obsessed with their own political views that they bolster private pathologists. A number of electors in Eden-Monaro have complained to me that their GPs have channelled their tests to private pathologists. (Quorum formed) I thank the honourable member for Indi (Mr Ewen Cameron) for providing me with an audience. I note that the honourable member for Petrie still has not appeared in the chamber. He deplored what he saw as a transfer of income from pathologists to GPs, but I say to him again that pathologists are fair game and GPs are not. I also mentioned that a number of electors in Eden-Monaro have complained that their GPs have channelled their tests to private pathologists instead of using the pathologist at the local hospital. This can make tests dearer for the patient or the Government, or both, and I urge GPs in country towns to use the local service, the local hospital, where testing facilities are available. Australian medicine suffers from an inability of too many to achieve the ethical attitudes of nurses, physiotherapists and others in the health field, including many doctors. Alan Marshal, when making the Presidential Address to Section D of the Australian and New Zealand Association for the Advancement of Science's Canberra conference in January 1964, said: Medicine is one of the few professions in Australia in which an industrious dolt, as distinct from the able diagnostician, can make at least #5,000 a year. Let us get away from the industrious dolts and get back to the able diagnosticians. I feel that this legislation is a move to that end. Dr WATSON(Forde)(9.35) —I rise to speak on the Health Legislation Amendment Bill 1986. Although this Bill consists of a number of Parts, I wish to concentrate on Parts II and IIa, which propose to amend the Health Insurance Act 1973 in the following ways: First of all, by curtailing fraud and overservicing in the area of pathology services; and, secondly, by reducing certain payments to pathologists. I wish to concentrate on Parts II and IIa because Queensland is in a relatively unique situation, although I must admit, as an aside, that it is probably similar to that in South Australia, where the Minister for Health (Dr Blewett) comes from and where the major part of pathology services throughout a very decentralised State are provided by pathologists in private practice. Before dealing with these matters in detail, I indicate some support for the concept of accreditation. I believe that concept is also supported not only by pathologists in Queensland but also by the Royal College of Pathologists of Australasia. In fact, the point was made by Professor Herdson, President of the Royal College of Pathologists of Australasia, when speaking on the submission the College made to the Public Accounts Committee, that all medical laboratories should be accredited. The only point I make in this line is that the two years provided in the Bill for these laboratories to be accredited is perhaps a little too long. The good laboratories of the private pathologists, at least in Queensland, are ready to be accredited right now. The two-year gap simply gives the individuals that the Minister seems to be concerned about-the entrepreneurial general practitioners or the entrepreneurial pathologists-a further two years in which to milk the system. Let me return to the major issue that I wish to address; that is, the fees issue. This is a major item, because in the Minister's second reading speech some 12 of the 17 pages are directly related to it. Even if I and other people did not think it important, the Minister certainly thinks that it is a major issue in this legislation. As I indicated earlier, Queensland is different. In Queensland we have two major pathology firms-Queensland Medical Laboratory and Sullivan and Nicolaides and Partners-as well as a number of smaller regional firms, some situated in Brisbane and some in the major coastal cities. The major firms provide services to a geographically dispersed area with a low population density and, therefore, their collection costs are quite substantial. I should indicate that those collection costs are nowhere supported or individually funded under any part of the medical benefits legislation. Queensland Medical Laboratory and Sullivan and Nicolaides are two of the largest firms in Australia, with some 40 specialist pathologists. These are not some of those fly-by-night firms which so concern the Minister; they have highly qualified professional, ethical pathologists. They also have about 1,800 members of staff, many of whom are tertiary qualified, with science degrees and post-graduate qualifications. As the honourable member for Petrie (Mr Hodges) said earlier, those firms have been described in numerous places as squeaky clean. That was true even after the Public Accounts Committee's investigations of the pathology industry. They provide a high quality service. They have none of the hidden subsidies that State and Commonwealth laboratories have. They have no subsidised equipment, no subsidised collection service and no subsidised employment practices. In Queensland, the effect of this legislation-the effect of the Minister's wishes-will be a reduction in the specialist pathology fee. This reduction will have the following effects: First of all, it will affect the pathologists' services to patients in both the city of Brisbane and the country areas, since collection, which is already difficult, will be made more difficult and even less economically viable. Secondly, it will reduce employment in these pathology firms as they have to reduce costs in order to cope with the extra impost imposed by this legislation. Finally, like all situations, if we reduce the returns, we will reduce future investment in high quality laboratories, expensive equipment and in individuals who have to acquire the skills that senior pathologists need to acquire. Australia is already flat out, as the Minister for Science (Mr Barry Jones) has often said, retaining its best scientific brains, whether in the medical or other fields, and this legislation will compound that problem in the future. I return to the Minister's second reading speech. Dare I say, as a former professor like the Minister, that if this speech had been submitted as an article to an academic journal it would have been summarily rejected as being poorly argued and because the propositions are totally without any empirical support. Firstly, the premise underlying this speech is fallacious. One cannot argue logically that because some entrepreneurial pathologists and medical practitioners exist and charge inappropriate fees all pathologists charge inappropriate fees. That is simply logically not true. The honourable member for Eden-Monaro (Mr Snow) in his speech seemed to make the same assumption, which is basically false. Secondly, the empirical facts are wrong. I will return to them in a moment. Thirdly, the response of slashing the specialist pathology rate for some 18 items is inappropriate. It is a socialist knee-jerk reaction to a situation which requires some creativity. I return to some of the detail contained in the Minister's second reading speech. Firstly, at page 6 the Minister stated: The 18 tests involved are generally: High volume and mainly automated; highly profitable because fees have not been adjusted downwards because of more productive technology; generally involve minimum specialist input; I intend to deal with these seriatim. Firstly, I deal with the question of high volume, mainly automated tests. This statement is simply not true. I take, for example, item 1014, which is a microscopic analysis of blood fluid, used generally as a test to find leukaemia. The examinations of blood film are generally not automated but are done one at a time by a human looking down a microscope. Some films are examined multiple times. Let us take items 1111 to 1117. That is the general category-not all of the numbers are filled-which relates to cross matching of blood for transfusion. It is an entirely manual operation which is very labour intensive and often is done in small batches after hours. Items 1609 to 1621 are microbiology tests. Cultures have to be grown and tests have to be made to see whether they are sensitive to certain drugs. The tests are not automated but are done in large volume. Items 1633 to 1636 relate to blood cultures. The tests are not automated and are not done in very large volumes; they require individual processing by hand. Items 1668 to 1676 relate to urine culture. The tests are high volume and the fee was reduced previously to recognise this. Again, the tests are not automated. It must be emphasised that the reductions proposed by the Minister will take place from levels already negotiated by his Department and have been adjusted by independent fees inquiries since then. The current reductions have taken place without any consultation with bodies representing pathologists. The changes are arbitrary, will cause massive economic disruption to highly capitalised organisations and in the future will inflate the risk premiums sought by those who wish to enter the pathology services profession. Of course, some of the tests fit into this area. The MBA test is a very common set of tests undertaken by what is called a SMAC machine-a sequential multiple analysis computerised machine. The critical thing, even in these highly automated, high volume areas, is not simply that as many as 120 tests are run in the space of an hour but that, if the tests are to be run at all, they must have a significant amount of high quality control. Of those I have looked at in Queensland, one in every eight tests run through is a quality control test. Every 48 tests the machine must be recalibrated. As the honourable member for Perth (Dr Charlesworth) continues to say, these are supervised by highly qualified technicians, who are mostly science graduates in chemistry or bio-chemistry, and they must be able to understand when abnormal or different results come about. When abnormal results come up, they require a chemical pathologist to analyse the results in detail. It is these, the five in 100 that require in-depth analysis and in-depth commentary by a pathologist, which have spread the cost over all the tests undertaken. The Minister should be aware of that in relation to pricing aspects of many other products, where overheads are spread over the production of all items. The MBA tests are simply no different from any other productive service. The second point made by the Minister was that these are highly profitable services `because fees have not been adjusted downwards as a result of more productive technology'. The honourable member for Perth also addressed this matter in his speech. Unfortunately, he seems to have left medicine some time ago and has not kept up with the politics of his previous profession. This issue was addressed by the Deputy President, Mr K. C. McKenzie, in the 1984 medical fees inquiry. His report stated: As far as economies of scale are concerned . . . they are probably irrelevant with respect to all forms of medical practice, other than pathology and radiology . . . Accordingly I propose to discount fees for pathology and radiology on this ground. The question is what is reasonable. He went on further: I propose to apply discounting of 0.25 per cent . . . That is to the total practice costs. So this issue was addressed in the 1984 fees inquiry. Then in 1985 Mr McKenzie said this in his summary of the 1985 medical fees inquiry: I turn to the proposal in respect of economies of scale in radiology and pathology specialties . . . the material before this Enquiry relates solely to pathology and not to radiology and even in respect of pathology does not provide a basis on which further discounting could fairly and reasonably be applied. So, contrary to what the Minister said in his statement, the issue of fee reductions had been addressed specifically by fee inquiries, and since the 1984 and 1985 inquiries there have been no substantive changes in technology in the pathology area. The third point of the Minister was that generally the tests `involve minimum specialist input'. That comment was extended later in the Minister's statement to imply that the SP fee should apply only when a specialist pathologist personally supervises in detail the performance of the tests or personally performs it. This is an incorrect interpretation of the basis for the SP fee. The SP fee was never intended to have any such connotation. It was introduced to recognise general economic factors involved in pathology services. This is clearly stated in the report of the Pathology Services Working Party, at paragraph 77 on page 29, which I quote: The two levels of Schedule fees were a general recognition of: Economies of practice, differentiating . . . Firstly: those private practices predominantly engaged in referred pathology- that is the case with those about which I am talking- Secondly: the levels and nature of tests in patient episodes, as between patients outside recognised hospitals, and patients of recognized hospitals- And thirdly- the expensive equipment and staffing provided exclusively for the practice of pathology by those in specialist pathology practice. It is absolutely clear that the SP rate was introduced to reflect general economics, not the personal supervision of pathologists. I should also add at this stage that consultation after the tests have been carried out is an exceptionally important part of the service and the two firms that I mentioned earlier, QML and Sullivan and Nicolaides, not only have highly qualified pathologists, but also have world renowned pathologists, one of whom was my former colleague and professor of pathology at the University of Queensland. After-test consultation involves a great deal of time and if general practitioners, who are interfacing with the patients, are to carry out their responsibilities it is necessary for expert advice to be available in difficult areas. Let me address two other interrelated areas which were touched on in the Minister's second reading speech. The Minister said: The proposal outlined will have the effect of . . . removing a significant financial incentive to excessive servicing and other abuses. This simply will not occur. Unethical, entrepreneurial pathologists will simply get around the 18 items that are included in this legislation. The Minister will argue that other sections of the legislation will limit this, but it is easy for unethical pathologists or medical practitioners to order other tests that are not covered by the 18 items that the Minister has hit. For example, they can easily order a folic acid test or a vitamin B12 test or some other item which can be appropriately ordered in the circumstances and which will be charged at a higher rate. This will hurt the professionally ethical pathologists, the ones who do not order additional tests unless they are the deemed tests of which the Minister is well aware. The second point that I wish to mention was touched on later in the Minister's second reading speech. I quote again: A further proposal contained in the Bill is that requests forms issued by the pathology laboratories for use by referring doctors are to be approved by the Health Insurance Commission. He went on: . . . continued approval of forms by the Commission will ensure that any encouragement to medical practitioners to order inappropriate tests should be removed. The Queensland pathology firms-both of which are ethical firms-already have forms which have been agreed to by the Minister's Department because they happen to combine the request form from the general practitioner and the Medicare assignment form. These make no references to tests, as the Minister would have us believe. In the two Queensland cases to which I have referred tests are ordered by general practitioners with no financial connection with either of the pathology firms. While I agree that