Wednesday, 28 May 1986 Madam SPEAKER (Hon. Joan Child) took the chair at 10 a.m., and read prayers. Debate resumed from 22 May, on motion by Mr Keating: That the Bill be now read a second time. Madam SPEAKER —I understand it is the wish of the House to debate this order of the day concurrently with orders of the day Nos 2 to 4. There being no objection, I will allow that course to be followed. Mr CARLTON(Mackellar)(10.01) —Today we are again discussing tax and tomorrow we will also be discussing tax. Mr Gear —About time. Mr CARLTON —The honourable member says: `About time'. We have been discussing tax since 19 September last year, when the Government produced its tax package. We have been waiting eight months for Bills to be introduced. Bills have been introduced into the Parliament without explanatory memoranda. Honourable members opposite who say it is about time we discussed tax should go to the Bills and Papers Office and ask for a copy of the explanatory memorandum for the capital gains tax legislation; it has been eight or nine months in preparation and is not ready. The Opposition got a proof copy of the explanatory memorandum for the capital gains tax legislation from the Treasurer (Mr Keating) after we kicked up a fuss about it last week in the Parliament and on national television. The legislation comprises 103 pages and the explanatory memorandum comprises 150 pages or so. It is still not available for honourable members who have to discuss the legislation tomorrow. The way in which this Government has been handling these tax measures is an absolute disgrace. That is not the end of it. We have had before the Parliament, since the 19 September so-called reform statement of the Treasurer, an additional 625 pages of taxation legislation, on top of the original 1,100 pages in the taxation Act. Since the so-called reforms of 19 September we have had a 57 1/2 per cent increase in taxation law. Some reform indeed! The latest package of measures was introduced in the House late on Thursday night-at 8 o'clock, to be precise. No detailed explanatory memoranda have been provided for the capital gains tax legislation, the Taxation Laws Amendment (Foreign Tax Credits) Bill or the Taxation Laws Amendment Bill (No. 2). An explanatory memorandum has been provided only for the Taxation Boards of Review (Transfer of Jurisdiction) Bill, which is one of the measures being considered this morning. We regard this as being totally unsatisfactory. If this Government wishes to get some sort of community acceptance for its taxation measures, if it is to live up to its original claims that it would take the community into its confidence by holding a national taxation summit, having discussions with interested groups and proper consideration by the Parliament, it must not introduce legislation on a Thursday night without providing explanatory memoranda, expect the Opposition to consult with its advisers over the weekend, to have a shadow Cabinet meeting on a Monday, and then come into the Parliament on a Wednesday and Thursday to discuss 275 pages of complicated legislation. That is not good enough. It is an abuse of the Parliament, it is an insult to the Australian people, and it is typical of the way in which the Treasurer of this Government works. I have been a member of this House for about eight years now, and during that period I have seen Treasurers under two governments. I do not think that anyone could possibly say that the former Treasurer, the present Leader of the Opposition (Mr Howard), treated the House with the contempt with which the present Treasurer treats the House. This is quite unconscionable. We lodge the strongest possible protest. I have to qualify my remarks today as the lead speaker for the Opposition in the House of Representatives-which requirement is a disgrace-by saying that these 275 pages of legislation will require considerable additional study before they go to the Senate, because there may well be things in them the full explanation for which we do not understand. We have not had a chance to consult external advisers to any degree. The whole of the business community, the whole of the taxation accounting community and the whole of the legal fraternity that has to worry about these things have been waiting around for eight months to look at the detailed proposals, have had them, and have had no chance to pass any comment on them before they have to be debated in the House of Representatives. That is a national disgrace. The way in which this Treasurer handles these matters is a cause of grave censure. At Question Time in the House on Friday, the Treasurer made remarks about my failure to attend a briefing which had been organised on Friday morning. Let me come back to that, because this is one of those smart responses from this arrogant Treasurer, and just what he does has to be exposed. Unlike the previous Treasurer, the present Treasurer refused briefings on taxation Bills to the Opposition. It is outrageous behaviour within a parliament to refuse access to officials to discuss the technical aspects of taxation legislation. I know of no examples under the previous Government where such briefings were refused, but they were refused arrogantly and contemptuously by the present Treasurer. I raised this matter, as did my colleague in the Senate, Senator Messner. We created a fuss about it. There was some public pressure about it. Then the Treasurer decided, on Thursday night, that a briefing would be made available to us at 11 a.m. on Friday. It so happened that it was absolutely impossible for me, because of unbreakable previous commitments, to attend that briefing. The Leader of the Opposition and I arranged for our respective staff officers to attend the briefing, which they did. We were thankful for it-except that it was in the context of having 275 pages of legislation dumped on us the night before at 8 p.m., to be considered over the weekend. What chance did we have to consider that in great detail? Actually, I will qualify that. We got advance copies at about 4 o'clock in the afternoon on Thursday, so we had from about 4 o'clock until midnight to look through the 275 pages. Anyone who knows about tax legislation will know that that is not simple. Then we were required to attend on the Friday morning. Maybe something could have been arranged over the weekend to bring in the officers concerned, but we have our commitments back in our electorates, and we needed also some time for reflection over Saturday and Sunday-which all of us spent working the whole time on the wretched things. It was, therefore, really a very meagre concession by the Treasurer to arrange that briefing. Following that, on the Friday, at Question Time, the Treasurer got stuck into the shadow Treasurer for not attending that briefing. I reject totally any charge that I was acting improperly or not taking advantage of an offer. Really, this fellow must be exposed. I understand that he treats the Caucus in the same way as he treats this Parliament. Mr Martin —That is not true. Mr CARLTON —The honourable member says that he does not. I have talked to many of your colleagues, my dear fellow, who make it clear to me, and have told me, that many of the ways in which the Treasurer treats us in this House are nothing like the way that he treats some of his colleagues in the Caucus-and I know it from them. Mr Mountford —Nonsense; arrant nonsense. Mr CARLTON —Do not try to tell me that. Madam SPEAKER —Order! The honourable member will speak through the Chair. Mr CARLTON —These people opposite, Madam Speaker, know exactly what happens, and many of them have told me what happens. Okay; that is the way that the Government handles these tax measures. Let me deal with the Opposition's response to the particular measures that we are looking at this morning. We are looking at the Taxation Laws Amendment (Foreign Tax Credits) Bill, which the Opposition will be opposing. We are looking at proposals for taxation boards of review in the Taxation Boards of Review (Transfer of Jurisdiction) Bill. We have grave doubts about whether or not it has been adequately discussed in the Parliament and throughout the community. We do not believe that it has been properly examined, and we seek to have the passage of that measure through the Parliament delayed to allow proper consideration by interested bodies. It proposes a major change which I will speak about later. If we are unsuccessful in having it delayed, we may well feel bound to oppose it in the Senate, but we will put to the Government the proposal that it be left for further consideration and not be introduced on the proposed date. We will not oppose the Taxation Laws Amendment Bill (No. 2) except for one clause, clause 4, which relates to the secrecy provisions of the Income Tax Assessment Act. I will explain exactly why later. We will not oppose the Income Tax (Securities and Agreements) (Withholding Tax Recoupment) Bill, which is a fairly technical matter of imposing a tax under other measures. Let me deal first with the proposal for the transfer of jurisdiction from the taxation boards of review to the Administrative Appeals Tribunal. It is really a fundamental change in the way in which taxation appeals are heard. It arises out of the recommendation of the Administrative Review Council in June 1983. It is proposed that the provisions in the Bill will take effect from 1 July. Mr Hodgman —It is a very short time. Mr CARLTON —A very short time is allowed. The honourable member for Denison quite correctly expresses his concern about this matter. There is a very serious concern on the part of the Government and the Australian community over the immense backlog in dealing with appeals under the taxation Acts. This is causing very great concern because people are in a state of anxiety and uncertainty. If they have had an assessment rejected or amended and they wish to appeal, they may well be held up for a couple of years. In the meantime, they have to pay tax, they have to pay interest and so on. It is obviously a very burdensome matter, particularly for taxpayers and also, of course, for those who have to administer the Acts. The Bill proposes to amend a number of Federal taxing Acts and the most significant of these is the Income Tax Assessment Act. The amendments will abolish the taxation boards of review and transfer their jurisdiction to the Administrative Appeals Tribunal. A Taxation Appeals Division will be created, and existing board members may transfer to that Division if they so wish. The Commissioner of Taxation will be allowed to extend the current strict 60-day limit for lodging and objection, and the Administrative Appeals Tribunal or the Supreme Court will be allowed to extend the time for lodging an appeal against the Commissioner's decision to disallow an objection. There is a plan to have more uniformity in the appeal process of Federal tax laws, and the objection and appeal process of the sales tax is to be brought more into line with the comparable income tax provisions. We do not quarrel with that. Mr Jacobi —There is no quarrel with that lot. Mr CARLTON —I acknowledge the interjection of the honourable member for Hawker. There is quite a lot of useful stuff in this Bill. I am not putting up the Opposition's concerns about this issue in any adversary way at all. Mr Jacobi —I have had concerns the same as yours, I must confess. Mr CARLTON —I thank the honourable member for Hawker. We have a sincere concern about certain aspects of this measure which we think require further consideration in the Parliament and in the community. Let me say what some of those concerns are. The first one is that a board of review currently has three members. It will be possible under the Administrative Appeals Tribunal system to have just one member sitting on a board. That member may be an officer or a former officer of the Australian Taxation Office. Although it would obviously speed up procedures if many more people were sitting individually and it would get rid of the backlog, there is concern that the rights of a taxpayer presenting an appeal might be somewhat more restricted if there is an individual commissioner hearing that appeal. If that commissioner has had a background within the Taxation Office, there might be a concern, without any disrespect to any individual officer-I am not implying that-that that person, when looking at the appeal, having spent a life as a gamekeeper, so to speak, and seeing the poacher come up before him, might have a somewhat more strict view of that appeal than would an independent taxation person or somebody from the outside community who is unrelated to the process. That is one concern. Mr Hodgman —Caesar unto Caesar. Mr CARLTON —Yes, Caesar unto Caesar, as my friend the honourable member for Denison so correctly points out. That concern is magnified by the fact that the appeal procedures are being altered quite considerably. I have a chart here which shows the income tax objection and appeal process that exists currently. It is quite complicated but the key point is that 97 per cent of appeals which go to a higher process go to a board of review; some 3 per cent go direct to the Supreme Court but I will not talk about those. If the appeal is not agreed to there is an appeal to the Supreme Court; following that there is an appeal by leave to the Federal Court of Australia and there can be an appeal by special leave in the most exceptional cases to the High Court of Australia. That is the current appeal procedure. First, there is a board of review with three members; secondly, appeal to a Supreme Court; thirdly, appeal by leave to the Federal Court; and finally, appeal by special leave to the High Court. The proposed system is that the appeal will go to the Administrative Appeals Tribunal, which could have only one member sitting, and then there is an appeal to the Federal Court only. There is no higher appeal beyond that. That is a very severe restriction on the rights of appeal. Perhaps there is a case for this which is more evident than that in the explanatory notes we were given on Thursday afternoon, but we do not believe that a change of this kind should be introduced by 1 July without a great deal more public discussion. That is just one aspect of the matter. Also, there is a limitation on objection rights. Objection rights against an amended assessment are to be limited to the particular amendment; that is, the amendment of the original assessment. Appeals from the AAT will be to the Federal Court and will be only on the actual point of law upon which the appeal is lost. Previously a taxpayer could appeal to a Supreme Court from a board of review and virtually have a rehearsing of the whole case. That is quite an important restriction because the original ground might not be the most important one. If an appeal is considered by the Supreme Court after a hearing by a board of review and if there is a capacity to examine the whole case and not a very narrowly constrained set of arguments, obviously that is of much greater benefit to the taxpayer and the taxpayer's civil liberties will be better looked after. On our reading of the legislation, it appears that under the proposed system, unlike the present system, in which the Department has to give the taxpayer reasons for amendment of the assessment-and those can be thought about by the advisers to the taxpayer before the board of review hears the matter-the Commissioner is not obliged to give reasons to the taxpayer before the AAT hearing. If our reading of it is correct-perhaps we have misread it but I do not think we have-we do not like it at all. It has been argued that most of the reasons that must be given by the Commissioner are relatively unimportant, that there is a great deal of junk, so to speak, in what is given, but the important reasons are also given at present. The fact that these might not be available to the person lodging the objection until the AAT hearing strikes us as a denial of basic rights and therefore we would like to have that looked at again. Mr Hodgman —How can one draw a notice of appeal if one does not know the reasons? Mr CARLTON —That is correct. As the honourable member says, how can one draw a notice of appeal if one does not know the reasons for the rejection of the claim? The next problem we have is the provision for the Attorney-General to intervene in cases of public interest. We would like to know a little more about that. Currently a person who lodges an appeal is up against the Commissioner, but he is not also up against the Attorney-General. This Bill provides for the Attorney-General to get into the act as well. So it is two against one. Maybe there are very sound reasons for that which go beyond the notes that we have been given. However, we have some concerns about this provision. We also have concerns based on reports from people who have appeared both before boards of review and before the Administrative Appeals Tribunal. Unless some considerable change were made in the taxation division of the AAT, we would be concerned about the additional formality of the AAT system compared with the current system of boards of review. Boards of review hearings are held in a relatively informal and quite speedy way. Those who have appeared before both types of bodies inform me that there is a great deal more formality in AAT procedures. Indeed, some of the speeding up which might be hoped for under this change might not eventuate unless there is a rather substantial change in the way in which the hearings are conducted. I do not have a great deal of time in this debate, but I think I have raised most of the points I wanted to put. I think I have raised sufficient points of query, worry and concern on quite fundamental issues to suggest that it really is not satisfactory to introduce a Bill of this complexity on a Thursday night, rush it through the Parliament on the following Wednesday, have it through the Senate within a week or two and bring it in on 1 July 1986. We do not think that is on. We sincerely ask the Government to reconsider that program. Certainly, if it does not, we will feel obliged in the Senate to try to seek support at least to hold it up. I now turn to the Taxation Laws Amendment Bill (No. 2) 1986, which contains a number of amendments on deferred interest security, interest withholding tax and a variety of other matters which we are not opposing. However, I would like to pick out one matter about which we are very concerned. There is a proposal to relax the secrecy provisions to permit the Commissioner of Taxation to communicate information on superannuation funds to the Secretary to the Treasury or any new authority created for the purpose of supervision or regulation of superannuation funds. It is stated that the decision as to whether certain responsibilities will be transferred will be made prior to the Budget sittings. No detail has been provided for the reasoning for this proposed change. This is a quite extraordinary provision. The Parliament is being asked to allow the Commissioner of Taxation to pass secret information about superannuation and taxation matters to another person or to a body not yet formed. Although we know who the present Secretary to the Treasury is, we would have grave doubts about transferring that information to the Secretary to the Treasury as such. We are being asked to agree to the relaxation of the secrecy provisions to allow passage of information to a body not yet formed. This is absolutely not on. We cannot do that. We will vote against that clause. We want to know who or what it is that we are providing this secret information to. That is an incredible proposal. We do not know whether a body will be set up under Gough Whitlam, Al Grassby-- Mr Lee —Or Malcolm Fraser? Mr CARLTON —Or Malcolm Fraser, or maybe Garry Weaven of the Australian Council of Trade Unions. Mr Weaven has a great interest in superannuation. He is the fellow who is rushing around at the moment clobbering all the employers on superannuation matters. Maybe the Government has a proposal to make Garry Weaven the head of a new body to regulate superannuation. The Opposition has absolutely no intention-I hope that the Government will accept the reasonableness of this proposition-of buying this pig in a poke. We will vote against that clause. Another little quite entertaining admission which is tucked away in this Bill is the provision to remove the need for signing of receipts et cetera, required after 30 June 1986 as part of the new substantiation rules, recognising, of course, the total unreality of having all receipts or invoices signed by the supplier when this is not normal business practice. In other words, under the proposals put up under the fringe benefits tax and superannuation rules, which in the case of the entertainment tax Bill that we dealt with a few months ago involved some 20-odd pages, one would have to have one's service station receipts, for instance, signed. All sorts of other fiddling receipts would have to be signed. This is the first admission publicly by this Government that its substantiation and fringe benefits tax rules are unworkable. We predict that this will be the first of a whole lot of backdowns of this kind. If there are not backdowns of this kind these matters will have to be cleared up by the incoming Liberal-National government. I turn to a very important aspect of this legislation, the Taxation Laws Amendment (Foreign Tax Credits) Bill. Let me deal with it in the limited time I have available. I might say that, as with other major areas of legislation, we still do not have any explanatory memorandum for this Bill. I have been given an explanatory memorandum for the Taxation Laws Amendment Bill (No. 2) 1986 but I think that is the one I already have. We still do not have the explanatory memorandum for the Taxation Laws Amendment (Foreign Tax Credits) Bill. It is a very important measure and it is having quite a deleterious effect on business investment by Australian companies abroad. Broadly speaking, what happens at the moment is that a company receiving income from an overseas subsidiary pays tax on that income in the other country and that is taken as being the tax paid. Very simplistically, this Bill says that, if the company tax rate in the foreign country where the subsidiary is operating is lower than the Australian rate, when that company brings the income back to Australia it will pay an additional tax up to the level of the 49c in the dollar Australian company rate. This is really a very silly proposal. Let us consider a company that is operating as a subsidiary in Singapore, and let us say that it is the only subsidiary-there are one or two arrangements which would help very big companies with widespread interests where they can average around a number of countries. Let us say that somebody has been entrepreneurial enough to set up a new operation in Singapore and that operation is set up in order to service exports from Australia. In other words, if one has a subsidiary company in Singapore designed to carry out a sales operation there to make money for Australian exports, under this measure that subsidiary will pay tax in Singapore, and the tax rate there is 40c in the dollar. The income will then come back to Australia and there will be an additional tax because the Commissioner of Taxation will say: `You have paid only 40 per cent in Singapore. The rate is 49 per cent in Australia, so you will have to pay an additional tax'. If an Australian company with a branch in Singapore has an Australian income of $100,000 and its Singapore income is $40,000, the present Australian tax would be $49,000-this is when we get the 49c rate in Australia-and the present Singapore tax at 40c in the dollar would be $16,000. So we have a total tax payment of $65,000. Under the new proposal we are looking at this morning the company would pay the Singapore tax of $16,000 and it would pay the $49,000 Australian tax, but it would also have to pay the difference in Australia between the Singapore tax and the Australian tax. So the new tax would be $68,600 on the whole income for the company, versus $65,000 before; that is $3,600 additional tax for being entrepreneurial, going to Singapore, setting up a subsidiary to sell Australian goods there, and making a profit. Now that is a nonsense. This funny little foreign tax credit thing was dredged up by the Australian Taxation Office and the Treasury when we were in office. In fact, we announced it in the late 1970s. Most people did not understand what it was all about-the foreign tax credits system is a rather arcane thing-but business houses obviously do. There was a lot of examination of it by people in the business and they raised very substantial objections to it. Because a country like Australia really wants to start getting out into overseas operations and setting up export arrangements and subsidiaries that operate in their own right, it was decided by the then Treasurer, the present Leader of the Opposition (Mr Howard), that this was just not on, that the proposal was unworkable and that it would be totally counter-productive. Now this Government has bought it and the reason it has bought it, as I see it, is that it is just desperate for extra revenue following its failure to broaden the tax base at the National Economic Summit. So all these old nasties that have been sitting around in the Taxation and Treasury cupboards for years have been dragged out and dusted off and, believe it or not, this absurd arrangement-the foreign tax credits scheme-has been put forward again. This Government has made a couple of amendments since its original announcement which allow companies to average out over a number of different countries. Some of the big boys who have very widespread operations will like that and they will move money all over the place to make sure that they do not pay any extra tax; but anybody who is battling in new areas with low tax regimes or setting up subsidiaries in a single country-I might say that the United Kingdom and the United States of America have tax rates that are lower than ours and they are going lower-will be clobbered by this tax. So, if one wants to set up subsidiaries in those countries one will be clobbered by this tax. Of course, what will happen is that people just will not do it or they will move their money around the world in ways to avoid bringing the money back to Australia. The Government reckons that it will get $60m out of this tax. If this tax goes ahead it will stop a whole lot of entrepreneurial activity in the first place; that is point one. In other words, it is a stupid thing to bring in at this time when we are really trying to get investment in exports, and so on. That is the absurdity of it in the first place. Secondly, I do not think anybody is going to pay it. They will find out ways of moving stuff from Singapore, they will set up another subsidiary somewhere else, and so on; and we can bet that the smart guys will somehow avoid the tax coming back. Therefore, why set up something that virtually invites this, is totally counter-productive, and so on? When we were in government we opposed this when it came up in the late 1970s, after we had had a look at it, and we withdrew it. We will oppose the measure in this instance here and we will oppose it in the Senate; and we will invite the support of the Australian Democrats. I do not think they have yet had a close look at it, but after they have had a close look at it I think they may well support us. We have this complicated range of measures in 275 pages of tax legislation. I repeat what I said at the beginning: Given the almost zero time that we have had to look at this and the fact that explanatory memoranda are not available for some of the most important parts of it, essentially this is a preliminary reaction from the Opposition. I now find that we have another explanatory memorandum on foreign tax credits. Well, splendid, it has just arrived! That is great; I have half a minute now to read that, absorb it and carry on with this debate. We will make other views known when the measure gets to the Senate. Mr MOUNTFORD(Banks)(10.31) —I rise to support the Taxation Laws Amendment Bill (No. 2) 1986, the Income Tax (Securities and Agreements) (Withholding Tax Recoupment) Bill 1986, the Taxation Laws Amendment (Foreign Tax Credits) Bill 1986 and the Taxation Boards of Review (Transfer of Jurisdiction) Bill 1986 before us today. It is unfortunate, though understandable, that the four tax Bills that we are about to discuss should have become overshadowed in the great debate over capital gains, which shall be before us tomorrow, and the fringe benefits tax, which this House passed last week. It is understandable because these measures represent the most direct attack upon the inequities of the present taxation system. It is unfortunate because the Bills now before us are still an integral part of the Hawke Labor Government's overall strategy to establish a fair system of tax which will remove the enormous burden that has been shifted to the shoulders of marginal taxpayers from the shoulders of better off Australians. While capital gains, fringe benefits and the like have rightly been given a place as a most decisive part of the Government's tax reform package, we would do well to remember that the Bills before us are just as committed to the task of tax equity. Each year difficulties arise within the tax system, loopholes are exploited, flaws are exposed, and legal decisions change the meaning of certain provisions. It is the responsibility of government to review these changes every year to ensure that such difficulties are addressed before too much abuse of them takes place. Our predecessors were sadly remiss in this respect and it is mainly because of their neglect that this Government has been forced to make the decisions that some now find so hard to take. The fringe benefits tax is a good example of this. For years employers used fringe benefit packages to attract staff by providing them with a tax-free benefit. The benefits of the rich became greater while their taxable income remained the same. Had honourable members opposite acted sooner, the present tax would not be necessary, but they neglected their duty, allowed the lower income earners to take on a greater burden and consigned the whole problem of tax equity to the too-hard basket. There are other necessary changes which need to be made to the tax system from time to time, which are not nearly as far-reaching as fringe benefits but which are still important. It is such legislation which is before us today-a fine tuning, as it were, of the taxation system. Honourable members should make no mistake about it; the spirit of equity and just distribution of the tax burden which is to be found in the capital gains and fringe benefits legislation is also present in the four Bills now before us. For example, the Taxation Laws Amendment Bill (No. 2) deals with two major changes to the Income Tax Assessment Act 1936 and with a number of minor changes. Firstly, the Bill will deal with discounted and other deferred interest securities. At present securities which issue most or all of their income only at maturity have been taxed only on redemption or prior to sale when the benefit is received in cash. This has created a situation in which holders of such securities are at an advantage relative to the position of holders of more traditional interest bearing securities. Clauses 16, 26, 27 and 28 are designed to eliminate such unfair tax deferral advantages. The imbalance will be redressed by taxing that portion of the ultimate gain which accrues to the security only in that particular financial year. Examples of the types of securities to which the changes apply are original issue discount securities interest at maturity securities and securities which separately market the entitlements to principal and interest on underlying securities. Even such securities will need to satisfy three criteria: Firstly, the issue needs to have taken place after 16 December 1984, when the initiative was first announced; secondly, the expected term will need to exceed, or be likely to exceed, one year; and, thirdly, the sum of all payments, other than periodic interest payments, will need to exceed the issue price. The new laws will not apply where the excess is less than 1.5 per cent per annum of the sum of the payments. The definitions are fairly clear, but to ensure that there is no doubt the legislation allows for inquirers to apply to the issuer of such securities for a notice as to whether the security comes under the new law or not. The legislation allows for varying accrual methods where the return to the security is not known for certain. Where determination in advance is not able to be calculated the Commissioner of Taxation will have authority to determine the amount to be included in the taxpayer's income. Allowance also is made for deductibility where the income ultimately is not received at the end of the term. For example, where the issuer becomes insolvent the amount already paid will become deductible as a bad debt. To ensure that no unfair disadvantage is imposed on holders of such securities the Bill provides also for cases in which the income of such securities is included in a private company's taxable income. Such income is excluded under Division 7 for tax circulation purposes until the security is sold or redeemed. Also provision is made for the sale of the security before maturity. Again, income arising from the sale of an affected security for more than the accrued value will be accounted as taxable income of the seller, whereas a loss will be an allowable deduction. Such moves prove that when the Australian Labor Party speaks of equity in the tax system it refers to fairness throughout the entire system, even when it relates to a part of the tax system which usually affects only the wealthier income earners. The new tax measure will result in gains to revenue of an unquantifiable amount. Related to this reform is another initiative announced in December 1984 designed to strengthen the presently existing provisions in the tax laws dealing with withholding tax. It has been the hallmark of the tax policy of the present Opposition when in government to let loopholes develop without closing them. Clauses 12 to 15 and 19 to 28 of this legislation are intended to close such loopholes. At present when a non-resident holds a security such as the ones I have just dealt with a lurk has evolved whereby withholding tax can be avoided by selling the security to a resident just before it reaches maturity. The proposed amendments make the profit from such transfers by non-residents to residents income that consists of interest. The profit will thus come under Division 2A of Part III of the existing Act and will be subject to withholding tax. The amendments will also deal with a situation in which a resident has entered into a hire purchase or finance lease agreement after 16 December 1984 with a non-resident. The charges under such an agreement at present are not classed as interest under the withholding tax rules. However, such charges obviously are the return for the provision of finance. The amendments will treat the excess of total payments over the cost price of such goods as interest assessable for withholding tax purposes. The Bill also removes any confusion about the necessity to pay withholding tax on the discounted element of a bank accepted bill where a resident reimburses a non-resident acceptor for the face value of the bill when it matures. It is obvious that if the resident drawer had met the face value of the bill immediately withholding tax would be payable. The Bill makes it clear that withholding tax is still payable on any discounted security or interest under a bill of exchange, thereby eliminating uncertainty and closing a possible abuse of the taxation system. The interest withholding tax provisions will not directly lead to a gain in revenue, but without these charges an unquantifiable amount would continue to be lost. While the provisions relating to discounted and other deferred interest securities and the interest withholding arrangement are the main features of the Taxation Laws Amendment Bill (No. 2) there are a number of other important features. For example, clauses 5, 8, 18 and 30 will exempt certain parts of the formal training allowance payable to trainees under the Commonwealth Department of Employment and Industrial Relations scheme introduced from 1 January 1986. The amendments will exempt from tax those components of the formal training allowance which equate with the presently exempt social security pension or benefit entitlements. The assessable component of the allowance will be subject to tax instalment deductions under the pay as you earn system. By this provision, people in receipt of the formal training allowance will not be disadvantaged by being taxed on their social security equivalent payment. The move is a part of the Government's efforts to improve the training, education and employment prospects of young people. This change will cost revenue approximately $100,000 in 1986-87 and about $200,000 in a full year. The incentive given to the young, however, outweighs the cost. In the category of corrective legislation, clause 17 will eliminate an unintended effect of the income tax rebate provisions which limit the rate of tax payable on certain payments made on termination of employment. The intention of the original legislation, section 160aa, is to limit tax on lump sum superannuation after 30 June 1983 to 30 per cent or in some cases 15 per cent. However, a technical difficulty in section 160aa means that some schemes where part of the relevant termination payment is taxed at the lowest marginal rate may not get the full rebate. The amendment will remedy that situation. The cost to revenue of this measure will be minimal. Clause 4 of the Bill allows for the possibility at a later date of the transfer of responsibility for the non-revenue aspects of superannuation fund regulations. At present, the Commissioner of Taxation is responsible for these regulations, but it is proposed that some changes be allowed possibly to extend responsibility to the Treasury, or a new authority set up for the purpose. Naturally, any such move would require consultations with the relevant business and employee groups. In preparation for this possible change, the secrecy provisions of the present Act are being changed to allow the Commissioner to communicate relevant information about superannuation funds to the prospective authority. The Bill will also allow donations of $2 and over to the Pearl Watson Foundation to be tax deductible. This foundation has been set up in memory of the wife of Mr Justice R. S. Watson of the Family Court in recognition of her great contribution to the Australian community. The foundation promotes programs in areas related to the Family Court's operations in marital breakdown, marriage counselling and conciliation. The estimated cost to revenue of $10,000 per year will be more than worth it. To ensure that the provisions of the Taxation Laws Amendment Bill (No. 2) dealing with withholding taxes are given enough sanction to make them effective, the second of the Bills before us, the Income Tax (Securities and Agreements) (Withholding Tax Recoupment) Act 1986 has been introduced. Where parties try to avoid the provisions of the new legislation, for example, by selling a security at less than its arm's length negotiated value, the Commissioner has authority to adjust the sale price to a truer reflection of its market value, and tax the item accordingly. In cases where tax is being avoided by a transaction between residents and non-residents, the Bill imposes liability for the avoided income on the resident, due to the difficulty of getting the tax from the non-resident. By such means, the Government hopes to prevent collusion in joint dealings which have as their ultimate aim the defrauding of the Australian taxation system. The Taxation Laws Amendment (Foreign Tax Credits) Bill 1986 addresses yet another abuse which our opponents did not confront-the avoidance of Australian tax by appearing to give income an artificial overseas source. Under the present laws the income of Australian residents derived from foreign sources is in most cases exempt from tax here if it has been subject to tax overseas. No matter how little the overseas tax may have been, the income is subject to no further review. This scheme is obviously open to abuse of the worst kind. It encourages the existence of tax havens. This legislation is a perfect example of how the Opposition failed to keep pace with change while in government. This blatant tax rort