it is probably appropriate for the Minister to ask all pathology firms to submit approved forms, the fact is that in Queensland they have already essentially done this. In summary, this response by the Minister is a typical socialist response. If the Minister really wants to attack the medical entrepreneurs, he must break the financial nexus between the general practitioner ordering the test and the specialist pathologist. This will not be accomplished by this legislation. It will not control pathology tests. It will reduce the services to patients, particularly country patients in areas such as in Queensland. It will penalise the professionally ethical pathologists while doing virtually nothing concrete to retain control over those whom the Government likes to call the entrepreneurs. Ms McHUGH(Phillip)(9.55) —In rising to support the Health Legislation Amendment Bill 1986 I congratulate the Joint Committee of Public Accounts for its medical fraud and overservicing inquiry and for its excellent and detailed report on pathology. The recommendations in its report form the basis of these amendments to the Health Insurance Act and address the real concerns of the general public and the medical profession to the growing problem of improper practices in the pathology industry. Contrary to what the honourable member for Forde (Dr Watson) said, they will be effective. There have been problems in this area for many years. These problems are not new. In 1977 the Liberal Government introduced legislation to try to control the problems in this area but it did not work. Unfortunately, those few people who have abused the industry have been able to get around these regulations and are still abusing the industry. Our Government has recognised the need to look again for an effective way of controlling these abuses. The amendments in Part II of this Bill are designed to introduce significant new controls over the provision of pathology services and this will greatly reduce the capacity for fraud and overservicing. The Joint Committee of Public Accounts raised a number of particular concerns about the provision of pathology services. I think it is timely to remind the House of some of those. They included a complex medical benefits schedule which encouraged pathologists to perform more tests than were necessary. Payment was too high for tests that were made simple by the introduction of new technology. The prospect of large profits attracted entrepreneurial pathology. Pathology groups provided inducements to doctors to order more tests then were necessary and doctors were found to have financial interests in laboratories which performed their tests. The cost of pathology services has risen at an alarming rate in recent years. Faced with this situation, the Government had no alternative but to institute more appropriate financial and administrative controls over the pathology industry. The measures being debated tonight will reduce Medicare expenditure by $40m in 1986-87 and by $47m in a full year. Let us look at what these new arrangements are designed to do. First of all, they will ensure that pathology tests are performed only in accredited laboratories. These accreditation proposals will mean the removal of backyard laboratories which currently provide poor quality services and the implementation of uniform minimum acceptable standards throughout Australia. What is more, the medical profession welcomes this. Even the Opposition welcomes this. Of course, the Opposition is in a bit of a mess when a very sensible measure like this is brought in by the Government. The Opposition finds it very difficult to cope with. One of the difficulties was very evident tonight, but I will leave it to the shadow Minister, the honourable member for Barker (Mr Porter), to sort out with the honourable member for Moreton (Mr Donald Cameron) his colleague's regret that the former shadow Minister has moved on. The second effect of this legislation-a related matter which has often been talked about tonight-is the reduction in fees which will follow for automated high volume and highly profitable services. The reduction brought about in the regulation of these fees will more accurately reflect the true cost of these tests. The Government believes that, by reducing the profit margin on these high volume tests, it will also reduce the incidence of kickbacks and other unethical practices. There has been a substantial shift in pathology to billing at the specialist premium rate, which returns the highest benefit to the pathology provider. In just five years the number of pathology services at the SP level increased by 111.5 per cent-from 8.08 million to 17.09 million; as if that did not have to be addressed. It is clear from evidence to the Public Accounts Committee that there has been a major shift to payment of medical benefits at the highest specialist rate and services provided by private laboratories have grown faster than those provided by hospital and public laboratories. Under the new arrangements, the Government will reduce the specialist premium, introduce a new other pathologist rate and increase the hospital pathology rate, which will involve a 12 1/2 per cent rise in HP fees for public hospital pathology services. The third effect of the amendments will be to set up a separate Pathology Services Advisory Committee to be established under an independent chairperson. The functions of that Committee will be to review pathology items and fee levels and make recommendations to the Minister for Health. This means that the Advisory Committee will be accountable to the Government, and also that from 1 August 1986 pathology items will no longer be subject to medical fee inquiries, which has been the case for a number of years. The report highlighted some disturbing aspects of the pathology industry, which included the dominance of specialist pathologist benefit payments over other pathologist benefit payments and the nature and oligopolistic structure of the industry. After information received from several pathology groups, including the top 25, the Committee published some general data on the number of specialist pathologists professionally associated with the top 25 pathology groups during the March 1985 quarter. It appeared that few of the large top pathology groups in Australia had many full-time specialist pathologists professionally associated with them during this period; 60 per cent of the top pathology groups had part-time specialist pathologists associated with them at this time. Because the higher specialist pathology fee can be charged if a test is done by or supervised by a specialist pathologist, for most of these top 25 groups most tests they bill at the SP rate may be carried out by others under the `supervision' of a small number of specialist pathologists. There are cases where only one or a small number of full-time specialist pathologists appear to `supervise' many tests billed at the SP rate in different laboratories and locations. Part-time specialist pathologists may be professionally associated with more than one pathology group. The report states that all witnesses to the inquiry have expressed grave concern about the many serious problems that currently exist with both the administration and the design of the approved pathologist scheme. The criticism from some specialist pathologists is that the current scheme is open-ended-that its potential for membership is huge. It appears that anyone at all, as long as a medical practitioner is employed, can become an approved pathology provider. As has been said earlier in this debate, all one needs to do is to ring the Commonwealth Department of Health and ask it to send out a form which one signs and sends back with a fee of $10. For $10 one can become an approved pathology provider. That means that one cannot carry out pathology but can bill for it. As one specialist pathologist made clear to the Committee, pathologists do pathology in laboratories but ordinary general practitioner providers bill pathology. They do not do it, they send it somewhere else, and that somewhere else could be a place that does not meet accreditation requirements or quality control. Whoever owns the business charges the fee for doing that pathology and the GP then bills the patient for something he does not even do and may not know the first thing about. Every patient knows what it is like to get a bill from the doctor and then the bills, many of them, from the pathologist. Under the amendment being presented in this Bill this practice will be stopped. The new arrangements will ensure that pathology tests are performed in an accredited laboratory and that Medicare benefits are paid only to medical practitioners who are natural persons and not companies for tests done in accredited laboratories. The dilemma caused by the overservicing in the pathology area is a dilemma for everyone. It is a dilemma for the Government because of the costs-we pay for the overservicing. It is to be hoped that the actions the Government is taking are sufficient to come to grips with this problem in the pathology field. The Advisory Committee the Government is setting up will constantly review the situation. It is also a dilemma for the medical profession. In their endeavour to practise what is called defensive medicine, many practitioners have been increasing the use of pathology tests as their defensive weapon against possible legal action. And it is a dilemma for the general public, of course, because we as patients must be able to have complete faith in our doctors into whose hands we place our health. The very fact that the Government has found it necessary to introduce these amendments is a condemnation of some sections of the medical profession who are determined to destroy Medicare, but who are also determined to extract as much money as they can out of the system they are hell-bent on destroying. As many of us have repeatedly said in this House, the Government is absolutely committed to Medicare; what is more, so is the Australian community. I have honestly never been able to understand why the doctors oppose it. They make very secure money out of it. To achieve uniformity in Medicare benefits, throughout Australia, the Government is putting in an extra $112m this year. This will simplify arrangements which have been unequal between the States. It will be more equitable and it will remove the current disincentives for doctors to relocate to less heavily doctored States. It is the doctors who will get the money from this particular scheme. The cost of Medicare, which is what the Opposition constantly bleats about, is one which the Australian community can afford. It would do well for those on the Opposition side to remember, as John Deeble has reminded us, that we spend only 7 1/2 per cent of our gross national product on national health. It is a public system which covers everyone. In America, which has a private system with big gaps, 11 per cent of GNP is spent on health, and it is a much higher cost. I commend this Bill to the House. Dr BLEWETT(Bonython-Minister for Health)(10.06) —in reply-I thank all honourable members who have participated in the debate. It seems to me that the only major issue with which the Opposition disagrees is the question of fee adjustments that have been made. I will turn to that in a moment. There are a couple of general comments to be made. As usual, we received one of these diatribes from the honourable member for Barker (Mr Porter) about the alleged costs of Medicare. I must say that after several months his figures seem to be plucked out of the air. They have certainly varied enormously. I take the following examples from his Press releases: On 17 February he proclaimed that Medicare was $250m over budget; by 9 March this had become $300m over budget; but in a Press release on 20 March he mysteriously adverted to a Medicare overrun of only $100m; by April he talked about a Medicare and a pharmaceutical scheme overrun of $148m; and last week he went back to proclaiming an explosion in the Medicare budget of $235m. They are his words. Tonight, he has halved this to $130m. I must say that anybody who over the course of five or six months produces an accounting of Medicare in those terms will be very lucky indeed to be believed. It is true that the honourable member for Moreton (Mr Donald Cameron) did have a bit more sense of the problems and at least got part of the way by making deductions for the money raised by the Medicare levy. If he had gone the full way and also made an allowance for the revenue that is now saved by the fact that there is no health insurance rebate in the tax system, he would have discovered that there had been no significant explosion of costs in Medicare. If we compare it with previous Budgets and as a proportion of the Budget we will see that most of this is concocted nonsense, particularly when we make those allowances which have to be made for the fact that the Government is taking in money from the levy and also is saving considerable moneys which were previously forgone by a health insurance tax rebate. The other general issue raised by the honourable member for Barker was the issue of surveillance and investigation. I would have thought that he would have done something to check out with his colleague, the honourable member for Moreton, that they had an agreed line. Basically, the line from the honourable member for Barker was that somehow the Health Insurance Commission was inefficient and unsuccessful in dealing with overservicing, whereas, of course, the opposite was proclaimed by the honourable member for Moreton who said that the HIC had been so effective that doctors were so nervous that they were now underservicing. It is extremely difficult to be able to put these two positions together. One is saying that our efforts are so disappointing that we are not having any success; the other is saying that we are so successful that doctors are beginning to underservice. Let me say what the correct position is. The latest advice I have is that so far this financial year 14 medical practitioners have been ordered to repay a total of $108,000 because of overservicing. Two of these cases have been finalised, six practitioners have appealed to the Medical Services Review Tribunal, and the other six are still within the time limits in which an appeal may be lodged. A further five, who in previous financial years were required to pay a total of $81,000, have also appealed to the Review Tribunal. There are currently 14 further cases being considered by medical services committees of inquiry. I think in some ways, as the honourable member for Moreton grasped, it is not simply the recovery moneys that are important. Indeed, the whole effort of the HIC has been to deter overservicing rather than to go through this complicated process of taking doctors through the MSCIs. Additionally, for the six months ended 31 December 1985 the HIC has advised me that it has either uncovered or deterred overservicing or inappropriate servicing practices, which saved around $1m. This was through investigation functions and practitioner and claims monitoring. Indeed, one of the advantages of having the investigation surveillance procedures in the HIC is that a whole range of these activities are possible that were not possible for the Health Department, which was forced much more to take the whole matter through the MSCI system. So if we look at the facts about overservicing particularly, we will see that the HIC with a range of activities is having a useful deterrent effect in that field. A number of specific issues have been raised in relation to this Bill. First of all, the honourable member for Barker raised a question about the meaning of the word `invites' in the amendments to section 129aa proposed by clause 47. The honourable member expressed some concern about that. It is obvious that the word `invites' does not cover acceptable practices such as advice and statements of opinion by a pathologist when providing results of requested tests to a practitioner as to the limits of that particular test in ascertaining the medical condition of the patient and/or the need for the practitioner to consider requesting a further specified test. I think there are also instances in hospitals where interns may have been instructed to perform or request the performing of certain tests. These instances would also not be invitations within the meaning of that provision. I think this meaning should also be obvious from sub-section 129aa (5), which provides that it is a defence to a prosecution under section 129aa that the conduct in question was in accordance with the standards of professional conduct generally accepted by medical practitioners. I hope that will help to clarify that point. Some concern was raised about the control I would have in relation to the new Pathology Services Advisory Committee. I point out that the power to make certain appointments to the Committee is limited by proposed new section 78d to a choice from nominees put forward by the Australian Medical Association and the Royal College of Pathologists of Australia. The power to remove members is limited to the circumstances outlined in proposed new section 78h. So there is a considerable limitation on the appointments the Minister can make. In addition, let me add that there is a power for the Minister to issue guidelines for the Committee and the Bill provides that these guidelines must be tabled in the Parliament and are subject to possible disallowance. I would, of course, be consulting bodies such as the Australian Medical Association and the Royal College of Pathologists of Australia in drawing up these guidelines. Moreover, the Minister can refer matters to the Committee. Indeed, I propose to request the Committee at an early stage to undertake a full review of all the items and fees in the new pathology services table. That may again answer one of the issues raised by honourable members opposite. The Committee also has the power to make recommendations on matters without a reference having been made by the Minister. It might choose to do so if a body such as the AMA asked it to do so. There is also nothing in the Bill to prevent members of the Committee being members of other committees or discussing matters outside the Committee, although the Committee may in some cases agree that this not occur. This capacity for outside consultation by members should enhance the Committee's decision-making processes. I was asked whether a survey was being conducted in relation to settling the fee issues. I have to say that no survey was conducted. However, I think honourable members will know that the AMA has not been prepared to co-operate with the Government in surveys to establish the costs of medical practice. A question was raised about the problem of moving to the Pathology Services Advisory Committee rather than using the current Medicare system we have for handling pathology changes. There are reasons for believing that this will be an improvement. Debate interrupted. Mr DEPUTY SPEAKER(Mr Keogh) —Order! It being 10.15 p.m., I propose the question: That the House do now adjourn. Dr Blewett-I require that the question be put forthwith without debate. Question resolved in the negative. Debate resumed. Dr BLEWETT(Bonython-Minister for Health) —I was pointing out, in answer to queries raised by honourable members, why we believe that a separate mechanism to handle pathology changes will be an improvement on the present system. First of all the current Medicare benefits revisions schedule sub-committee is unable to respond quickly to new technology, that is, to effect appropriate changes in services and associated fees. This implies that the current mechanism for rendering pathology changes is unsatisfactory. Recommendations are made to the Minister by the Medicare benefits schedule revisions sub-committee following previous consideration by the pathology sub-committee. The current arrangement for fees inquiries has, since November 1979, applied the same fee increase to all divisions of pathology without regard to relativities. The new committee will incorporate the functions of the medical fee reviews which, while held annually, had to be negotiated with the AMA. As we all know, the AMA has tried to insist that the Government bind itself to accept the recommendations of that review without accepting that its members should also be bound. We believe generally that this way of tackling the matter, by treating pathology separately, will address a whole range of problems much more efficiently, much more quickly and much more flexibly than having them addressed through the old system. One other general point was raised and that was the question of consultation. When I met the College of Pathologists the other day it thanked the Government for the extensive consultations that there had been on this matter. My officers had met with the college a number of times in relation to the report of the Joint Committee of Public Accounts and the college thanked me for the co-operation it had received from the offices. This is not to say that either the college agreed with all of the proposals that we made or that we had discussed with it the issue of fees because, as other speakers have pointed out and as I pointed out to the college, this decision was made in the Budget context. It was not an issue that I was able at that stage to discuss with the college. I also point out that there are one or two other matters of detail in this measure which, because of later changes and alterations, the college had some disquiet with. I have said to the college that we will monitor very closely those issues about which it expressed some concern. If there are problems, I have indicated that the Government would be prepared to meet any worries the college may have, and, if necessary, make changes in those sections. Let me turn to the one issue which has aroused, I think, the only criticism in this debate and that is costs. We were influenced in this decision very much by the general concerns expressed by the Public Accounts Committee. One can identify at least three concerns in relation to fees arising out of that Committee. The first concern was that fees were too high for many tests that were made simple by the introduction of modern laboratory equipment. The second concern was that the Medicare benefits schedule was too complex and it encouraged pathologists to perform more tests than were necessary. The third concern was that the prospects of large profits had attracted entrepreneurs into pathology. As part of our exercise we examined fee structures for pathology in a number of other comparable countries. I think that New Zealand is a very good example to look at when looking at fees in a comparable country. When I say `comparable country' I accept that there are some differences in the cost of living in New Zealand but in terms of medical relativities, for instance, the fees paid to GPs in New Zealand are much the same as those paid to GPs in this country. When one looks at the differences in the fees structure between this country and New Zealand, New Zealand would have to be an extraordinarily undeveloped society to explain the enormous differences that occur. The haematology fee in this country is $25.20; at present the New Zealand fee is $NZ7.79. In the area of biochemistry one test in Australia costs $17.20. In New Zealand it costs $2.60. Three biochemistry tests in this country cost $28.50. In New Zealand they cost $6.20. Five biochemistry tests in Australia cost $28.50. They cost $11.40 in New Zealand. Urine cultures in Australia cost $32. In New Zealand they cost $11.22. They are exactly the same tests performed under the same conditions by the same sorts of machinery. Allowing for the exchange rate, the contrast would become even sharper. The difference would be even greater. That is one guide to the extraordinarily high charges for some of these tests in Australia. In relation to some specific points made by the honourable member for Forde (Dr Watson) and addressed in some detail, many of the tests he mentioned-for instance, the blood films, the blood cultures and other cultures-are not yet automated tests. However, new equipment is now available which automates them and which is already beginning to be used. Again, most of the tests the honourable member referred to have very little pathologist input. One can go through all those tests and find out that in most cases they have very little specialist pathologist input. Despite the remarks made by the honourable member, I still say that the SP fees he mentioned were at least in part related to the fact that specialists were very heavily involved. In fact, specialist pathologists are involved in very few of the total number of these tests. In regard to nearly all of the tests the honourable member mentioned and to many of the tests talked about in documents which have been circulated to honourable members, what is not acknowledged is the fact that a great number of them are done in combination. For instance, most blood matching is done in relation to other blood tests. Therefore, the single collection provides not only for these highly automated tests but also for many of the other tests that are done on the same blood. It is important to recognise, as I have said, that a great number of the tests mentioned by the honourable member for Forde are done in association with other tests. One could go through the statistics, which have been carefully looked at by my Department, and find the proportion of tests that are done in association with other tests, therefore very much reducing overhead costs. What has happened as a result of the very high payments for these tests and the very high profit levels that are possible is that a lot of the surplus money has been used in providing highly competitive advantages to firms. For instance, if one looks at some of the statistics one finds that something like 25 to 30 per cent of the cost comes from collection costs. Extraordinary collection systems have been set up, paid for by the taxpayer, in order to give firms competitive advantages. I do not believe that those costs can be justified. If this legislation leads to some rationalisations in those areas, it will be a very good thing not only for pathology in this country but also for the general Medicare bill. Much criticism has been made of this Government for overruns in Medicare benefits. This legislation is one very clear and direct way of addressing them in relation to one area of the Medicare benefits schedule where there is clear evidence of excess profitability. I finish by reading a letter from an ethical specialist pathologist running a fairly large laboratory who, I think, exemplifies the very best in the medical profession in his response to these measures. It is a very courageous letter which he has given me permission to read in this House. It reads: Dear Minister, Consequent to findings by the Joint Parliamentary Committee of Public Accounts on Medical Overservicing in Pathology, your government is enacting inter alia a reduction in schedule fees of pathology tests by 25% for the most commonly performed tests. There is widespread opposition to this fee reduction by pathologists in private practice. As a specialist pathologist of some thirty years standing operating my own private practice in Sydney, currently employing about 100 staff and serving upward of about 300 doctors, I feel you might like to know that there is at least one pathologist who approves the principle of the measure you propose. Pathology is a desirable and necessary scientific adjunct to the proper practice of medicine and has until recent years been an honourable profession requiring years of specialized training on the part of both the pathologist and the technologist. But today the profession is seen by the public as an industry motivated by gain, given to unethical practices like overservicing and actual fraud. To the disgrace of the profession there is a big element of truth in this. Now that we have a National Health Service, the cost of medicine is borne by taxpayers, and you act properly as Minister to protect the taxpayer from those abusing the system for their own pecuniary gain. In addition, you are upholding the true cause of medical science and acting to restore public confidence in the medical profession and pathology in particular. Those dedicated to medicine and pathology will support you for doing what the profession has been unable to do for itself. I look for continuing scrutiny of the effectiveness of the measures to reduce the attractiveness of pathology to the entrepreneur. If it will be of any help to ascertain the costs of providing a service in a medium-sized, large automated laboratory, or any other purpose, then my laboratory and its books are open to you or your representatives. Mr DEPUTY SPEAKER(Mr Keogh) — Order! The Minister's time has expired. Question resolved in the affirmative. Bill read a second time. Message from the Governor-General recommending appropriation announced. The Bill. Dr BLEWETT(Bonython-Minister for Health)(10.27) —by leave-I move: (1) Clause 14, page 8, lines 16 to 19, omit the clause, insert the following clause: Medicare benefit in respect of 2 or more operations ``14. Section 15 of the Principal Act is amended by inserting in sub-section (4) `general medical services' before `table'.''. (2) Clause 15, page 9, line 5, insert ``whom'' after ``by''. (3) Clause 15, page 9, line 11, insert ``whom'' after ``by''. (4) Clause 15, page 9, line 27, omit ``7'', insert ``14''. (5) Clause 15, page 9, line 40, insert ``whom'' after ``by''. (6) Clause 15, page 9, line 42, insert ``whom'' after ``by''. (7) Clause 17, page 11, line 24, insert ``whom'' after ``by''. (8) Clause 19, page 24, omit ``7'', insert ``14''. (9) Clause 19, page 24, lines 10 and 11, omit ``, or is deemed for the purposes of section 16a to have made,''. (10) Clause 19, page 24, line 16, omit ``7'', insert ``14''. (11) Clause 19, page 28, line 8, omit ``as the period''. (12) Clause 19, page 30, after proposed paragraph 23do (5) (a) insert the following paragraph: ``(aa) a decision by the Minister varying or revoking an approval given under sub-section 23dn (1);''. (13) Clause 35, page 40, line 22, insert ``to establish'' after ``required''. (14) Clause 37, page 41, line 38, omit ``practitioner'', insert ``authority''. (15) Clause 37, page 44, line 42, omit ``it appears to''. (16) Clause 37, page 44, line 43, insert ``has reasonable grounds to believe'' after ``practitioner''. (17) Clause 37, page 45, line 7, omit ``it appears to''. (18) Clause 37, page 45, line 9, insert ``has reasonable grounds to believe'' after ``practitioner''. (19) Clause 40, page 47, line 5, omit ``10'', insert ``28''. (20) Clause 73, page 55, before paragraph (1) (a) insert the following paragraph: ``(aa) by inserting in paragraph (3) (b) `or such later day as the Minister determines' after `that year' (first occurring);''. As I indicated when speaking on the second reading, there are a series of technical corrections, many of them of a grammatical nature and several of them of a clarificatory nature, to be made in this Health Legislation Amendment Bill. There are also one or two which alter the time periods to which the Bill applies. It is probably unnecessary form to go through each of these amendments and so I have moved them as a whole. If anybody wishes to raise issues about particular amendments, I will be happy to respond to them. Mr PORTER(Barker)(10.28) —I want to raise a number of issues, firstly in response to the claims of the Minister for Health (Dr Blewett). He criticised my initial remarks during the second reading debate by suggesting that the estimates I had given of the blow-out in the Medicare budget were erroneous because different figures had been cited. He then