has been dealt with long ago by many other nations, including the United States of America, the United Kingdom, Japan and West Germany-nations which are hardly in the vanguard of socialist reform. The attention of the Australian Government to the problem was aroused as early as 1975 by the Asprey Taxation Review Committee, which recommended the use of a foreign tax credit system to eliminate the rort. In 1978 our opponents began to legislate to deal with the problem, but backed off when they were criticised by their masters in big business. As a result, a glaring abuse of our tax rules has been sanctioned for almost a decade. Rest assured that this Government will not shrink from the task. Put simply, the foreign tax credit system will allow for overseas sources of income to be taxed at the normal Australian rate, and a credit will be allowed against that tax on the basis of the foreign tax paid. The system is based on the White Paper and the reforms announced by the Treasurer (Mr Keating) last September. Since then, discussions have been held with interested business and professional groups to ensure that the tax is fairly and effectively imposed. The legislation as it stands will allow for excess foreign tax credits from high tax countries and ensures that company tax is paid in such a way as to prevent possible abuses while not subjecting companies to a system of double taxation. The Bill recognises the need to exempt income earned overseas and taxed in the other country. It also contains provisions to convert currency from foreign money into Australian dollars. This tax is a most direct example of the Hawke Labor Government's determination to ensure that each Australian shoulders his or her fair proportion of the tax burden, and does not escape that responsibility, leaving it to others to bear. It is expected that the Bill will bring an increase in revenue of $60m per annum, measured in 1985-86 dollars. The legislation will take effect from 1 July 1987. The first results will appear in the financial year 1988-89. Finally, the Taxation Boards of Review (Transfer of Jurisdiction) Bill 1986 deals with several administrative points of taxation appeal organisation. The Bill for the most part adopts the recommendations of the Administrative Review Council. The major recommendation followed in this Bill is the abolition of the taxation boards of review and the transfer of their power to a new Taxation Appeals Division within the Administrative Appeals Tribunal. The new arrangements are designed to retain the high standards and legal expertise of the present taxation boards of review while coupling with it the flexibility of the Administrative Appeals Tribunal. The backlog of cases left over from the tax avoidance boom during the Opposition's period in government has delayed many hearings of appeals. The structure of the new Tribunal will allow for hearings by a single member, which will substantially increase the number of appeals that may go through. Once again, we see that it is left to this Government to clean up the mess of our predecessors. The four Bills before us now are an integral part of the Labor Government's commitment to tax equity. Certainly, they may not attract the enormous media attention of the other legislation which forms part of our total reform package; but in their initiatives to create new laws, correct or replace old laws, and advance and streamline the procedures involved in taxation administration, they are every bit as important as the other elements of the package. They prove that the Labor Government is determined to succeed on difficult technical points, just as much as on sweeping innovations. I commend the Bills to the House. Dr WATSON(Forde)(10.50) —I rise to speak on three Bills this morning-the Taxation Laws Amendment (Foreign Tax Credits) Bill 1986, the Taxation Laws Amendment Bill (No. 2) 1986 and the Taxation Boards of Review (Transfer of Jurisdiction) Bill 1986. Before I begin, I comment to the honourable member for Banks (Mr Mountford) that I am afraid the next Liberal-National Party Government will have to clean up the mess created by the Bills that are being debated today and tomorrow and the ones that were debated last week in this House. I would like to make a couple of general observations on matters which were partly covered by the honourable member for Mackellar (Mr Carlton). I think it is worthwhile reiterating them now. The Income Tax Assessment Act 1936, in case some Government members have not seen it, has about 1,200 to 1,300 pages and is fairly complex legislation. In the last couple of weeks another 300 to 400 pages of equally complex legislation have been put forward. Even though I was a professor of accounting, I would not claim to have a great deal of expertise in the area of taxation law. It is a specialty area and one must study it day in, day out, if one wants to keep on top of the subject. Since I studied taxation law, in my various roles in auditing and giving financial accounting advice, I have come across the Act on numerous occasions and have also had the opportunity to consider overseas Acts, such as those in the United States of America, but I do not believe that I could possibly understand, in the space of a week, 300 or 400 pages of complex legislation. The mere fact that the Government wants to push through such legislation without giving this House, and members of the Opposition and the public, sufficient time to consider it is absolutely disgraceful. I have consulted some of my colleagues who lecture in taxation law and members of major chartered accounting firms. I even spoke last night with Mr Ian Gzell, QC, the President of the Taxation Institute of Australia, which is a body that represents 9,000 lawyers and accountants throughout Australia. Not even Ian Gzell has had sufficient time to absorb and respond significantly to the legislation which was introduced last Thursday night. Not even his committee in the Taxation Institute of Australia, which is looking at this legislation, has had sufficient time to absorb and understand it. There is absolutely no way that members of this House-and I would say that there would be very few Government members-could confidently read, understand and comment on it. When I say very few Government members could comment, obviously some of them have had the help of the Treasurer (Mr Keating) in writing their speeches, but very few Government members, let alone Opposition members, who have had less time to look at it, could actually absorb this legislation. Not only members of the House will find this legislation complex; the complexity of the legislation introduced last week will tell on small businesses over the next couple of years. The legislation involves significant extra bookkeeping and significant extra recordkeeping. It will involve significantly increased costs for professional consultation. I must admit that my friends in chartered and public accounting must be rubbing their hands because of the actions of this Government. The legislation will certainly increase the amount of advice that will be sought from them and also, I am sure, from legal practitioners. It will increase the costs of doing business. It will also increase the risks of doing business because of the self-assessment system and the fact that businesses will have to live with a significant amount of risk in the taxation area for a period of up to at least six years. The system is becoming even more unwieldy than is already the case. No one would argue that the taxation system does not need some simplification, but the legislation that has been introduced does not go in that direction. In fact, the legislation is seen to be almost arbitrary. It is considered to be less fair today than it was in the past. I believe that that process, which has been going on for some time, will be compounded in the future. The Government has had this legislation in its mind since at least September 1985. It has taken eight months to produce it. In the meantime, it has had a significantly detrimental effect on business and on the investment climate in Australia. It is not only that; when we get the legislation, what do we see? We see at most the debit side. All the nasties are presented. We have not yet seen the tax cuts. We have not yet seen the imputation system. Will that system be guillotined through? Why is that legislation, which is absolutely critical to business in the future, not being guillotined through at the same time and with the same haste as the nasties? We know that the corporate tax rate will rise to 49 per cent. Why are the positive aspects not being introduced at the same time? Australia seems at present to be going in the opposite direction-this will lead me on to the Bill on foreign tax credits-to that of most of our competitors. There is before the Senate in the United States of America a Bill in relation to which the House of Representatives there has suggested that the corporate tax rate in the United States should fall to 36 per cent. The United States Treasury has suggested that tax rates should fall to 33 per cent, and there is some indication that President Reagan will not simply accept a fall from 46 per cent to 36 per cent but will insist on a 33 per cent tax rate. The United Kingdom has just completed its corporate tax renewal, dropping its rate to 35 per cent. Singapore dropped its rate from 40 per cent to 33 per cent, the Minister for Finance (Senator Walsh) announcing that on 7 March this year. He announced the drop to improve the after-tax return on capital. Yet in Australia we shall be increasing our corporate rate to 49 per cent, and we have yet to see any imputation system. I now turn to the Taxation Laws Amendment (Foreign Tax Credits) Bill. At a time when business is being requested-almost pressured-to invest in Australia, when we have leaders in the Australian Council of Trade Unions exhorting business to increase investments and exports, and when we have a problem with our balance of payments, there is introduced a Bill to tax foreign revenue. The argument, of course, is that any criticism of the Bill overlooks the fact that foreign tax credit systems are common in developed countries, such as the United States of America, West Germany and Japan. The problem is that Australia faces a major problem with its exports. At present we need all the competitive advantage we can possibly muster. Even though an imputation system is to be introduced-so we are led to believe-and even though the return to shareholders may be higher after tax because of that, the fact is that Australian companies will be facing a high marginal rate of 49 per cent, and they will be competing with companies overseas that will be facing low marginal rates of figures around the low 30s. Our companies themselves must finance the tax. They are the ones that will have to pay it and finance it. That will give foreign companies against which they are competing a comparative advantage in the market-place. At a time when we need everything to go our way, we have the taxation system, in essence, going in exactly the opposite way. Mr Martin —Maybe they will invest in Australia for a change. Dr WATSON —They would not invest in Australia because of the cost system that Australian Labor Party members have helped to introduce. Labor members, including the Prime Minister (Mr Hawke) when he was President of the ACTU, did damage to Australia and increased the costs of operating in Australia more than any other individual. Labor members and their Treasurer have not helped one iota. I now turn to the Taxation Laws Amendment Bill (No. 2) 1986. On page 12 of his second reading speech, the Treasurer indicated that it had been decided to transfer responsibility to somebody else-perhaps the Secretary to the Department of the Treasury, perhaps to some new supervisory authority. We have no idea what kind of structure will be proposed. Whatever the new organisational structure is, we have no idea how far its responsibilities will go. We have no idea who may or may not be in that organisation. We have no way of knowing how much information should or should not be transferred to this unnamed organisation. We do not know how it is to be limited. We do not know how secure that information will be in the hands of this new body. Although there may be problems from time to time, the confidentiality of taxation records has generally been very high under our taxation system. We do not know whether the same kinds of standards will be met by this body. Yet this Parliament is asked to give a blank cheque to the Treasurer. We would hardly buy a new car from him, let alone give him a blank cheque. This legislation should be considered only when we know what the new statutory body will be and what its powers will be. Then we can have drafted an Act and a set of regulations which limit the information to be transferred, in a more appropriate way. I now turn to the Taxation Boards of Review (Transfer of Jurisdiction) Bill 1986. The transfer of jurisdiction from boards of review to the Administrative Appeals Tribunal undoubtedly has some very positive aspects to it. The added flexibility associated with being able to have one or more members will undoubtedly help to cut the backlog of taxation appeals. Another positive aspect will be the fact that it is possible that more details will be provided to taxpayers in appeals through the Administrative Appeals Tribunal. It is also a positive aspect that the AAT and the Supreme Courts are to be given some discretion to permit a taxpayer to widen the grounds of objection in appropriate cases. Certainly, minor as it may be, the abolition of the $2 fee is probably welcome. However, in saying that I must reiterate in some detail the questions raised earlier by the honourable member for Mackellar. Taxation boards of review are presently composed under section 178 of the Income Tax Assessment Act 1936, and each board consists of a chairman and two other members. It has been the practice that the chairman is usually chosen from senior officers of the Australian Taxation Office, while one of the other members is usually chosen from the legal profession, and one other is chosen from the ranks of practising public accountants. This has given each of the taxation boards of review a breadth of experience and a breadth of background in considering any particular case. With the new proposal, the only thing that we are told is that the Attorney-General, in appointing members to this new division of the AAT, must consult the Treasurer. We do not know whether the same kinds of practices in getting the breadth of experience will be followed. Even though the present Attorney-General (Mr Lionel Bowen) seems to be quite reasonable, we have seen Labor Attorneys-General in the past noted for their lack of judgment-going anywhere from the break-in of the Australian Security Intelligence Organisation to flights over Tasmania. So, we must be concerned somewhat with the process of appointments to the new AAT division to begin with. Secondly, there is a second stage to the allocation process. The President of the AAT will need to appoint individual members of the division to individual cases. There is a significant backlog. Given the provisions in these Bills that will be debated over the next couple of weeks, I would say that a significantly greater number of cases will go to the Administrative Appeals Tribunal. I think the majority of cases held up in the backlog at the moment deal with section 51 (1) of the Income Tax Assessment Act, where deductions are less than $500. While matters such as those are relatively minor, except for the taxpayer involved, and certainly can be handled by one member of a board, whether it be a former officer of the Australian Taxation Office, a chartered accountant or a lawyer, it will be difficult for a commissioner to distinguish some matters of substance. Matters of substance really require a much broader tribunal to hear the case. That is important because not only must justice be done but justice must also be seen to be done. I would like a statement either from the Treasurer or from the Attorney-General to assure the public of Australia that people who will be appointed to the Taxation Appeals Division of the Administrative Appeals Tribunal will have a variety of backgrounds and that some guidance will be given to the Tribunal on what individuals will be appointed to particular cases. At the moment the only guidance given is in that part of the Administrative Appeals Tribunal Act which states that the President of the Tribunal: (a) shall have regard to the degree of public importance- I hope that refers not only to the cases in which the Attorney-General decides to intervene- or complexity of the matters to which that proceeding relates. One of the important attributes that need to be taken into account by the President of the Tribunal when he is allocating people to individual cases is that the breadth of their experience be appropriate to the substance of the law and of the case being considered. The taxation appeals system will be considered fair only if the appeal process itself is considered to be reasonable. There simply has not been sufficient time, either before or during this debate, to consider all of the things that one would like to consider in legislation such as this. I believe that the Opposition will simply have to do considerable searching of this legislation when it comes before the Senate, because it simply has not been given that opportunity in this House. Mr MARTIN(Macarthur)(11.09) —Today, we are debating the latest in the Government's tax package legislation. We are canvassing the Taxation Laws Amendment Bill (No. 2) 1986, the Income Tax (Securities and Agreements) (Withholding Tax Recoupment) Bill 1986, the Taxation Laws Amendment (Foreign Tax Credits) Bill 1986 and the Taxation Boards of Review (Transfer of Jurisdiction) Bill 1986, each of which has a very significant part to play in this Government's attempt to overcome the difficulties inherent in the taxation system that has operated in this country for a number of years and which, regrettably, were certainly not stamped out by the former Government when in power, when it was in a position to do so. As has been demonstrated time and time again in this House, the rorts in the taxation system were known to those opposite when they were in government. Many points of view were put forward to the effect that something should be done about it but, of course, the previous Government was shown to be totally inactive and incapable of attacking the problem. As usual, it has fallen to the Labor Government to remedy the situation and put it in its true perspective. I want to talk specifically about two of the Bills before the House. The first is the Taxation Boards of Review (Transfer of Jurisdiction) Bill and I want to make one or two comments also about the Taxation Laws Amendment (Foreign Tax Credits) Bill. I also wish to pick up on a couple of points that were made by the shadow spokesman on Treasury matters, the honourable member for Mackellar (Mr Carlton), and on some of the comments that have just been made by the honourable member for Forde (Dr Watson) in his contribution to this debate. I turn firstly to the Taxation Boards of Review (Transfer of Jurisdiction) Bill. As we have already heard, and as the Treasurer (Mr Keating) has so capably pointed out in his second reading speech, this Bill reflects in large measure the Government's response to recommendations made in a report by the Administrative Review Council entitled `Review of Taxation Decisions by Boards of Review'. That document was published in June 1983 as parliamentary paper No. 219/1983. It set the scene for the legislation that has come before the House today. I will return a little later on to some of the points in that report. In accordance with the recommendations contained in that report, the principal function of this Bill is to abolish the taxation boards of review and to transfer the present jurisdiction of the boards to the Administrative Appeals Tribunal. The changeover is to take effect as at 1 July 1986. The Bill also contains amendments to the sales tax law to give further partial effect to decisions of the former Government to revise the objection and appeals provisions of that law. I must pay tribute to the former Government in that it at least recognised some of the inequities in that law, but, as usual, it failed to carry forward that recognition into some practical effect. As usual, this Government has had to pick up the pieces. Other provisions in the Bill make further amendments to the objection and appeal provisions of the various laws administered by the Commissioner of Taxation, with a view to achieving a degree of desirable uniformity. I am sure that we would all agree that that is a most desirable effect. In deciding to accept the recommendations of the Administrative Review Council, this Government was concerned to ensure that the complex and exacting task of reviewing taxation decisions be undertaken by persons with a high level of expertise in and specialist knowledge of the taxation laws. Therefore, a notable feature of this Bill is the creation within the Administrative Appeals Tribunal of a separate division to review taxation decisions. This goes to the heart of the point raised by the honourable member for Forde when he said that the provision that a tribunal may comprise just one representative meant that the opportunity for people with various degrees of expertise in law, taxation matters and so on to contribute would be lost. Quite clearly, this will not be the case because, as I have just indicated to the House, provision is made within this legislation for the creation of this separate Taxation Appeals Division to review taxation decisions, which will ensure the continued build-up of expertise in taxation matters. I am sure that the people who lodge objections to their taxation returns will find, just as they have found in the past, that that degree of expertise will be brought to the assessment of their problems. In fact, the creation of this separate division will ensure that the review of taxation decisions will be undertaken by Tribunal members who have knowledge and skills relevant to that function. I think that is an important point, and it must be underlined. It really goes to repudiate the concern levelled at this matter by the honourable member for Forde in his speech some moments ago. It is important to realise that one of the major features associated with the creation of tribunals and the provision that a tribunal may comprise one person is that the backlog of appeals will be dealt with far more quickly than it has been in the past. As we have seen, a substantial backlog of requests for review by the taxation boards of review has developed in recent years. That has occurred primarily as a consequence of the tax avoidance boom in the mid-1970s and the early 1980s-a tax avoidance boom which, I hasten to point out again, was not stamped out by the former Government but which, in fact, has contributed in later years to this backlog of requests for review by taxation boards of review. Therefore, the extra hearing capacity that will be provided under these more flexible procedures will enable the backlog to be dealt with more quickly than would otherwise normally be the case. I think requests to have decisions of the Commissioner of Taxation reviewed by the Administrative Appeals Tribunal will be sent in the first instance to the Commissioner who will then refer them on to the Tribunal. As such, this procedure will enable decisions to be re-examined by the Commissioner before they are referred to the Tribunal for review. Again, within that system, we have a very staged arrangement whereby every facet of the appeal process is given careful scrutiny. To say that people will not get a fair hearing is not a true indication of the correct position-and I am sure that the honourable member for Forde will probably agree with that on reflection. Indeed, by this appeal process whereby various people with expert knowledge will examine the various objections, some of the basic problems which have arisen in the past will be overcome. As a resource saving measure and to assist in making inroads into this backlog to which I have referred, the documents and the statement along the lines of those presently made available to the taxation boards of review will be provided until 30 June 1988. This will assist in the transitional arrangements. It is important to reflect on the number of cases which have existed in the past and the level of time it has taken to look at those cases and to bring them to finality. I refer briefly to that document which spawned this legislation. It is the Administrative Review Council report to the Attorney-General which is entitled `Review of Taxation Decisions by Boards of Review' and is dated June 1983. This will clearly establish my point. Page 22 of that document talks about the expedition of cases. Unfortunately the figures are only comparative between 1975-76 and 1981-82; nevertheless they substantiate the claims that I am making. The figures demonstrate how the number of appeals has risen and the backlog that has been caused as a result of that factor alone. In 1975-76, there were something like 7,917,000 returns lodged and this increased to 8.6 million in 1981-82. The number of assessments issued each year has remained relatively constant. However, the number of objections has trebled, rising from 73,997 in 1975-76 to 201,376 in 1980-81. That clearly demonstrates some of the problems we have with people making objections about taxation assessments and the difficulties that that causes in a department which has its necessary expertise being overtaxed in time. Therefore there is the difficulty of a backlog developing. Quite clearly it is important that we establish clear guidelines through this legislation as to how that problem might be overcome in the future. A very small proportion of the requests for reference to boards is to the boards of review. Of these, 50 per cent are settled; 25 per cent are allowed by the Commissioner of Taxation; and only 25 per cent are withdrawn by the taxpayers. The number of cases awaiting hearings before boards of review has risen about 50 per cent. If one compared 1981-82 with what has happened in the past year or so, one would see that those figures are a true representation of what has happened. According to the report, the Commissioner informed the Council-and one must remember that this was in 1983-that the delay in obtaining a hearing before the Board as at 30 June 1982 was as follow: Board No. 1, 18 months; Board No. 2, 29 months; Board No. 3, 9 months. I am sure that many honourable members in this House have had representations time and time again from legitimate taxpayers, people who are prepared to pay their fair share, but who believe they have a legitimate claim for review. These people realise that the ability to have that matter dealt with swiftly is being impeded because of the delays occasioned by these sorts of factors. I know from personal experience that that is the case and I am sure that the proposition that has been put before us today in this legislation to enable this problem of the ability to handle matters quickly and carefully will be welcomed by all those people in the community who are prepared to pay their fair share of tax. Hopefully, it will also appeal to those people who have previously rorted the system and those people who have tried to rort it even further by making fairly incredible claims on appeal to try to add further to their wealth. It is important to make a brief statement on the sales tax system. Amendments in this Bill will bring the objection and appeal provisions of the sales tax law into line with the comparable income tax provisions. I think that that will be most appealing simply because sales tax payers will now have a right of objection or review in all cases where a liability for sales tax exists. Previously one just had to take a chance and if one was brought into court one fought the case through the court system. I believe that this is very fair and I am pleased that the Opposition has no objection to that particular part of the legislation. I turn very briefly to the foreign tax credit system because I wish to pick up a couple of points that were made by the honourable member for Forde. He indicated that if people were paying a lower level of tax in a foreign country-and he used Singapore as an example-and the corporate rate of tax in Australia was 49 per cent, it was inconceivable that any difference in the tax should be paid in Australia. We on this side of the House totally reject that argument. We believe that if companies are prepared to invest overseas at the expense of investing in Australia they should be made to pay their fair share of tax. If they were investing in Australia, they would be seen and they would be paying their fair share of tax. Thus the burden would not fall back on the pay as you earn taxpayers. The foreign tax credit system has been criticised because many Australian businesses fear that such a system will harm their competitiveness. We do not believe that that is the case. The Government will seek to ensure that genuine overseas investment and trade interests are protected. The underlying factor there must be whether these overseas interests are genuine. Too often we have seen people who are prepared to go offshore for tax rorts and that does nothing to improve the Australian economy or the manufacturing sector which we all agree is in need of support at present. The Government cannot agree to allow the Australian tax system to effectively subsidise operations of Australian companies in low tax countries on an open-ended basis. Under a foreign tax credit system we can reassert some control over the use of tax havens and low tax countries so that Australia's commercial interests are protected. Many of our trade competitors, such as the United States of America, Japan, the United Kingdom and West Germany, have successfully operated a foreign tax credit system without the dire consequences that some people have predicted for Australia. The honourable member for Forde, who is a former professor of accounting, said he thought that this was nonsense and that it would not happen, but the evidence from overseas clearly demonstrates that it can happen and that it can be policed effectively. I am sure that we will see that happening in this country. Therefore, such companies will not be at a tax advantage to other Australian businesses through this process and I am confident that this legislation will bring about a much fairer system whereby those people who should pay tax will pay it. In the time remaining to me, I wish to pick up a couple of points that were raised by the shadow spokesman on Treasury matters, the honourable member for Mackellar. Frankly, I was a little disappointed by his contribution this morning. I came here specifically to sit through his speech in order to see the Opposition's response to the four Bills before us. Mr Price —It was a disappointing response. Mr MARTIN —As the honourable member for Chifley rightly points out, I was somewhat disappointed because the honourable member for Mackellar spent the first 10 minutes whinging again about the fact that he did not receive explanatory memoranda. Let us talk about the time factor involved here. Since September of last year we have all known what the basic tenets of the legislation would be. We knew that this Government was committed to improving the tax system and we knew that it would be prepared to put legislation in place that would eliminate the rorts that have been perpetrated on Australian society for far too long. Yet, for some reason, the honourable member for Mackellar believes that if he had simply had some explanatory memoranda in front of him when the legislation was introduced, matters would have been simplified for him. If he is going to speak on Treasury matters he should be in a position to understand what is in those Bills. It was surprising to see him continue along this line when, once again, no concrete Opposition tax policy was advanced. We just have not seen the Opposition's tax policy yet. The Opposition's tourism policy has been dropped on us. Its education policy was leaked to us yesterday. The Opposition's aviation policy and primary industry policy have been leaked to us. But we do not have its tax policy. Mr Tuckey —What about small business? There is some tax in that. Mr MARTIN —We would like to see all the policies so that we can understand what the shadow spokesman has to say about tax in general. Of course, we have to remember that a lot of the tax side of things has been given to Senator Messner. I think he is responsible for taxation matters. I can understand why the shadow Treasurer was not quite up to standard today so perhaps we can excuse him for that. The honourable member criticised the proposal to have only one person on boards of review to hear some of the cases. As I indicated previously, I think that arrangement is going to free up the system, and that has to be far better than the position at present. But what really got me was his remarks about foreign tax credits. In recent days big businessmen like Ansett have been imploring the business community to break the law and not pay tax-to become law breakers. These fine upstanding citizens of Australia, these leaders in the business community whom people are supposed to look up to and whom those opposite are supposed to be representing, are imploring the business community of Australia to break the law. In fact, the honourable member for Mackellar, when talking about the foreign tax credit system and about people who locate companies overseas, says that he does not think anyone will pay the difference in tax or locate overseas any more. He says that they will find other ways to invest their money so as not to pay any further tax. He says that they will be able to walk around the tax system again. I think it is a sad reflection on those opposite if they vindicate what has been said by people in the business community such as Ansett and by other people such as Sir Joh Bjelke-Petersen who claim that people should break the laws of the land. I honestly hope that I have misinterpreted what the honourable member for Mackellar said because, quite frankly, I thought he was a far better representative of the Australian people than that. These Bills are part and parcel of the tax package to which this Government is committed to ensure that a much fairer system of taxation is established. The legislation will simplify the system. It will make it far more efficient and, more importantly, those people who have not paid tax in the past will be brought to account. Mr DEPUTY SPEAKER(Mr Millar) —Order! The honourable member's time has expired. Mr BRAITHWAITE(Dawson)(11.29) —I welcome this opportunity to be able to debate taxation matters and even economic matters. However, that opportunity is limited because I understand the time for debate has been cut down. Nevertheless, I want to refer to two aspects of the taxation legislation that is now before us. Firstly, I wish to refer to the Taxation Laws Amendment (Foreign Tax Credits) Bill 1986-a very vital Bill which will affect Australia's trading position in more ways than one. The second matter to which I wish to refer is the transition from the Taxation Board of Review to the Administrative Appeals Tribunal. This is an area with which I had a close association during my days as a public accountant. Nobody on the Government side will deny that Australia's trading deficit has received national and international prominence as this nation's major economic problem. However, the Taxation Laws Amendment (Foreign Tax Credits) Bill contains yet another disincentive to trade. I say `yet another disincentive' because there have been major disincentives over the last two or three years. The Treasurer (Mr Keating), in his exaggerated description in the past two weeks of our economy, failed to accept-or if he did accept it, he failed to reveal-that quite apart from the terms and conditions applying to international markets, the other major problem that Australia faces is the domestic environment in which we have asked business and manufacturers to produce and export. The Treasurer did not accept that that disincentive to trading was as much a problem in Australia at the moment as the terms of trade being experienced by our commodity exporters. I suggest that until the Treasurer realises and accepts that taxes such as the foreign credits tax, the fringe benefits tax and the capital gains tax are new and fresh barriers to Australia's production and to Australia's capacity to trade our economy will continue to deteriorate to the extent that the Treasurer predicted last week; and be that on his own head. The Australian economy requires less intervention and less tax. What we have had has been more intervention and higher taxes. The foreign credits system is complex. We were told that the tax package would be in the interests of simplicity, fairness and equity. The amending legislation comprises 26 pages. I understand at the time of Federation the complete income tax Act was no more than four or five times that size. So, the legislation is not simple; it is complex. Of course, the cost of compliance will be just another cost to business. It will be just another tax on Australia's export sector. As a result, those people who have been genuinely operating overseas to market Australia's products, as we would want them to do, and who, in the past, would have been motivated on the basis of profit in foreign countries will now face a major disincentive. The previous speaker, the honourable member for Macarthur (Mr Martin), mentioned that those who were genuinely operating in a foreign country would not be discriminated against. I fail to comprehend how the Australian Taxation Office, bearing in mind the way in which it operates, is going to differentiate, in the present climate of attacks being made on the taxpayer, between what is genuine and what is not. Let us look at the economic differences, of which this tax will be only one aspect, between Australia and our major competitors. Many people go overseas on a marketing expedition and set up a branch office on the basis of the level of taxes that operate in foreign countries. I suggest that, on the whole, Asian tax rates are only a fraction of the Australian rates. For instance, the Hong Kong rate is 18.5 per cent. Of course, this has to be an incentive to a person who is looking at the whole set of criteria for trading overseas. Let me outline another reason why Australian firms may wish to operate overseas. Australia has an inflation rate of 9.2 per cent. The inflation rate in the United States of America is 3.2 per cent. The rate in Japan is 1.8 per cent. West Germany, which next year will have a negative consumer price index figure, has a rate of well under one per cent at the moment. This is another reason why Australian firms would want to go off-shore. In addition Australia's 18 per cent interest rates must rank as among the highest in the world. The rate in the United States is 7 per cent, in Japan 6 per cent and in West Germany 4.9 per cent. Why would a person considering the criteria for going overseas not look at that? Our currency devaluation should have favoured exporters by at least 25 per cent in the last 12 months. Now profits made on foreign shores are going to be repatriated to Australia. Those profits will be assessed, not in foreign terms but in terms of the equivalent exchange rates. This indicates to me that on whatever Australian firms get from trading in foreign countries the tax rate will be 25 per cent higher because of the exchange rate on repatriated profits. Australia has to realise that the world does not owe it a living. Neither should we expect the world to pay Australia's penalising rates of tax-and that is precisely what this legislation proposes. I wonder whether it has been brought to the notice of the Treasurer or the Taxation Office that a major financial consultancy is now advising Australians to place or invest their funds and savings off-shore to gain the benefits of lower taxation, lower inflation and higher security. We had a situation years ago where law and accounting firms were advising on tax avoidance. The foreign tax credit scheme will only increase legal tax avoidance for people who want to have secure funds by investing overseas. If this foreign tax credit scheme means that a company will pay a differential tax in Australian terms, its operations will go completely off-shore. In trying to import taxes