purported to quote from a number of my Press releases. Of course, different figures have been cited because they refer to different things. For example, I think on Friday I said that Federal medical, pharmaceutical and hospital outlays are blowing out at a rate 70 per cent greater than projected. A serious explosion in the Medicare budget of $235m this financial year has been confirmed by the Department of Finance statistics. In other words, the blow-out of $235m in that instance referred to medical, pharmaceutical and hospital outlays under the Medicare program. It was patently obvious from the Press release. Later in that same Press release I cited the blow-out in the medical benefits portion of Medicare. Department of Finance figures show that the blow-out is currently $107m. On an annual basis, that would amount to $130m. Again, I quoted and specified the sections of the Medicare Budget to which I was referring. The Minister said that they were all different figures. They are indeed different figures. They relate to different parts of the total Medicare budget. He indicated that I was wrong when I suggested that the Health Insurance Commission investigation section had not recovered any money for overservicing. At that stage, I was pointing out problems that the Opposition sees in the bulk billing system which in fact encourages overservicing. The Minister responded by saying that that was all wrong and he gave us a whole lot of figures relating to money that the Health Insurance Commission had raised as a result of recovering moneys for overservicing. I do not know when all these things are happening. I put questions on notice, through my senatorial colleagues, to Senate Estimates Committee B. I have the report of that Committee in my hand; it is dated May 1986. The Department of Health when questioned about the recoveries for the first half of 1985-86, said that in the area of overservicing, no recoveries had been made in 1985-86. Mr Rocher —Who is telling the truth? Mr PORTER —That is the point. Who is telling the truth. I ask the Minister: What more can I do? I said that no recoveries had been made in the first half of 1985-86. I have quoted from the Senate Estimates Committee Hansard report in which the Minister's officers responded to questions placed on notice during the Senate Estimates Committee hearing. But the Minister came into this place and said `They are all wrong; in fact we have recovered $1m'-or whatever the figure was. The fact is that the Minister just cannot be believed. In relation to the point I raised that the Minister had not consulted with the Royal College of Pathologists of Australia, the Australian Medical Association and others in relation to this legislation, the Minister said: `Yes, we have. We talked to them about the PAC report'. I have no doubt that the Minister talked to them about the Public Accounts Committee report on medical fraud and overservicing, and indeed he should have. But there is a bit of difference between the PAC report and this legislation. Today, one of the larger organisations of pathologists-the Society of Pathologists in Private Practice-said that firstly, there had been no consultation, secondly, that it wanted some action and, thirdly, that it had asked why the Minister would not implement the PAC report recommendations. The Minister has yet to tell us why he will not implement them. Sure, he has picked up some of them, but what about the rest. What is he doing with them? When will he tell us? He says that there have been consultations over the PAC report. I do not know who the Minister consulted with, because the organisations do not know. I come to the amendments. The amendments that the Government has moved are a bit of a laugh too. They show good administration and great consultation; the Government has really discussed this issue and thought it through! Amendment No. 12 is an amendment to an amendment to an amendment, because the Government got it wrong and then corrected it when it was being passed around. I move to amendment No. 13. The Government wants to add the words `to establish' after the word `required' in line 22 on page 40. There is no word `required' in line 22 on page 40. So even the amendments are wrong. This is really just a classical example of the total chaos in the administration of health under this Government. Mr Hodgman —This is Canberra, not Moscow. Mr PORTER —One really wonders about that at times, with this Minister. The Australian community is suffering under the worst health system that we have ever had in this country. More people are now waiting for urgently needed hospital beds than ever before in this country. More money is being spent on the provision of health services and more people are dissatisfied with them. It is no wonder that the recent polls in April indicated that the second most important issue of concern to the Australian population is health. This Minister has failed the Australian people. He has failed providers of medical services in this country. He has failed members of the community who rely on this Government and on the medical services provided by it. There is enormous discontent in the community about the cost of medical services provided by this Government-non-existent services in many cases, or, where they are being provided, the low standard of service. I repeat: Never before have we been in a situation in Australia where the cost of medical care is growing so fast and at the same time so many people are unable to get into much needed hospital beds. The people affected are those whom this Government purports to represent-pensioners, low income earners and unemployed. They are on the end of the queue for public hospital beds because they cannot afford to take out private insurance, but are supposedly covered by the Medicare arrangements. They are supposed to be covered but they cannot get beds. It is a very serious situation. The Government has let down badly the Australian community. On attaining government we will ensure that the cost of medical care in this country is contained; that people who need assistance will get it; and that access is available to hospital beds. Mr McGAURAN(Gippsland)(10.37) —The Committee is considering some 20 amendments to the Health Legislation Amendment Bill. These 20 amendments reflect very poorly on the competence and level of administration displayed by the Minister for Health (Dr Blewett). That should come as no surprise to any member of this chamber or to any of the almost 27,000 people in Victoria alone who are on hospital waiting lists. In the course of the Minister's summing up at the end of the long debate on this legislation he trotted out the good old bogeymen in the eyes of the Australian Labor Party-the doctors and pathologists. The Australian Medical Association came in for its ritual bashing in this chamber by this Minister, who has an ideological hatred of that body, which represents the doctors of this nation. The Minister used the report of the Joint Committee of Public Accounts to club them about the head. For some months I served on that Committee's inquiry into overservicing and fraud. I make two points abundantly clear to the Minister. Firstly, no matter how hard we tried in the initial stage to define overservicing, we were utterly unable to come up with a definition. Secondly, we were utterly unable, despite our best efforts, to estimate just what overservicing amounts to each year. The Minister's Department was able to give a rough definition and a rough estimate of figures. Nonetheless, for the Minister to rely heavily on that report to tar the whole profession of pathologists with the one brush is utterly inaccurate and unfair. So long as the Minister remains on a war footing with the medical profession in this country, we will not wipe out the worst abuses of, firstly, his system of Medicare and, secondly, what fraud and overservicing exists. Quite frankly, only a fool would argue that no fraud or overservicing exists; the debate is only as to the extent. It needs to be said, as the shadow Minister, the honourable member for Barker (Mr Porter), has said on numerous occasions, that the overwhelming majority of doctors, pathologists and other specialists are honest and display the ethics and honour expected of their professions. The Minister can talk all he likes about fraud, overservicing and related problems, but the root cause-in fact, the motivation-for what fraud and overservicing exists is Medicare, with the lunacy of bulk billing. Until proper signals are sent to consumers as to the cost of health services, there will be a ballooning of costs under Medicare. The prime responsibility, not just for the imperfections of the health system and all the pain and suffering that is caused to people as they wait to get into hospitals, but also for the fraud on the system, lies with the Minister's ideological commitment to Medicare. Like all members of parliament, I have had people come into my electorate office-mostly frail and elderly people who are less able to care for themselves, but like many others in society-who have been told that they must join a long queue for a hip replacement operation or for treatment for many of the ailments from which we do not want anyone to suffer. So long as the Medicare system wreaks turmoil in our hospitals, these people will continue to visit our electorate offices and we shall be unable to assist them very much at all, at least in most cases. In conclusion, I simply say that there are people who are dying whilst waiting for operations, particularly coronary operations, on the long lists in our public hospitals. There are people dying over the six to eight months waiting period which is required for a number of bypass operations in some Melbourne hospitals. It is an intolerable situation. It is a national disgrace. If the Minister will not honestly look at the failings of his own system and seek better ways with the co-operation of the medical profession, that situation will only worsen. Mr HODGES(Petrie)(10.41) —The Minister for Health (Dr Blewett) has again tonight been at pains to defend Medicare-a system which is really indefensible. It is a disaster on two fronts. I am sure that the Minister knows both of them, but I will remind him and the chamber. It is a disaster, firstly, financially. When this particular legislation was introduced and Medicare came into being in February 1984, he stated in clear and unequivocal terms that the levy would account substantially for the expenditure. The levy, after two years, is bringing in $1.28 billion, and Medicare is costing this country $4.3 billion. Where is the shortfall coming from? It is coming from Consolidated Revenue. The levy ought to be 3.4 per cent at the moment. There is a massive shortfall, which is being met out of Consolidated Revenue-and the Minister told this Parliament that it would be substantially funded from the one per cent levy. Let me look at the second front. Medicare is supposed to provide a service. For the ordinary visits to doctors, it is a simple process. However, as the honourable member for Gippsland (Mr McGauran) has rightly pointed out, and as have other honourable members, including the honourable member for Moreton (Mr Donald Cameron), when it comes to simple services and bulk billing, it is a complete disaster. Firstly, however, let me take up the point about elective surgery. Medicare was supposed to provide a service for Australians in public hospitals. The Prime Minister (Mr Hawke) was at pains to tell us that; indeed, I think that he notified all Australians that Medicare would provide a hospital bed for them when they needed it. Yet there are up to 60,000 Australians at present who cannot get elective surgery. I recently spent a couple of hours at Royal Melbourne Hospital and I spoke to some of the specialists there. The Minister ought to talk to some of them. Elective surgery is really something of the past. The only people wanting operations who are treated are the acute patients. Is it any wonder that people are returning to private health insurance, through which they can attend a private hospital, have a doctor of their choice and have their elective surgery done. Let me look at bulk billing, which is the so-called great achievement of the Minister for Health. Bulk billing means that doctors take a 15 per cent cut in their fees. They have no bad debts. They have fewer administrative costs. They get prompt and sure payment from the Government. Let me point out to the Minister, if he has not already worked it out-it is rather simple arithmetic-that a doctor has to bring patients back only once in every seven visits and he has picked up the 15 per cent that he has lost through bulk billing-and do not think that doctors do not do that, because they do, and the Minister will never detect it. While there is no patient contribution, that is what will happen. The patient does not see the bill, the doctor does not care, the doctor brings one in every seven back-indeed, some doctors bring back two in seven, or three in seven, and they are doing quite nicely out of it. That is bulk billing-a simple, easy practice that allows doctors to bring patients back without the patient knowing what the cost of the visit is; and, indeed, he does not even care in most instances what that cost is. As I pointed out, it is very easy for the doctor to compensate himself for that 15 per cent loss in fees which he incurs when he decides to bulk bill. The patient pays nothing and he is not likely to object to the extra treatment. What patient will say to the doctor: `I am sorry, doctor, I do not believe that I need to come back'? He will say: `You have asked me to come back and your judgment is better than mine'. Do honourable members opposite think that patient will say: `I am sorry, I will not come back because I will incur an extra bulk bill fee for you which will be paid for by the taxpayer'? What a lot of nonsense. Of course bulk billing is an utter disaster. It should be outlawed and the quicker this happens the quicker the costs will come back to a reasonable level. The patient must know what he is being charged for. He gets no itemised account and he does not care. If bulk billing were abolished the patient would be more careful about visits to the doctor and the doctor would think twice about bringing the patient back because that patient would have to pay something. Also, that doctor would think twice before he referred a patient to a specialist or pathologist. That would help to eliminate what I term the gay abandon attitude of both the patient and the doctor because it is all free anyway. It would help to break down the attitude that this Government is paying and that the Government has a bottomless pit of funds. That is what the socialists in this country are doing. They are saying: `We have a bottomless pit of funds, nation come and share in it; patients, go to doctors without any thought to the costs'. Doctors are saying: `Patients, please come back again because it is costing me nothing and it is costing you nothing'. I wish to return to the 12 1/2 per cent cuts that will reduce pathologists' turnovers. If the Minister does not know it-and he would not because he has no appreciation of business-that means that the 12 1/2 per cent cut will come off the top of the business, straight off the profits. If self-survival motivates pathologists-and I am sure that it will-they will sack employees and cut back services. They will, perhaps, bulk bill fewer patients in order to pick up more fees by way of the gap, but generally they will rationalise their operations. It is as simple as that. It will be a matter of self-survival and those are the sorts of things that will happen. It should be a prerequisite for all politicians and senior bureaucrats to have some practical business experience. It is scandalous that people with so much power in determining what happens to business, often with the stroke of a pen, can make such decisions without really knowing or caring. That is the key point-they do not know and they do not care about the consequences of their actions for those businesses. The Minister has never been in business and he would not know any of the pressures or worries associated with conducting a business or a doctor's practice. He is a pedantic, nit-picking academic failure as a Health Minister. Mr HODGMAN(Denison)(10.48) —I rise briefly because, thanks to the Medicare system imposed on the people of Australia by this Government, there have been deaths in Denison. Like the honourable member for Petrie (Mr Hodges), who preceded me, I can bring to mind two cases of patients who died before they could get into hospital for elective surgery. The Medicare motto under this Labor Government has become `death first, hospital second'. That is the situation to which honourable members opposite are party. I raise this point on behalf of two families in my electorate. I might also add in passing that I had a phone call from a major in the Salvation Army whose parents were in the home State of the honourable member for Perth (Dr Charlesworth) and who had been trying to get into hospital for hip surgery for nearly two years. Nobody will raise a finger and those two old people will have to pay and pay-if they can get in. The honourable member for Barker (Mr Porter) said that there were 100,000 on the waiting list and the honourable member for Petrie mentioned 60,000. I am told that on the entire waiting lists there are about 100,000 people. The Government's bulk billing is an absolute and monumental disaster. It is a rip-off about which members of the Opposition have warned over and over again. However, the doctrinaire socialist intellect of the Minister for Health (Dr Blewett) and his total failure to understand the basic principles are such that his arrogance exceeds his ignorance. He has put a $4 billion albatross around the necks of the taxpayers of Australia. This is the health service that he and the Prime Minister (Mr Hawke) proclaim as being the best in the world. Finally, I take the opportunity in the remaining 15 seconds to reject the smear the Minister has cast across every pathologist in this country. What he has done in this debate and what he has done in his public statements is deplorable. On behalf of all the pathologists in Tasmania, I say-- Dr Charlesworth —Ha, ha! Mr HODGMAN —The honourable member for Perth can laugh. As I said before, he is a far better hockey player than he will ever be a politician. On behalf of all the pathologists in Tasmania, most of whom I know personally and all of whom I know by repute, I reject the Minister's smear as an unwarranted and dishonourable attack on an honourable profession. The sooner we get rid of him, the sooner we get rid of the Hawke socialist Government and the sooner we get rid of Medicare-the worst health care system in the world-the better. If anybody in this country wants to see how socialism can go mad, how socialists can bring about hardship and deprive people, resulting in people actually dying, Dr Blewett will be remembered for many years, and the memory will not be pleasant. Dr BLEWETT(Bonython-Minister for Health)(10.52) —This opportunity to debate the amendments to this Health Legislation Amendment Bill 1986 has brought a lot of strange creatures out of the woodwork. Obviously most of them did not listen to what I said. I challenge the rhetorician from Denison to go through my speech and find any smear whatsoever of pathologists. Indeed, if the honourable member for Denison (Mr Hodgman) bothered to listen to the speech, if for once in his quite foolish life he had listened to what other people say, he would have heard that during that speech I praised one particular pathologist as an outstanding example of that profession. I also praised the co-operation we had from the Royal College of Pathologists. Indeed, it would be worthwhile his listening to what other people say before he gets up and makes his nonsensical speeches. That comment applies to most of what has been said in the last five minutes. I am glad that the honourable member for Barker (Mr Porter) made some effort to clarify his statistics, though when he goes back to the figures he is still going to have some particular problems with the things he has said over the last four months. I doubt whether anyone else can, but he may be able to somehow make all of those figures consistent. One thing I did interestingly learn from his speech tonight was that the pharmaceutical benefits scheme which was developed by the Liberals-we have not changed that pharmaceutical benefits scheme in any significant way-has somehow become part of Medicare. That is an interesting development that we have learnt. If he had listened to what I said about surveillance and investigation, he would know that I was not claiming that there had been high collections of moneys recovered during 1986. I pointed out to him that I did not think that the Health Insurance Commission should be judged simply by that collection. I pointed out the latest statistics of the number of cases this year in which doctors have been ordered to pay back money to the Health Insurance Commission as a result of decisions in relation to overservicing. That money, of course, has yet to come in. There are appeals and other procedures. If he had listened to what I said, he would have understood quite clearly that I was not making any contradiction whatsoever of any of the documents he had before him, but was giving him what I thought would be useful information of the decisions which have been made as a result of HIC action by the medical services committees of inquiry. I made it quite clear that those moneys have yet to be collected because in many cases these doctors have appeal procedures open to them. The honourable member for Gippsland (Mr McGauran) in his contribution to the debate suddenly seemed to think that overservicing and fraud were the discovery of Medicare. I remind him that his Government, under its private health insurance scheme, suddenly recognised that there was fairly massive overservicing and fraud taking place. It took action and I supported that action, but any pretence or notion that somehow Medicare produces the overservicing and the fraud is not correct. Indeed, under his Government there were estimates accepted by his Ministers that there was over $100m in fraud and overservicing costs under those previous schemes. The notion that a member of the Public Accounts Committee that had done all that work on this issue could come into this House and somehow pretend that Medicare is the source of overservicing and fraud is a nonsense. If Opposition members had done any work on this they would have discovered that fraud and overservicing were very much a characteristic of the previous health insurance system as they are a feature of this one. The honourable member for Petrie (Mr Hodges), by pretending that I had said things I have never said, managed to make some plausible case. Let me now say what I did say. I have never claimed, nor has the Government, that the levy would make a substantial contribution to the total costs of Medicare. If honourable members go back to the second reading speech and the clear statements made at the time, what was said was that the levy plus the money saved on the health tax rebate would substantially cover the extra costs of Medicare. What Opposition members with all their statistics seem to forget is that the previous Government paid a substantial part of medical benefit cost. What the previous Government did was to pay something like half the medical benefits bill. In looking at the medical benefits bill, what I was saying and what I have always said was that that further half would be substantially covered by the levy on income, the Medicare levy, plus the money saved by no longer having health insurance rebate. The honourable member for Petrie can examine that in the context of his own speech. I was interested to note that several members, including the honourable member for Denison and the honourable member for Petrie, said that bulk billing should be banned. As 70 per cent of those who are provided with bulk billing are pensioners and the disadvantaged, it was interesting to see the Opposition now moving towards banning bulk billing for all those groups. Mr McGauran —You are misleading the House. Mr DEPUTY SPEAKER(Mr Leo McLeay) —Order! The honourable member for Gippsland will cease interjecting. He is well aware that it is most improper to suggest that somebody is misleading the House. I ask him to withdraw. Mr McGauran —I withdraw. Dr BLEWETT —The honourable member for Petrie's argument is that it is bulk billing which leads to doctors' fraud and overservicing. The whole basis of his argument was that bulk billing is an awful thing because it leads doctors to overservicing. I want him to explain at some stage logically how, when 70 per cent of the bulk billing relates to pensioners, it does not have that effect in relation to the greatest part of the bulk billing procedures. There is no logic in the kind of argument that has been developed by the honourable member for Petrie. He cannot have it both ways. He cannot say that in 70 per cent of cases doctors behave well and only the other 30 per cent involve fraud and overservicing. It is a problem he will have to work out if his Party is to have some kind of logical policy in this area. Returning to the amendments, there is one point I wish to take up in the argument put forward by the honourable member for Barker (Mr Porter). There are two misprints in the schedule of Government amendments. Amendment (12) should read: Clause 19, page 30, after proposed paragraph 23do (5) (a) insert the following paragraph: ``(ab) a decision by the Minister varying or revoking an approval given under sub-section 23DN (1);''. The second correction is to amendment (13) which should read: Clause 35, page 40, line 24, insert ``to establish'' after ``required''. Mr ROCHER(Curtin)(11.00) —I will not keep the House long. Does the Minister for Health (Dr Blewett) have the gall to stand up and say that if the honourable member for Barker (Mr Porter) had not looked at the Schedule those 20 or 30 printed amendments the Minister has put before the House would have been passed by the House in the manner presented? If that is what the Minister is saying, on top of the preposterous number of amendments to his own legislation that he is proffering at the Committee stage, he is saying that they are not even correct. If the honourable member for Barker had not drawn them to his attention they would have been moved and passed as they have been circulated to us. I find that utterly unacceptable and an indictment of both the Minister and whoever advises him on these matters. If the Minister cannot come into this House after all this time, after he has had his legislation drafted, with a complete and accurate set of amendments it is just another condemnation of the way he runs his Department. I think it is to be deplored. Mr PORTER(Barker)(11.02) —The Minister for Health (Dr Blewett) has continually said that there is no relationship between bulk billing and fraud and overservicing, despite the assertions made continually by the Opposition, by the medical profession, by health administrators, by health professionals, by academics, and in fact by the Joint Committee of Public Accounts. I will read just one paragraph from the PAC report, to which the Minister refers so frequently and so warmly. It says on page 107: Better informed patients, interacting with their medical practitioners on the pros and cons of pathology investigations and having increased potential to audit the bills for services provided, could lead to more rational health care and use of pathology services. That is exactly what we are saying does occur under bulk billing, under direct billing where the patient gets no opportunity to audit the account. The PAC report, with a majority of government members, has acknowledged the problem the Opposition has continually brought to the Government's attention, and yet the Government persists in maintaining universal bulk billing, which is promoting overservicing and a blowout in the Medicare budget. Finally, it is a total misleading of the House for the Minister to suggest that we have proposed that for welfare patients, pensioners and other health care card holders we would scrap bulk billing. We have never said that. What we will do is scrap it for everyone else. Dr BLEWETT(Bonython-Minister for Health)(11.04) —I am not going to go into that particular point, other than to say that the Opposition will have to explain to the public why it believes that bulk billing is the source of all this evil of overservicing and fraud, yet it will not remove bulk billing for 70 per cent of those who are bulk billed. It has to answer the logic of that. Secondly, the quote from the Public Accounts Committee report refers to a proper audit. That does not necessarily mean that people cannot be bulk billed. In fact, a whole discussion in that Committee looked at ways of improving the medical audit by patients. To assume that that has to involve patients making a fee is something that the Committee itself made no recommendation about. It simply said, and we agree, that the audit of medical activities by doctors should be improved. It is something we certainly support. In relation to the issue raised by the honourable member for Curtin (Mr Rocher), we had already informed the Clerk of the House of the misprint that had occurred and those two points in the amendments. It was a misprint which arose from the original print of the Bill, in which the appropriate line number was 22. When the Bill was reprinted with the House of Representatives heading on it, the line number became 24. That was the reason for that change. We had informed the Clerk of the House of that change. Mr ROCHER(Curtin)(11.05) —The point I made was that the Minister for Health (Dr Blewett) responded only to the reference made by the honourable member for Barker (Mr Porter). It is all very well for the Minister to say that he has advised the Clerk of the House. None of the whole raft of people from both sides of the chamber listening to this debate were advised. I repeat that the explanation given was not satisfactory. It showed a complete disregard for the Parliament and for the Committee. I note that the honourable member for Hindmarsh (Mr Scott) is nodding in agreement. As the Minister seems to be determined to answer every point that is made and to ask his own rhetorical questions, knowing that people on this side of the chamber cannot get up and answer in the debate, perhaps he will answer finally another point that was made by the honourable member for Barker. He mentioned that evidence was given before a Senate Estimates committee which produced information to which he quite properly replied and with which the Minister did not seem to agree. In other words, the Minister has figures that were not available and were not given in response to questions led before a Senate Estimates committee when officers of his Department were examined. The Minister has completely ignored that point and that is a very serious discrepancy. If officers of his Department give information before a Senate Estimates committee which is seriously at variance with that which the Minister has in his possession and which he offers in the course of debate in this chamber, surely it behoves him to check with his advisers and find out why there is this discrepancy. I think the Minister should address his mind to that. I think he really should try to answer this point before the debate is concluded this evening. Mr HODGES(Petrie)(11.08) —I must not let pass the opportunity to rebut the misrepresentation a few moments ago by the Minister for Health (Dr Blewett). At no stage, as the honourable member for Barker (Mr