we will be exporting Australian business in its entirety. Australia will then lose the investment, the work and the enterprise that we so desperately need at the moment. We should be encouraging our exporters, by creating a rational Australian economic environment, a rational tax regime. We should be trying to lower interest rates, and trying to improve the situation on the industrial front. There has been no encouragement to do that, and the foreign tax credit scheme is just a further discouragement for business. The Opposition abhors the abuse of any system. We abhor it and we would try to correct it, but by introducing this foreign tax credit scheme to stamp out abuse, the Government is throwing out the baby with the bath water. It is not looking at the comparable tax regimes overseas. It is not looking at where we might involve people in investment overseas and still retain an Australian component. The interesting thing is that the Minister in his second reading speech apologised for his embarrassment at bringing this legislation into the House by saying that the tax regimes in the United States of America, West Germany and Japan have this provision. I ask all parliamentarians to look at the situation Australia faces in comparison with those three countries. If there is a pecking order, we are at the bottom of the list every time. Our trade balance is in a worse situation per capita, our whole domestic environment is different, and now the Government is saying that we must compare ourselves with the world's three economic giants and expect the rest of the world to accept it. Mr Hicks —How are we going to survive? Mr BRAITHWAITE —We will not survive if we have new additional taxation imposed continually. Let me quote the comment of the Business Council of Australia: . . . there is simply no Foreign Tax Credit system that we can envisage that would not do serious harm to the Australian economy, and in light of the uncertainties and concerns widespread in the business community it would be better for the nation for the Government to abandon the exercise. The effect of the measure is to put a stranglehold on Australian companies operating overseas. To compete against local companies they must operate under the same tax rules as those competitors. If this measure were in place they would either withdraw their operations from low tax countries or find ways and means of keeping their earnings abroad. That is precisely what I outlined to the House earlier. No exporter or group of exporters that I have spoken to over the last six months, whether they are manufacturers or in the service or consultancy areas, have had a good word to say about this taxation. They are not whingers; they are people who are trying desperately to maintain the limited advantage we have in our export markets and they have all thoroughly condemned this measure. The wretched part about it is that the Treasurer (Mr Keating) and the Minister for Trade (Mr Dawkins) either are not aware of these comments or are not prepared to acknowledge that they are justified. In every respect the legislation before us is a contradiction of the Government's other policies. The Government wants us to export and to trade but it then imposes a penalty in the form of this tax. The Government needs exports, Australia needs exports, but what we are doing is taxing those exporters out of existence. We are trying to compete, but we have inferior work practices, higher interest rates and a higher inflation rate. All the disincentives we have that are preventing growth in Australia are firmly linked to the Government's policies on the economy and all these disincentives have culminated in this current legislation. Having been involved as a tax agent and chartered accountant within the profession for 25 years, there is no appeal tribunal in Australia that is closer to my heart than the Taxation Board of Review. The Board of Review always provided the taxpayer with the fairest approach. The Board itself was most approachable; one did not have to appear before it with a legal representative, and it was the least costly form of appeal. I am not sure whether the fee has been updated, but a taxpayer could take his case before a board of review for a cost of $2. I have found that those components are not necessarily incorporated in any other form of appeal against any other law in Australia. The composition of the boards was well balanced. They consisted perhaps of somebody who had retired from the Australian Taxation Office, somebody who was a specialist in law, and normally an accountant who had been practising on a professional basis. I believe that that composition was well balanced, and balanced in favour of the taxpayer. If there is a backlog of appeals it is not the fault of the Board of Review. The fault is in the taxation system and its complexity, as I have mentioned. As I understand it, this new legislation consists of about 91 pages. In two pieces of separate legislation today we have the same volume content as in the complete income tax Act of 1901. The fault lies not in the Board of Review but in the departmental approach and the manner in which tax avoidance has been practised-I do not deny that. When people in the community deliberately set out to avoid tax we will have a bigger backlog as people appeal against assessments. I suggest that there has also been a bluffing on the part of the Department in making assessments. It takes the high ground and the taxpayer is then forced to follow through, in the interests of equity, with an appeal. That is one of the reasons for the backlog, but there are other factors such as the higher penalties that apply at the moment, and the cost of business compliance. While businesses are complying with all other aspects of taxation, perhaps they are not as dutiful as they might be in their original returns and this can be corrected only by an objection later on. I suggest that, if there is a backlog, it is because of the greed of the Government in trying to get more tax revenue into its coffers without looking at the other side of the equation and trying to curb expenditure. I do not believe that these new procedures before the House will provide the same degree of fairness as the Board of Review has provided. Appeals will be more costly than they are at the moment because these one-man bands will not travel as the boards of review did. We will see the same thing happen as occurs with appeal tribunals in the social security area, where people have to go from their place of domicile to Brisbane or some other capital city. Because of the complexity of the procedures I believe that the new Administrative Appeals Tribunal system will not operate in the same way as the boards of review. As I see it at the moment, the endangered species in Australia are the honest and upright taxpayer and the tax agent who tries to follow through the procedures of the Taxation Office to bring some justice to proceedings. These people are now an endangered species. More people are taking from the public purse at the moment than are putting into it. I recollect that in the early 1970s for every 10 taxpayers there was one beneficiary on welfare. Now we are approaching a situation where we have 10 taxpayers for every five beneficiaries on welfare, and those numbers of taxpayers have not been increasing at the same rate as the economy. I have received a letter which I think encapsulates the Department's attitude as far as taxpayers are concerned. I just wish to mention one matter which the Australian Taxation Office might take on notice. A constituent wrote to me and said that he was told on 21 April by registered letter of 1986 that he had not lodged his return, which he thought he had lodged, and that proceedings would go before a magistrate on 15 May. On 22 April he provided a copy of the missing return, which showed that a credit of $1,381 was due to him. On 15 May, prior to the court hearing, he discussed the matter with the taxation representative, together with his accountant, and he offered to pay the fine, but to no avail. The magistrate went ahead and heard the case, at a cost of $200 to a man who had a credit available to him and who up to that stage had been an honest taxpayer, diligent in his operations with the Taxation Office. He had handled a large number of payments of group tax, company tax and prescribed payments tax for builders, and that is the treatment he got. I speak in this vein because I believe that the taxpayers of Australia are being screwed unmercifully. It is about time that some justice was given to them, both in the operation of the law and in the legislation with which they have to comply. Mr MAHER(Lowe)(11.45) —The honour- able member for Dawson (Mr Braithwaite) made a number of interesting points. I want to comment on his reference to the taxation level in Hong Kong which, he pointed out, was 18.5 per cent; and I believe that in Singapore there is also a very low level of taxation. Such countries are not nations in which there is an extensive social security and welfare system. In Australia 30 per cent of revenue is paid out under the social security and welfare portfolio. We have age pensions and family allowances; we have an enormous commitment to people who are retired or who are poor. No country with such a commitment can have such a very low rate of taxation. The Government's whole tax exercise is designed to reduce the levels of direct taxation not only to taxpayers but also to Australian companies, and it is the most thorough-going reform of the Australian tax system that has ever been introduced into this Parliament. The honourable member for Dawson is quite wrong when he says that it involves more tax. It does not involve more tax. The whole idea of this tax package which is being debated here today, which was debated last week and which will be debated later in the week is that it is revenue neutral. There is $1 1/2 billion involved, but it will all come from people who are now walking around the tax system, receiving payments or goods in kind and facilities or benefits that are not taxed. Unlike the pay as you earn taxpayers, they are avoiding tax on part of their income. These people or their employers will be expected to pay tax on fringe benefits, on capital gains, on negative gearing, and all the other things that people were doing quite legitimately to take advantage of the tax laws of this country and to avoid their direct liability. The previous Government was in power for 30 years and overviewed the tax system but did nothing about changing it. There were reports and inquiries undertaken. The Asprey Taxation Review Committee of 1975 made a lot of recommendations but many of these were not acted on. One of the Bills being debated in this cognate debate today is the Taxation Laws Amendment (Foreign Tax Credits) Bill 1986. This matter was raised before the Asprey Committee, which recommended the introduction of a foreign tax credit system in the interests of equity and efficiency, the idea being to encourage Australians not to avoid tax by arranging for their income to have an artificial overseas source. In 1978 the previous Government said that it would introduce some sort of a scheme to stop Australians shifting their money to tax havens or laundering their money in tax havens. The Government knew that most Western nations, including the United States, West Germany and Japan, have schemes to stop the avoidance of tax by the use of foreign tax havens. It is costing the Australian taxpayers $60m a year. The vast majority of taxpayers, people who are working, are in the pay as you earn tax bracket; their tax is taken out every week and they have no way to minimise their tax, to walk around the tax system. These were the people who were outraged by the bottom of the harbour revelations in 1982, when it became obvious that many companies could totally avoid all their tax liability. As I said earlier, the whole exercise is revenue neutral. The Government has undertaken to introduce substantial tax cuts to bring the top marginal tax rate from 60 per cent down to 49 per cent, and to stop the double taxation of company profits which has been an enormous disincentive to investment in private companies and in small businesses. I believe that we are seeing a great watershed in the collection of taxation in this nation. Australians will see from now on that the system will be fair. There will be some incentive not to go into tax avoidance and to work harder, because if one works harder one will lose not 60 per cent of what one earns but only 49 per cent. I think it is an enormous tribute to the Treasurer that he was able to work on this scheme, with the help of Treasury officers, and that he was able to come up with this proposal once the consumer tax idea was rejected at the summit conference. It is a great credit to the Treasurer that he has been able to bring these very detailed amendments before the House over these weeks, and the Australian people will again see honesty and integrity in the tax system. Another Bill involved is the Taxation Laws Amendment Bill (No. 2) 1986. This Bill relates to `dingo bonds', as they are called, a scheme for avoiding tax liability by discounted securities. There is also legislation on interest withholding tax which is long overdue. Another matter that I want to touch on as well is the changes in the appeal mechanisms. This is of great significance, as the honourable member for Dawson and other honourable members have mentioned today, because it is a test of the rule of law if a citizen has the right to go to a board, a court or a tribunal and contest the assessment of his or her taxes. In this country for the past 60 years the ordinary taxpayer has been able to seek from taxation boards of review redress of an assessment that is considered onerous. From inquiries that I have made I was pleased to find that the great tradition of going to a board of review and accepting its decision without the penalty of legal costs is to be retained by the abolition of the boards of review and their absorption into the administrative appeals system. In this country we have the Administrative Appeals Tribunal which has no power to award costs in its ordinary jurisdiction. In its workers compensation jurisdiction it can award costs against the Commonwealth, but there is no power to award other costs. This will allay the fears of taxpayers who feel that they might have lost this right to appeal without penalty of costs if they lose. Most of the appeals that go to the Taxation Board of Review are small matters, involving perhaps a trifling amount, but very significant to some taxpayers-often a claim for a deduction for an overseas study tour or home office expenses. This might involve a teacher, an author or someone who works from his home and who claims that part of his electricity and home maintenance repairs should be set off against his income because that is his place of work. The boards of review were the tribunal where some of the capital gains tax disputes were heard under the old section 26 (a) when people did not want publicity for perhaps some development or some property subdivision, and enormous numbers of these cases were heard by the three boards of review in the eastern States. The system has become clogged, as other speakers have said, and there has been considerable delay, as every member of parliament knows, not only in the hearings but in getting objections looked at by the Commissioner of Taxation and then having the appeals transmitted by the Commissioner to the Board of Review. There are procedures in the Act for expediting the transmission of appeals to the boards of review, but under the proposed changes, with the absorption of the Board of Review in each State into the administrative appeals system, it will be possible for a single individual, a member of the Administrative Appeals Tribunal, to hear appeals, whereas under the Taxation Board of Review arrangements it was always a full board of three who by a majority decided each matter. I was delighted to see that in the second reading speech and the Bill there is also an assurance that secrecy will remain. The Board of Review always publishes its decisions without mentioning the name of the appellant. Of course it is very difficult to maintain secrecy. One case that I remember involved the owner of private land in Sydney which was used as a golf course. Everyone knew who the man who owned the golf course, had it subdivided for sale and made a substantial profit was. Mostly, however, these are cases involving ordinary, humble taxpayers. Sometimes substantial amounts are involved, sometimes Queen's Counsel appear before the board of review. The board of review always attempted to have an informal procedure. It was a tribunal before which most of the applicants appeared in person, representing their own interests. Usually these were people who were untrained in the law but were guided and assisted by the three members of the tribunal, who themselves also were assisted by staff of the Australian Taxation Office. I do believe-I have always believed-that in most cases the vast majority of appeals to boards of review are settled before hearing. I am sure that that procedure will continue. However, there is a backlog of cases. There have been problems with the taxation board of review system. I congratulate the Treasurer (Mr Keating) because I think it is a very sensible move to bring the boards of review which were out on their own under the umbrella of the Administrative Appeals Tribunal, which has developed considerable expertise in the area of informality and minor legal processes. I feel that this is an important move. Certainly, I have been making representations to the Treasurer about the board of review delays. The changeover will actually take place on 1 July 1986. They are the matters that I wanted to mention in the House today. Essentially, I wanted to touch on the guarantee to taxpayers that they will still have a right to object, beyond the Commissioner of Taxation, to an independent tribunal which they can approach without fear of cost. Many people are frightened of losing a case in court proceedings. Although they may feel that they have the better case and that they have justice on their side, they are frightened that something may happen and that if they lose not only will they lose the determination of the matter in hand but also they will have the penalty of costs of the other side awarded against them. At present there are no costs to be awarded in the taxation board of review system, and certainly there will be no costs awarded under the new procedure in the Administrative Appeals Tribunal. Even the $2 fee or deposit that was mentioned by the honourable member for Dawson has been abolished. I commend the Treasurer for bringing this package of legislation before the House. I ask the House to support the Bills. Mr DOWNER(Mayo)(11.58) —I want to confine my remarks in this debate on the Taxation Laws Amendment Bill (No. 2) 1986, the Income Tax (Securities and Agreements) (Withholding Tax Recoupment) Bill 1986, the Taxation Laws Amendment (Foreign Tax Credits) Bill 1986 and the Taxation Boards of Review (Transfer of Jurisdiction) Bill 1986 to the introduction by the Government of a new foreign tax credit system because the new foreign tax credit system is something that will be a matter of great concern to a large number of people in the business community. Of course, fairly obviously it will be of particular concern to those firms involved in international activities. I would have thought that at a time when the greatest national challenge for Australia was to take action to restore our balance of payments the Government would be looking for constructive initiatives to try to ensure that Australian industries become more competitive. Also I would have thought that the Government would be trying to ensure that Australian industries not only are more competitive but also are more export oriented and outward looking in their attitudes. Certainly it has been one of the great problems of Australia, almost since white settlement, that in economic terms we have been very insular and inward looking. Australian industry needs to be imbued with the attitude that it can take on the best in the world and go out there and beat them. However, Australian industries are not going to be able to do that if the Government continues to impose costs on them, in this case through taxation legislation, which will have the effect of making Australian firms less competitive than many of their international rivals. This whole tax package, including the foreign tax credit system which is included as part of the package, really militates against that objective of making Australian industry more competitive. That has been pointed out by a number of members, including me, in debates on the fringe benefits tax. No doubt it will be pointed out tomorrow in the debate on the capital gains tax that that too will increase costs to Australian businesses. It has been pointed out again and again in the Australian community in relation to the increase in company tax from 46c to 49c in the dollar. All those things have increased costs to Australian business-some of them by small amounts, some of them by very substantial amounts. The proposed new foreign tax credit system is just another example of the ever-increasing taxation burden for business. Of course, the new foreign taxation credit system does not affect all businesses; it affects only those which operate overseas with overseas subsidiaries or branches. However, it is a measure which increases the cost structure of those particular firms. In other words, it is a taxation measure which is based not on the principle of making Australian industry more competitive but on the tired old Labor strategy of wealth redistribution, which militates against wealth creation. Also it is based on Labor's tired old strategy and tired old rhetoric of the politics of envy, which is so destructive to the objective of economic growth. It is always argued-including by the Treasurer (Mr Keating)-that a good taxation system is one based on the three principles of efficiency, equity and simplicity. It is on those three basic principles alone that this particular foreign tax credit system proposed by the Government falls down. First of all, as I have already explained by implication, the foreign tax credit system in economic terms is grossly inefficient. I will explain later how it works, but what it does is discourage the earning of foreign income by Australian companies. At a time when this country is running a balance of payments deficit on an annual basis of over $14 billion I would have thought that the Government would be trying to encourage the earning of foreign income, not discourage it. Therefore, it is inefficient. Secondly, the measure is one which is inequitable. It is introduced on the basis of eliminating tax havens, yet what this does, as I will explain later, is to create a completely new tax rort. This is a point that does not seem to have been drawn to the attention of either the Treasurer or the officials in his Department. It is something that needs to be given proper consideration. Although it has been given proper consideration in other countries which have these systems, it has not been given consideration in this country, as I will explain later. Thirdly, we are looking for a tax system which in some ways is at least more simple than the vastly complex tax system we have had up to now. One only needs to speak to the managers of any of the Australian companies which will now be confronted by this foreign tax credit system to know that this particular measure will be vastly complex to companies. Just the administration of the tax will increase their administrative costs very substantially. The current arrangements for the taxing of foreign income are that that foreign income when it is returned to Australia is exempt from taxation. I do not think that that is necessarily an anomalous situation, particularly when one considers-it often is not considered-that those companies which have been operating overseas already have paid tax in the country in which they have earned that income. That is one of the bases of the various double taxation agreements that Australia has with a number of other countries. I might add that we have taken a long time in negotiating those double taxation agreements. As I understand it, there is an enormous backlog of those agreements. I hope that the Government will do something to accelerate the negotiations of those agreements so that at least that will assist Australian companies operating overseas. Let us remember that Australian companies already have paid tax in, if one likes to use the economists' term, the `host country' in which they are operating. We have three basic objections to the foreign tax credits system. In addition there is an objection in relation to the tax rort brought about by this measure. First of all, it does not take into consideration the fact that Australian companies operating in other countries have to cope with a completely different cost structure and a completely different taxation system from that which exists in Australia. Some countries place a greater emphasis on indirect taxation and less emphasis on income tax, which is the reverse of what we do in this country. An Australian company-operating in a country such as that-will already have borne a very substantial burden of taxation through the indirect taxation system. In other words, the taxation system, to some extent, reflects the general cost structure of a particular country. Any government which has the slightest concern about the growth and survival of its economy will ensure that its tax structure and its taxation system promote competitiveness. I know that the Australian Government does not do that, but the governments of most other countries do, so where there are other substantial cost disadvantages those countries will be pursuing policies to offset them, in some respects through the taxation system. In any case, the different tax structures do lead to substantially different tax and cost outcomes. Imposing Australian company tax, a tax which will be one of the highest in the world, on Australian companies operating off-shore will only make those companies substantially less competitive, and less competitive, of course, in relation to other companies operating in those countries. My second objection is also important and relates to my first objection; that is, that Australian companies operating off-shore and employing Australians in other countries have to cope already with a quite distorted Australian cost structure in relation to their employees. They have, of course, to pay Australian wage rates with all sorts of additional allowances for those who live outside Australia. In almost every case they have to provide some sort of housing. They now have to pay a fringe benefits tax on fringe benefits such as housing, which is a compulsory benefit that they provide. In addition to those cost problems, they will be hit with the highest company tax rate-or one of the highest company tax rates-in the world through the operation of the foreign tax credit system. It is inevitable that this system will discourage Australian firms from investing overseas; that brings me to my third objection. I think that it is extraordinarily negative to try to stop Australian companies from expanding into other countries. They have to pay a company tax rate of 49 per cent if they are operating in Malaysia, Singapore, the United Kingdom or the United States of America whereas other companies operating in those countries, for example, Malaysia and Singapore, are paying 40 per cent company tax. If they are operating in the United Kingdom they are paying a tax rate in the vicinity of 35 per cent and the United States is heading towards a company tax rate of 33 per cent; so at least the home based companies operating in those countries are paying a very much lower rate of company tax than will Australian firms under this proposal. Mr Eric Mayer, Chairman of the Taxation Review Task Force of the Business Council of Australia, summed matters up very clearly when he said the following on 31 July 1985: The Council believes that a foreign tax credit system would have a serious and negative effect on the existing overseas business operations of Australian companies and restrict desirable Australian overseas investment in the future with an attendant depressing effect on business and employment both overseas and in Australia. At a time when the Government is trying to encourage a stronger international orientation by Australian companies and promote export growth a foreign tax credit system would simply be counterproductive to this policy objective. The ability of Australian companies to grow by seeking economies of scale beyond the limited constraints of the Australian domestic market would be discouraged by a foreign tax credit system. Often, expansion into the large markets, for instance, in Asia and the Pacific Basin, represents the only way in which Australian business can grow and support ongoing operations. I think that that was a very telling statement, one which sums up the third major objection that I have to this legislation. It will stop Australian companies from investing overseas. Many of them have already made that point publicly. It will limit their capacity to achieve economies of scale, which is a very difficult thing to achieve in a small domestic market of 15 million people. Those companies have to try to expand their operations off-shore. However, they will not be able to do that-or at least there will be a disincentive for them to do that-because of this measure. In turn, they will not achieve the economies of scale that they need to compete internationally. All of that will limit economic development in Australia and will also limit economic development in developing countries, or at least in those developing countries, in which Australian firms wish to operate or are operating. Those lost countries, whether developing countries or not, desperately need investment from the developed world. They desperately need technology transfers from the developed world. This is one of the most constructive ways, if not the most constructive way, of providing development in those countries. However, it is being inhibited by this Government with its foreign tax credit proposal. It is also important to point out in this context that by inhibiting Australian investment overseas the Government is inhibiting the development of Australian export markets, because there is absolutely no doubt that where Australian investment goes abroad so Australian exports will follow that firm in varying degrees. That process is now being discouraged. Inevitably, many Australian companies will do one of two things; they will either close down their subsidiaries overseas or move the whole of their operation from Australia off-shore. Both of those things would be very much to the disadvantage of the Australian economy. In the last couple of minutes left to me I will say something about the new tax rort that this foreign tax credit system will create. Under the Australian proposal-and this does not apply to the foreign tax credit systems that some other countries such as the United States and the United Kingdom have-this tax will not apply if the profits of an Australian subsidiary are held overseas rather than repatriated to Australia. Inevitably, should an Australian company keep its subsidiaries overseas it will do its best to avoid paying this foreign tax credit. Needless to say, with the highest company tax rate in the world, they cannot be blamed for doing that. What Australian companies will do is get their subsidiaries to lend money to the Australian parent company instead of repatriating profits so that they can hold their dollar earnings overseas. In order to avoid this taxation, a subsidiary will lend money to the parent company here in Australia. That, of course, is a form of tax avoidance; that is a tax rort, and is something that has not been addressed in this legislation-it has apparently not even been considered by the Government. It has, I might say, been considered and addressed by other countries through other forms of taxation, but it has not been considered by the Australian Government. All I can say is that it is extraordinarily ironical that this piece of legislation which is designed to get rid of a tax avoidance scheme, will in fact create a new tax rort and at the same time will have the effect of substantially increasing Australia's overseas debt because of these subsidiaries lending money to their parent companies. This is also a non-neutral measure because, as honourable members will appreciate, subsidiaries will be able to lend money in the same way I have just described, but branches of Australian companies will not be able to do that; they can do it, but cannot avoid taxation in that way. That is absurd and non-neutral discrimination which is both inequitable and inefficient. In conclusion, I think that this Government measure, whilst not the worst part of its taxation package, is a foolish one because we need to be doing precisely the reverse of what this tax measure actually encourages Australian firms to do. We need to be encouraging Australian firms to invest overseas in order to achieve economies of scale, to develop export markets for Australian industry, and to assist developing countries in their development. This measure will militate against those particular proposals. Finally, as I have said before, there is a tax rort involved in this particular proposal. I very much hope, that the Treasurer in winding up the debate, will address this problem and will explain how it can be overcome. I suspect that it cannot be overcome by existing legislation and look forward to hearing how the Government will get rid of this new tax rort that it has created by trying to eliminate a previous one. Mr GEAR(Canning)(12.15) —It is entirely appropriate, I believe, that the honourable member for Mayo (Mr Downer) should finish his address by talking about tax rorts. Of course, anybody who studies taxes in this country will know that the Party of which he is a member presided over the greatest tax rorts in this country's history. I honestly believe that the taxation Bills that are before us today-the Taxation Laws Amendment Bill (No. 2), the Income Tax (Securities and Agreements) (Withholding Tax Recoupment) Bill, the Taxation Laws Amendment (Foreign Tax Credits) Bill and the Taxation Boards of Review (Transfer of Jurisdiction) Bill-are part of a continuing process by this Government to bring in genuine tax reform, which is something those opposite would never have attempted. In fact, they sat on the government benches for 30 years and did nothing while the tax system fell apart before their eyes. The poor supported the rich. It was a rotten and corrupt system and it was about time we did something about it. I am happy to be a member of a government that is doing something about it. I will pick up a few of the points regarding the fringe benefits tax, which was alluded to by the honourable member for Mayo. Throughout his speech there was a feeling of the sort of doom and gloom that is brought up every time the taxation laws are changed. It is always illuminating to look back at some of the changes we have made and at the predictions of doom and gloom that come up whenever new taxes are brought in to replace old ones, or whenever taxes are changed in some way. If one goes back to 1982, one of the last pieces of tax legislation the former Government dealt with was, of course, the retrospective legislation to outlaw the bottom of the harbour rorts. There were predictions of doom and gloom by the business community of the day to the effect that these ill-gotten gains had been ploughed back into businesses and that, if the Government were to take the money away from them, all of those businesses would collapse. That has not happened. The same thing happened in 1983. One of the first pieces of legislation we introduced was the withholding tax to try to stop the haemorrhage of the tax that was being lost to this Government. The withholding tax, for those of us who can remember back to 1983, was once again held up to the community as a terrible piece of legislation which would wipe out business. That has not happened. Last year, the issue of the business lunch arose. We all remember the demonstrations outside Parliament House by people from restaurants, who said that they would lose their jobs and thousands of restaurants would close. I think it was said that 80,000 jobs would be lost in the catering industry. It just has not happened. In actual fact, as the Minister for Finance (Senator Walsh) pointed out the other day, employment in the hospitality industry has actually gone up. Another example that would be near and dear to the heart of the honourable member for Mayo was the tax on wine. When we imposed a 10 per cent tax on wine there were predictions of doom and gloom. Wine sales have gone up, not down. The same thing has occurred in regard to the fringe benefits tax. When the fringe benefits tax was introduced in this House we once again had a scare campaign, but this time it has taken on a different connotation in a very important way. In yesterday's West Australian there appears a full page advertisement taken out by none other than the Liberal Party. It contains a picture of its failed leader, Mr Hassell, saying: `Mr Hawke, there's nothing left to take!'