Porter) has stated in clear terms, have I, or indeed any member of the Opposition, claimed that pensioners ought not to be bulk billed. I want to make that quite clear. Of course pensioners and the disadvantaged of this country should be bulk billed. The Minister made great play of the fact that 70 per cent of bulk billing is in respect of pensioners. What about the other 30 per cent? Is it not of some concern to the Minister-and I am sure that the statements I made earlier are true-that many doctors are bulk billing many patients who do not see their accounts and who visit their doctors again and again? It is a rort and we all know it. What about that 30 per cent? Is the Minister not concerned about that 30 per cent? Of course the Minister is concerned about it. If he is not, he ought to be. However, really he cannot be because he is encouraging more and more doctors to bulk bill. Let me say this in regard to the one per cent Medicare levy: The Minister is on record many times as stating that the one per cent levy will substantially fund Medicare. This arrangement is a failure. I know it is a failure, the Minister knows it is a failure and the nation knows it is failure. It has not substantially funded Medicare. A levy of about 3.4 per cent is required to fund it. Medicare has a tremendous shortfall of billions of dollars and it is time the Minister woke up to that. Of course, what the Minister is considering is reducing the doctors' 85 per cent to 75 per cent to save some of the money in the blow out in Medicare. We will no doubt hear a little more about that later in the year. However, if the Minister is truthful about the levy he ought to increase it to 3.4 per cent. However, he is not truthful about that. Obviously, what he is going to do now is reduce the doctors' 85 per cent to 75 per cent and continue to encourage bulk billing. We can bet our bottom dollar that doctors will be bringing patients back more and more because of the reduced rate. While there is no identifiable cost and no patient moiety, that is what we will get-doctors bringing patients back unnecessarily. Mr McGAURAN(Gippsland)(11.10) —It is with a sense of unreality that we listened to the answers of the Minister for Health (Dr Blewett) to the points brought up by Opposition members. It quite escapes any logical thinking to deny that the system of bulk billing, which has total disregard for the cost of the provision of medical services, is leading to a vast increase in the amount of overservicing and fraud. The shadow Minister, the honourable member for Barker (Mr Porter), offered, as evidence, the conclusion along the same lines of the Joint Committee of Public Accounts, following its inquiry into medical fraud and overservicing. Let me read paragraph 4.59 to the Minister. He answered an earlier question on this matter but I need him to reply after I read another paragraph. The shadow Minister read this paragraph: The Committee- honourable members should bear in mind that it is a Government majority committee- concludes that: Better informed patients, interacting with their medical practitioners on the pros and cons of pathology investigations and having increased potential to audit the Bills for services provided, could lead to more rational health care and use of pathology services. After the shadow Minister read that out the Minister replied that it referred to medical audits, that is, simply whether or not the medical provisions were actually needed. The Minister should turn the page to the final part of paragraph 4.59, which reads as follows: It may be desirable for both the patient and the referring practitioner, during a consultation, to be made more aware of the pathology tests and associated Medicare Benefits Schedule costs that were being incurred due to a referral or a request that was about to be forwarded to a pathologist. The Committee recommends a financial audit as much as it recommends a medical audit-a financial audit that requires both the provider and the receiver of medical services to understand better the cost. For that reason, I believe that the Opposition can rightly hold up the report of the Public Accounts Committee as evidence that bulk billing, without proper regard to the cost of the provision of services, leads to enormous overservicing. Dr BLEWETT(Bonython-Minister for Health)(11.13) —I will try to respond briefly to the three points that have been made and bring this debate to a conclusion. In response to the point made by the honourable member for Curtin (Mr Rocher), I did not deny anything that was in the Hansard report for the Senate. Mr Rocher —You didn't explain that-- Dr BLEWETT —Wait a minute. I only added further figures which had recently become available as to the number of cases which had gone to the medical services committees of inquiry. In fact, in many cases since that Senate inquiry doctors have been ordered to pay moneys. I pointed out that they had not yet paid those moneys, which was the specific question asked at the Senate Estimates Committee inquiry. In relation to the last point raised by the honourable member for Gippsland (Mr McGauran), of course there is much to be said for and this Government would encourage people being aware of both the medical benefits that they are being given and of the costs of those benefits. I am sure that all Australian Labor Party members of the Joint Committee of Public Accounts were perfectly able to support a proposal which was not a proposal against bulk billings but simply a proposal that people be more aware of the medical services they are getting and the costs of those services. I say to all members of the Opposition that we on this side of the chamber do not believe that bulk billing is the source of all the fraud and overservicing, the source of all of the evils, to which honourable members on the other side have referred. If honourable members opposite believe their own argument they have to explain to the rest of us why 70 per cent of the bulk billing will remain. They have to answer that question. They cannot say that they think that the 70 per cent bulk billing for pensioners is all right because if bulk billing causes all of these problems it is extremely difficult indeed for the Opposition to say that it will not worry about the 70 per cent bulk billing for pensioners. Amendments agreed to. Bill, as amended, agreed to. Bill reported with amendments; report-by leave-adopted. Bill (on motion by Dr Blewett)-by leave-read a third time. House adjourned at 11.16 p.m. The following papers were deemed to have been presented on 26 May 1986: Defence Act- Defence Force Remuneration Tribunal-Determination-1986-No. 1. Determinations-1986- No. 24-Overseas Living Out Allowance and other allowances. No. 25-Bindoon Allowance. No. 26-Overseas Living Out Allowance and other allowances. No. 27-Education Assistance Overseas. No. 28-Higher Duties Allowance. Public Service Act-Determination-1986-No. 32. The following answers to questions were circulated: (Question No. 2315) Mr Blunt asked the Minister for Transport, upon notice, on 12 November 1985: (1) What was the expenditure by the Minister's Department and authorities under the Minister's control on public relations in (a) 1983-84 and (b) 1984-85. (2) What was the nature or the subject of the public relations expenditure. (3) Was outside assistance obtained for public relations, if so, (a) who provided the assistance, (b) what payments were made and (c) why was the assistance sought. Mr Peter Morris —The answer to the honourable member's question is as follows: DEPARTMENT OF TRANSPORT (1) (a) $174,986; (b) $311,458. (2) The amounts above include total salaries of the staff of the Department's Public Affairs Section, costs associated with the issue of press releases, other promotional material and consultancy fees (see answer to Part 3). It should be noted, however, that the major proportion of the time of the officers employed in this Section is devoted to the Department's public education function (eg road safety, driver behaviour, sea safety etc) and it is not possible to disaggregate the proportions of salaries between the public relations and public education functions. (3) (a) The Consultancy Pty Ltd was engaged for 29 weeks in May 1983 to advise the Department of Transport on the development and implementation strategies for public information and public education policies and procedures; (b) $46,350; (c) At the time of the engagement of the above firm, the Department had recently been established and in-house expertise for this purpose was not available. AUTHORITIES As the Minister for Transport I am responsible for two Statutory Authorities-the Australian National Railways Commission (AN) and the Australian Shipping Commission (ANL). I am also responsible for administration of the Inter-State Commission Act 1975 which provides for the operation of the Inter-State Commission, an authority established by the Constitution. Both AN and ANL are required by legislation to operate as commercial business undertakings and both are in substantial competition with private sector competitors. I am advised that ANL considers that certain of the information sought by the honourable member is of a commercial confidential nature and I am therefore not prepared to authorise its release. Australian National Railways Commission (AN) (1) (a) $249,879; (b) $308,271. (2) The above expenditure represents salaries/wages and incidental expenditure incurred by AN's Public Relations Department including such items as subscriptions to periodicals, photography and promotional material, production of `AN News', displays and exhibitions. (3) No outside assistance is obtained by AN for public relations. Australian Shipping Commission (ANL) (1) (a) and (b) The specific levels of expenditure on public relations is regarded by ANL as commercial information of a confidential nature which should not be divulged to its competitors. (2) The main area of ANL's public relations expenditure during the period related to a campaign to enhance its corporate image. Other areas of expenditure included publication of ANL's Annual Report and its in-house journal. (3) (a) ANL employed outside consultants for its corporate campaign and to assist in the design of its in-house journal; (b) See answer to part (1); (c) Use was made of consultants when ANL did not have the resources and/or personnel with appropriate expertise, and where it was not cost effective for ANL to acquire such resources/personnel on a permanent basis. Inter-State Commission (1) (a) and (b) Nil. (2) and (3) Not applicable. (Question No. 2343) Mr Blunt asked the Minister for Transport, upon notice, on 12 November 1985: (1) What was the expenditure by the Minister's Department and authorities under the Minister's control on advertising (other than classified newspaper advertising) by individual subject or program in (a) 1983-84 and (b) 1984-85. (2) Who (a) initiated and (b) conducted each campaign. (3) Why was each campaign necessary. (4) What was the basis of remuneration for each campaign. (5) Was the assistance of the (a) Information Co-ordination Branch or (b) Australian Government Advertising Service obtained. Mr Peter Morris —The answer to the honourable member's question is as follows: DEPARTMENT OF TRANSPORT In relation to advertising campaigns conducted by the Department of Transport, I invite the honourable member's attention to my answer to question No. 1449 (Hansard of 11 Feb 1986, page 128). In respect of non-campaign advertising by the Department, the following details are provided: (1) (a) Newspaper advertising in connection with the XVII World Road Congress of the Permanent International Association of Road Congresses (PIARC) held in Sydney in October 1983-$678; Departmental entry in ``What's Where and What's About''-$220; Public announcement of Inter-State Commission inquiry into the Tasmanian Freight Equalisation Scheme (TFES) advertisements in Australian Financial Review-$1000; Hobart Mercury-$750; Launceston Examiner-$410; Burnie Advocate-$300; Age-$1200; and Land-$1000 (b) Public announcement of and call for submissions to the National Road Freight Industry Inquiry-$3074; Public announcement of the National Road Safety Symposium-$2500; Department Entry in `What's Where and What's About'-$220; Additional print run of sea safety insert for `Cruising Skipper'-$1352. (2) PIARC Advertisement-(a) Australian Organising Committee of PIARC. (b) News Ltd, Sydney, `What's Where and What's About'-(a) Department, (b) Aquarius Promotions. TFES-(a) Inter-State Commission, (b) Gordon and Gotch. National Road Freight Industry Inquiry-(a) Department, (b) Australian Government Advertising Service. National Road Safety Symposium-(a) Department, (b) Gordon & Gotch. `What's Where and What's About'-(a) Department, (b) Aquarius Promotions. `Cruising Skipper'-(a) Department, (b) Leisure Magazines Pty Ltd. (3) The Government's policy is that all Australians have a right to equal access to information. The role of Government information programs, including advertising campaigns, is to inform Australians in the most effective manner of their rights, duties, obligations and responsibilities and matters deemed of national importance. The necessity of an information campaign is determined according to these criteria. (4) The basis of remuneration in each case was the standard commercial advertising rate for the type of advertising. (5) PIARC Advertisement-(a) and (b) No. `What's Where and What's About'-(a) and (b) No. TFES-(a) and (b) Yes. National Road Freight Industry Inquiry-(a) and (b) Yes. National Road Safety Symposium-(a) and (b) Yes. `What's Where and What's About'-(a) and (b) No. `Cruising Skipper'-(a) and (b) No. AUTHORITIES As Minister for Transport I am responsible for two statutory authorities-the Australian National Railways Commission (AN) and the Australian Shipping Commission (ANL). I am also responsible for administration of the Inter-State Commission Act 1975 which provides for the operation of the Inter-State Commission (ISC), an authority established by the Constitution. Both AN and ANL are required by legislation to operate as commercial business undertakings and both are in substantial competition with private sector operators. I am advised that both authorities consider that certain of the information sought by the honourable member is of a commercially confidential nature and I am therefore not prepared to authorise its release. Australian National Railways Commission (AN) (1) (a) In 1983-84 an advertising campaign for both passenger and freight services was conducted for AN by McCann-Erickson Advertising Pty Ltd for an amount of $250,000; (b) During 1984-85, television, cinema and print advertising were undertaken in South Australia and interstate to promote AN's passenger and freight services based on AN's official sponsorship of the South Australian challenge for the America's Cup. This campaign was conducted by Leo Burnett Pty Ltd for an amount of $295,602. In the same period television and print advertising of AN's passenger and freight services was carried out by Ogilvy and Mather (Australia) Pty Ltd at a total cost of $300,342. Advertisements prepared in 1984-85 will continue to be used in repeat campaigns in 1985-86 and 1986-87. (2) All advertising campaigns were initiated by AN and conducted by the agencies named above. (3) AN operates in extremely competitive markets for passenger and freight services. As a result, it is considered essential to conduct advertising campaigns to inform potential users of the appeal of rail travel and of specific freight services offered, to sustain and increase market share and revenue earnings. (4) Negotiated fees and standard media charges. Details are considered confidential for commercial reasons. (5) (a) and (b) No. Australian Shipping Commission (ANL) (1) (a) and (b) Apart from advertising for public relations purposes, the main purpose of ANL advertising is to announce services it and its