. That is a complete and utter lie. Mr Hassell knows it is a lie because it is not a new tax. We are putting a tax on fringe benefits so that we can give it back to the honest taxpayers who have always underwritten the business lunch, the private use of cars, the concessions given to executives so that their kids can go to private schools-all those little tax-free rorts that members of the business community used to love. When the Labor Government takes them away from them, they bitch. We see these sorts of advertisements. It does the Liberal Party, and the National Party in Queensland, no credit to lend their voice, in full page advertisements, to that campaign. As I have said before, in a year's time we will look back on the fringe benefits tax and remember the sorts of predictions that are being made now by the business community and by failed leaders like Mr Hassell and the Queensland Premier, Sir Johannes Bjelke-Petersen, who has advocated breaking the law. We will remember that their predictions of doom and gloom did not come true. Fair dinkum, if business in this country put as much effort into making a quid as it does into fighting taxes, we would not have a trade deficit to worry about. It jumps on the bandwagon every time we try to reform the taxation system. We have come to expect it from the business community, and on page 17 of this morning's Sydney Morning Herald, Ross Gittins has written an excellent article on that subject. I recommend honourable members opposite to have a look at it. Mr Gittins blows that argument out of the water. I would like to look at something that is not widely known-something that those oppose and those who criticise the tax reforms by this Government never mention. The fact is that they always talk about the Australian Labor Party being the high taxing party. In actual fact, the Labor Party is the low taxing party. To illustrate that point, one need look only at the marginal rates of tax under the Liberal Party compared with those under the Labor Party. Under the Liberal Party, the lowest tax rate one would pay was 30c in the dollar and the highest marginal tax rate was 60c. After our tax reforms, the rate will drop from 30c under the Liberals to 24c under Labor. The top marginal rate, which was 60c under the Liberals, will fall to 49c. Mr Tuckey —But you haven't done that yet. You're backpedalling on that already. Mr GEAR —The honourable member for O'Connor, who is well known in this House for his contributions, says that we have not done it. Of course, we are going to do it, despite his efforts and despite the efforts of all members of the Opposition parties, who make big fellows of themselves by saying: `We will give the tax cuts, but we will oppose everything that will allow you to fund those tax cuts'. Mr Valder put his finger right on the point, and this was alluded to yesterday by the Treasurer (Mr Keating) in Question Time. Mr Valder, the President of the Liberal Party-that highly principled man-said: `Wouldn't it be great if the Labor Party could get in and do all the hard things'. Of course, these political opportunists opposite will oppose everything, but they will not give a commitment that when they return to government they will legislate to get rid of the fringe benefits tax. Really, they want it both ways. They are nothing more than political prostitutes. What they want to do is take all the credit for fighting the so-called fringe benefits tax-- Mr Tuckey —Mr Deputy Speaker, I raise a point of order. I ask for that statement to be withdrawn. He does not need to learn from the Treasurer. Mr DEPUTY SPEAKER(Mr Mildren) —Order! There is no point of order. It is not a personal attack on the honourable member. Mr Tuckey —It was a personal attack on me as a member of the Opposition. I was referred to as a prostitute and I ask that it be withdrawn. We have been through that exercise. I am prepared to make a speech on it, if you like. Mr Uren —On the point of order, Mr Deputy Speaker: There has been a long-standing tradition in the Parliament that when an honourable member talks about a collective attitude and does not refer to an individual, it is allowed under the rules of parliamentary debate. It is only personal reflections that are against the Standing Orders. I can give precedents of situations when many more collective charges were made by a government than in this case. Mr DEPUTY SPEAKER —I am informed that under Speaker Snedden a comment which was taken collectively, if it was seen to be objectionable, was subject to withdrawal. I will rule accordingly. I ask the honourable member to withdraw. Mr Uren —Just for the record, Mr Deputy Speaker-I know you will not change your mind-Speaker Snedden made many contradictory decisions. It was during his time that the collective charge was made which had much deeper implications than the one that has been made today. Mr DEPUTY SPEAKER —Order! I have made my ruling. I ask the honourable member for Canning to withdraw. Mr GEAR —Mr Deputy Speaker, I withdraw, more in deference to you than to the former Speaker. I return to my point about people who oppose tax reform and all the hard tasks of tax reform but promise all the goodies. I know that the honourable member for O'Connor (Mr Tuckey) has set himself up as the moral guardian of what happens in this place with regard to what we say about the Opposition. I will not use that term again. I just say to the people of Australia: What do they think of people like Liberal Party members who take out full page advertisements in newspapers, opposing the hard parts and promising the good parts, but who will not promise that when they return to government-if that should ever happen-they will oppose it? If that is not acting like a prostitute, I do not know what is. I also draw to the attention of the House some of the significant changes we have made to the taxation system. I also refer to the people for whom we quite properly have responsibility-the people on lower incomes-and that is where genuine tax reform should go. I allude particularly to poverty traps. Some of the benefits contained in these Bills will flow towards alleviating those. In particular, the taxation rebates for persons receiving unemployment and other benefits will be increased from $75 a year to $220 a year for married or de facto couples, and from $50 a year to $170 per year for single beneficiaries. These increases will ensure that persons wholly or mainly dependent on social welfare benefits will pay no tax in 1985-86. The limits for exemption from the Medicare levy have been lifted significantly. As from the 1985 Budget, individuals earning less than $7,526 will pay no Medicare levy. Married or de facto couples, without children, earning less than $12,504, rising to a single income family, with two children, earning less than $15,564, once again, will pay no Medicare levy-but they will have access to all the benefits of Medicare, which this Government introduced. That is a measure that has saved those low income earners significant amounts of money. Among the other provisions that these tax reforms will help to fund is the provision that recipients of social welfare payments will also be able to earn more private income before their total income is subject to tax. That, once again, is aimed at easing poverty traps. I conclude my contribution to this debate by stating that since the Labor Party has been in government-one of the most reformist governments ever-we have attempted to make the system fairer. In the social security system, we moved immediately to end the haemorrhage by putting a tax on lump sum superannuation payouts, and, of course, the assets test was introduced to stop the pension going to the millionaires who were previously getting it. We wore the flak from the Liberal Party about that. We all remember that during the last election campaign the Liberals went around scaring pensioners. The once great Liberal Party, now the pensioner scarers party, tried to scuttle that move. We have made significant reforms in social security. In the health portfolio we have introduced Medicare, a much fairer system which covers the two million Australians who previously had no cover. Once again, in the taxation system we are now making the most significant changes to taxation laws that this country has ever seen. In fact, if fair taxation reform were an Olympic event, Paul Keating would take the gold medal for Australia. Mr TUCKEY(O'Connor)(12.28) —Previous speakers, in particular the honourable member for Mackellar (Mr Carlton), the shadow Treasurer, have complained about the absence of explanatory memoranda. A previous speaker seemed to be of the view that these were purely something to assist the Opposition in understanding the legislation. That is not the reason for the complaint. We want something in black and white from this Government as to what its interpretation of the legislation is. We want to see it in the Parliament. We do not particularly trust the Government's interpretation. We have good reason for that-namely, the string of broken promises, of which, in the context of this debate, the promise that there would be no capital gains tax is the most significant. I remind the honourable member for Canning (Mr Gear) that the bottom of the harbour problems originated during the Whitlam Government, and there is plenty of evidence of that in the report of the Royal Commission on the Activities of the Federated Ship Painters and Dockers Union. Labor members do not have to go any further than that to know that they had time to fix them. Furthermore, that is the end of that. I also remind the honourable member for Canning, as he is back to saying that fringe benefits tax revenue is needed to fund the tax cuts, that the revenue from the fringe benefits tax will equal only about one-sixth of the proposed tax cuts. So we have this wonderful fraud that has apparently been cooked up with the Australian Democrats whereby the taxpayer forgoes $500m for a return of nothing. The Democrats-the Press has caught them out on it-have not achieved a reduction in taxation by these arrangements. All that they are doing is agreeing that the Government can get the amount of money that it seeks and they are prepared to enter into retrospective legislation to guarantee that if their deal does not work. Is it not amazing that the Government cannot even be sure of the tax effect on the Australian people of these sorts of matters? We deal today with four Bills. Barring one of them, they are all about more taxation. The Taxation Boards of Review (Transfer of Jurisdiction) Bill is an administrative measure which has, I think, more merit than fault; nevertheless, the other three Bills are all about more taxation-the Taxation Laws Amendment Bill (No. 2) 1986, the Income Tax (Securities and Agreements) (Withholding Tax Recoupment) Bill 1986, and the Taxation Laws Amendment (Foreign Tax Credits) Bill 1986. What a remarkable thing that is. The honourable member for Canning has just said: `We shall not tax you as heavily as others because we shall alter the marginal rates'. That is something for the future. That has been put back three months already, and we do not know what the next step will be. Mr Uren —No, it is not true. It is completely false. Mr Hand —That is not the truth. Why don't you tell the truth? Mr TUCKEY —We shall live and see. I shall believe it when I see it. It is like the honourable member for Kalgoorlie (Mr Campbell) crossing the floor against the gold tax. I shall believe it when I see it. There will be no argument with me about that. The point is that we must look at the Hawke Government's tax record. When Malcolm Fraser left office, the imposition of the Federal Government by way of taxation was $44 billion. What is it in this Budget? It is $64 billion-and it is suggested that there could be a revenue overrun. You have increased taxation revenue by $20 billion-nearly 50 per cent in three years. It took the governments of Australia 83 years to get to $44 billion. You have managed to increase it-- Mr Uren —By how much has the GNP gone up? Mr TUCKEY —These are the figures. In fact, you have had a great trilogy. You have increased taxation revenue by $20 billion-- Mr DEPUTY SPEAKER(Mr Mildren) —Order! The honourable member for O'Connor will direct his comments through the Chair. We might thus be able to avoid some of the interjections. Mr TUCKEY —Thank you, Mr Deputy Speaker. The Hawke Government has increased annual expenditure by $20 billion in three years. It has increased tax revenue annually by $20 billion in three years. It just so happens to have borrowed $20 billion in three years. That is the great trilogy, and that is the only one that Labor members are interested in. As a result of that borrowing, we have seen the interest charges in our Budget go from $3.3 billion to $6.7 billion and take second place in terms of government expenditure and push education expenditure down from third place to fifth place. Australia's overseas debt is now $20,000 per family. Let us talk about this wonderful new tax proposal to which these Bills contribute. They are part of the so-called reform package. The National Australia Bank's Monthly Summary, in talking about these wonderful tax cuts, says this: This means that a taxpayer on average weekly earnings in June 1985 and paying 22.4 per cent of salary in tax will actually pay 23.4 per cent tax when the new tax scales come into effect two years later should average earnings increase by 8 per cent per annum in the interim. Inflation is running at 9.2 per cent, so that percentage could even be worse. That is an informative and independent publication telling us that this legislation is not about tax cuts. The Bills that we are now debating are part of the so-called `reform package' of the Government which is to make people pay less. I now mention the other thing to which these Bills contribute by way of growth. There is some growth in the economy, and this is one of the classic examples. When Mr Malcolm Fraser left office, the Income Tax Assessment Act was 1,100 pages thick. By the time we have completed this reform package, it will have an additional 625 pages. That is the only sort of growth that we have around in this economy-growth of bureaucracy and growth of additional tax law. Of course the Opposition is entitled to complain about these matters. The downstream effect of all these taxes eventually always ends up with the less advantaged in our community. Recently the Treasurer (Mr Keating) tried to convince ordinary Australians that they should support the fringe benefits tax on the basis that, when they are strap-hanging in the tram or the train and they see a Mercedes going along the road, that car is being paid for at present by their taxes, by the taxes of poor people with their little lunches in their brown paper bags. Let me tell the House-and it will be proven-that 90 per cent of these tax impositions will end up in those brown paper bags. If Labor members suggest to me that someone such as Mr John Elliott will absorb these taxes and reduce his dividend and put himself at risk to all the corporate raiders that are around today, there is something wrong with their intelligence. Of course he will not do that. He will pass them on to his customers. In the case of Elders-IXL Ltd, its customers are those in the farming sector who can ill-afford those sorts of increases. Honourable members opposite should not think for a minute that all this tax will be paid by the people they want to catch. That is what we are on about. Government members spoke again today about the protection of honest taxpayers. Mr Price —That is right. Mr TUCKEY —I am pleased that the honourable member says that is right. Before the honourable member arrived we heard the argument about protecting honest taxpayers. One of the provisions introduced to protect honest taxpayers was the retrospective bottom of the harbour legislation, and this Government got the major proportion of the money recovered-about $400m-by way of that mechanism. How much has it given back to honest taxpayers? Not a penny. It has spent it; it has not given it back. So the honest taxpayers did not gain anything. I am not saying, in the argument of equity, that everybody should not pay the right amount of tax. I believe that people should meet their tax responsibilities. I am telling honourable members opposite that the Government never gave the money back. It kept it. It knocked it off. That is what the Government did. The honest taxpayers got none of that money back. Let me remind honourable members that this legislation comes from a money-grubbing government which has contributed considerably to the fact that, although in 1950 all we needed to run government was 15 per cent of our gross domestic product, today that figure has grown to 45 per cent. Let us talk about how the Government will use these tax Bills. Malcolm Fraser's average outlays on government expenditure amounted to 27.5 per cent of GDP. The Hawke-Keating Government's average stands at 29.5 per cent of GDP. Last year, 1984-85, government expenditure took up 30.5 per cent of GDP. Last night the honourable member for Flinders (Mr Reith) told us that the useless Australian Constitutional Commission will cost Australian taxpayers $4m. Some $30,000 of that money will be spent in flying a past Prime Minister of Australia, Gough Whitlam, back and forth from the luxurious residence the Government provides for him in Paris. Honourable members know what will happen to the Commission's recommendations. History has proved time and time again that when such recommendations are put to the Australian people they reject them. While Malcolm Fraser managed Australia on 23.8 per cent of GDP, the present Government needs 25.3 per cent. People in Australia are fed up with having to pay more taxes. Three out of four of these Bills-75 per cent; that is not a bad average-are all about more tax. We can give them any name we like; they are about collecting more tax. That is what we object to. I am pleased that the Liberal Party in Western Australia is lodging a complaint on behalf of the Australian people. They do not want more taxation either. They will have to pay it by one means or another. Mr Hand —They got it from the bottom of the harbour scheme. You have been giving protection to every rort in the business. Mr TUCKEY —I am sorry that certain members are so sensitive about this issue. Let me tell the honourable member for Melbourne that his constituents, many of whom might be on some form of welfare, will find that that welfare dollar goes a lesser distance. As additional taxes are imposed on business and small business, they will absorb those taxes into their costs and they will charge them onto the consumers. The downstream effect of this type of taxation measure is invariably more cost to the people. These pieces of legislation do some interesting things. There is an attack on the bond, best known as the dingo bond. Income on those bonds will now be taxed on a notional basis. It will be taxed each year rather than at the time when the income is actually received. I can see some merit on the grounds of equity in that proposal but, of course, it means that there will be tax without income. It is interesting that members of the Opposition were told the other day in an interview with some concerned farmers that they should get behind the honourable member for Capricornia (Mr Wright), because he is running around telling farmers that he will introduce a tax free bond. Which way are we going? It will be called the Australia Fund, or something. The honourable member for Capricornia proposes that, by some miraculous means, money will be sucked out of savings banks and income earned on that money will be tax free. The Government had better get its act together. It is currently extending the tax regime over certain bonds while one of its members is trying to curry favour. I have never seen the honourable member for Capricornia so busy. I think he has read a few surveys indicating that things are not going too well for him. He is on his feet in the House every day, speaking on issue after issue, and he is running around committing this Government to the introduction of tax free bonds. Mr Braithwaite —He is a oncer. Mr TUCKEY —Yes, he is a oncer. He has given us the evidence that he is worried. I bet some surveys have been done in Capricornia that show that he is in trouble. Mr Hand —I take a point of order, Mr Deputy Speaker. The speaker is straying a fair distance from the legislation before the House. I ask you to bring him back to the relevant matters that we are discussing. He is wandering all over the place in talking about Capricornia and farming. Mr DEPUTY SPEAKER(Mr Mildren) —Order! There is no point of order. Mr TUCKEY —Thank you for your protection, Mr Deputy Speaker. The point that I am making is that, if the Government is prepared to allow one of its members to run around the countryside promising farmers that a form of tax free bond for specified lending will be introduced, why is it in here attacking and proposing to increase the tax on another form of bond? Other proposals in this package of legislation are designed to create tighter tax measures to prevent avoidance of interest withholding tax. Some of those provisions are probably necessary because there is evidence that the present arrangements are being abused. In the few minutes that I have left, let me quickly touch on the proposed changes to the taxation boards of review and the transfer of their powers to the Administrative Appeals Tribunal. If that proposal will overcome what I understand to be the backlog of 90,000 appeals, it is a good move. When it comes to single-member tribunals and if, as the Bill provides, original board members transfer across to these tribunals, the mix will suddenly be broken down. The mix, as has already been explained by one honourable member who spoke today, usually involves one person with a background in the office of the Commissioner of Taxation, an accountant and a lawyer. It will be a bit tough for those people who appeal to a one-man tribunal and get the man from the Australian Taxation Office. I presume he might have a slightly different view. It will be like the Sydney courts. I am told that all the criminals down there want a special magistrate to hear their cases. I imagine that the average taxpayer would want the accountant to hear his case, and very few would want the man with the Taxation Office background. These are the sorts of things that somebody will have to consider. As I said, the idea of a one-man tribunal does not upset me if it will improve the speed and efficiency of hearing these matters, but let us remember that it might be a bit tough, depending on which tribunal member one draws. If one draws a lawyer, I am not sure what his judgment or experience might be in such matters. I am being a little light-hearted about this matter. If there is to be that selection process, I certainly do not reflect in any way on the members of the present boards of review. Finally, in this regard, let us remember that this new appeal system will be dealing with the taxpayer's new-found role of self-assessment. Self-assessment hangs entirely on field auditing. Let us hope that, by the time the Government gets field auditing properly going, it will have written some decent guidelines. Plea bargaining over issues of interpretation is going on between the Commissioner, his officers and honest taxpayers. I do not think that is right. I do not think people should be told the maximum cost or the penalty for which they might to liable and then be able to plea bargain it down to something else. That is not right. I am not criticising the Government for this. It is happening and I am asking that it write some decent guidelines so that people will know where they stand. They should not be threatened in this way. I have written to the Commissioner about this question. He knows my views on it. Sitting suspended from 12.44 to 2 p.m. Madam SPEAKER —I wish to take this opportunity to remind honourable members of the display in Senate Committee Room 7 of the new prototypes for the seating in both the House of Representatives and the Senate. The Joint Committee on the New Parliament House will meet on Thursday week and we would like an expression of opinion from members before then. The display is available for formal presentation at 11 a.m., 3.30 p.m. and 8 p.m. on 27, 28 and 29 May and at 11 a.m. and 3.30 p.m. on 30 May. Mr Sinclair-While you are reporting on the seating, could you advise the House of the present state of consideration of electronic counting for the purposes of the facilities being installed in the new Parliament House? Is the matter being considered? Will it be possible between now and the time when the facilities are built for there to be some consideration of it in this Parliament? Could we have a report from the Committee or yourself, Madam Speaker, to advise us of the economics and practicalities? Madam SPEAKER —I will put the matter on the agenda for the meeting next week and a report can come back to the House later. Mr BLUNT —My question is directed to the Minister for Social Security. Is it a fact that the Department of Social Security guidelines for the payment of sickness benefits provide for the continued payment of the benefit even if the recipient has been remanded in custody? Has the Department received advice from the Director of the New South Wales Government Prison Medical Service to close this loophole? Has this advice been implemented? Can the Minister assure the House that no person charged in connection with the Milperra bikies Fathers Day massacre has been receiving sickness or any other benefits from his Department while on remand? Mr HOWE —I thank the honourable member for his question, which raises a number of issues that I am more than happy to investigate. It is true that there have been investigations going on in my Department into the possible payment of benefits to people in prisons in the various prison systems. That matter has been under investigation for some time. When the results of that investigation come to hand I will certainly convey them to the honourable member. With respect to the Opposition, I think there have been certain contradictions in its attitude to this area of benefits control and ensuring that payments made within the social security system go to those people who are most in need. It is extraordinary that whenever I have raised in this Parliament measures which are designed to tighten up the social security system in certain respects and ensure that payments are more targeted and made only to people who are entitled to receive them there has been criticism from the Opposition. I wish to refer to a recent article in Inside Canberra which makes this point. The author is talking about the logicality of Liberal attitudes to welfare. He says: But when something is done in pursuit of this objective, such as seeing that well-to-do pensioners are not rorting the system, there is an outcry from the Opposition . . . but the moment the Hawke Government does anything to cut out welfare rorts, the Opposition immediately resorts to the crudest forms of politics-frightening the living daylights out of the great majority of pensioners who have no tax shelters. Mr Connolly —I raise a point of order, Madam Speaker. The Minister's response bears no relation to the question. Madam SPEAKER —There is no point of order. Mr HOWE —This was a detailed question which covered the possibility of rip-offs in the welfare system the substance of which I said I would investigate and report my findings to the honourable member. I pointed out that it was true that we had been carrying out investigations for some time in relation to prison inmates. I went on to say that whenever we sought to take action in any area where there were possible rip-offs, we always lacked support from the Opposition. That seems to be quite extraordinary. Mr Blunt —I raise a point of order, Madam Speaker. In order to assist the Minister with his investigations, I seek leave to table these leaked letters from the Department, including the final response to the New South Wales Government Prison Medical Service on this question. Leave not granted. Mrs DARLING —I direct my question to the Minister for Aviation. Is he aware that the extensive air search in Bass Strait on Monday was probably the result of a hoax call? What measures can the Federal Sea Safety and Surveillance Centre take in order to ensure that its rescue services are used only in genuine emergencies? Mr PETER MORRIS —I thank the honourable member for her question. I am aware of the circumstances of what was probably a hoax call last weekend. The response mounted to that call involved the use of five aircraft, cost the taxpayer $62,500 and tied up valuable emergency resources. In addition, it entailed considerable risk to the searchers and would-be rescuers. Through the Federal Sea Safety and Surveillance Centre in Canberra, we provide a very valuable and important community support service. It is there to help people who are in genuine distress at sea or on the water. It has very effective, sophisticated facilities and in 1984-85 it was involved in some 2,500 incidents and 61 searches. Under international maritime conventions, we as a nation are responsible for assisting people in distress at sea on one-ninth of the world's surface. That service-all those people in the community organisations and the relevant State authorities which make up the assistance we provide in the event of an emergency-is there to assist people who are in genuine distress or emergency. The call to which the honourable member referred was probably a hoax. That was a deplorable act on the part of the person or persons involved. The distress call received was similar in a number of respects to previous calls which have been verified as hoaxes. All we can do is appeal to those people involved to desist and to act responsibly. Meanwhile, the Department of Communications is investigating the nature of the call and the previous events in an attempt to track down the people responsible. Mr CARLTON —Does the Treasurer still believe, as he has repeatedly argued, that the reduction of the productivity claim from 4 per cent to 3 per cent, its staggered implementation and the 2 per cent wage discount at the current national wage case will be sufficient to isolate totally the effect of the depreciation on the consumer price index and that there is therefore no need for additional wage discounting? Mr KEATING —The Government Statistician's measured direct effects have come within the 2 per cent. In respect of the indirect effects, the honourable member will recall that delaying the 3 per cent cost of superannuation over a year would have a national cost of about 1 1/2 per cent, so the deferment of that cost to 1 July 1986 would go a substantial way to meeting indirect costs. Therefore, in respect of the depreciation on the Statistician's measurement of the direct cost, I think the answer is in the affirmative. Mr LAMB —My question is addressed to the Minister representing the Minister for Industry, Technology and Commerce. What are the implications of the figures issued yesterday by the Australian Bureau of Statistics about private sector investment in research and development since the Hawke Government took office? Is there a change in direction or is it a case of too little too late? Are the sleepers in the private sector starting to wake? Mr BARRY JONES —The figures released yesterday by the Australian Bureau of Statistics compare Australia's performance in private sector research and development in the years 1978-79, 1981-82, and 1984-85. Three indicators are provided. The first indicator is the number of enterprises that received research and development expenditure, in both current dollar and constant dollar figures and in person years of effort-something which, in more sexist times, used to be called man years. The tables confirmed that between 1978-79 and 1981-82 the person years of effort fell in Australia from 8,626 to 8,388-a pathetically small figure of not much more than one-tenth of one per cent of the total labour force at a time when the private sector in every Organisation for Economic Co-operation and Development nation was increasing its research and development work sharply. However, for 1984-85 up to the twenty-seventh month of the Hawke Government, the figure increased from 8,388 person years to 11,435 person years-a rise of 36.3 per cent. Actual expenditure rose by 51 per cent in constant dollars or 80 per cent in current prices while the number of enterprises rose by 39.6 per cent. While this change in direction is to be welcomed, a few cautionary words are in order. First, the change is long overdue. We could and should have started it 15 years ago. Second, we have a great distance to go to catch up with the raised levels of private sector research and development activity in Japan, the United States of America, Britain and Canada. Those countries are a long way ahead. Third, when we start from a low base, a sharp relative increase may not mean very much in absolute terms. This is like the honourable member for Denison's popularity. Our long incapacity to recognise the technological revolution around us is reflected in our very adverse terms of trade in high technology products. We still rank twenty-first of 24 OECD nations in the value of high technology imports over exports. Only Greece, Iceland and Turkey are lower. I have been saying for years that Australia is now passing through an information revolution. I commend Dr Bill Caelli's article in yesterday's Australian which points out that in the nine months to March 1986 information technology products accounted for 12.8 per cent or $3.3 billion of imports in a narrow definition-that is, computers and office equipment-and 23.6 per cent of imports of $6.2 billion in a broader definition which includes music and entertaining equipment. The ABS figures are only a start. We have a great deal of rethinking to do. The sleepers are waking but they have taken a long time to do it. Mr MILLAR —I direct my question to the Treasurer. I refer him to his assurance that the Government is confident that the proposed fringe benefits tax liability on farm employers will not be unduly harsh and also to his calculation that the cost may be only a few dollars a week. Would the Treasurer consider a new fringe benefits tax liability of $25 a week on farm employers to be unduly harsh, given that many are experiencing income losses and that the average net farmer income is only $73 a week? Mr KEATING —I indicated to the House the other day that if one took 60 per cent of what the employee of a farm is charged in terms of the rental value of a farmhouse building and then deducted from that the amount which is paid by the employee in rent and took 49 per cent of that amount, the value would have to be fairly substantial for the liability to reach $25 per week. It would mean that the farmer himself or herself was establishing a value on the rent which would be higher than the ones which I think are generally being charged. In that case the farmer would need to be certain that the value of the rental accommodation was being appropriately priced for taxation purposes. But in many cases we are talking about something in the order of $40. A 40 per cent discount on that would get us back to about $34. If one were charging the employee $20 or $25 a week one may then be taxing $10 a week at 49 per cent, which is $4.90. I am not saying that all farm employees are charged a rental of $40 for accommodation, but that is a fairly common figure. If the figure is markedly above that, presumably so too is the rental which the farmer charges and, after the 40 per cent discount and at the 49 per cent rate, I still think we are dealing with modest sums of money. I think in fairness to the honourable gentleman and in fairness to the Government I ought to say that the fringe benefits tax is but part of a package of measures which the Government has introduced. The point is that the same farmer will enjoy the benefit of a reduction in the top marginal rate from 60 per cent to 49 per cent. Mr Howard —When? Mr KEATING —I gave the honourable gentleman the answer to that yesterday. I thought that after they did the job on him in Adelaide he would have heard the answer. I gave it to him yesterday-it was 1 July 1987. If the farm is incorporated, as many are of course, there will now be no double taxation on the distribution. When one thinks about all incorporated enterprises, including farms, having the capability of putting distribution into the hands of shareholders and removing the corporate tax rate as it now applies, one can see that that is of substantial benefit. In this respect, the whole Government tax reform package is essentially about taking away some of the tax advantages or tax rorts which have been in the system to give other taxpayers the benefit of generally lower taxation rates. Instead of facing a marginal rate of 60 per cent, at one and a half times average weekly earnings, one would face a marginal rate of 49 per cent. The rates under that, instead of being 48 and 46 per cent, could be 40 per cent. These measures are of substantial and material benefit to all people, including farmers. Mr SAUNDERSON —Has the attention of the Minister for Social Security been drawn to media reports that an ex-officer of the Department of Social Security has written a book about how to cheat the social security system? Has this ex-officer demonstrated how to beat the system with impunity? Mr HOWE —I am aware that an ex-officer of the Department has attempted to put his rather dishonest and extraordinary claims into practice and that he has enlisted the assistance of his wife to do so. The wife of this former departmental officer was recently granted the supporting parent's benefit in Western Australia. The former officer who was legitimately claiming the unemployment benefit at the time had his payment reduced to the single rate following the alleged separation. The payment of the supporting parent's benefit to his wife was swiftly suspended shortly after grant when follow-up investigations indicated possible misrepresentation. After, and only after, suspension and before the investigation was complete he visited the social security office in Western Australia claiming that he had also been receiving the unemployment benefit by misrepresentation to an office in New South Wales. Prior to this he tried to receive additional benefit by claiming his sister-in-law's children as his own. His application was rejected because they were not in his custody, care and control. Other matters relating to possible fraud and misrepresentation are currently under investigation. This person's rather poor record of success and the possibility of his prosecution must deter those who foolishly seek to use his less than foolproof manual of crime. The conduct of both him and his wife has been referred to the Office of the Director of Public Prosecutions. Without in any way pre-empting the decision of the Director of Public Prosecutions, I must say that I believe this sordid affair demonstrates the foolishness of those who try to break the law and the very serious consequences for those who are caught. The social security system, with 105 million transactions completed each year, relies, like most organisations where the distribution of money is concerned, on the integrity of officials given responsibility for administration, particularly in relation to security. I am sure that our banking institutions would be outraged if one of their managers wrote a manual for the general public, using his intimate knowledge of security, to suggest a career of armed robbery for the general populace. The Department of Social Security uses a range of security measures and investigative procedures, most of which I cannot divulge to the House for obvious reasons. Indeed, I refer to this specific case for the fairly obvious reason that I know the person involved intends to divulge much of this information on television. However, I refer honourable members to comments I made in the House on 26 May, on overpayment detection. All systems, no matter how sophisticated, are vulnerable to fraud by trusted employees. Fortunately, most employees are trustworthy, just as most citizens are honest and law-abiding. It is a sad fact of life that there are a few people who are not honest, who lie and cheat or misrepresent their circumstances. That is why we have police and courts to deal with these people. It is no excuse to say that one breaks the law to test the system. That is hollow and implausible. While many of the claims of this former officer have been found to be without foundation, others are continuing to be examined. I say in closing that I found it most disappointing that the honourable member for Richmond, when interviewed in relation to this book, failed to condemn the project in any way or to disassociate himself from this kind of activity. The Government is continually investigating possible loopholes in the operation of the social security system and closing them either by administrative changes or by legislation. I was recently speaking to a delegation from Canada, who were extremely impressed with the fact that, whereas Canada's social security legislation is rarely amended, our legislation is amended on a continuing basis, with a Bill being presented every session. That means that we have the opportunity each year to tighten up and to learn from information that comes to hand. I must say that this exercise is a very nasty one and I think all honourable members of the House would condemn what this person is seeking to do in publishing this very dishonest tract. Mr HOWARD —I ask the Treasurer: Does his answer to the question asked by the honourable member for Mackellar mean that the Government will support full wage indexation in future national wage cases and will not pursue any discounting of wages additional to that contained in the accord mark 2? Mr KEATING —That was not the implication in either the question or the answer. I was asked whether I thought the discount the Government had negotiated in respect of the direct price effects of the depreciation was the appropriate one. The answer to that is in the affirmative. In respect of full wage indexation, under the principles there is always an area where the Government may introduce argument, if it sees fit from time to time, about the question of a guaranteed level of full indexation in particular cases. We always reserve our right to put those views, if we see fit, in the light of economic circumstances. Dr CHARLESWORTH —My question is directed to the Minister for Health. In view of the clearly demonstrated ability of medical research to contribute to improvements in health care and, indeed, to effect reductions in health costs, will the Minister assure the medical research community that he will be arguing strenuously for a continued upgrading of financial support by this Government for medical research in the 1986-87 Budget? Dr BLEWETT —From the outset this Government has recognised the contribution that medical research could make, both to the long term health of the Australian community and also, of course, to cost containment in the long run. I think we have proven over the past three years our recognition of the importance of health research. In the 1985-86 Budget the Government appropriated $50.8m for medical research through the Medical Research Endowment Fund. This represented an increase of 14.9 per cent over the 1984-85 year and it represents, over the three years, a 71.5 per cent cumulative increase in moneys allocated to medical research. I think even our critics would not disparage the achievement in this area. In fact, there is no period in the Commonwealth's history when a government has made so sustained a commitment to medical research. The Hawke Government has also introduced other measures to encourage private investment in research. These include a 150 per cent tax deduction for eligible companies spending money on research and development in Australia and, of course, the national biotechnology program research grant scheme, which gives preference to research proposals involving direct collaboration with private industry. One would hope that, as a result of these two major initiatives by the Hawke Government, there will be a greater investment of the private sector in medical and health research in this country and that will find a position much more comparable with countries such as the United States of America and Canada. I certainly can assure the honourable member for Perth that I will be fighting to maintain that excellent record in the Budget debate. Mr WHITE —I refer the Treasurer to advice given by the Australian Taxation Office this week to the hospitality industry in relation to the fringe benefits tax. Is the Treasurer aware that a motel owner who requires a cook to live on the premises and allows him to eat in the kitchen would be liable to a fringe benefits tax of some $6,000 on his accommodation and some $5,000 on his meals because the valuation is based on the commercial retail rates prevailing for that room and for those meals? Can the Treasurer confirm that such a fringe benefits tax on the hospitality industry will create severe unemployment? Mr KEATING —Before I address the detail of the question, I point out again that this is another question put as though the owner of the particular hospitality industry-it is a hotel, I presume-receives no benefit from a reduction in marginal rates or the imputation system. If this was a substantial operation it would probably be incorporated. On every $100 of company income that shareholder at the moment is paying 46c in the dollar company tax, leaving $54; and if the person is paying an average rate of 40 per cent or 50 per cent he would be receiving about $27 out of every $100 of company income. Under the imputation system he will receive $51 out of $100, and not $27. It is not much good coming up with all these hard luck stories and then on the same basis denying that this is a package, a package which is revenue neutral to the Government. The Government hands back all the proceeds of the fringe benefits tax to taxpayers. That needs to be understood clearly by everyone in the community, including members of the Opposition. The provision of accommodation, depending on the level of the rental value of that accommodation, would be fringe benefit taxed and the meals would be fringe benefit taxed. If $5,000 is the tax on meals, the tax being at 49 per cent, there would be $10,000 worth of meals a year. That is $250 a week, so it is a pretty dear pub. If that is what they charge the housekeeper, God help the patrons! If somebody pays for another person's meals, that is a benefit which is outside the tax system, and, as we say, we are handing back the full proceeds of the fringe benefits tax. To get all of this in perspective: The package will raise about $600m. Over half of that will come from the motor vehicle area alone. Therefore, the balance, including all the other questions I have had about farms-- Mr Cadman —How much for charities? Mr KEATING —The honourable member keeps making this point about charities. Let me make this point again specifically for the honourable member, because it takes a lot to penetrate the block of ivory that he has on his shoulders. If a charity is handing out cars and credit cards and the rest, why does anyone in the House believe that the employee of a charity ought to be receiving those benefits outside the tax system when employees of any other body do not? It is as simple as that. Mr Donald Cameron —Because a charity has a need for a car, you thickhead. Madam SPEAKER —Order! Mr KEATING —Let me just make this other point: The Government has made it quite clear- Mr Donald Cameron interjecting- Madam SPEAKER —Order! The honourable member for Moreton will cease interjecting. I warn the honourable member for Moreton. Mr KEATING —The Government has made the position quite clear in relation to charities, particularly major ones, which may be affected in this way. However, it is a pretty curious proposition for a charity trying to keep the show on the road to hand out massive fringe benefits. One wonders why a charity would be handing out massive fringe benefits, anyway, but if it has handed out fringe benefits which are so large as to give it an economic problem, the Government has said that it will address that directly on the outlay side of the Budget. We have made that quite clear, and we repeat it. The honourable member for Moreton interjected, but I ask him to please listen to the answer. I go back to the main point: Outside the motor vehicle area, there is about $300m across the whole of all the other sectors of the economy in fringe benefits taxation, including the farm sector. Therefore, there is not much point in drawing pictures of economic debilitation around particular cases, when the broad impact of this is still going to be modest in terms of the increases in profitability for the whole economy, sector by sector, particularly for the hospitality industry. The hospitality industry was one of the first industries to gain a benefit from the depreciation of the dollar, with a very high level of increase in local destinations for travel. It is the hospitality industry which has now been given a 4 per cent write-off for buildings. The hospitality industry has had the benefits of higher growth in activity and a higher level of incomes than would have been the case under the policies honourable members opposite pursue and have pursued for years. That is why there has been very strong employment growth in the hospitality industry. I remind honourable members opposite about when they had the handkerchiefs out for the restaurants a couple of months ago-there was going to be wholesale slaughter of the restaurants. Well, members opposite were wrong, were they not? How about that! They were wrong, and the fact is that they are wrong again. Mr GRIFFITHS —I address my question to the Minister for Trade. I refer the Minister to the widely publicised incitement by Mr Bob Ansett to business persons to break proposed Commonwealth laws. Does this incitement conflict with Mr Ansett's role as an adviser to the Government? I remind the Minister of the old Chinese adage that to punish one is to educate one hundred. Will the Minister take steps to dismiss Mr Ansett from his position as Chairman of the Trade Negotiations Advisory Group of the Trade Development Council? Mr DAWKINS —The first point I want to make is that Mr Ansett was appointed to the Trade Negotiations Advisory Group of the Trade Development Council for the assistance that he might give us on trade and not for any absurd views that he might have on the taxation system. The point is that I think a number of people would be impressed by Mr Ansett's business record, particularly in the area of services and indeed in the export of services, and it was for that reason that I thought it might be a good idea to include someone like that in this group. It seems to me that the problems confronting Australia are such that we should try to bring together those people who have a reasonable contribution to make to improving Australia's trade position. However, I must disassociate myself from these views that he expresses. It is not that we object to people who are on these advisory groups holding views different from ours. We do not appoint people to advisory groups simply to echo the Government's views. What is different in this particular case is that Mr Ansett has decided to incite people to break an impending law. I think in that way he puts himself in an entirely different class. I just want to say that I am not quite sure what objection Mr Ansett has to the fringe benefits. Mr Tuckey interjecting- Madam SPEAKER —Order! I warn the honourable member for O'Connor. If he interjects again I will name him. Mr DAWKINS —I did not hear the interjection from the honourable member for O'Connor. Madam SPEAKER —Then there is no need to comment on it. Mr DAWKINS —Well, I am sure we were all fascinated by his literary allusion of a few weeks ago. Mr Tuckey —On a point of order, Madam Speaker: It is interesting to see the Minister get his courage up, is it not, when you, Madam Speaker, tell me to shut up. He would not do it before. Madam SPEAKER —Order! The honourable member for O'Connor will resume his seat. Mr Tuckey interjecting- Madam SPEAKER —Order! I name the honourable member for O'Connor. Motion (by Mr Young) proposed: That the honourable member for O'Connor be suspended from the service of the House. Madam SPEAKER —The question is that the motion be agreed to. Those of that opinion say aye, to the contrary no. I think the ayes have it. Mr Sinclair —Madam Speaker, could I suggest to you that the naming of the honourable gentleman, in the circumstances of your having warned him and the Minister for Trade deliberately having incited him, is totally unjustified. Government members interjecting- Madam SPEAKER —Honourable members on my right are not assisting either the House or the Chair. Mr Sinclair —Madam Speaker, after you had warned the honourable member for O'Connor the Minister for Trade deliberately commented upon matters relating to the honourable member for O'Connor. In his answer he specifically referred to some literary allusions which apparently the honourable member for O'Connor had made. I suggest that it was in those circumstances quite justifiable for the honourable member for O'Connor to seek to respond in the only way possible within the Standing Orders of this place. Madam SPEAKER —In reply to the Leader of the National Party: The Chair has given the honourable member for O'Connor over a number of days a certain amount of indulgence. The Chair does not intend to continue that indulgence. Mr Spender —Dawkins is gutless. Madam SPEAKER —Order! The honourable member for North Sydney will not interrupt the Chair. The honourable member for O'Connor chose to disregard the Chair's authority. He has been named. The question has been put and given to the ayes. Mr Sinclair —Madam Speaker, I call for a division. Madam SPEAKER —Is a division required? Mr Sinclair —Yes. Question put: That the honourable member for O'Connor be suspended from the service of the House. The House divided. (Madam Speaker-Hon. Joan Child) Ayes . . . . . . . . . . . 76 Noes . . . . . . . . . . . 61 —— Majority . . . . . . . . . 15 —— Baldwin, P. J. Jones, BarryBeazley, K. C. Keating, P. J.Beddall, D. P. Kelly, R. J.Bilney, G. N. Kent, L.Blanchard, C. A. Keogh, L. J.Blewett, N. Kerin, J. C.Bowen, Lionel Klugman, R. E.Brown, John Lamb, A. H.Brown, Robert Langmore, J. V.Brumby, J. M. Lee, M.Charles, D. E. Lindsay, E. J.Charlesworth, R. I. McHugh, J.Chynoweth, R. L. McLeay, LeoCleeland, P. R. Maher, M. J.Cross, M. D. Martin, S. P.Cunningham, B. T. (Teller) Mayer, H.Darling, E. E. Mildren, J. B.Dawkins, J. S. Milton, P.Dubois, S. G. Morris, AllanDuncan, P. Morris, PeterFatin, W. F. Mountford, J. G.Fitzgibbon, E. J. O'Keefe, N. P.Free, R. V. O'Neil, L. R. T.Gayler, J. Price, L. R. S.Gear, G. Punch, G. F.Gorman, R. N. J. Saunderson, J.Grace, E. L. Scholes, G. G. D.Griffiths, A. G. Scott, J. L. (Teller)Hand, G. L. Simmons, D. W.Hawke, R. J. L. Snow, J. H.Hayden, W. G. Staples, P. R.Holding, A. C. Theophanous, A. C.Hollis, C. Tickner, R. E.Howe, B. L. Uren, T.Hurford, C. J. West, S. J.Jacobi, R. Willis, R.Jakobsen, C. A. Wright, K. W.Jenkins, H. A. Young, M. J. Adermann, A. E. Howard, J. W.Aldred, K. J. Hunt, R. J. D.Andrew, J. N. (Teller) Jull, D. F.Beale, J. H. Lloyd, B.Blunt, C. W. McArthur, F. S.Braithwaite, R. A. McGauran, P. J.Brown, N. A. MacKellar, M. J. R.Burr, M. A. McVeigh, D. T.Cadman, A. G. Macphee, I. M.Cameron, Donald Miles, C. G.Cameron, Ewen Millar, P. C.Cameron, Ian Moore, J. C.Carlton, J. J. Nehl, G. B.Coleman, W. P. Porter, J. R.Connolly, D. M. Reith, P. K.Conquest, B. J. Robinson, IanCowan, D. B. Rocher, A. C.Downer, A. J. G. Ruddock, P. M.Drummond, P. H. Shack, P. D.Edwards, Harry Sharp, J.Everingham, P. A. E. Shipton, R. F.Fife, W. C. Sinclair, I. McC.Fischer, Tim Slipper, P. M.Fisher, Peter Spender, J. M.Goodluck, B. J. Sullivan, K. J.Hall, Steele Tuckey, C. W.Halverson, R. G. Watson, DavidHawker, D. P. M. Webster, A. P.Hicks, N. J. (Teller) White, P. N. D.Hodges, J. C. Wilson, I. B. C.Hodgman, W. M. Question so resolved in the affirmative. Madam SPEAKER —The honourable member for O'Connor is suspended from the service of the House for 24 hours. The honourable member for O'Connor thereupon withdrew from the chamber. Mr DAWKINS —Madam Speaker, I was referring to the-- Mr Sinclair —Tax dodger Dawkins. Tax evader Dawkins. Madam SPEAKER —Order! The Leader of the National Party will withdraw that comment. Mr Sinclair —Which one? Madam SPEAKER —The right honourable Leader of the National Party knows which comment. Mr Sinclair —I withdraw the remark `dodger Dawkins'. Honourable members interjecting- Madam SPEAKER —Order! Would honourable members on my left be silent and would the Minister continue his answer. Mr Spender —What about what Dawkins said? Madam SPEAKER —What did he say? How can the Chair hear what he said? Mr Spender —You have a marvellously deaf ear on your right. Madam SPEAKER —Order! The honourable member for North Sydney will not cast aspersions upon the Chair. Mr DAWKINS —I was saying that we do not-- Mr Howard —Are you going to attack somebody else outside the House? Mr DAWKINS —I am not going to attack him at all. I said that we do not appoint people to advisory bodies simply to echo our views. There would not be any point in having them if we did. Mr N.A. Brown —Is the Ansett scheme better than the Dawkins scheme? Is that what you are complaining about? Madam SPEAKER —The Deputy Leader of the Opposition will withdraw that comment. Mr N.A. Brown —No, I will not. Why should I? Madam SPEAKER —Because the honourable member has been asked to do so by the Chair. Mr N.A. Brown —On what grounds? Madam SPEAKER —The Chair will not allow personal aspersions to be cast across the table. Mr N.A. Brown —Very well, I withdraw in deference to you, Madam Speaker. Mr DAWKINS —The point to be made here is that, in relation to the fringe benefits tax, it is not clear whether Mr Ansett's views are expressed in his role as an employer or in his role as a provider of otherwise tax free benefits to the employees of others. The whole point is that if the executives, that relatively small minority of the work force who receive tax free fringe benefits, were paid their remuneration package entirely in cash, of course, there would be no fringe benefits tax. Indeed, they would then be treated in precisely the same way as the overwhelming majority of the work force who happen to be much less well remunerated in total terms. Mr Ansett is entitled to his views on these matters; what he is not entitled to do is encourage people to break an impending law. It is not my intention to remove Mr Ansett from the advisory group, but I would have to say to him that, if he persists in providing this advice and taking this attitude in relation to the breaking of an impending law, it is a fact that the value of his advice will be diminished, as will his credit in the community generally. Mr YOUNG(Port Adelaide-Leader of the House) —I inform the House that today is the birthday of the father of the House, the Hon. Tom Uren. We wish him all the best. Mr Hawke —Happy birthday, father. Mr HAWKE(Wills-Prime Minister)(2.55) —by leave-I move: That this House notes that this day marks the twenty-fifth anniversary of the foundation of Amnesty International and records its continuing support for Amnesty's efforts in the promotion and protection of human rights. Amnesty International today celebrates with pride 25 years of successful endeavour to identify and free prisoners of conscience, to secure fair and prompt trials for political prisoners, and to end torture and executions throughout the world. From small beginnings, Amnesty has become an organisation with over half a million members, supporters and subscribers world-wide. It has made ordinary people all over the world aware of the plight of those defending the human rights we in Australia take for granted. It has succeeded in bringing practical help to thousands of victims of abuse. Amnesty International seeks to secure throughout the world the observance of the provisions of the Universal Declaration of Human Rights. It has brought home to all governments the indisputable fact that the rights proclaimed by this Declaration apply to all people. These rights have been incorporated into many countries' constitutions and laws, and have been elaborated in other international human rights standards adopted by the United Nations. In Australia Amnesty has some 10,000 committed members in branches in all States. One hundred and thirty groups are working hard towards the release of prisoners of conscience. The Government particularly commends the current campaign whereby the entire membership is writing to 10,000 decision-makers in South Africa towards this end. For its part, the Government is committed to continuing, both bilaterally and in multilateral bodies, its active pursuit of these important human rights issues. The high priority the Government accords to these issues was clearly illustrated last year by our signature of the United Nations Convention Against Torture, appropriately on Human Rights Day, 10 December 1985. The strong support for this Convention by all branches of Amnesty in Australia and by Amnesty throughout the world was crucial to its acceptance by the United Nations General Assembly. We are actively working towards ratification of the Convention. Amnesty International's work on this and other human rights issues has been most valuable to the Government, and we are always ready to take into account Amnesty's information and representations and to follow them up as appropriate. Australia has been an increasingly active member of the United Nations Commission on Human Rights over the last two years, and has given strong support to action on torture, summary and arbitrary execution, and disappeared persons, issues of special concern to Amnesty. Australia is closely associated with the current initiative in the Commission on Human Rights to draft a declaration, the aim of which is to protect the rights of individuals and groups like Amnesty to promote and protect human rights. This Parliament has a very active Amnesty International group, as honourable members are aware, as is appropriate to an institution which is central to Australia's fundamental ideals of freedom and democracy. Members from all parties co-operate effectively for a common cause which is important to us all. No Australian had a greater concern about the human rights of his fellow men than the late Senator Alan Missen. At a ceremony in King's Hall earlier today with which I was associated along with leaders of other parties, I was proud to announce that the Parliamentary Amnesty group had decided to establish a permanent memorial to Alan Missen, which will reflect his lifetime commitment to human rights causes and his service to Amnesty. Amnesty International has taken as its symbol a candle surrounded by barbed-wire in recognition of the truth of the ancient Chinese proverb `Better to light a candle than curse the darkness'. That candle has become a symbol of concern for human rights among decent people everywhere and of hope for those suffering oppression for their political beliefs in many countries around the world. I am sure that I speak for all honourable members in congratulating Amnesty International on its twenty-fifth anniversary and in expressing our continuing support for the work of this exemplary international organisation. Mr HOWARD(Bennelong-Leader of the Opposition)(3.00) —I assure the Prime Minister (Mr Hawke) that on this occasion he speaks for all members of the House in congratulating Amnesty International on its twenty-fifth anniversary. It is a very special body and a very special cause that in this Parliament can draw together the support of all the political parties and for that support to be freely and publicly given. Amnesty is one such body. It is committed to some basic ideals that are important to the Australian way of life-the concepts of political liberty, personal freedom, freedom of expression, and support and encouragement to those in other parts of the world who would seek to exercise similar rights of free political choice to those that are exercised in Australia. Over its 25 years of existence the Amnesty movement has encouraged prisoners of political conscience all over the world, irrespective of whether they have lived under regimes of the Right or the Left, to continue their struggle for personal expression and individual freedom. In that sense the body has won the support and respect of political parties of both the Right and the Left in the free world. Deservedly, in this Parliament and in other parliaments, the Amnesty body is one that draws very strong bipartisan support. I would like, as has the Prime Minister, to express my congratulations to the honourable member for Hughes (Mr Tickner) and Senator Puplick, a senator for New South Wales, in particular, who do so much to further the work of Amnesty in the Parliament. Also, I take pride as parliamentary Leader of the Liberal Party in recording my appreciation for the decision of Amnesty in this Parliament to inaugurate a memorial lecture in memory of the late Alan Missen, whose work for Amnesty and whose commitment to the ideals that Amnesty stood for have been remarked upon, and deservedly so, by members on both sides of the House in recent times. He embodied the bipartisan support for Amnesty that is so very important for the survival of that body. He was a person who, with others, was able to put aside partisan political differences for this cause. It is therefore particularly fitting that a lecture should be inaugurated in his memory. I am quite sure that if he had thought of an epitaph, this would have been one that would have very greatly warmed him because of his commitment to political freedom and individual liberty. I warmly endorse the Prime Minister's remarks. It is fitting that this Parliament record its appreciation for the work of Amnesty and, in so doing, remark the contribution made by the late Alan Missen. Mr SINCLAIR(New England-Leader of the National Party of Australia)(3.03) —I seek the indulgence of the House to comment further on the motion moved by the Prime Minister (Mr Hawke). In so doing, I speak on behalf of members of the National Party of Australia to say that the tragedy of the celebration of Amnesty International's twenty-fifth anniversary is the reality that there is a need for such a body. While bodies like the Red Cross, the Salvation Army, World Vision and many others work in either a charitable or religious role, the work of Amnesty occupies a different part of the political spectrum. The fact that there is total unanimity within this chamber and the other place as to the aspirations of those who work within Amnesty reflects the concern that in so many countries around the world there are still practices against the sanctity of the individual in the abuse of human rights. Amnesty's twenty-fifth anniversary is marked by a growing world awareness of the difficulties that exist in so many countries around the world. This motion not only marks our commendation of those who work for this cause within this place-the honourable member for Hughes (Mr Tickner), Senator Puplick, the late Alan Missen and others-but also reflects the marked efforts made by so many in parliamentary environments that are not quite so easy as this one. Indeed, I think it is as a token to them as much as to those in this place that I rise to support this motion. I commend those who, within the Parliamentary Group and the wider national group, work to achieve those motives, which we all endorse. I commend those who have worked within Amnesty for their 25 years of effort. I trust that by the time the next 25 years of its existence is over, the cause for which it fights might well have eased. One would only hope that absolute governments-be they of the Right or the Left-would see fit to recognise the sanctity of human rights and human liberty to a greater degree than, sadly, so many do this day. Mr TICKNER(Hughes)(3.05) —I seek, on behalf of the Parliamentary Group of Amnesty International, to join with the Prime Minister (Mr Hawke) in supporting his motion, which has been so warmly supported by the Leader of the Opposition (Mr Howard) and the Leader of the National Party of Australia (Mr Sinclair). The Leader of the Opposition spoke of the basic high ideals of Amnesty. Perhaps it is appropriate briefly to refer to those at this time. Amnesty is a world-wide movement which is independent of any government, political faction, ideology, economic interest or religious creed. It plays a specific role within the overall spectrum of human rights work. The activities of the organisation focus strictly on prisoners. It seeks the release of men and women who are detained anywhere for their belief, colour, sex, ethnic origin, language or religion, provided they have neither used nor advocated violence. They are termed prisoners of conscience. Amnesty advocates fair and early trails for all political prisoners and works on behalf of such persons detained without charge or without trial. Finally, Amnesty opposes the death penalty and torture or other cruel, inhuman or degrading treatment or punishment of all prisoners without reservation. Previous speakers have referred to the successes of the Amnesty organisation. There are 2,600 Amnesty groups and national sections in 40 countries and half a million members and supporters in 150 countries. It was put to me today by a member of the media that in some ways Amnesty has been a failure. It was put to me that half of the 159 members of the United Nations still hold prisoners of conscience. There have been reports of the use of torture in more than 60 countries. In over 50 countries people may be held without trial or charge and in 34 countries the death penalty continues in force-in many, for so-called crimes that are politically motivated. The Leader of the National Party was quite right in referring to this still outstanding, unresolved series of injustices regarding human rights that makes the continuation of the work of Amnesty so desperately needed. With respect to the journalist who asked me a question, Amnesty has not been a failure. It has been an outstanding success. Merely looking at the vehemence of the attacks on the Amnesty organisation by totalitarian regimes of the Left and Right indicates that Amnesty is respected and listened to by governments world-wide. Amnesty has been a leader in promoting international standards of human rights. Were it not for Amnesty, the United Nations declaration on torture would probably never have come about. It has also been important, of course, in specific instances regarding human rights and prisoners of conscience. Were it not for Amnesty, many prisoners of conscience around the world would never, apart from their immediate families and friends, have their voices heard by the outside world. Ever since the Universal Declaration of Human Rights, no country can claim that human rights abuses are a matter for the internal jurisdiction of that country. That is no longer a tolerable position for any government to hold. The work of Amnesty is based on the work of its individual members. As I remarked earlier today at the ceremony the Prime Minister referred to, let this motion and this twenty-fifth anniversary not be simply a symbolic recognition. Let them be a springboard for future action by Amnesty and by the wider Australian community, to make sure that the next 25 years of Amnesty are successful in removing those abuses of human rights that have been referred to by all speakers to this motion. Mr RUDDOCK(Dundas)(3.10) —I want to be associated with this motion. I have been involved with the Parliamentary Group of Amnesty International as its Chairman for a time and as a member for the 13 years in which the Group has functioned as a branch of Amnesty. I am very proud that within this Parliament there have been as many members as are and continue to be associated with it involved in the Parliamentary Group. It is a unique organisation. I do not know of any other organisation with which members of Parliament so readily associate themselves as they have with Amnesty International. Considering that it has been in existence for only 25 years and that for some 13 years of its existence members in this Parliament have been so active with it, its unique position will be appreciated. The Australian Parliamentary Group, as I understand it, is the only one of its type in the world. There is a Human Rights Group in the House of Commons in the United Kingdom, but nowhere else have members of Parliament joined an organisation such as Amnesty International. It is not easy to be involved with Amnesty because when one takes up the issue of political prisoners and the issue of torture with governments on the basis Amnesty expects, with balance in the program being an important factor, one often finds that one's comments are condemned and criticised by those to whom advice is offered. I was recently in Kampuchea, and, while speaking to a political leader, I raised the question of political prisoners. I found that, whilst people were happy for Amnesty to investigate activities of the past, the present leadership had no interest in anyone looking at its human rights record in more recent years, and wanted to disparage Amnesty because of comments that it had offered. That was a country of the Left. I have equally raised questions in relation to countries that are described as right wing in character, and Amnesty has been equally disparaged by the governments of those countries. I remember a time when India was the subject of some criticism as a Third World nation, and there was criticism of Amnesty then as well. It is the important balance in the program that makes Amnesty such a unique organisation. The fact that here in Australia parliamentarians across the board are prepared to be involved distinguishes us from places such as Canada, where, when I looked at what was happening there, it seemed to me that it was only the Opposition that was concerned to make political point-scoring on the issue of prisoners of conscience against the Government of the day. It seemed that, as governments changed, the parties that were raising the Amnesty issues changed. Here in Australia that has not been the case, and that makes us unique in the world. I am delighted that this motion has been moved so ably by the Prime Minister (Mr Hawke) and seconded by the Leader of the Opposition (Mr Howard) and has been supported by other members, such as the Leader of the National Party of Australia (Mr Sinclair), because this demonstrates the way in which Amnesty International has bipartisan support. As we take up issues in which we seek to involve members of Parliament in the future, I hope that we shall have the unanimous support of members of Parliament for those particular questions when they are raised. Question resolved in the affirmative. Mr HAYDEN(Oxley-Minister for Foreign Affairs) —With the indulgence of the Chair, Madam Speaker, I wish to read into the record an answer to a question which was raised on 22 May in this Parliament by the honourable member for Wentworth (Mr Coleman). Madam SPEAKER —Please proceed. Mr HAYDEN —On Thursday 22 May, the honourable member for Wentworth asked a question of the Minister representing the Acting Minister for Foreign Affairs, Mr Beazley, regarding provision by the Australian Ambassador to the United Nations Educational, Scientific and Cultural Organisation of certain information to the Director-General of UNESCO, Mr M'Bow. The answer to the honourable member's question is as follows: The issue to which the honourable member refers is related to an initiative taken by the so-called Geneva Group, comprising the OECD members, including Australia, which each contribute more than one per cent of the budgets of the United Nations specialised agencies. A meeting of the Geneva Group on 20-21 March 1986 agreed on the principle of an Australian proposal that there should be a limit of two terms on the tenure in office of the heads of specialised agencies and other United Nations bodies. The honourable member will know of the Government's interest in the proposal from my answer to his question No. 2388 (Hansard, 29 November 1985, at page 4268). A further meeting of the Geneva Group on 11 April agreed that this proposal should be taken up formally with the agency heads by the co-chairmen of the Group. The question of when this would be done was deferred pending further group consultations on 30 April. Reflecting Australian concern that the Geneva Group's proposal should be discussed with the Director-General of UNESCO, Mr M'Bow, before the UNESCO Executive Board and special committee meetings beginning on 28 April, Mr Whitlam convoked meetings of Western UNESCO delegations on 16 and 22 April and indicated at the latter that it was his intention to pass to Mr M'Bow a copy of the Geneva Group proposal and to circulate copies to all Executive Board members. On 23 April he called on Mr M'Bow and gave him a summary of the decisions of the Geneva Group meeting. He also wrote to all Executive Board members on 24 April. I am informed that it had always been intended that the initiative on tenure of Directors-General and other Geneva Group decisions would be discussed with the heads of agencies, including Mr M'Bow. The action was not contrary to instructions from Canberra, given the concern that has been expressed that Mr M'Bow should be briefed on the proposal about tenure before the Executive Board meeting, and the delay that was occurring from within the Geneva Group in informing him. The Clerk —Petitions have been lodged for presentation as follows and copies will be referred to the appropriate Ministers: To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The humble petition of the undersigned citizens 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 Beale,Mr John Brown,Dr Harry Edwards,Mr Fitzgibbon and Ms McHugh. 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 Duncan,Mr Kent,Mr Milton and Mr Scott. To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The petition of the undersigned citizens of Australia respectfully sheweth that persistent rumour suggests that the Hawke Government intends to reduce Government expenditure by contracting or eliminating programs for war veterans and war widows. Your petitioners humbly pray that the Hawke Government honour its commitment and that of previous Governments to ex-servicemen and women by: Ensure no additional cut-backs will be made to the portfolio of Veterans' Affairs. Review the previous cut-backs in such areas as the travel allowances, dental scheme and repatriation pharmaceutical benefits scheme. Proceed with abolishing more stringent conditions applying to the granting of the TPI pension. by Mr Beale,Mr Halverson and Mr Hicks. To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The humble petition of the undersigned citizens of Australia sheweth: (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 petitions as in duty bound will ever pray. by Mr Beale and Mr Halverson. To the honourable the Speaker and Members of the House of Representatives in Parliament assembled. The humble petition of the undersigned citizens of Australia 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 divisions in the Australian community. Your petitioners therefore pray that your honourable House will: Propose and pass a motion that ``the existing Australian National Flag be changed only with the approval of the Nation as expressed in a Referendum''. And your petitioners as in duty bound will ever pray. by Dr Harry Edwards and Mr McArthur. 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 the undersigned citizens of Australia respectfully showeth the legislation to tax fringe benefits is iniquitous, inequitable and unfair. Your petitioners humbly pray that you do not proceed with the legislation. by Mr Beale. To the honourable the Speaker and Members of the House of Representatives in Parliament assembled. The humble petition of the undersigned citizens of Australia sheweth that: We are opposed to the imposition of a Capital Gains Tax. Your petitioners humbly pray: that the Honourable House repeal any Act and reject any Bill which imposes this disincentive to economic growth. And your petitioners as in duty bound will ever pray. by Mr Beale. To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The humble petition of the undersigned respectfully showeth that the Bill of Rights is not supported by the people of Australia, and calls on the Government to: Delay proclamation of the Bill until all matters of contention are settled by national referenda, and that: (1) Matters of States rights, property rights, rights of the newborn, the right not to belong to unions, among other issues, have not been submitted to the people of Australia to decide, and that; (2) No Australian Bill of Rights should depend on any foreign convention for its basis in Australian law. And your petitioners as in duty bound will ever pray. by Mr Cadman. To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The petition of the undersigned showeth that there is widespread public concern about the provisions of the Bill of Rights, and especially the dangerous powers to be vested in the Human Rights and Equal Opportunities Commission, and the failure to protect vital rights such as the right to own private property. Your petitioners therefore humbly pray: (i) that the Hawke Labor Government not proceed with the Bills enacting the Bill of Rights and the Human Rights and Equal Opportunities Commission; and (ii) that we the people be given the opportunity to express our opinion on the Bill of Rights in a referendum. And your petitioners as in duty bound will ever pray. by Mr Donald Cameron. To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The humble petition of the undersigned citizens of Australia, respectfully showeth: That the proposed Australian Bill of Rights Bill 1985 will endanger the Federal system in Australia, the State and Federal criminal justice systems, the State and Federal Police Force, the State and Federal education systems, the independence of the churches and religious associations, marriage and the family, children, the unborn, the handicapped, the aged and the infirm, employer and employee relationships and Australian society generally. Your petitioners therefore humbly pray: That your honourable House defer debate on the Bill for twelve months and circulate the Bill for twelve months for the widest possible debate, scrutiny and discussion. And your petitioners, as in duty bound, will ever pray. by Mr Ewen Cameron. To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The petition of the undersigned respectfully showeth: 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 Fife. 