business associates provide and to advise schedules of those services. ANL carries out such advertising locally and overseas, primarily in the press. The total cost of such advertising is considerable, but specific levels of expenditure on advertising, or in other ANL operational areas, is considered by ANL to be commercial information of a confidential nature which should not be divulged to its competitors. (2) (a) Advertising is usually initiated by Line Managers in consultation with the General Manager of the appropriate ANL Division. Specific promotional campaigns are submitted to ANL's Executive Committee for approval; (b) ANL's Corporate Relations Department is responsible for implementation of advertising decisions and where appropriate, it does so with the assistance of advertising agencies. (3) See answer to Part (1). (4) ANL's advertising campaigns are conducted within budgets approved by its Executive Committee. Fees paid to media outlets and to advertising agencies are the standard fees which generally apply in the advertising industry. (5) (a) and (b) As a commercial organisation competing in a commercial environment ANL does not have access to these Government agencies. Inter-State Commission (1) (a) and (b) Nil. (2) to (5) Not applicable. (Question No. 2439) Mr Sinclair asked the Minister for Defence, upon notice, on 15 November 1985: (1) What are the (a) male and (b) female resignation rates as a percentage of strengths for each Service and each rank for the 4 quarters up to and including September 1985. (2) What is the 5 year average for resignation rates in each category listed. Mr Beazley —The answer to the right honourable member's question is as follows: (1) (a) and (b) The terms wastage and resignation are often confused in relation to separation from the Defence Force. Wastage is a loss for any reason. `Resignation' is an option, available only to officers, to terminate their appointments prior to attaining retirement age or on completion of obligation of service. Information on Other Rank wastage is therefore not included in the following tables. Officer resignation rates for each Service by rank for males and females for the 4 quarters to September 1985 are contained in Tables A, B and C. Historically resignations comprise approximately 75 per cent of separations. Analysis of wastage trends is based upon comparing the period under consideration to the preceding five year average. The 5 year rate of wastage for officers prior to 1982-83 was 7.2 per cent. It fell markedly to 5.9 per cent in 1982-83, attributed to then prevailing economic conditions. 1983-84 and 1984-85 rates were above the former average and the half year figures for 1985-86 indicate a full year result of the order of 9 per cent. Separation rates differ between individual Service and ranks for a variety of reasons. For example, for Air Force Officers it is expected to remain high for the next two years because of the relatively high numbers of personnel recruited during the Vietnam War who have completed, or will complete, 20 years service. In contrast, after the manpower rundown due to the aircraft carrier and fixed wing aviation decisions, Navy separation appears to have stabilised. Current features are the increasing number of junior officers (Captain equivalent and below) who have resigned in recent months as well as Army's continued concern over the number of Majors resigning. As there is no requirement for an officer to give any reason for resignation, only voluntary data is available to formulate options for remedial action. Informal discussions with intending and recently separated officers have identified perceived fears of loss or detriment to conditions of service, as contributory factors rather than the prime motivation. The 5 year average for officer resignations in the categories: Percentage of strength by rank, and percentage of total officer strength are shown in the tables, adjacent to the corresponding March 1984 to September 1985 quarterly figures. It should be noted that resignations form only one component of total officer wastage. Because of the varying numbers in each rank as shown in table D below, small variations in trends especially for the senior officers (Colonel equivalent and above) can show large fluctuations when converted to percentage values and potentially misleading interpretation if rank comparisons are made out of context with relative strengths. Information on total wastage for officers and other ranks is available. However, that information comprises a large volume of statistical tables. Table A RAN QUARTERLY OFFICER RESIGNATIONS FIVE YEAR AVERAGE STRENGTH MALE OFFICERS...2 099 FIVE YEAR AVERAGE STRENGTH FEMALE OFFICERS...108 FIVE YEAR AVERAGE % RESIGNATIONS MALE...5.11% FIVE YEAR AVERAGE % RESIGNATIONS FEMALE...10.91% FIVE YEAR AVERAGE % RESIGNATIONS TOTAL...5.4% Serial Equiv. rank Dec. qtr. 1984 Nos. % of Str. 5yr. Dec. qtr. av. 5yr. av. Nos % of av. Str. Mar. qtr. 1985 Nos. % of Str. 5yr. Mar. qtr. av. 5yr. av. Nos. % of Str. (a)... (b) (c) (d) (e) (f) (g) (h) (i) (j) 1... GEN . . . . . . . . . . . . . . . . 2... LTGEN . . . . . . . . . . . . . . . . 3... MAJGEN . . . . 0 3.85 . . . . 0 3.85 4... BRIG . . . . 0 1.72 . . . . 0 1.72 5... COL...M . . . . 0 0.57 2 2.22 3 3.45 6... COL...F . . . . . . . . . . . . 0 50.00 7... LTCOL...M 5 1.86 3 1.08 9 3.19 7 2.53 8... LTCOL...F . . . . . . . . . . . . . . . . 9... MAJ...M 5 0.83 5 0.85 10 1.66 11 1.88 10... MAJ...F 1 9.09 . . . . . . . . . . . . 11... CAPT...M 6 0.72 8 0.96 12 1.46 13 1.55 12... CAPT...F 3 5.45 1 2.13 2 3.77 3 6.38 13... LT...M 2 0.53 1 0.27 7 1.75 3 0.8 14... LT...F . . . . 1 2.27 3 4.92 1 2.27 15... TOTAL...M 18 0.81 17 0.81 40 1.79 37 1.76 16... TOTAL...F 4 3.03 2 1.85 5 3.76 4 3.7 17... TOTAL 22 0.94 19 0.86 45 1.9 41 1.86 Notes: 1. 0 indicates an average of less than 0.5. 2. Totals serial 17 may differ from column total as a result of rounding 0 figures. Table A RAN QUARTERLY OFFICER RESIGNATIONS FIVE YEAR AVERAGE STRENGTH MALE OFFICERS...2 099 FIVE YEAR AVERAGE STRENGTH FEMALE OFFICERS...108 FIVE YEAR AVERAGE % RESIGNATIONS MALE...5.11% FIVE YEAR AVERAGE % RESIGNATIONS FEMALE...10.91% FIVE YEAR AVERAGE % RESIGNATIONS TOTAL...5.4% Serial Equiv. rank June qtr. 1985 Nos % of Str 5 yr. June qtr. av. 5 yr. av. Nos % of av. Str Sept. qtr. 1985 Nos % of av. Str 5 yr. Sept. qtr. av. 5 yr. av. Nos % of av. Str (a)... (b) (k) (l) (m) (n) (o) (p) (q) (r) 1... GEN . . . . 0 20 . . . . . . . . 2... LTGEN 1 100 0 33 . . . . . . . . 3... MAJGEN 2 16.67 1 9.09 . . . . 0 4.55 4 BRIG . . . . 1 3.57 1 3.45 1 3.57 5 COL...M 3 3.26 1 1.15 . . . . 2 2.3 6... COL...F . . . . . . . . . . . . . . . . 7... LTCOL...M 6 2.07 4 1.44 5 1.72 5 1.81 8... LTCOL...F . . . . 0 12.5 . . . . 0 12.5 9... MAJ...M 5 0.84 6 1.02 6 1.02 7 1.19 10... MAJ...F . . . . 0 5.0 . . . . 0 5.0 11... CAPT...M 5 0.62 8 0.96 7 0.86 8 0.96 12... CAPT...F 2 3.92 1 2.13 2 3.57 1 2.13 13... LT...M 2 0.52 3 0.8 1 0.25 2 0.53 14... LT...F . . . . 1 2.27 1 1.59 1 2.27 15... TOTAL...M 24 1.09 24 1.14 20 0.9 26 1.24 16... TOTAL...F 2 1.55 2 1.85 3 2.21 2 1.85 17... TOTAL 26 1.11 26 1.18 23 0.98 29 1.31 Notes: 1. 0 indicates an average of less than 0.5. 2. Totals serial 17 may differ from column total as a result of rounding 0 figures. Table B ARA QUARTERLY OFFICER RESIGNATIONS FIVE YEAR AVERAGE STRENGTH MALE OFFICERS...4 163 FIVE YEAR AVERAGE STRENGTH FEMALE OFFICERS...310 FIVE YEAR AVERAGE % RESIGNATIONS MALE...5.29% FIVE YEAR AVERAGE % RESIGNATIONS FEMALE...6.76% FIVE YEAR AVERAGE % RESIGNATIONS TOTAL...5.4% Serial Equiv. rank Dec. qtr. 1984 Nos % of Str 5 yr. Dec. qtr. av. 5 yr. av. Nos % of av. Str Mar. qtr. 1985 Nos % of av. Str 5 yr. Mar. qtr. av. 5 yr. av. Nos % of av. Str (a)... (b) (c) (d) (e) (f) (g) (h) (i) (j) 1... GEN . . . . . . . . . . . . . . . . 2... LTGEN . . . . . . . . . . . . 0 33 3... MAJGEN 1 8.3 0 3.12 . . . . 1 6.25 4... BRIG 1 2.22 0 1.06 1 2.04 1 2.08 5... COL...M 2 1.69 1 0.81 8 6.4 6 4.88 6... COL...F . . . . 0 20.0 . . . . 0 20.0 7... LTCOL...M 10 2.13 7 1.38 23 4.76 20 3.93 8... LTCOL...F . . . . . . . . . . . . . . . . 9... MAJ...M 16 1.18 14 1.00 31 2.19 27 1.92 10... MAJ...F 1 1.92 0 1.04 . . . . 0 1.04 11... CAPT...M 17 1.19 11 0.76 21 1.46 20 1.39 12... CAPT...F 1 0.68 3 2.04 3 1.9 3 2.04 13... LT...M 5 1.46 4 1.17 7 2.22 6 1.75 14... LT...F 3 4.35 1 1.64 3 4.23 3 4.92 15... TOTAL...M 52 1.38 37 0.89 91 2.37 83 1.99 16... TOTAL...F 5 1.82 5 1.61 6 2.05 7 2.26 17... TOTAL 57 1.41 42 0.94 97 2.35 90 2.01 Notes: 1. 0 indicates an average of less than 0.5. 2. Totals serial 17 may differ from column total as a result of rounding 0 figures. Table B ARA QUARTERLY OFFICER RESIGNATIONS FIVE YEAR AVERAGE STRENGTH MALE OFFICERS...4 163 FIVE YEAR AVERAGE STRENGTH FEMALE OFFICERS...310 FIVE YEAR AVERAGE % RESIGNATIONS MALE...5.29% FIVE YEAR AVERAGE % RESIGNATIONS FEMALE...6.76% FIVE YEAR AVERAGE % RESIGNATIONS TOTAL...5.4% Serial Equiv. rank June qtr. 1985 Nos % of Str 5 yr. June qtr. av. 5 yr. av. Nos % of av. Str Sept. qtr. 1985 Nos % of av. Str 5 yr. Sept. qtr. av. 5 yr. av. Nos % of av. Str (a)... (b) (k) (l) (m) (n) (o) (p) (q) (r) 1... GEN . . . . . . . . . . . . . . . . 2... LTGEN . . . . . . . . . . . . . . . . 3... MAJGEN 1 8.33 0 3.13 . . . . 1 6.25 4... BRIG 1 2.13 1 2.08 1 2.13 1 2.08 5... COL...M 0 0.4 3 2.44 4 3.23 2 1.63 6... COL...F . . . . . . . . . . . . . . . . 7... LTCOL...M 6 1.26 10 1.96 13 2.75 14 2.75 8... LTCOL...F . . . . 0 10.0 . . . . 0 12.5 9... MAJ...M 10 0.72 15 1.07 28 2.04 23 1.64 10... MAJ...F . . . . 0 1.04 3 4.76 1 2.08 11... CAPT...M 10 0.70 11 0.76 20 1.42 15 1.04 12... CAPT...F 4 2.56 3 2.04 4 2.63 3 2.04 13... LT...M 1 0.31 1 0.29 3 0.88 3 0.87 14... LT...F 1 1.41 0 0.82 . . . . 1 1.64 15... TOTAL...M 30 0.79 44 1.06 69 1.83 59 1.42 16... TOTAL...F 5 1.71 5 1.61 7 2.4 6 1.94 17... TOTAL 35 0.86 49 1.1 76 1.87 65 1.45 Notes: 1. 0 indicates an average of less than 0.5. 2. Totals serial 17 may differ from column total as a result of rounding 0 figures. Table C RAAF QUARTERLY OFFICER RESIGNATIONS FIVE YEAR AVERAGE STRENGTH MALE OFFICERS...3 365 FIVE YEAR AVERAGE STRENGTH FEMALE OFFICERS...214 FIVE YEAR AVERAGE % RESIGNATIONS MALE...5.62% FIVE YEAR AVERAGE % RESIGNATIONS FEMALE...10.67% FIVE YEAR AVERAGE % RESIGNATIONS TOTAL...5.92% Serial Equiv. rank Dec. qtr. 1985 Nos % of Str 5 yr. Dec. qtr. av. 5 yr. Av. Nos % of Av. Str Mar. qtr. 1985 Nos % of Av. Str 5 yr. Mar. qtr. av. 5 yr. Av. Nos % of Av. Str (a)... (b) (c) (d) (e) (f) (g) (h) (i) (j) 1... GEN . . . . . . . . . . . . . . . . 2... LTGEN . . . . . . . . . . . . . . . . 3... MAJGEN . . . . 0 4.55 . . . . 1 9.09 4 BRIG . . . . 1 3.13 2 6.25 2 6.25 5 COL...M 1 0.89 2 1.8 2 1.77 4 3.6 6... COL...F . . . . . . . . . . . . . . . . 7... LTCOL...M 6 1.47 5 1.21 18 4.38 17 4.12 8... LTCOL...F . . . . . . . . . . . . . . . . 9... MAJ...M 12 1.56 9 1.18 19 2.45 20 2.62 10... MAJ...F . . . . 0 8.0 . . . . 1 5.56 11... CAPT...M 20 1.45 19 1.44 29 2.09 25 1.89 12... CAPT...F 3 2.70 4 3.92 6 5.04 4 3.92 13... LT...M . . . . 3 0.48 3 0.48 3 0.45 14... LT...F . . . . 2 2.35 1 1.18 2 1.96 15... TOTAL...M 39 1.17 39 1.16 73 2.18 72 2.14 16... TOTAL...F 3 1.33 6 2.8 7 2.89 7 3.27 17... TOTAL 42 1.18 45 1.26 80 2.22 79 2.21 Notes: 1. 0 indicates an average of less than 0.5. 2. Totals serial 17 may differ from column total as a result of rounding 0 figures. Table C RAAF QUARTERLY OFFICER RESIGNATIONS FIVE YEAR AVERAGE STRENGTH MALE OFFICERS...3 365 FIVE YEAR AVERAGE STRENGTH FEMALE OFFICERS...214 FIVE YEAR AVERAGE % RESIGNATIONS MALE...5.62% FIVE YEAR AVERAGE % RESIGNATIONS FEMALE...10.67% FIVE YEAR AVERAGE % RESIGNATIONS TOTAL...5.92% Serial Equiv. rank June qtr. 1985 Nos % of Str 5 yr. June qtr. av. 5 yr. av. Nos % of av. Str Sept. qtr. 1985 Nos % of av. Str 5 yr. Sept. qtr. av. 5 yr. av. Nos % of av. Str (a)... (b) (k) (l) (m) (n) (o) (p) (q) (r) 1... GEN . . . . 0 20.00 . . . . . . . . 2... LTGEN . . . . 0 20.00 . . . . 0 20.00 3... MAJGEN . . . . 0 4.55 . . . . 0 4.55 4... BRIG 1 3.13 1 3.13 . . . . 2 6.25 5... COL...M 1 0.88 2 1.8 1 0.88 3 2.7 6... COL...F . . . . 0 50.0 . . . . . . . . 7... LTCOL...M 9 2.19 9 2.18 25 6.1 12 2.91 8... LTCOL...F . . . . . . . . . . . . 0 20.00 9... MAJ...M 11 1.42 8 1.05 20 2.59 12 1.57 10... MAJ...F . . . . 0 10.0 . . . . 1 5.56 11... CAPT...M 21 1.51 15 1.14 24 1.73 15 1.14 12... CAPT...F 1 0.79 3 2.94 4 3.17 3 2.94 13... LT...M 2 0.32 1 0.15 3 0.48 2 0.3 14... LT...F . . . . 1 0.98 . . . . 1 1.18 15... TOTAL...M 44 1.31 37 1.1 73 2.18 45 1.34 16... TOTAL...F 3 1.17 5 2.34 4 1.56 7 3.27 17... TOTAL 47 1.3 42 1.17 77 2.14 52 1.45 Notes: 1. 0 indicates an average of less than 0.5. 2. Totals serial 17 may differ from column total as a result of rounding 0 figures. TABLE D ADF-BREAKDOWN OF PERSONNEL BY RANK Rank (Army) Equiv RAN Male Female ARA Male Female RAAF Male Female Gen... 1 Lt Gen... 1 . . 1 1 . . Maj Gen... 12 . . 13 11 . . Brig... 29 . . 47 32 . . Col... 92 . . 127 1 114 1 Lt Col... 286 4 479 4 413 6 Maj... 578 14 1407 61 777 24 Capt... 736 51 1431 156 1395 130 Lt... 322 60 548 135 463 76 2 Lt... . . . . 149 164 27 (Question No. 3377) Mr Braithwaite asked the Minister representing the Minister for Industry, Technology and Commerce, upon notice, on 13 March 1986: What (a) tariffs, (b) quota restrictions, (c) export incentives, (d) bounties, (e) non-tariff barriers and (f) general protective measures has the Minister's Department identified as restricting the import of foreign merchandise, commodities and services. Mr Barry Jones —The Minister for Industry, Technology and Commerce has provided the following answer to the honourable member's question: (a) the relevant tariffs are those listed in the Schedules to the Customs Tariff Act 1982, which generally apply to imports competing with Australian manufacturing industries. The Industries Assistance Commission has estimated in its 1984-85 Annual Report that in 1982-83 for the manufacturing sector as a whole, the average nominal rate of assistance on output was 16 per cent, the average nominal rate of assistance on materials was 10 per cent. (b) Quota restrictions, i.e. tariff quotas, are a form of import control which provides for goods to be imported, up to a ceiling level set by the Government, at concessional rates of duty. There is no prohibition on the importation of goods outside quota arrangements but where this occurs higher rates of duty apply. Goods presently subject to tariff quota arrangements are (i) Textiles Clothing and Footwear Quota-Knitted or crocheted coats, jumpers, cardigans, sweaters and tube tops; Knitted or crocheted shirts and blouses; Woven shirts and blouses; Coats and jackets; Trousers, jeans and overalls; Shorts and Male Swimwear; Women's girls' and infants' swimwear; Dresses, dressing gowns, shave coats, kimonos, bathgowns, nightdresses and night shirts; Sets or garments, suits, tracksuits and rompersuits; Male pyjamas; Undergarments for men and boys; Panties for women, girls and infants; Brassieres; Corsets, girdles, panty girdles, corselettes and body suits; Other garments for women, girls and infants; Garments of artificial plastic material of rubber and textile fabrics; Tights; pantyhose, socks, ankle socks and sockettes; Footwear and parts for footwear; Terry towelling, towels and babies napkins; Bed linen; Curtains; Sleeping bags; Cotton sheeting; Woven fabrics of man-made fibre. (ii) Motor Vehicles Quota-Certain vehicles less than five years of age. (iii) Developing Countries Quota-Sugar confectionery; Rubber tyres, tyre cases, tyre flaps, inner tubes and interchangeable tyre treads; Twine, cordage, ropes and cables and articles made therefrom; Tarpaulins, awnings, sunblinds, tents and camping goods; Certain made up textile articles, including sunshades, flags, shoe laces etc; Ceramic sanitaryware; Domestic refrigerators less than 200 litres internal capacity; Electric current rectifying assemblies; Domestic electric fans; Certain insulated electric wires, cable bars and strip; Ships and boats not exceeding 150 tons gross