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. We the undersigned believe that the quality of reception of the Brisbane SBS UHF television station is of a very poor quality in many of the Brisbane suburbs. Your petitioners therefore humbly pray that the House of Representatives in Parliament assembled urge the Government to erect a translator capable of providing a service comparable to that of the major cities in Australia. by Mr Humphreys. To the Honourable Speaker and Members of the House of Representatives in Parliament assembled. This petition of the undersigned citizens of Australia respectfully showeth that the humble petitioners respectfully believe that the representatives in Australia of the African National Congress of South Africa (ANC) and of the South West African People's Organisation of Namibia (SWAPO) should not have to suffer unending financial problems related to the cost of rent, food and clothing, and the maintenance of two small offices run on the most austere basis. Your petitioners therefore pray and urge Australian Government provision of: 1. Official recognition of the ANC and SWAPO as the legitimate representatives of the people of South Africa and Namibia; 2. Financial support to the offices and representatives of the ANC and SWAPO to promote the anti-apartheid cause in Australia; 3. Additional financial support for the official representatives of the ANC and SWAPO to assist the humanitarian needs of Namibian and South African refugees who are victims of apartheid; 4. Scholarships for South African and Namibian refugees. These to be provided through the ANC and SWAPO education departments. And your petitioners, as in duty bound, will ever pray. by Mr Scott. To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. This petition of citizens of Australia shows that: Approximately 100,000 Australians live on the verge of homelessness, dependent on Government resources to survive, or sleep out of doors or in refuges. Over 700,000 households, or in excess of 2 million Australians are living below the poverty line after paying their rent or mortgage costs. In addition, there are thousands of households with special needs, such as the disabled, who are not well catered for in the private sector but who nevertheless require suitable housing. Waiting lists for public housing have almost doubled in the past five years to 146,000 by June 1985. The list is expected to grow to some 250,000 by 1990. We therefore ask that the Australian Government, as a highest priority Undertake a campaign to bring the issue of poverty and, in particular, housing-related poverty, to the attention of the Australian public Increase expenditure on public housing through the Commonwealth State Housing agreement, by at least 15% annually in real terms Increase rent relief payments for those on low incomes in the private rental market Use its influence with State and Territory governments to encourage them to increase their expenditures on public housing. by Mr Staples. To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The petition of concerned people respectfully showeth their desire to have the brumby declared a protected species. Your petitioners therefore humbly pray that your honourable House follow the example of President Nixon in the U.S.A. by declaring our wild horses protected from industry and discriminate slaughter. And your petitioners, as in duty bound, will ever pray. by Mr Staples. To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. This petition of concerned Australian citizens respectfully points out: That, for our survival, an effective Worldpeace Initiative needs to be established to 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 for the needs of present and future generations. By working for these objectives, Australia can set an example for the rest of the world. Your petitioners therefore humbly pray that your honourable House will: 1. Propose to the United Nations General Assembly that 1989 be declared International Year for Repairing the Earth. 2. Implement Action Programs leading up to 1989 which will include: (a) Actively supporting the International Year of Peace in 1986 by reallocating at least 10% of our military expenditure to fund environmental repair programs. (b) Implementing National Recycling Programs to reuse water, and to compost into hygienic humus all presently wasted organic garbage and sewage-sludge mixed with fine ground powder from mineral-rich gravels and rocks, to use as a natural fertiliser in revitalising impoverished soils; (c) Developing National Employment Programs giving priority to the planting and growing of healthy forests, food-producing trees and other crops and vegetation including environmentally sound use and reuse of water to assist the greening of Australia. And your petitioners, as in duty bound, will ever pray. by Mr Staples. To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The humble petition of the undersigned citizens of Australia respectfully showeth: The future of work at Port Arthur and Tasman Peninsula to conserve historic sites and present them to the public is under grave threat due to the proposed termination of the Port Arthur Conservation and Development project on June 30th, 1986. Your petitioners therefore humbly pray that the Federal Government, in acknowledgement of the national significance of the historic remains on Tasman Peninsula, provide appropriate financial support for the continuation of the Port Arthur Conservation and Development Project in cooperation with the Tasmanian State Government. by Mr Staples. To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. This 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 urge it to oppose 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 Staples. To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. This petition of Australian residents shows that we strongly oppose the introduction of the ``Australia Card'' or any form of compulsory identity cards. We believe that the introduction of Identity cards will erode civil liberties; will create an increased risk of invasion of privacy; and will not result in any significant increase in Government revenue. We call on the Parliament to immediately reject any proposals for the introduction of compulsory Identity cards. by Mr Staples. To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. This petition of the undersigned citizens of Australia shows that In this International Year of Peace, 1986, the world needs a Nuclear Test Moratorium by the United States, the Soviet Union, France and other nuclear-testing powers. That such a moratorium would create a favourable climate and basis for the negotiation of a Comprehensive Nuclear Test Ban Treaty. That such a Moratorium and Comprehensive Nuclear Test Ban Treaty would be the first vital step to nuclear disarmament impede the development of new nuclear weapons decrease the reliance upon an unstable nuclear strategy inhibit the spread of nuclear weapons. Your petitioners therefore ask that the Australian Government be urged to Use its influence with the United States Government to encourage it to join the moratorium on nuclear testing begun by the Soviet Union. Use its influence in all forums to encourage other nuclear nations to join the Nuclear Test Moratorium. Use its influence in all forums to encourage non-nuclear nations to demand the establishment of a Nuclear Test Moratorium and Comprehensive Nuclear Test Ban Treaty. by Mr Staples. To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The humble petition of the undersigned citizens of Australia respectfully showeth. That numerous provisions exist in industrial legislation and awards which purport to provide special protection to women workers but which have been shown to be detrimental to their achievement of equality in employment. Noting the relevant provision in Article 11 of the United Nations Convention on the Elimination of All Forms of Discrimination against Women, to which Australia is a party, your petitioners request that urgent action be taken to ensure that these legal barriers to equality be removed. And your petitioners, as in duty bound, will ever pray. by Mrs Kelly. To the Right Honourable the Speaker and Members of the House of Representatives 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 and Mr Grace. To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The petition of concerned people of the Electorate of Indi respectfully shows their desire that Your Honourable House (the Government) act immediately to raise the Tertiary Education Assistance allowance to the level of the Unemployment Benefit. And your petitioners as in duty bound will ever pray. by Mr Ewen Cameron. To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The Petition of certain citizens of Victoria respectfully showeth: That all legitimate business expenses incurred in earning or producing assessable income should be allowable deductions. That the proposed Capital Gains Tax is an unwarranted burden on the rural sector, which will severely affect its long-term viability. That the delay by the Government in introducing the legislation into Parliament is causing confusion and hindering farmers in the organisation of their affairs. Your petitioners humbly pray that the Government introduces the Capital Gains Tax legislation without delay and that the Australian Democrats join with the Opposition to defeat the proposed legislation. by Mr Hawker. To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The humble petition of the undersigned citizens of Queensland respectfully showeth: Whereas the present Government of the Commonwealth of Australia has purported to present the Title Deeds to Ayers Rock in Central Australia, in reality the joint property of the people of the Commonwealth, to an Aboriginal Land Council on 26 October 1985, Whereas opinion polls and statements of representative groups, Members of Parliament and respected individuals show clearly that the Commonwealth Government had no mandate from the citizens of the Commonwealth to act in such a disgraceful manner, Whereas the present Government claims to be totally opposed to apartheid (separate development) in South Africa but purported to hand over Ayers Rock to an Aboriginal Council in support of a policy of apartheid (separate development) which has been shown to be detrimental to the Aboriginal people of Australia, Whereas it is pursuing this policy making it a crime for most white and many Aboriginals to enter, without permit, large areas of the Commonwealth designated apartheid (i.e., set aside for separate development), contrary to our democratic traditions and experience of freedom of movement for citizens of all racial origins within Australia, Whereas Australian citizens have no present means available to them to prevent this violation of their natural rights to unfettered common ownership of, and access to, a treasured natural asset. Your petitioners therefore pray that the House of Representatives, in Parliament assembled, urge the Government to: Seek means available for the protection of the people's interests to reverse this outrage and preserve the democratic traditions of Australia. And your petitioners as in duty bound will ever pray. by Mr Slipper. To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The humble petition of certain citizens of the Federal Division of Fisher in Queensland respectfully showeth: That the current policy pursued by the Hawke Government is causing an intolerable increase in home loan interest rates beyond the capacity of families to pay. That consequently this policy is causing grave hardship throughout Australia and is contributing to social problems and the breakup of the family unit. That unless the Government act urgently the Australian dream of home ownership is fast becoming shattered for many of our citizens. Your petitioners therefore humbly pray: That the Government make home loan interest rates tax deductible therefore alleviating the present crippling burden of current high interest rates on home owners and home buyers. And your petitioners as in duty bound will ever pray. by Mr Slipper. To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The petition of certain citizens of the Federal Division of Fisher in Queensland respectfully showeth: That the actions of trade unions have gone beyond their traditional goals of protecting workers conditions and rates of pay and have reached the point where they are seriously affecting the economic health of the nation and the people. Your petitioners therefore humbly pray: 1. That all Governments throughout Australia acknowledge and protect the Right to Work on behalf of all Australians. 2. That the total sovereignty of individual governments be recognised as a fundamental requirement of a workable, balanced Federal system of government. 3. That all necessary steps be taken to protect the citizens of Australia from any inducement, compulsion, threat or intimidation to join any trade unions. 4. That there should be no preference in employment for people who are members of trade unions. 5. That the supremacy of elected governments over the sectional interests of trade unions be recognised, and 6. That the provision of essential services be maintained, free from industrial disruption. And your petitioners, as in duty bound, will ever pray. by Mr Slipper. To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The humble petition of the undersigned citizens of Fisher respectfully showeth: That we deplore the discriminatory tax proposals as outlined in the Government's ``White Paper'' and the Government's preferred option on proposed new and widened tax proposals as so outlined, namely: Capital Gains tax Hidden Death tax described as ``Capital Gains tax after death'' Gift Tax Increased Company tax Employer taxes on employees' employment benefits. All such taxes will discriminate against and inhibit progress, growth and employment throughout the nation. They will attack hardworking people who have built up their assets; they will discourage thrift; they will inhibit development; they will treat unfairly all who plan for the future; they will cause trouble and expense in arriving at the value of their assets; they will discourage industry and punish achievement. We ask that the tax proposals be rejected. And your petitioners, as in duty bound, will ever pray. by Mr Slipper. To the honourable the Speaker and Members of the House of Representatives in Parliament assembled. The petition of certain citizens of the Federal Division of Fisher in Queensland respectfully showeth: 1. They are completely satisfied with the design of the existing Australian National Flag. 2. They are aware it properly reflects the immutable characteristics of Australia, namely: (a) The Union Jack, itself the creation of three Christian Crosses, represents the nation's historical origin and the source of its language and law; (b) The Southern Cross on an azure blue background signifying its geographical location on this planet Earth; (c) The large star depicting the advent of Federation in 1901. 3. They know the Flag has been a source of inspiration to generations of Australians in peace and war. 4. They recall that millions of native-born Australians and newcomers to these shores from other parts of the world have become united under its proud symbolism. 5. They are certain that any change to the Flag will produce divisions in the Australian community. Your petitioners therefore pray that your honourable House will: Propose and pass a motion that ``the existing Australian National Flag remains sacrosanct from change''. And your petitioners, as in duty bound, will ever pray. by Mr Slipper. Petitions received. Mr DEPUTY SPEAKER(Mr Leo McLeay) —Order! Madam Speaker has received the following message from the Senate concerning the Parliamentary Commission of Inquiry: The Senate transmits to the House of Representatives the following Resolution which was agreed to by the Senate this day: That, in accordance with section 4 of the Parliamentary Commission of Inquiry Act 1986- (a) the Honourable Sir George Hermann Lush, the Honourable Sir Richard Arthur Blackburn and the Honourable William Andrew Wells be appointed members of the Parliamentary Commission of Inquiry, and (b) the Honourable Sir George Hermann Lush be appointed the Presiding Member. Bill returned from Senate without amendment. Mr DEPUTY SPEAKER(Mr Leo McLeay) —Madam Speaker has received a letter from the Deputy Leader of the Opposition (Mr N.A. Brown) proposing that a definite matter of public importance be submitted to the House for discussion, namely: The public concern at the Government's incompetent handling of current industrial relations issues. I call upon those members who approve of the proposed discussion to rise in their places. More than the number of members required by the Standing Orders having risen in their places- Mr N.A. Brown(Menzies)(3.23) —I do not know where the Minister for Employment and Industrial Relations (Mr Willis) is. Mr Rocher —He is on strike. Mr N.A. Brown —I do not know whether he is on strike or whether he is off having another one of those peculiar negotiations with the trade union movement. If ever anything were needed to show the absolute, complete and final collapse of the Government's prices and incomes accord with the trade unions, it must surely have come today with the so-called national day of protest of the Australian Council of Trade Unions-a national day of protest in which members of the trade union movement have been incited to take industrial action to bludgeon the Australian Conciliation and Arbitration Commission yet again into doing what the trade union movement wants it to do. We say without any qualification whatsoever that we condemn this industrial action. We invite and encourage the Government to condemn it likewise. If the system of conciliation and arbitration which the Government continues to praise and hold out as the answer to all industrial problems is half as good as the Government says it is, it must have as an essential ingredient for its proper working compliance with the Arbitration Commission and support for the Arbitration Commission. It must be completely divorced from anything remotely resembling an attempt to intimidate or to put improper pressure upon the Arbitration Commission. What we are seeing today is yet another attempt to exert improper pressure on the Arbitration Commission, and complete silence from the Government in response to that pressure. If the Government will not dissociate itself from this industrial action, if it will not take in hand its constituent members of the trade union movement and encourage them to show more respect for the Commission, for the community and for the future of this nation, we say that the Government should be utterly condemned. There is no doubt that if anything were needed to show that the accord had been a miserable failure we have seen it today in this now outbreak of industrial disputation, involving apparently some 500,000 people, egged on by the Australian Council of Trade Unions, with no criticism or condemnation from the Government. It has always been the great claim of the Government that on a twofold basis the accord holds the future for the security, development and progress of this country. The Government has always put it on a dual basis. It said first of all that the accord would introduce-it says it has introduced-a new dawn of economic progress and that this new dawn would beam down on the happy people of Australia as a result solely of the prices and incomes accord. We have seen this claim made in so many places, particularly in a comic-book presentation from the Government entitled `Accord-The First 2 Years'. Honourable members will remember the booklet. It is the one in which the inflation rate is depicted as floating down merrily, like a balloon, to 5.1 per cent at December 1984. According to the Government, the inflation rate coming down would be the great success of the accord. There is no sign of any second edition of this booklet being released to show that the balloon has now filled with helium and has taken off to give us an inflation rate of 9.2 per cent, and it is apparently merrily on the way up. That is the presentation that the Government made. Secondly, it has said that with this accord an unparalleled nirvana has descended upon the country and the people are the happy recipients of a new era of industrial harmony. Let us look at both of those statements briefly, because they are both absolutely false and show the complete failure of the prices and incomes accord. Let us look at the first proposal that the Government put under the accord. It said that the accord was responsible for a new dawn of economic progress. We say that the accord has produced record interest rates in this country and it is producing an inflation rate which is higher than that in virtually any industrialised country in the world. It is an accord which has produced the real lasting monument of the Hawke Government-600,000 people unemployed with no hope of the unemployment level ever being reduced. Most recently and most disastrously, the accord, working its way through the centralised arbitration system, has produced a balance of payments situation which can only be described as a national crisis. That is what has been produced by the accord. We can see in our most recently published trade figures that what is happening to this country as a result of the accord and of the economic policies pursued by this Government is that our nation is now pricing itself out of goods and out of trade overseas, and it is pricing itself out of jobs. There should be no argument about the first leg of the prop that the Government put under the accord, because it is obvious to anyone who is prepared to look at the facts that the accord has been economically a complete failure. It has not brought prosperity to this nation. It is bringing to it economic ruin. The Government said that the other great achievement of the accord was that it had introduced industrial peace and harmony to this country. If anything were needed to disprove that nonsense, we would simply have to look at what we are faced with today. Today we are faced with a demand by the Australian Council of Trade Unions, its orders having been sent out through its constituent union bodies that the members of those trade unions will go on strike, that they will take part in industrial stoppages, that they will take extended breaks, that they will engage in whatever industrial action they can engage in to force and bludgeon the Arbitration Commission to bring down decisions in the current wages case before it which are not conducive to the economic prosperity of this country but which are simply what the trade union movement wants. That is what is happening. If there were any need for evidence that the accord has been a failure with regard to the industrial situation in this country, it must be found in what this country is faced with today. In the first place, it is utterly false to say that the accord has brought about industrial peace in this country, and that is seen to be doubly false when we look at the evidence available today. We have seen the statistics. Of course, the Minister and the Government are all very keen to trot out statistics to show how the number of industrial disputes of over 10 or more days has dropped. Mr Rocher —He will do it again today, no doubt. Mr N.A. Brown —No doubt the Minister will do that again today. The Government does not tell us what is happening with industrial disputes in those areas that are not recorded in the statistics. There is evidence, of which the House should be aware, on what is actually happening at the work place and on the shop floor in the area of industrial disputation. We say that this sort of industrial disputation in this country comes about because of the excessive power of the trade union movement and because the Government, whose masters are in the trade union movement, will not stand up to them. I said that there was evidence of this wider industrial disputation and it is apparent now for any honourable member who wants to see it by examining the statistics and the real facts. It has been like pulling teeth to get this document out of the Minister. Honourable members may not be aware that the Department of Employment and Industrial Relations keeps a report on industrial statistics. This document tells the story that is not told in the statistics that the Government is always so keen to trot out. What do we see from this document? It contains 388 pages of industrial disputes which have occurred since March this year-388 pages of disputes which have originated since March, egged on by the trade union movement and never criticised or condemned by this Government. These disputes are causing this country and its people untold economic damage. The document reveals that 324 new disputes have been notified since March this year. It has always been utterly false to say that there has been a new dawn of industrial harmony in this country as a result of the accord. If anything is needed to put a final nail in the coffin, it must be the industrial disputation which is taking place today. We say that this situation has been brought on and egged on by the Government because the Government has not been prepared to condemn it or to exert any pressure or influence on the trade union movement at all in order to bring this disputation to an end. It is not simply that the Government stands by and does nothing; it wants to make things worse, it wants to give more power to the trade union movement. We see this from the leaked-and I emphasise leaked-Australian Labor Party industrial relations policy which was thoughtfully brought to public notice by some public-spirited citizen only a few days ago. This policy shows the Labor Party in its true colours. It proposes to make four major changes to the industrial law of this country which can only strengthen the position of the trade union movement and encourage more industrial disputation to the detriment of this nation. We have seen all this from the leaked ALP industrial relations policy. The ALP wants, first of all, to exempt trade unions from the provisions of the Trade Practices Act. Today we have seen the hypocrisy of the Minister for Trade (Mr Dawkins) who is concerned with that Act, saying that outside citizens are complaining about a law that has not even been passed by the Parliament. Yet his own Party is proposing a change to the law so that trade unions will be exempt from the legal provisions contained in an Act that has already been passed by this Parliament and implemented. The second ALP proposal is that trade unions should be immune from common law actions for the damage they do in the course of industrial disputes. According to the ALP, it does not matter that there is a law, that damage has flowed from a breach of the law and that innocent victims of that damage should have the right to sue and get some compensation. Oh no, the ALP says that trade unions are different, they are above the law and they should be exempted from the liability that applies to everyone else. The third point that the ALP makes in this policy is that subcontractors-people who are not even employees, people who should be and want to be free to lead their own lives in their own way-should be subject to the compulsory union membership that is so widely spread in this country and, of course, subject to the straightjacket of trade union awards obtained through the Australian Conciliation and Arbitration Commission. As if all that were not enough, the ALP then goes on to say that it wants the repeal of all penal provisions directed at trade unions. Is it any wonder that the trade union movement today thumbs its nose at the Government. First of all, the Government turns a blind eye to any industrial action and then secondly, by way of policy of its own party, it goes further and encourages the trade union movement to engage in further industrial disputation from which this nation and its people can only suffer. What is the Government response to all of this? It goes off to conferences with the trade union movement; it waffles about upcoming meetings of advisory bodies; but it will not take the hard decisions which must be taken. We have told it what hard decisions are needed if this country is not to continue down the economic slippery slope into ruin and we defy the Government today to stand up in this place and say one way or the other whether it will make these hard decisions. I put it to the Minister for Employment and Industrial Relations so that there is no opportunity for his avoiding it on this occasion as he has on so many others, when he has been interviewed by the Press or when he has been answering questions in this Parliament. We have put some specific questions to the Minister and we want him to answer them today in his reply. First, does the Minister support the present productivity case before the Arbitration Commission in the terms in which it is being pursued by the trade union movement? Does he propose that there should be any amendment to it? We want a straight and specific answer. Secondly, will he seek any adjournment of the national wage case as we in the Opposition have urged him to do? Will he seek any adjournment of those proceedings until later this year or beyond the end of the year so that at least employers in this country will have a chance to catch up and some opportunity to expand their businesses and employ more people? Thirdly, is there not an overwhelming case now on all the economic evidence before the Government for the Minister to argue for full discounting in the current national wage case? Is this what the Minister is on about or not? We have seen an article in the Daily Telegraph today-I do not know whether it is a leak or an inspired guess-in which the Prime Minister has said that we must cut pay rises and that the Government is looking for some sort of discounting in the Arbitration Commission. Can the Minister tell us one way or the other-is this correct? What is his position? These are specific questions. They must be answered. The Minister has an opportunity to answer them now and if they are not answered in a constructive and persuasive way, we will certainly be entitled to say, as we have many times in the past and will continue to say, that the Government's attitude on wage fixing has been completely irresponsible. Mr DEPUTY SPEAKER(Mr Leo McLeay) -Order! The honourable member's time has expired. Mr WILLIS(Gellibrand-Minister for Employment and Industrial Relations)(3.38) —Anyone listening to this debate for the past quarter of an hour would realise that the Deputy Leader of the Opposition (Mr N.A. Brown) really has no shame whatever. He is prepared to say anything, to make any calumny in this place in order to make a point. The Opposition really defies any attempt to have people take it seriously because Opposition members simply do not make credible statements in this place. Until the Deputy Leader of the Opposition begins making credible statements, he will not deserve to have deference shown to his remarks or to have them taken seriously. Let me take up a few of the absurd comments we have just heard from him. He said that I had been egging the unions on to industrial disputation. He has no evidence whatever for that statement and of course it is totally untrue. The contrary is obviously the case. As Minister for Employment and Industrial Relations, I have certainly endeavoured to minimise the level of industrial disputation. I have been very much more successful in doing that than my predecessors in the Fraser Government. The level of industrial disputation under this Government has plummeted compared with anything that prevailed under the previous Government. That is an undeniable fact and it is absurd and ridiculous in the extreme for the Opposition spokesman to stand up in this place and suggest that I am egging the unions on to industrial disputation. As I said, the contrary is the case. I have continuously done everything in my power to minimise the level of industrial disputation and of course this level has been very greatly reduced. The Opposition is aware of that. It is aware of being on very weak ground here. It has sought to argue that the level of industrial disputation has been reduced only because this is a trend that is occurring all over the world. Recently the Leader of the Opposition (Mr Howard) put out a Press statement to that effect. He spoke about the myths of the accord and said that there had been reduced industrial disputation in other countries and that we had nothing to boast about in this country. The reality is that we have had a very spectacular reduction not only by our past historical standards, but also compared with other countries. Independent research at the Australian National University which was published in the Australian Financial Review found that there was compelling evidence of a structural break in Australian strike behaviour under the Hawke Government's accord. The Australian Financial Review article publicised that research. It found that the fall in the number of disputes in Australia has been significantly greater than in other Western nations. Even if honourable members want to make international comparisons, let me make it quite clear that the reduction in international disputation in this country has been far greater than that in other countries with which we normally compare ourselves. In the period 1983-85 compared with the period of the Fraser Government there was a fall of 75 per cent in the level of industrial disputation in Australia compared with a fall of 54 per cent in the United States of America and an increase of 22 per cent under the Thatcher Government in the United Kingdom. So let us get it straight. We have been recording a reduction in the level of industrial disputation which is not only commendable and very important in terms of our historical level but also, compared with other countries, a very substantial achievement that stands up very well to international comparison. While I am on the matter of industrial disputation, let me say that the suggestion that I have not in any way criticised the national day of protest which the Australian Council of Trade Unions has undertaken today is wrong. Indeed, yesterday-the day before that dispute-I made it quite clear in discussions with the media that I certainly did not in any way support the taking of industrial action in relation to the present case before the Australian Conciliation and Arbitration Commission. Indeed, I have made it clear that the Government's position is this: We call on all parties to adhere to the proper processes in relation to the Commission, to put their case properly before the Commission and to accept the outcome. In that respect I must say that there has been a deafening silence from the Opposition in relation to the actions of the Confederation of Australian Industry, which on the weekend sought to take action which, by any standards, was improper behaviour by a party appearing in the national wage case. The CAI said that if the Arbitration Commission were to give an outcome which the Confederation saw as inappropriate-that is, allowing the superannuation claim in the productivity case and the 2.3 per cent wage increase-it would regard that as evidence that the Commission was biased and would boycott the Commission. I regard that as a quite improper suggestion on the part of the CAI just as I regard the taking of industrial action on the part of the trade unions improper also. I can understand that there is concern amongst wage and salary earners in this country about the length of time that the present case has taken. The normal expectation, of course, was that the case would result in some wage increases in early April. We are now at the end of May. It is quite clear that there will be no outcome from the case until late June. So, one can understand that there is concern at the very long delay in the finalisation of the case and a wage outcome. However, in our view, that does not in any way justify the taking of industrial action. I criticised that action yesterday and I do so again today. The suggestion that 600,000 people unemployed is a monument to the accord is just amazing hypocrisy from the Opposition. The number of jobs created since this Government came to office is almost double what the previous Government achieved. It was in office for over twice as long as we have been in government. So we have a record of employment achievement which is staggeringly higher than that of the previous Government-a record of almost twice as many jobs in less than half the time. Yet, the Opposition talks about the accord as being some failure in relation to employment. If people do not know, they ought to understand the reason the unemployment rate has not come down in the face of that extraordinarily high level of employment growth, for which the accord must take great credit, is the fact that there has been a very large increase in the participation rate. A lot of people who were not previously looking for work under the previous Government because there was no hope of finding it have, under this Government, realised that there is a chance of getting a job and have gone out and looked for one. Therefore, the size of the work force has increased. That increase in the participation rate has added over 200,000 people to the work force. If there had not been that increase in the participation rate we would be seeing at present an unemployment rate of just over 5 per cent instead of just under 8 per cent. The increase in the participation rate has kept the unemployment rate up in the face of the fastest employment growth we have had in this country for many years. That is the reality, not the absurd picture painted by the Deputy Leader of the Opposition. The honourable member talked about a national crisis produced by the accord. In this respect he was talking about the balance of payments current account. He said that this is the result of pricing ourselves out of the overseas market, losing international competitiveness and so on. If that is the Opposition's analysis of our current account problem, one can only say that honourable members opposite deserve to remain in opposition for a very long time, because it shows that they are economic cretins of the first order-something that they proved conclusively when they were in government. They are proving conclusively now in opposition that they have learnt nothing in the last three years. Anyone with any sense knows-all members of the National Party of Australia should know because they are the ones who keep complaining about farmers' incomes-that the primary reason we have a balance of payments current account problem is the very adverse terms of trade we have had over the last year and a quarter. From the December quarter 1984 to the March quarter this year the terms of trade have turned against us by about 11 1/2 per cent. That has been the reason for a very strong increase in the balance of payments current account over and above what we expected in the Budget and, of course, this has brought a situation which is a cause of concern. That terms of trade adjustment is, of course, washing over the J-curve effects which are coming from the devaluation, which would otherwise be turning the current account around. In that situation, it is absurd in the extreme to argue that it is the fault of wage increases, the accord, this Government or the trade union movement that there is a current account problem at this time. If I might say so, it is an absolute economic nonsense. I think members of this House, when considering issues of this kind, must discount enormously comments by Opposition members about the failures of this Government. Their wages policy is a nonsense. The wages policy that they put forward for us to adopt apparently is one for a permanent wage freeze-as though that were something which would be achievable or desirable at present. The reality is that wage freezes can work if we create the worst recession for 50 years as the previous Government did. Wage freezes can then be imposed. But that cannot be done in the context of a strong growth in the economy; nor is it desirable to do so. What we want is a responsible wages policy. That is what the Government has said it will achieve. It has quite clearly achieved that in its term of office. The absolute rate of increase in wages has been considerably less than it was under the previous Government-about half the rate-and we have indicated that in the current circumstances our wage policy, if it needs to be adjusted, will be adjusted. In terms of the current account problem, we have indicated publicly-indeed, I did so yesterday to the ACTU executive itself-that a further adjustment has to be made to our economic policy and that an option in that area is wages policy. That is something which the Government is considering very closely at present and it will shortly decide its position in respect of that matter in some detail. There is no lack of resolution on the part of this Government to face up to the situation which is before us-a situation which is not of our making, not of the making of the ACTU, not of the making of the workers of this country and not really of the making of any particular sector of the economy. This situation has been foisted upon us by the fact that the rest of the world is not now prepared to pay the price for our exports that it was prepared to pay in previous years. In that situation we have to adjust and we will make that adjustment. There is far more chance of making that adjustment through the accord processes with minimal effects in foisting adversity on the Australian people and particularly in creating unemployment than would be the case if we did not have the accord. The conventional wisdom in current circumstances would simply be to depress the economy considerably, create a lot of unemployment and reduce the imports. The accord gives an alternative process and that alternative process is being pursued. Mr N.A. Brown —You have three minutes to answer these questions. Why won't you do it? Mr WILLIS —The Opposition is asking me why I have not answered the questions. Members of the Opposition had the whole of Question Time to ask questions. If they want to ask me questions they must get up in Question Time and ask them. I will make my own speeches in my own time. We have had released recently in this country a so-called industrial relations policy from the Opposition-a policy over which it agonised for ages, a policy it had little hope of getting together for a long time. It agonised about how it would get it together and about how it would sell it to all these people whom it had to convince it was an important policy. When it finally came out, what did we see? We saw a pathetic attempt to produce an industrial relations policy, the principal element of which was no wages policy whatever. So at a time when the Opposition is saying to us `What about altering your wages policy?, at a time when I am saying that that is something that is under consideration in any case, the Opposition has a policy that has absolutely no wages policy. Members of the Opposition are simply saying to people: `Go out there and do your own thing'. They say to the Australian Conciliation and Arbitration Commission: `Do not give them anything', but then they say that it has no basis for stopping people making agreements outside. Indeed, they would encourage people to go out and make voluntary agreements and to set any wage level they liked. In those circumstances, if the Opposition were in government pursuing such a wages policy, we could be absolutely sure that we would be seeing an enormous wages blow-out, and the possibility of having any rational economic outcome would be totally gone. On top to that let me say that the policy honourable members opposite have produced has other enormous deficiencies. There is obviously no time for me to go into those now, but let me flag just one point. In respect of the voluntary agreements area, which the Opposition has indicated is the centrepiece of its industrial relations policy, there are grave questions to be asked about its constitutional validity. In fact, I would say that there is no way in which that policy can be based upon the conciliation and arbitration power in placitum (xxxv.) of section 51 of the Constitution. There is no way in which that can be done. What we have is an industrial relations policy with no wages policy, its centrepiece constitutionally flawed and not capable of being implemented under the Conciliation and Arbitration Act. So after three years of agonising the Opposition has produced an industrial relations policy which is economically hopeless, industrially unworkable, and constitutionally not capable of being implemented. The Government refutes the absurd suggestions coming from the Opposition in this debate, and we assure the country that the wages policy under this Government will continue to be a responsible one, appropriate to the economic circumstances. Mr DEPUTY SPEAKER(Mr Leo McLeay) —Order! The Minister's time has expired. Mr ROCHER(Curtin)(3.53) —There could be no more appropriate day for my colleague the Deputy Leader of the Opposition (Mr N.A. Brown) to bring on this discussion of matters of monumental importance. Why is this a day of nationwide strikes? Why is there a national strike? Why this national day of mourning pulled on by pretentious unionists? Above all, why has there been no offensive by this Government to prevail upon its masters in the trade union movement to call off this nonsense, if only in the interests of the sick economy it caused and over which it presides? There is no sensible answer to the last question, although one is to be found in the gutless abdication of power by this elected Government to an unelected union cabal. We have been told by the Australian Council of Trade Unions, and this has not been contradicted by the Government, that a national strike is justified by delays in granting, not deciding, its productivity claim. There is no concession from either the ACTU or the Government on the unassailable truth that the decision on whether grounds for a claim even exist is yet to be made by the Australian Conciliation and Arbitration Commission. The ACTU would have us believe that it is all cut and dried; that it is not a question of if, it is a matter of when. It is the same with the national wage case claim for a further 2.5 per cent. Never mind that we will not even get the benefit of the Budget promise of full discounting for the effects of the depreciation of our dollar. Even if the unions get a favourable verdict it will be discounted by only 2 per cent, which is equal to the estimated effect up until December 1985. There is no provision for the effects of that flow-on in 1986, so the promised full discounting is yet another promise broken by this wavering Government. This day of yet another series of strikes-another day of shame-is upon us because of alleged delays by the Commission in granting claims which will add another 5.5 per cent to the cost of employment. It does not seem to have crossed the small, collective mind of the ACTU-the real government of Australia, I might say-that the only unusual delays have occurred because the Commission has refused to continue its deliberations on the merits of the claims while strikes are current. That has happened quite properly on three separate occasions, and the most recent occasion is today because of the inanity of the ACTU in pulling on another nationwide strike. We hear a lot of misleading drivel about the incidence of strikes these days and the statistical measure of man days lost. We heard it again today from the Minister for Employment and Industrial Relations (Mr Willis), and no doubt we will hear it in a moment from the honourable member for Barton (Mr Punch). Even if there is some comfort to be taken from bald figures, and that is at least doubtful, caution, not apparent in this Government's mouthings, is called for. It must always be remembered that the Australian Bureau of Statistics figures of working days lost are not a perfect measure of industrial disputation. Mr McArthur —Why? Mr ROCHER —The honourable member for Corangamite asks why. It is because the statistics exclude work bans, go-slows and other work restrictions. Such tactics undoubtedly are clearly disruptive and costly to the employer. Dr Harry Edwards —They tell only half the story. Mr ROCHER —They tell barely half the story in some ways. Furthermore, ABS figures include only stoppages of work of 10 man days or more. They therefore exclude small or very short disputes, no matter how many of them there may be. They exclude indirect days lost through stand-downs in other industries arising from primary disputes. For example, employees in the components industry stood down after a strike in the car manufacturing industry are excluded from the statistics. Let me give another example. If only six employees responsible for power reticulation into the Victorian grid go on strike at Loy Yang, electricity supplies are reduced by a crippling one-third, with all that that means for normal and worthwhile employment in manufacturing and commerce in that State. Strike time is not even measured in such a case if the stoppage by the six employees does not exceed one shift, but the damage done to the productive sector is simply beyond estimation. Most of the time lost today is in so-called response to the lack of a decision on the national wage case. Even today's debacle will not be reflected in the figures to be published by the ABS in their entirety. Even the figures relating to this national strike today will not appear in figures subsequently. So it is that the ABS figures on time lost due to strikes become meaningless. It is not the duration of a strike or the man hours lost as a direct result of a strike that are significant; it is the quality and the dimensions of the effect that is important. The bald figures cannot measure that. It is also completely false to maintain that a decline in working days lost due to strikes can be equated, as they are by this Minister and this Government, with industrial harmony. The accord has contributed to decreased productivity in many industries. Rather than go directly on strike, far too often these days union bosses have been content to pursue more indirect means of industrial action by imposing bans, limitations and other restrictions. None of these union tactics are picked up in statistics from the Australian Bureau of Statistics. That fact has been totally ignored again today by the Minister for Employment and Industrial Relations (Mr Willis) but it should be well understood by Australians who are the victims of sudden union disruption such as we are confronted today. Confronted as it is by what the Government clearly intended was an offer it had better not refuse, the Australian Conciliation and Arbitration Commission is bound to consider the so far irrefutable cases mounted by employers against both the national wage and productivity cases. The Commission must realise, as we all know, that it has before it what is at once the most important and most complicated set of circumstances it has had to consider in living memory. Despite that, the Commission gets no comfort or joy from the Government and this Minister, who is full bore behind the Australian Council of Trade Unions and is unquestioning in his servitude in a way that is unprecedented. It is inescapable to observe that this Government has its own unique formula which determines its handling of current industrial relations issues. As its base, the Government takes as its starting point any demand from the ACTU; it multiplies it by a factor for servility and then adds a loading for economic naivety. Regardless of all that, the Minister and his acolytes continue to trot out the spurious and increasingly discredited argument that the accord, mark I and mark II, has somehow led to a unique decline in industrial disputes in Australia. That is plainly ridiculous. It is part of the great myth that the Government tries in vain to sell. It is well and timely to remember, as the Leader of the Opposition reminded us in a Press statement the other day, that under both versions of the accord Australia has experienced the highest interest rates for over 50 years, over 9 per cent inflation-at a time when Japan, West Germany and the United States are heading for zero or near zero inflation-and a veritable balance of payments crisis. The fact is that over the past four years there has been a world-wide decline in industrial disputation in the Western democracies, including Italy, the United States, France, Canada and West Germany. That circumstance, therefore, is not peculiar to Australia. No doubt the honourable member for Barton (Mr Punch) will get up and at strength 10 do what he often does in this place-substitute volume for reason. But will he try to obtain from the Minister answers to questions asked by the honourable member for Menzies (Mr N.A. Brown)? What about the Government's attitude to the national productivity case? What about its attitude to discounting for the value of the Australian dollar? Further, what about its attitude to or support for the national wage case claim? It is appropriate and no wonder that my colleague raised this matter. The public is concerned, and so are we, at the Government's incompetent handling of the current industrial relations issues. Mr DEPUTY SPEAKER(Mr Millar) — Order! The honourable member's time has expired. Mr PUNCH(Barton)(4.03) —We have come to accept the Deputy Leader of the Opposition (Mr N.A. Brown) coming into this place and cutting the facts of the day to his point of view, regardless of whether or not they fit. He shapes his whole point of view around a little anecdotal evidence and ignores the vast realities happening on the industrial landscape. But I must say that I am quite shocked that the honourable member for Curtin (Mr Rocher) would come in here and lend his name to such drivel that is the matter of public importance today-because that is what it is. On the one day when this nation has a day of national protest by the trade union movement-not, as the honourable member for Curtin said, a national day of strikes-honour- able members opposite come in here quick as a flash and leap on to it as a matter of public importance faster than one can say `Jack Robinson', maintaining that the country is falling apart, that there are strikes everywhere, that the union bosses have taken over the country and all the rest of the rot that comes from those opposite, who seek to justify the politics of greed with some anecdotal-based, out of date policies that are best suited to the failures of Thatcherism rather than anything that suits this country. It is a little like the Mudginberri dispute. For how many months did we hear day after day that the union movement was taking over the country? The only industrial problem that honourable members opposite could cite for months and months was Mudginberri. Now we will hear for months and months about the national day of protest, or the national day of mourning, as the honourable member for Curtin called it. I think it is about time for some mature debate about where this country is heading from honourable members opposite; given that this Government knows exactly what it is doing; and if honourable members opposite want some answers, I will give them in a minute. It is about time that those opposite offered some sort of mature response in terms of industrial relations policy. The Deputy Leader of the Opposition said that the accord was responsible for 600,000 people being unemployed. To me that is amazing. Members opposite on the back bench, when next there is a leadership and a deputy leadership ballot, provided that some of them do not resign or do not run by accident ought to have a good hard look at who was the Minister responsible for employment when much of that unemployment got into the momentum that we had to confront in March 1983 when we were first elected. Let us look at a couple of the facts. The Prime Minister (Mr Hawke) gave us a few in this House yesterday. The honourable member for Curtin can talk about statistics, statistics and damned lies, but these are the statistics on which the nation is based; they are the statistics on which the former Government based its policy; they are the only statistics that the Organisation for Economic Co-operation and Development recognises; and therefore they are fact, whether honourable members opposite like it or not: In the Fraser years, there was an average annualised rate of growth in employment of 0.8 per cent. Under this Government it has been 3.5 per cent. What about unemployment? Under the former Government it was 10.2 per cent. Mr Hand —How much? Mr PUNCH —It was 10.2 per cent. Under this Government the rate is 7.9 per cent, despite a rise of 2 per cent in the participation rate; that is, 2 per cent of the population who gave up any hope of ever getting a job and did not even register while those opposite were on the treasury benches. Honourable members opposite want to talk about industrial disputes on this day of national protest by the union movement-not national strike. It might suit those opposite to hear this: The average number of days lost under their Government was 3.2 million days per annum, while under this Government it has been 1.4 million. Under the former Government the figure was two and a half times greater than it is at present. Yet, all facts aside, that does not stop honourable members opposite from coming in here with this ridiculous drivel that we have heard today. I am very glad that one of the senior advocates for the employers was in the gallery here a short while ago. Mr Rocher —You drove him out. Mr PUNCH —The honourable member opposite drove him out actually; he left while he was speaking-another foot in the mouth. I am very glad that he was here to hear exactly what those opposite have to say, because it might be a sober reminder to him of just what there was in days past. It might be a sober reminder to the employers of this country to have a good hard look once again this month at the accord. Instead of running television advertisements which, in my view, have served only to incite much of what has happened today, they would do well to have a look at the alternative coming from those opposite. It is a timely reminder for those on the Opposition back benches to remember what happened and to consider what would happen again under the policies advocated by those opposite. I am referring to the head to head confrontation between the Government and the union movement and head to head confrontation between business and the union movement. The small business sector of this nation appears to be the ideological battleground for the conservatives in this country who, like the Marxists of the last century, seem to see something inherently wise in renewing some sort of employer-union battles out there in the private sector. Honourable members opposite should have a good hard look at their own ideology, because it is warped. Also, what about the policy document that was handed to us before honourable members opposite managed to neutralise everyone concerned? Under that policy there was to be no indexation, no productivity pay claims, no anything for the union movement. They said: `We will just accept the return of profit share to the levels of the 1960s; we will just accept the lowest strike rates for 20 years; we will just accept the lowest real unit labour costs for something like 20 years. There will be nothing in return for the union movement, the working people, the wage and salary earners'. At least 52 per cent of those people are in the trade union movement in this country. There was to be nothing at all for them. What chance industrial relations peace under honourable members opposite? If we want to see just how hypocritical is the policy honourable members opposite are advocating-this is apart from the fact that it probably is unconstitutional, but we will deal with that another time-let us recall what the now Deputy Leader of the Opposition, the honourable member for Menzies (Mr N.A. Brown), had to say on 24 March 1982 when he was the Minister for unemployment; I beg your pardon, Mr Deputy Speaker, when he was the Minister for Employment. Mr Hand —Who was that? Mr PUNCH —That was the honourable member for Menzies. He said: The OECD has made it plain; we make it plain to the people: What we look for is some support such as we have seen recently from the German trade union movement. He continued: If that sort of example were set by Australian trade unions, they, too, in partnership with us, would be making a very substantial contribution to increasing employment and reducing unemployment. He talked about it but it never happened. It has happened under this Government. Honourable members opposite have returned to a policy that would restore this nation to the industrial relations battlefield that it was when the Deputy Leader of the Opposition was the Minister for Employment in this country. There is absolutely no doubt about the reason honourable members opposite have proposed as a matter of public importance today `the public concern at the Government's incompetent handling of current industrial relations issues'. All that has been cited has been the events of today-this national day of protest. Why have we had a national day of protest today by the union movement? It is because the union movement has been pursuing, as is its right, the present case before the Conciliation and Arbitration Commission since February. Employers have been doing everything they can to delay it, at the encouragement of honourable members opposite. Unions today have taken one very mild action compared with the actions of yesteryear-regrettable though it is, it is mild. They have declared today a national day of protest. I think honourable members opposite should regard that as an example of just how far the union movement has come in giving up so many claims in the national interest. It is about time that the employers of this nation recognised that and did a little bit of that themselves. Even more to the point, if the employers of this country are thinking of supporting the return of the present Opposition to government, they had better have a good hard look at the Opposition's industrial relations policy and the people who are advocating it. They should look at the Opposition's track record and at what is being advocated. They should look at whether it is possible to implement it-because it is not. Mr DEPUTY SPEAKER(Mr Millar) —Order! The honourable member's time has expired. The discussion has concluded. Debate resumed. Mr DEPUTY SPEAKER —Order! Before the debate is resumed on the Taxation Laws Amendment Bill (No. 2) 1986, I remind the House that it has been agreed that a general debate be allowed covering this Bill and Orders of the Day Nos 2 to 4. Mr BRUMBY(Bendigo)(4.14) —It is my pleasure to rise to speak in support of the Taxation Laws Amendment Bill (No. 2) 1986, the Income Tax (Securities and Agreements) (Withholding Tax Recoupment) Bill 1986, the Taxation Laws Amendment (Foreign Tax Credits) Bill 1986 and the Taxation Boards of Review (Transfer of Jurisdiction) Bill 1986. Mr N.A. Brown —It won't be a pleasure to listen to you. Mr BRUMBY —I suggest, if the honourable member is not interested in listening to this contribution, that he leave the House. There are four Bills before the House. The major thrust of these Bills-certainly the main Bill-arises from the National Taxation Summit last year and from the tax reform statement issued late last year by the Treasurer (Mr Keating). Over recent weeks we have seen a number of Bills having to do with the Government's tax reform statement debated in this House. These Bills before the House relate to that statement as well. Of course, tomorrow there will be further discussion and debate in this House on the question of a capital gains tax, which also arises from the tax reform statement. As I said, there are four Bills before the House. I think that the major Bill is the Taxation Laws Amendment (Foreign Tax Credits) Bill. It is designed to give effect to proposals announced by the Treasurer in his 19 September 1985 tax reform statement. The intention of the Bill is to replace the present double taxation relief arrangements of the income tax law with the general foreign tax credit system. The Taxation Boards of Review (Transfer of Jurisdiction) Bill, also before the House, reflects in large part the Government's response to recommendations made in a report by the Administrative Review Council entitled `Review of Taxation Decisions by Boards of Review'. It proposes that, with minor departures, the recommendations of the Administrative Review Council be adopted. In accordance with the Council's recommendations, the principal function of the Bill is to abolish the taxation boards of review and to transfer the present jurisdiction of the boards to the Administrative Appeals Tribunal. This takeover is scheduled to take place on 1 July 1986. I should point out that the present avenue of appeal under some taxation laws to a supreme court will, of course, remain. The Taxation Laws Amendment Bill (No. 2) amends the income tax law in two major respects. It also contains a number of other amendments of the taxation laws. The principal measures which it seeks to give effect to, again, are proposals which were announced previously by the Treasurer. The first of these was to tax each year the income accruing to resident taxpayers from discounted, deferred interest and capital indexed securities. The other was to strengthen the interest withholding tax provisions in relation to such securities held by non-residents and other non-traditional financing arrangements. I think it is important to mention that this Bill also exempts from tax certain allowances which are paid to recipients of the new Commonwealth formal training allowance. Another measure in this legislation will correct a technical defect in the rebate provisions of the income tax law that applied to certain employment termination payments. In addition, the income tax secrecy provisions are to be amended to enable information concerning superannuation funds, approved deposit funds and similar funds to be conveyed to persons who may be responsible for supervision of the superannuation industry. Finally, I point out in respect of this Bill that it will amend the income tax gift provisions and make a number of what are purely technical amendments relevant to the recent changes to the repatriation laws. I will make some comments during my speech on the question of training allowances because I think that is an important aspect of the legislation before the House. However, I want to make some general comments which relate to this package of legislation and the other legislation which arises from the 19 September 1985 tax reform statement of the Government. To date this has been a fairly wide-ranging debate which, I think it is fair to say, has looked at many issues of tax reform before the House. There have been contributions from Opposition members in this debate on such wide-ranging areas as the fringe benefits tax, negative gearing and the entertainment expenses changes made by this Government. I refer just briefly to those because they relate to these Bills in the sense that they are matters which arose from the tax reform statement of 19 September 1985. (Quorum formed) I was talking about the Government's tax reform proposals, which are well represented before the House today in these four Bills. I make the point that one of those Bills has to do with foreign tax credits. Over the past few days and during this debate we have heard contributions from Opposition members who have said that this Government has a policy of taxing business too heavily in this country. That has been a consistent theme of the debate. I point out that this whole exercise in tax reform in which the Government is engaged, and which includes the Bill now before the House on foreign tax credits, is a revenue neutral arrangement. No additional taxes will be levied as a result of the tax reform statement or these Bills; they are all taxes that will go into general revenue and be redistributed back to businesses and Australian wage and salary earners in the form of other tax concessions and reduced levels of pay as you earn tax. When one looks at the business area affected by this general foreign tax credit system the point needs to be be made that while the Opposition can argue that through taxes such as the fringe benefits tax, or perhaps the capital gains tax or this legislation, the Government is taking from business it conveniently forgets to mention all the other good things that we have done in terms of taxation arrangements for business. We have got the general economic setting pretty right, we have strong economic growth, new investment at good levels, record levels of employment growth, and industrial disputation and real labour costs are down. We have also done a great deal in this area of business taxation. When the Opposition makes those claims it conveniently forgets to mention that it is this Government which introduced the 5:3 depreciation allowance. That has provided businesses with a benefit that is costing of the order of $2 billion a year. The Opposition forgets to mention the group tax loss provisions introduced by this Government and the 150 per cent tax deduction for research and development which has already been so successful in stimulating research and development in Australia. And, of course, during the debate on these Bills the Opposition has entirely neglected to mention the major corporate tax reform embodied in this tax reform package; that is, the removal of double taxation on dividends. When one takes all of those matters into account one sees that, on the one hand, we have given considerable benefits to business which enable it to invest, grow and create jobs-which all Australians want-while on the other invoking a new measure of fairness and equity into our tax system so that we move away from those days in the past when under Opposition parties it was the PAYE earners in Australia who shouldered the bulk of the burden of tax liability and when it was other areas that were avoiding and evading their rightful tax responsibilities. The Bills before the House give effect to many of the measures contained in the tax reform statement. One of the other matters raised in this debate was the Government's decision to stop making a tax deduction available for what are known as entertainment expenses. We were told when we took that decision that that would mean the destruction of the entertainment industry and the restaurant industry. Of course, what we have seen since that tax change-what it has brought about-is not any great reduction in employment levels or profitability in the restaurant industry or entertainment industry; in fact, we have seen increases in employment in those industries. Mr Robert Brown —Nineteen thousand jobs. Mr BRUMBY —As the honourable member for Charlton (Mr Robert Brown), who is an astute commentator and observer of politics and economic matters, rightly points out, in the entertainment and restaurant industries as a whole there has been an increase in employment of 19,000 people since that tax was introduced. So much for the claim by the Opposition that this tax reform package, and these Bills, would result in the obliteration and destruction of the entertainment industry. Mr Lindsay —They were spurious claims. Mr BRUMBY —It was a highly spurious claim, as the honourable member points out. It is worth looking at another claim made during the debate today, and previously, by Opposition members concerning this tax reform package. This again concerns the so-called consequences and implications of the decision we took in relation to negative gearing. We were told that because of negative gearing there would be a disastrous drying up of housing construction, rental unit construction, flat construction, and so on in Australia. We have not seen that consequence throughout Australia. We certainly have not seen it in my electorate, where housing approvals are running as strongly as they were in 1984-85. I point out that in the Greater Bendigo area that means that housing approvals are currently running in excess of $40m a year. The point is worth making that when we took government in 1982-83 housing approvals were running at only $10m a year, so we have improved the housing position, housing stock and housing commencements by 300 per cent over the past three years. Those figures have stuck, and despite the concern in relation to high interest rates over the past six months, and the implications of that for the housing industry, certainly in my area, and in Australia as a whole, we have seen little effect of that. This year, of course, we will see housing commencements of the order of 135,000 units Australia-wide. Last year we saw 137,000; in 1984-85, 152,000; and in 1983-84, the first year of our government, 137,000. When one thinks of those figures one should bear in mind the last year of the Fraser Government, in which only 105,000 homes and units were constructed in Australia. It was a disaster, so we have seen in the three and a half years of our Government an additional 200,000 houses and units constructed which would not have been constructed were it not for the economic and taxation decisions taken by this Government. Mr Braithwaite —Why don't you come back to a bit of tax? Mr BRUMBY —I will come back to a bit of tax, because the Opposition has suggested it would like to concentrate on the tax reform statement. I was talking about that statement, negative gearing, non-deductibility of expenses for entertainment and about the Bills before the House, which affect business taxation in many ways. I have already mentioned that and do not want to repeat my arguments because, frankly, they would be an embarrassment to the Opposition. We have heard claims in this debate that taxation levels under this Government have risen to horrendous proportions. We have also heard the claim that all of the revenue that we are bringing into the system from these tax reform changes will disappear into government coffers and that it will never be returned in tax benefits to business or PAYE income earners; that it will be hidden away in an ever-increasing rise in government spending. I point out that nothing could be further from the truth. I repeat for the benefit of Opposition members that this whole package is revenue neutral. We have given specific commitments in regard to the tax reform package. I see that the shadow Minister for Social Security, the honourable member for Richmond (Mr Blunt), is in the House. I think he probably understands what revenue neutral means, but for the benefit of other Opposition members in the House, it means that money coming in through one source-it may be $1 billion-will be returned to taxpayers by another source to the tune of exactly the same amount, $1 billion. So $1 billion comes in but $1 billion goes out. It is like keeping the car in neutral-nothing really changes except that we have put a bit more equity and fairness into the system. That is what we have done with this legislation. I must say that it is good legislation. When one compares our record with the Opposition's record, one must acknowledge-I think Opposition members privately would acknowledge-that under the Fraser Government there simply was not any semblance of fairness or equity in its taxation arrangements. We saw a massive growth in rorts, avoidance, evasion and perks. That is what happened under the previous Government. We also saw an increase in the total tax take. Figures produced by the Australian Bureau of Statistics show that during the period of the Fraser Government the percentage of taxation as a proportion of real gross domestic product actually increased in real terms. That is what happened under a government which was supposed to be based on the concept of small government. Let us look at the record of the previous Government. Honourable members who think back to 1977-it is not that long ago-will remember when Malcolm Fraser promised in television advertisements, during the election campaign, a fistful of dollars. Those disgraceful, misleading advertisements promised a fistful of dollars. No doubt they seduced some voters in the electorate who were gullible enough to believe that the Fraser Government could honestly represent its election promises. They had to wait only a matter of weeks after the 1977 election, when basically Fraser said: `Now we have the election out of the way, we have been returned to office, we will grab your money back'. That is what the previous Government did. The honourable member for Perth (Dr Charlesworth) is demonstrating what happened by putting his hand in his pocket. That is what happened, but it was Malcolm Fraser's hands, and he was taking back the money from the people to whom he had so dishonestly promised a fistful of dollars before the 1977 election. Mr Robert Brown —But Howard was Treasurer and he took it. Mr BRUMBY —As the honourable member points out quite astutely, at that time the present Leader of the Opposition (Mr Howard) was the Federal Treasurer in the Fraser Government. I am sure it was actually his idea-I have it on good advice-to take back those tax cuts after the election. During the 1980 election campaign exactly the same thing happened. In that year the Fraser Government promised direct tax cuts of $2.35m to Australian taxpayers. That was the greatest con job of all time. It said: `Here is $2.5m in income tax cuts, but look at the fine print'. The fine print showed that the Government was actually increasing taxes in the indirect sales tax area by $1.8m. So $2.5m in tax cuts became only $600m in tax cuts. That goes to show that one cannot really trust the Opposition-the Liberal Party or the National Party. We in the Labor Party know that this whole tax exercise is revenue neutral and that every extra dollar that is received will go back to people by way of a fair and equitable tax system. Mr ADERMANN(Fairfax)(4.34) —I hope that my contribution will be more relevant to the Bills before the House-the Taxation Laws Amendment Bill (No. 2), the Income Tax (Securities and Agreements) (Withholding Tax Recoupment) Bill, the Taxation Laws Amendment (Foreign Tax Credits) Bill, and the Taxation Boards of Review (Transfer of Jurisdiction) Bill. I register a bitter complaint that the Government should bring in such a comprehensive package of very significant tax Bills, bracket them together and allow us only a fraction of the time necessary to debate them. Whilst I would have desired to speak to and analyse in detail the Taxation Laws Amendment Bill (No. 2), the time allotted to me under this Government's curtailment of debate prevents me from having that opportunity. I can register my very serious concern about only one aspect-the proposed alteration of the secrecy provisions. I register my strong objection to the provision which allows the Deputy Commissioner of Taxation to convey information on superannuation to the Secretary to the Treasury or to any body set up to deal with superannuation. This contains inherent dangers. The absolute secrecy of a taxpayer's returns has been extremely important and is a fundamental plank in our taxation assessment system. I have very grave misgivings, and even foresee possible abuse, if this previous provision of secrecy is to be diluted or qualified, as is proposed by this Bill. I want the Government to note that the reason I do not say more and expand more on this very serious matter is that I have been denied the time and opportunity to do so, as I want to speak at more length on another Bill in this package with which I violently disagree. Similarly, I would desire to comment on the Income Tax (Securities and Agreements) (Withholding Tax Recoupment) Bill. I would like to have stated clearly why I cannot support the Taxation Laws Amendment (Foreign Tax Credits) Bill. Mr Braithwaite —The member for Dawson did that. Mr ADERMANN —The honourable member for Dawson did that and he did it extremely well. Instead, I must confine my brief ration of time to a discussion of the Taxation Boards of Review (Transfer of Jurisdiction) Bill. I absolutely oppose this Bill without any qualification, even though my Opposition colleagues may not entirely agree with me. I believe it is an erosion of the taxpayer's rights to justice, his appeal processes are diluted, and it is most dangerous legislation. Although I know that in the battle against tax evasion it was necessary to give greater discretion to the Commissioner of Taxation, I am alarmed that that power has become so wide and in some ways so harsh under this Government. I have become concerned about fairness and equity, not only in the matter of demands and penalties, but also in the matter of appeals. This Bill is all about appeals. The Government and the Commissioner point to the fact that there is a backlog of 94,000 cases on appeal to the boards of review. That is their so-called justification for this Bill. I agree that this is a serious logjam, and I deplore the interminable time it is taking to have appeals heard. I know that taxpayers experience extreme financial hardship, are precluded from making any business decisions and plans because they cannot predict the result of their appeal, and there is often a long period of heartbreak and worry. Let me say, however, very definitely and without equivocation that the Australian Taxation Office has contributed very greatly to this most unsatisfactory situation. Where the Taxation Office fears that a decision might be cast for the taxpayer and against the Taxation Office, and when that decision might have flow-on consequences, it will delay submitting that case to the Board of Review for an inordinate time. There are still cases from 1980-81 and probably earlier, which taxpayers have appealed, which the Department has not brought forward, and which it could, and should, have submitted to the review board long ago. The reason, unfortunately, is plain to see. The Taxation Office knows that such delays mean that the taxpayer is in limbo. He does not know whether he must alter his corporate or business structure, what funds he might have available to conduct his business, and, in fact, whether or not he is solvent. I make it clear that I am not talking about tax dodgers. I am talking about family companies, family partnerships, and honest individual