construction tons; Frames for spectacles and goggles; Slide and film strip projectors; Loaded cartridges; Chairs; Domestic furniture; Canned ham; Builders' carpentry and joinery; Hot-rolled products of iron and steel; Cold rolled products of iron and steel; Hoop, strip, sheets and plates or iron or steel; Hot rolled alloy steel; Tubes and pipes of stainless steel; Welded tubes and pipes of iron or steel; Seamless tubes and pipes of iron or steel; Bars, rods, angles, shapes and sections of iron and steel; hollow mining drill steel; sheet piling of iron or steel. (iv) Forum Island Quota-Plywood; Blockboard; Passionfruit pulp and juice; Caribbean pine; Plastic film and bags; Matches; Reconstituted wood; Furniture and parts therefore; Certain woven polypropylene bags. (c) and (d) Export incentives and bounties do not directly restrict the import of foreign merchandise, commodities or services. (e) Goods, commodities and services which are subject to non-tariff customs controls barriers include those subject to: import licensing: Used, secondhand or disposals earthmoving, construction and material handling machinery and equipment. Certain used, secondhand or disposals four-wheeled drive vehicles, and import prohibition, in some cases importation subject to prior approval: Fish, landed direct off overseas trawlers Prison labour goods Imitation brandy Potatoes for food purposes Aircraft, airframes and aircraft engines Filled milk Certain seeds of barley, oats, rye Ships, Sugar, golden syrup, treacle. However in general Australia does not use non-tariff Customs barriers to restrict the importation of foreign merchandise, commodities and services for the purpose of assisting domestic industry. There are however, a number of measures in place which may indirectly restrict importation of products which do not satisfy health or other safeguards. These include plant and animal quarantine requirements, standards for the protection of human health and safety, censorship law copyright protection and markings and product labelling requirements. (f) Apart from the measures already mentioned, there are not considered to be any protective measures over which the Commonwealth has control which restrict the importation of foreign merchandise, commodities and services into Australia. However the various Australian States and Territories do have a range of measures which may affect the sale or use of foreign merchandise, commodities and services. (Question No. 3713) Mr Jacobi asked the Minister representing the Minister for Resources and Energy, upon notice, on 9 April 1986: (1) Who are the members of the Ministerial Council formed at the Ministerial meeting on Murray-Darling Basin management on 15 and 16 November 1985. (2) Does the Council include Ministers for Tourism and Recreation; if not, why not. (3) When has the council met. (4) Has the River Murray Commission made any submissions to the Council pursuant to its statutory responsibilities; if so, what was the nature of the submissions. (5) Has the Ministerial Council given detailed consideration to the possibility of an extended or changed role for the River Murray Commission or some successor body, as promised in the communique issued after the meeting in November; if so, what was the outcome of the deliberations. (6) Who are the members of the Murray-Darling Basin Standing Committee and when has it met. (7) Who are the members of the 5 working groups established as a result of the Ministerial meeting. (8) What progress has been made by each group. (9) Who is undertaking the major benchmark environmental study and what progress has been made. (10) Have the details of the expanded program for water research in the Murray-Darling Basin been finalised; if so, what are the components of the program. (11) Will consideration be given to involving Queensland in the workings of the Council and its committees in view of the large portion of the Murray-Darling Basin contained within Queensland, if not, why not. Mr Barry Jones —The Minister for Resources and Energy has provided the following answer to the honourable member's question: (1) The current membership of the Murray-Darling Basin Ministerial Council comprises: Commonwealth: Senator the Hon. Gareth Evans QC, Minister for Resources and Energy (Chair); The Hon. John Kerin MP, Minister for Primary Industry; The Hon. Barry Cohen MP, Minister for Arts, Heritage and Environment. New South Wales: The Hon. John Aquilina MP, Minister for Natural Resources; The Hon. Jack Hallam MLC, Minister for Agriculture and Fisheries; The Hon. Bob Carr MP, Minister for Planning and Environment. Victoria: The Hon. Evan Walker MLC, Minister for Agriculture and Rural Affairs; The Hon. Joan Kirner MLC, Minister for Conservation, Forests and Lands; The Hon. Andrew McCutcheon MP, Minister for Water Resources. South Australia: The Hon. Don Hopgood MP, Deputy Premier, Minister for Water Resources and Minister for Environment and Planning; The Hon. Kim Mayes MP, Minister for Agriculture. (2) No. The Council is essentially concerned with the effective and efficient planning and management of the land, water and environmental resources of the Basin, though tourism interests are taken into account with consultations as appropriate. (3) The first meeting of the full Council is scheduled for 2 July in Adelaide. (4) No. (5) A meeting of the four Lead Ministers (Senator Evans, Mr Walker, Dr Hopgood and Mr Aquilina) was held in Melbourne on 2 April to consider, inter alia, papers prepared by each Government on possible future institutional arrangements for the management of the Basin. The Lead Ministers agreed to appoint a working group of Senior Officers to prepare a consolidated paper on future institutional arrangements for the Basin. This paper will be available for consideration by the full Council when it meets in July. One of the main topics dealt with in the report will be the future role of the River Murray Commission with respect to the Murray-Darling Basin Ministerial Council. (6) The Murray-Darling Basin Standing Committee comprises: Commonwealth: Mr J. P. Galvin, Secretary, Department of Arts, Heritage and Environment; Mr E. N. Fitzpatrick, Deputy Secretary, Department of Primary Industry; Mr B. J. Hill, Deputy Secretary, Department of Resources and Energy. New South Wales: Mr J. B. Cunneen, Chief Commissioner, Water Resources Commission; Mr G. Knowles, Director-General, Department of Agriculture; Mr P. Standen, Director, State Pollution Control Commission. Victoria: Dr J. Paterson, Director-General, Department of Water Resources; Dr R. Campbell, Director, Land Protection Service; Dr R. Wildes, Department of Agriculture and Rural Affairs. South Australia: Mr K. Lewis, Director-General and Engineer-in-chief, Engineering and Water Supply Department; Dr I. McPhail, Director-General, Department of Environment and Planning; Dr J. C. Radcliffe, Director-General, Department of Agriculture. River Murray Commission: Mr T. A. O'Brien (ex officio), President. The Standing Committee is scheduled to meet for the first time on 4 June in Canberra. (7) Membership details of the five Working Groups are detailed below: WORKING GROUP 1: Environmental Resources- New South Wales: Mr P. Standen, Director, State Pollution Control Commission; Mr L. F. Reynolds Deputy Chief Division of Fisheries, Department of Agriculture; Mr R. Roberts, Director of Environmental Research and Services, New South Wales Soil Conservation Service. Victoria: Mr P. Dunk, Department of Conservation, Forests and Lands. South Australia: Mrs A. E. Jensen, Department of Environment and Planning. Commonwealth: Mr K. Thompson (Chair), First Assistant Secretary, Environment Policy Division, Department of Arts, Heritage and Environment; Mrs J. Lopez, Water Policy Branch, Department of Resources and Energy. WORKING GROUP 2: Community Participation- New South Wales: Mr P. Standen, Director, State Pollution Control Commission; Mr D. Hartley, Regional Director of Advisory Services, Agricultural Institute, Department of Agriculture; Mr J. D. Clarke, Deputy Regional Director, Soil Conservation Service. Victoria: The Honourable Mrs J. Kirner, M.L.C. (Chair), Minister for Conservation, Forests and Lands. South Australia: Mr J. C. Killick, Manager, Water Resources, Engineering and Water Supply Department. Commonwealth: Mr K. Thompson, First Assistant Secretary, Environment Policy Division, Department of Arts, Heritage and Environment. WORKING GROUP 3: On-Farm Water-use- New South Wales: Mr H. J. Fiander, Principal Agronomist (Irrigation), Division of Plant Industries, Department of Agriculture. Victoria: Dr B. Wildes, Department of Agriculture and Rural Affairs. South Australia: Mr G. N. Thomas (Chair), Chief, Department of Agriculture, Murray Lands Region. Commonwealth: Mr D. Purcell, Water Policy Branch, Department of Resources and Energy; Mr P. Allen, Assistant Secretary, Production Branch, Department of Primary Industry. WORKING GROUP 4: Irrigation Infrastructure- New South Sales: Mr K. J. Armstead (Chair), Director, Operations, Water Resources Commission; Mr R. A. Claxton, Chief, Division of Plant Industries, Department of Agriculture. Victoria: Mr P. Gill/Mr I. Johnson, Rural Water Commission. South Australia: Mr R. C. McKnight, Engineering and Water Supply. Commonwealth: Dr N. McDonald, Water Policy Branch, Department of Resurces and Energy; Mr P. Allen, Assistant Secretary, Production Branch, Department of Primary Industry. (Working Group 5: Salinity Reduction Options) New South Wales: Mr D. Marston, Special Agronomist (Irrigated Soils) Department of Agriculture; Dr D. Garman A/g, Principal Research Officer Water Resources Commission. Victoria: Dr C. Lawrence, Department of Industry, Technology and Resources; Mr R. Paterson, Department of Water Resources. South Australia: Mr I. E. Laing, Principal Engineer, Water Resources Engineering and Water Supply Department; Mr P. J. Cole, Department of Agriculture Regional Officer (Research) Department of Agriculture. Commonwealth: Mr D. Purcell, Water Policy Branch Department of Resources and Energy; Mr L. Northrop, Production Branch, Department of Primary Industry. RMC: Mr D. Blackmore (Chair), Deputy Chief Executive River Murray Commission. (8) All Groups expect to have their reports available for presentation to Standing Committee in June. The reports will then be submitted to the first meeting of the full Council on 2 July. (9) The Working Group on Environmental Resources is developing a report for the Council's July meeting which will outline an approach to the preparation of the Benchmark Environmental Study, identify management arrangements for carrying out the study and make recommendations on the resource requirements. This report will form the basis on which the Council will decide who will carry out the Benchmark Study, to enable it to be considered by the Council at the end of 1986. (10) Details of the Murray-Darling Basin water research initiative are currently being finalised by the Australian Water Research Advisory Council, for recommendation to the Minister for Resources and Energy. (11) The Murray-Darling Basin Ministerial Council was established by the four governments signatory to the River Murray Waters Agreement. Queensland is not a signatory to that agreement. However, a large part of the Basin is in Queensland and resource use in that State does have an impact on the quality of river water used lower down the river system. With this in mind, the relationship of Queensland to the Ministerial Council will be kept under review. (Question No. 3816) Mr Scott asked the Minister for Health, upon notice, on 29 April 1986: (1) Has his attention been drawn to the CSIRO Division of Food Research report on research for 1984-85; if so, does it contain a section on microbiology and biotechnology which covers irradiation of packaged processed meats. (2) Does the report discuss a study of the effect of irradiation on the storage life and organoleptic quality of vacuum-packaged corned beef. (3) Does the study claim that irradiation at 2.5 to 3.0 KGy caused flavour and aroma changes, while significant, were rated by the panel as only slight; if so, how can significant changes be rated as only slight. (4) Does the report state that products with a stronger flavour and aroma, such as smoked ham, may better mask irradiation-induced organoleptic changes. (5) Does the word `organoleptic' mean stimulating any of the organs of sensation, susceptible to a sensory stimulus and the quality of being able to make an impression on the sensory receptors of a special sense organ. (6) Does the word `mask' include in its meaning `to disguise, screen or conceal'. (7) Does the claim in the report mean that food products with a stronger flavour may disguise or conceal the changes of smell and taste caused by irradiation of the products; if so, will consumers be expected to allow for this factor when consuming irradiated food. (8) Does he have any information on the possible effects on the senses of smell and taste of consumers if they are frequently changing from irradiated food to non-irradiated food; if so, what are the details. Dr Blewett —The answer to the honourable member's questions is as follows: (1) Yes. The CSIRO Division of Food Research Report of Research 1984-85 does contain a section on microbiology and biotechnology which includes a study on the irradiation of packaged processed meats. (2) Yes. (3) Yes. While in everyday English `significant' can be used to mean large or substantial, in this particular sentence `significant' is used in it statistical sense, i.e., there is a degree of certainty, normally taken as 95 per cent that taste difference will be detected even if only slight. (4) Yes. (5) Yes. (6) Yes. (7) Yes. The Burgen Report on the Safety and Wholesomeness of Irradiated Foods published by HMSO in April 1986 states that `The chemical changes produced in food by ionising radiation are in general much less severe than are produced by other methods of cooking and heating'. This being so consumers would no more be expected to allow for changes in the smell and taste of irradiated foods than they would in the case of foods processed by well established methods. (8) No and it is unlikely that any such information exists. (Question No. 3833) Mr Simmons asked the Minister for Health, upon notice, on 1 May 1986: (1) Was there a special reason for the use of the photograph of BMX riders on pages 2 and 3 of the publication entitled The Drug Offensive. (2) Has the use of this photograph in the publication produced any complaints from individuals and organisations associated with BMX sports. Dr Blewett —The answer to the honourable member's question is as follows: (1) The purpose in using the picture of BMX riders and other similar pictures was to make concerned Australians aware that drug abuse is everyone's problem and not confined to certain sections in the community. (2) One parent from Queensland wrote to inquire why The Drug Offensive booklet had a picture of BMX riders. No complaints have been received from organisations associated with BMX sports. However, the mother of one of the boys featured in the picture, and the BMX Club to which he belongs, are delighted and proud to be associated with the National Campaign Against Drug Abuse. (Question No. 3841) Mr Tickner asked the Minister for Primary Industry, upon notice, on 1 May 1986: (1) Has his attention been drawn to allegations that a Taiwanese gillnetting fleet operating in the Australian fishing zone in the Timor and Arafura seas is responsible for the drowning of 3,000 dolphins each year; if so, what action has he taken in response to the allegations. (2) Has the Government given consideration to (a) phasing out gillnetting by the Taiwanese and (b) proposing that more selective fishing methods such as longlining be used. Mr Kerin —The answer to the honourable member's question is as follows: (1) and (2) Your attention is drawn to my Press statement of 16 May 1986 on this matter.