taxpayers. Very clearly, the Taxation Office hopes to put the taxpayer under such strain and in such intolerable circumstances by this protraction of five or six years, and the knowledge that assessments for the succeeding years are under a cloud, that he will withdraw the appeal. It is no use either the Government or the Taxation Office protesting that I am wrong. I am not wrong; I am dead right. Mr Braithwaite —You are absolutely right. Mr ADERMANN —Yes, I am dead right. The Taxation Office should bring on these appeals, but it knows that if a taxpayer succeeds then a goodly number of other appeals will be automatically allowed. That would substantially reduce the backlog and save taxpayers a great deal of interest and fear of penalty, and it would bring justice and fairness, which seem sometimes to be sadly lacking. The answer is not, I repeat, to abolish the boards of review and bring the jurisdiction under the Administrative Appeals Tribunal. The answer is to get the appeals to the boards and provide the boards with more bodies to deal with them. The boards of review, not only because of the quality of their decisions but also simply because they exist, have fulfilled an excellent role. During my many years as an accountant, many times one of my clients would have a claim rejected or reduced by the Taxation Office, particularly in regard to the use of a vehicle for both business and private purposes, or some other similar type of expense. I would appeal for reconsideration and present substantiation on my client's behalf. Again, it would fall on deaf ears in the Taxation Office. So, finally I would send the $2 fee and a request for the appeal to be submitted to a board of review. Invariably-and I never had a single case go to the board-the Taxation Office would then write back either accepting our submission or making a proposition for a greater taxable deduction than it would previously entertain. Obviously, it must have known that its decision was not sustainable before a board of review, and when it could not bully or bluff the taxpayer, the very threat of an appeal to the board was enough to make it discuss and consider the matter further. Under the change encompassed by this Bill, the boards of review are to abolished. Furthermore, as the application for appeal will be lodged directly by the taxpayer with the Administrative Appeals Tribunal body, and the Commissioner of Taxation, presumably, is required to provide only details that he wants to provide concerning the case, the whole process will be considerably different and, for reasons which I shall elucidate, will disadvantage the taxpayer in comparison with the existing system. The boards of review have very specific advantages. Not only were they created for the purpose of adjudicating on taxation matters; they were independent of the Tax Commissioner, and the informality of the hearings enabled a taxpayer to put his appeal clearly without any requirement of judicial-type atmosphere or language. Taxpayers had a great confidence in these boards. This Bill makes some undesirable changes. First of all, appeals become the function of another tribunal, which deals with and considers appeals over the whole range of government administration. No matter what the Government says about creating a special department within the AAT, I believe that the special meaning and expertise of a specific structure dealing with tax alone is lost. I think that that is a grievous loss. Secondly, I fear that the informality will be either diminished or lost. Thirdly, I am most concerned that a board of three referees can be replaced by a single arbiter. I would have opposed that move even if the review boards were retained and the number of referees on those boards was reduced. Unfortunately, where a single arbiter sits as jury and referee, the decision is far more likely to reflect the personal view and the limitations, even perhaps the bias, of that referee than a more balanced panel of three. Mr Braithwaite —The Family Court. Mr ADERMANN —Yes. There is a danger, too, where a single arbiter sits, if his decisions predominantly favour the taxpayer against the Commissioner, that he might be worried about his permanency and future as an arbiter of tax appeals. Certainly it would be some sort of inhibition to giving the benefit of the doubt or to evidence concern about any arbitrariness by the Commissioner if a score-sheet of his cases were kept and his suitability to continue were considered. A panel of three is ideal. It provides balance. It provides the facility for the arbiters to discuss the submission and examine its validity, and it gives a much greater balance and range of views. It shares the responsibility, and it is infinitely preferable. If it means that to provide continuation of panels of three requires more appointments, so be it. With something as important as taxation appeals, it is far better to provide more personnel if necessary than to risk the diminution or dilution of a taxpayer's rights and his confidence, and to replace a most satisfactory structure and system with something that is less substantial and less commendable. I do not say this carpingly. I say it because over quite a long experience in accounting and taxation, and having had many dealings and debates with tax assessors over assessments, I have seen the worth, effectiveness and quality of taxation boards of review of three members. Perhaps the Taxation Office has also seen this, and, with the increasingly adversarial and pre-emptory attitude of the Office these days, perhaps it would like to remove the degree of restraint and inspection provided by such taxation review boards. Although the decisions of the boards are appealable to a court, the number of decisions favouring the taxpayer which are not taken to court appeal by the Commissioner must be compelling evidence of the quality and correctness of those boards and his perception that they would be reinforced and upheld by the courts in very many cases. Surely these are very strong reasons why we should strengthen our review boards, and not diminish their number of referees, nor submerge them in the Administrative Appeals Tribunal. Appeals to the review boards are special and specific. They are, to some degree I suppose, appeals against an administrative arm of government. More importantly, they require specialist and specific arbitration by specifically appointed arbiters, independent of the Taxation Office and of the Government and departments, and quite separate from the appeals structure of other departments and bodies which form the bulk of the work and attention of the AAT. There are two other most grievous concerns which I have about this legislation. At present, the review boards are required to give a full statement of reasons for their decisions. This means that both the Commissioner and the taxpayer, particularly the latter, are fully apprised on the reasons why their submission was not upheld, are able to consider those reasons and get advice on them, and to contemplate whether those reasons are appealable and warrant the formidable expense of retaining counsel and going to the courts. These reasons, too, provide a basis for eliminating insubstantial or frivolous further appeal. They are vitally important to the taxpayer, and he has an inalienable right to be given a full statement of the reasons for the arbitration to which he is being expected to submit. This Bill takes that right away or considerably diminishes it. Under the proposed change, the arbiter of the AAT is required to give no reasons to the taxpayer. This may save time and cost but it denies justice, and savings should never result in denial of justice. A statement of reasons is provided only by the arbiter to the main Administrative Appeals Tribunal, and the taxpayer has to go to the AAT to try to ascertain those reasons. That is clumsy and ineffective, and I oppose it. Additionally, this Bill allows the Attorney-General to intervene in the AAT if he judges it to be in the public interest. Under the present boards there is no capacity for the Attorney-General or anyone else to interfere with, impede or influence the board's decision. Under this horrific provision, the Attorney-General can do all those things. This proposal has absolutely nothing to commend it or support it. It is dangerous and has plenty to fear and it is completely incompatible with the effectiveness and quality of the taxation appeals system presently applying. No taxpayer should ever have to look over his shoulder when he is trying to get justice or consideration of a matter which can affect his total welfare and that of his family, and which is conceivably of heavy financial consequence, to see whether the Attorney-General is going to intervene, circumscribe his rights and limit or remove his capacity to appeal. This is a totally objectionable provision, completely indefensible, and an intrusion into human rights, about which this Government is supposed to be greatly concerned, and I absolutely and utterly reject it. Mr Braithwaite —It could be referred to the Human Rights Commission. Mr ADERMANN —Yes, it could be so referred. Finally, I condemn the Government for bringing to this Parliament such a major change with such ramifications without any discussion and consultation with accountants, tax agents and taxpayers' bodies. It is true that Eric Risstrom predicted this move and expressed concern about it. However, there has been no consultation, no discussion and no Green Paper proposal ever conducted by this Government. Probably the Government knew that it was unsupportable, and such discussion would have exposed that. Unfortunately, this Government's track record is no consultation or discussions beyond a cup of tea with the Australian Council of Trade Unions, then, to prevent scrutiny, ruthlessly guillotining or gagging debate in this House. Again today we have the guillotine. This Government should have tabled these Bills to allow scrutiny and discussion and adequate opportunity for comment. I regard the legislation designed to abolish the review boards as one of the most devious and reprehensible Bills ever presented by this Government, and I absolutely and unequivocally oppose it. I do that because for very many years I have been involved in taxation and accounting. I know the value of those boards. I very much suspect the motives in getting rid of those boards, and this Bill will find no favour with me. Mr GRIFFITHS(Maribyrnong)(4.50) —In the debate on the Taxation Laws Amendment Bill (No. 2), the Income Tax (Securities and Agreements) (Withholding Tax Recoupment) Bill, the Taxation Laws Amendment (Foreign Tax Credits) Bill and the Taxation Boards of Review (Transfer of Jurisdiction) Bill, I wish to concentrate on the foreign tax credits legislation, but I note that most of the previous speakers traversed the debate reasonably widely. Given that this legislation is a direct result of the National Taxation Summit and the taxation White Paper that was put together, obviously there are implications far beyond the specific matters in the legislation itself. One point that was raised earlier that I think bears repeating is that this legislation, and all other legislation that is part of the tax reform package, is revenue neutral. It is worth stressing that point. Whilst it may be a little polemical, it is worth putting it this way: The Government does not expect to gain from any of these proposals one dollar that will not subsequently be redistributed by way of direct benefit to the taxpayers of Australia. The whole of the tax package has come about as a result of a clear mandate. I have said before in this House that it is very rare indeed for a government to be able to say that it went to the people at election time not ruling out any specific proposals. I think it suffered some electoral pain for adopting that position. Subsequently it presided over what can only be seen as the major reform of the Australian taxation system in the history of this country. Unfortunately, the Government has had to respond to attempts made in another place to change the substance of those tax reform measures. I think it is totally inappropriate for the Senate to seek to change the tax package. I believe that in the final analysis it will receive the sanction that the Australian people will apply through the ballot box. In the context of the debate on this legislation, I think it is worth making very briefly some points that follow up matters that the honourable member for Bendigo (Mr Brumby) raised. He indicated the Opposition's approach to these matters when he referred to the famous tax grab after, I think, the 1977 election. I went through some figures some time ago that showed how the former Government got its tax revenue. It is interesting to note that, according to the figures that I was able to establish, there were substantial income tax cuts under the Fraser Government-$2.35 billion over one year-but, I hasten to add, it is worth noting where that money came from. Looking at how that figure of approximately $2.4 billion was arrived at, it is interesting to see how the Australian taxpayer made up that money. There was an increase of 2.5 per cent in existing sales tax rates and a subsequent revenue yield of some $500m; that was $500m of the $2.35 billion package. Taxation at a rate of 7.5 per cent was levied on certain goods that were previously exempt. This resulted in a revenue yield of a further $150m. The Fraser Government removed the excise exemption for off-road distillate, at a revenue gain of $304m. I would have thought that that move was a significant impediment to our rural community. The Fraser Government also increased excise on motor spirit and distillate, with a revenue yield of some $214m. Excise on tobacco, for example, gave a yield of $125m and the yield from the excise on beer was $135m. When all those figures are added up they account for of the order of $1.6 billion of the $2.35 billion package. It is very much a case of giving with one hand and taking away with the other. It is worth reflecting on the previous Government's approach to taxation reform when we are considering the sorts of Bills that are coming into the House now. In my electorate, as I would imagine is the case in most electorates throughout Australia, there has been some consternation about different aspects of the tax package, essentially because, as is inevitably the case when one is presiding over quite complicated reforms of the tax system, they are open to misinterpretation in the community. There is one concern about which quite a number of people have approached me. My electorate abuts Melbourne Airport and Essendon Airport. In direct relationship to that fact, I have in my electorate a very large number of employees in the airline industry. I have received many representations on how the fringe benefits tax would affect my constituents insofar as it related to concessional air travel. I am pleased to advise you, Mr Deputy Speaker, and the House that as a result of negotiations between the Australian Council of Trade Unions, other airline industry unions, Ansett Airlines of Australia, Trans Australia Airlines and Qantas Airways Ltd, a broad agreement has been arrived at. The end result of that agreement is that for existing employees existing entitlements to staff travel concessions will remain unchanged. There will be absolutely no impact on airline employees. The companies will pay the tax and not the employees. The fringe benefits tax will be calculated on the basis that it applies to the arm's length price of an airline ticket. The arm's length price is 50 per cent lower than the lowest published fare for international travel. The Government accepts that the concession is based upon staff travel being seen to be different from business travel. As I have indicated, the existing travel concessions will remain intact-that is, the parties have agreed to maintain the status quo. The airlines will not diminish staff concessional travel arrangements, nor, I might add, will benefits be improved. Existing concessional travel entitlements for current and future employees and eligible relatives will be maintained. The most important point-this is one that has caused a lot of consternation-is that the status quo will be maintained for retired employees and those entitlements to which they currently have access will continue unaltered. In the context of taxation reform legislation, it is also worth going back and having a look at the relationship between these Bills and revenue that will subsequently be dispersed through the taxation system to mostly ordinary pay as you earn taxpayers in this country. A couple of points are worth making. One is that on a national accounts basis the profitability of Australian corporations-that is, the gross operating surplus of trading companies-has risen by some $8.5 billion or 48 per cent in the last two years. For comparative reasons, I think the House should be provided with similar information for the last two years of the Fraser Government. Under the tutelage as Treasurer, of the present Leader of the Opposition (Mr Howard), profitability rose by only $1 billion in those two years, compared with $8.5 billion in the last two years. I think that is significant. It is also worth noting that under the coalition there was a 7 per cent growth in profits, with a 24 per cent inflation rate over the same period. Under this Government there has been 14 per cent growth in profits, which, of course, is quite significant. When we talk about these tax changes we ought not to forget what we have already put in place, because those measures directly benefit particular companies in our community. It is worth noting that the Government did bring in the accelerated depreciation allowances at a significant cost-if my memory serves me correctly, it was in excess of $2 billion a year. This Government introduced group loss provisions and the 150 per cent tax deduction for research and development which, of itself, I think will cost at least $100m a year. There are also major corporate tax reforms in terms of the full imputation changes, the removal of double tax on dividends and the abolition of Division 7 tax which together will cost about $250m. With the $8.5 billion increase in profits over two years, the full imputation system, the depreciation provisions, group losses and faster write-off for investment in research and development, I believe that companies in this country can legitimately compare this Government's performance with that of the previous Government. Whilst from time to time they may be upset with some particular changes-and they always will be-they must realise that there is a strong case to be made for the argument that this Government has done a great deal to assist companies in this country. In addition we have introduced deregulation of the financial system, something that was talked about for a long time but never addressed by the previous Government, the steel plan, the motor vehicle plan and the rural package. Previous speakers touched upon capital gains taxes. It is important to note that every comparable country has a capital gains tax and one of the consistent themes in the Australian economy in the post-war period is that we have been a capital scarce country. Those who wish to embrace the scare campaign on capital gains taxes must find it rather difficult when the US, which is very much the country of full blooded capitalism, has currently before its Congress legislation which will increase the level of capital gains tax to that applying to income tax-although I concede that both of those are at slightly lower rates than ours. The fact is that the capital gains tax will be a significant advance to the Australian economy. It is worth noting that it will be totally prospective; every property owned up to 19 September 1985 will be exempt. Mr Tim Fischer —It will apply to small businesses and primary producers. Mr GRIFFITHS —I must point out to honourable members that I do not, and doubt whether I ever will, own any large blocks of flats and I do not have any great assets outside my home which, in any event, is heavily mortgaged. Frankly, the capital gains tax will not affect me or the majority of Australian taxpayers. To the extent that it will affect those who are caught with investments after 19 September 1985, it is more than justified. In philosophical terms this is something that the Opposition should support because it is fundamentally about efficiency in an economy and trying to have a tax system that is neutral in encouraging money in one sector of the economy or another. One of the great problems that our urban communities have had in the post-war period is the massive increase in house and land prices. That is substantially a function of people owning more than one property and sitting on it. Some years ago I was interested to look at some figures dealing with land in the eastern suburbs of Melbourne. These showed that while there was a great availability of land at a time when people were very rapidly bidding up the cost of home building blocks, a lot of that land was locked up by people who owned their own home and one or two additional blocks of land or even homes. This very much rationed the availability of land and forced up prices. I do not think that anyone in this House would seriously put the view that we should not reform tax mechanisms that have demonstrably contributed to very great inflation in home and land prices in the major capital cities and, indeed, elsewhere. Some nights ago I went to Warrnambool where I was talking to some of that town's fine citizens. We were talking about the prices of homes and land in Warrnambool. For heaven's sake, that town is right out in the middle of the bush and I would have presumed that a decent three-bedroomed home down there would cost about $40,000. That is certainly not the case. The prices in a place like Warrnambool were surprisingly similar to the prices being paid in Melbourne itself and to some extent that is a function of the pre-existing laws relating to capital gains. I conclude my remarks by referring to something that has been discussed in this House over the past couple of days; that is, the widely publicised tax boycott advocated by Mr Bob Ansett, Mr McLachlan of the National Farmers Federation and the Queensland Premier, amongst many others. These people have advocated breaching the Commonwealth's proposed taxation legislation as a protest. Mr Ansett evidenced the famous Boston Tea Party as the philosophical and principal position from which he argued his point that a boycott would be appropriate. It is worth pointing out that, as with the Eureka Stockade, the Boston Rebellion or Tea Party was fundamentally about no taxation without representation. It is somewhat misleading to call upon either of those two major historical incidents to argue the case for opposing a particular tax that has been arrived at-whether one accepts its desirability or not-through the properly constituted democratic processes of this country. I for one was very disappointed with the comments of Mr Ansett and Mr McLachlan. I was also disappointed that Sir Joh Bjelke-Petersen came into the debate, but one can usually expect that sort of behaviour from him. It is particularly hypocritical for the Queensland Premier to take this attitude because over many years he has established as a political catchcry the need to enforce law and order in this country, yet as soon as it suits him and for what he perceives to be a minor political advantage, he is prepared to advocate the breaking of the laws of this land. In the case of the Boston Tea Party the British Red Coats were fighting people who were trying to establish a democratic process in the US; that is, it was the Red Coats versus the democrats. As a very interesting historic analogy, we now have the rednecks fighting the democratic process. I think all members of the House, irrespective of party, should be prepared to condemn that sort of behaviour, I hope that the steam will go out of the so-called campaign for a boycott of the tax measures. It may not, but I believe these things transcend party lines and I do not think that honourable members opposite would support a proposition where people in the community were incited to break the law. I do not know what Mr Ansett's response would be if people who hired motor vehicles from him and entered into contractual arrangements suddenly decided that because they did not like the colour of the car or because they disapproved of some aspect of it, they should return the car and say they were not prepared to pay for its use. This is a case of electing to break a particular law that does not suit one. I have indicated my view that consumers should boycott Budget Rent A Car System Pty Ltd until such time as Mr Ansett takes the view that we should not encourage breaking the laws of the land and I maintain that position. In terms of this Government's relationship with Mr Ansett, I believe it would be appropriate in the circumstances to analyse what business dealings we have with his company and in a peaceful and law-abiding manner- Mr Tim Fischer —Would you sack him from the trade body? Mr GRIFFITHS —I am sure that if a trade union official advocated a breach of Commonwealth legislation and, if he were on an advisory body to a Liberal government, the honourable member would take exactly the same view. I am somewhat disappointed that on an issue like this we do not have a greater degree of bipartisan support. Mr DEPUTY SPEAKER(Mr Millar) —Order! The honourable member's time has expired. Mr MacKELLAR(Warringah)(5.10) —In response to what the honourable member for Maribyrnong (Mr Griffiths) had to say about breaking the law, let me make my position quite clear right from the outset. I do not think that it is appropriate for people to advocate the breaking of the law. To that extent I am at one with the honourable member for Maribyrnong. I would be much more convinced by the remarks of the honourable member and people on his side of the House if they displayed as much concern when the law was broken by their trade union colleagues as they do when action of this sort is proposed by people they regard as their political opponents. For instance, I have never heard the honourable member say one word about the dispute that took place last year at Mudginberri. I have never heard the honourable member say in this House that trade unionists should not have taken certain action which is clearly in breach of the law set down by this Government or any other government. So let us have no crocodile tears from the honourable member or from anybody else from the Australian Labor Party in relation to this matter. Let them put their own house in order and be consistent in their attitudes. I am totally consistent when I say that I do not agree with people who advocate the breaking of the law. The simplest way of getting rid of this law, of course, is to change the government. More and more people will understand that this is what is needed. I was particularly interested in the honourable member for Maribyrnong's exposition in support of the capital gains tax. I found it fascinating that this should come from a member of the Labor Party. Of course, all of us on this side of the House remember very clearly the famous statement of the Prime Minister (Mr Hawke)-and I will use almost his exact words, language which even we could understand-`There will be no capital gains tax'. Members of the Labor Party, one after the other, are supporting the tax changes brought in by the present Government. They are saying what a good thing those changes are. However, they have not for one moment mentioned the complete about-face and the total rejection of the statement `There will be no capital gains tax'. In this one instance alone we find a reason why nobody in this country could trust the word of the Labor Party and the Labor Government on any issue. This was a fundamental issue which was so heavily underlined by the Prime Minister himself who said: `There will be no capital gains tax'. Notwithstanding that promise, speaker after speaker on the Labor side has supported its introduction. Talk about-- Mr DEPUTY SPEAKER(Mr Millar) —Order! The Chair reminds the honourable member that he is addressing his remarks to a Bill which I understand will be before the House tomorrow. That Bill is not listed in the legislation presently before the House. Mr MacKELLAR —Mr Deputy Speaker, I am responding to the remarks of the honourable member for Maribyrnong. However, I take your point. I would like to respond to one other remark of the honourable member which went unchallenged. I say again that it is all very well to talk about the taxation package. Of course, he did not mention that a tremendous proportion of Australian taxpayers will be moving into the highest tax bracket. About one in two Australian taxpayers will be in the highest tax bracket following the introduction of these changes by the Labor Party. I would now like to address my remarks to the issue arising from the Taxation Boards of Review (Transfer of Jurisdiction) Bill. The Bill proposes to implement a report of the Administrative Review Council which, given its title, not unsurprisingly argued the case for abolishing taxation review boards and incorporating the review process into the administrative appeals system. Let us understand the process that now obtains. The process has its origin in a challenge by the taxpayer which can be killed by the Commissioner of Taxation; or the Commissioner may decide to refer it to an independent board of review. The taxpayer has a further right to secure a hearing in the Supreme Court. The Court can canvass all the facts of the case and make a decision, whether the case turns on point of fact or on points of law. This is a very important right of access to the higher courts of the land. This right surely must constrain the Taxation Commissioner to take into careful account the statement of the facts. It surely must be one of the important compulsions which the Taxation Commissioner takes into account when he makes his decision whether or not to refer the matter to a board of review. And the board for its part must have to take the same kind of care, if it does not wish to see a successful challenge in the Supreme Court. So let us not underestimate for a moment the constraint that operates on the taxing authority by the existence of the citizen's right to have the matter canvassed from go to whoa in the Supreme Court. I want to know whether these rights in their entirety remain unaffected by this legislation. All the Treasurer (Mr Keating) says in his second reading speech is that the present avenue of appeal under some taxation laws to a Supreme Court will remain. I would like to be reassured on this point, because the right of appeal from the Administrative Appeals Tribunal to the Federal Court of Australia can only be on a point of law. Paragraphs 157 and 158 of the report of the Administrative Review Council read: 157. A consequence of the transfer of jurisdiction to the AAT would be that appeals would lie, as with other jurisdictions of the AAT, to the Federal Court of Australia. As appeals from the boards presently lie to the State Supreme Courts, and thence to the Federal Court, the jurisdiction of State Supreme Courts in respect of appeals from Boards of Review would be eliminated. This reduction in the number of appeal stages was given by some State Councils of the Taxation Institute of Australia as one reason for preferring the transfer of the Boards' jurisdiction to the AAT. 158. As appeals from the AAT to the Federal Court may be made only on questions of law, appeals would no longer be by way of rehearing the matter, as presently occurs in hearings before the Supreme Courts. Is the House being treated fairly by such a brief reference-and an ambiguous reference at that-by the Minister in his second reading speech? The question is: Does the process mean that the right of appeal through the court remains unaffected by this legislation? Or are we being put in a position where a very important right is being curtailed by the action of the Government? One is left in doubt because the Minister does not close with the issue outlined in the Review Council's report. So the House and the people of Australia will need reassurance. Clearly a right of appeal to the Federal Court is a more limited right than the appeal right that now exists. The key question is: What sacrifices is the taxpayer making in this change? A more general argument concerns me. The present system has been in operation 60 years. With very little notice, the change is being exacted in a cognate and guillotined debate. Is it intended to rush the taxpayer off his sense of balance, to seize the opportunity to ring in changes, while people are pre-occupied with present and legitimate concerns about fringe benefits and capital gains taxes? The fact is, that an increasing backlog of cases calling for review is building up. I have personally received representations from chartered accountants in my electorate expressing concern about the delays. As we all know, taxation payments have to be made prior to review. A significant number of appeals are upheld by the board and the process of delay has the effect of funding the Government for an extensive period. Moreover, it denies the taxpayer the ability to employ funds in a high interest rate market. As honourable members would understand, the sense of grievance is considerable when considerable amounts of money are involved. I am informed that this backlog of cases is building at an ever increasing rate. It is not surprising under those circumstances that the accountancy profession is becoming actively concerned about the pressures placed on it by this Government. We should not be surprised to read the statement by Mr Bernard Wright, President of the Australian Society of Accountants, who is reported today as saying that the Government must delay the introduction of the fringe benefits tax until it can offer a simple, cost effective system of compliance. The profession complains, quite rightly, about the unnecessary administrative burden on all organisations, not only in industry, commerce and government, but also charities and non-profit organisations. We will expect taxation appeals under this new taxation system to be considerable indeed because everyone is saying how much more complex the system is likely to be following the changes. This means a new avenue is opened up for factual disputation. Will appeals be to the Supreme Court as they would from the boards? I seriously doubt it. Thus, the Government is not only producing horrendously complicated tax administration, but also hell-bent to limit the right of appeal on the facts; and many of the appeals will be disputes of fact. Given those scenarios, it is no wonder that the second reading speech is clouded in ambiguity by the issue of appeals to the Supreme Court. For instance, why does the Government repeal section 196, the right of appeal to the Supreme Court on the assessment, and leave the issue so cloudy in the second reading speech? Why does the Government feel obliged to restrain the appeal mechanism? I think that is a good question and it is one for which there are no obvious explanations. I hope that the Treasurer, or whoever answers for the Government, will make the point absolutely clear when he replies. As I have suggested, it is intended to increase the powers of the Commissioner of Taxation to quash appellants. The Government needs this now that it has invented the most complex tax laws in Australia's history. Given that scenario, to explain the transaction in this legislation we have to look at the Government's general predicament, because the debate on this legislation takes place against a sense of national crisis, entirely engendered by the management errors of this Government. There is no dispute about it. In the last few days the nation has been put through the wringer. People have been told by the Treasurer of this country that the nation, under Labor, is on the way to becoming a banana republic, and they have heard that statement loudly and clearly. We all have to make sacrifices, we are told. The cupboard is bare, we are told. But we get a strange sort of message from the Treasurer because he says that the internal economy is terrific; it is just those rotten sods overseas who are making it so difficult for us. I do not see how we can be a banana republic on the one hand and so terrifically forward looking and in such good economic shape internally on the other hand. It just does not make sense, but that has never worried the Treasurer. The impression created by the Treasurer not only has left a sense of depression about the national needs of the economy but also has successfully give a widespread impression that the Government does not know what to do. It leaves us with a racy analysis, blaming everybody in sight but itself and, in the most dramatic piece of handwringing by a Treasurer ever in the history of Federation, it has deepened national bewilderment rather than doing anything else. Of course, we had the Prime Minister, whilst overseas, finding his own sanguine approach to the economy exposed, apparently having been hoping to maintain a very shallow approach to the problem. Being found out, he has been told by his colleagues, left behind in the discomfort of a government in crisis, that it is time to stop wishing the problems will disappear and instead try to come to terms with them. Many have seen the point in a recent cartoon in the Sydney Morning Herald which depicts the Treasurer being confronted by the Leader of the Opposition (Mr Howard) saying `You have been telling us fibs for the last 12 months', and the Prime Minister angrily saying: `You have been telling the truth for two weeks'. We have seen what happened to that. The Prime Minister very quickly moved in and tried to do something to ease this sense of real concern that is felt throughout the nation following this extraordinary remark by the Treasurer that we are heading down the track to becoming a banana republic. I do not think it is too much to say that there can be no doubt that the Prime Minister's authority over the economic management of the Government has suffered a very grave loss of confidence in this public dispute. As one prominent newspaper stated, he found himself a lame duck Prime Minister with no explanations and little direction. What have we seen since he came back to Australia? We have not had one statement to this Parliament. Of course, that is too much to expect. We find the Government increasingly treating the Parliament of the nation with more and more contempt. We had the Acting Prime Minister (Mr Lionel Bowen), a bewildered witness to the decline of the Prime Minister's stakes, finding himself resurrected for leadership qualities, and in a stage-managed unveiling he was brought in from the cold to hose down the all-too-frank-talking Treasurer and to restore the Government's composure. So here we are today in the Parliament, meeting in an atmosphere of economic crisis, with the Prime Minister handing out bromide to all who pass him by. Mrs Kelly —Get on with the tax Bills. Mr MacKELLAR —The honourable member says that I should get on with it. I think we should analyse the economic malaise that is gripping this nation, which has been brought about by the actions of this Government. Speakers from the Government side of the Parliament get up and say: `It is all terrific. These are great taxation changes'. We find total confusion out in the market-place, we find employers confronted with the most complex series of obligations they have ever been confronted with and we find the Commissioner of Taxation sending out documents before the law has ever been passed. The honourable member for Canberra asks me to get on with the subject. I am getting on with the subject all right. I am pointing out to this House and to the Australian people the absolute confusion that has been brought about by the actions of this Government. As I have said, we are meeting here today in an atmosphere of economic crisis, with the Prime Minister trying to hose down the whole thing. I think we are finding that the Government really is battling with a serious economic situation. It cannot hide that serious economic situation by statements from the Treasurer that all is well at home, that it is only the people and the countries overseas who are making things difficult for us. That simply does not hold water in the present situation. In relation to the Bills before us in this cognate debate-hopefully I will have an opportunity to say more about the capital gains tax on another occasion-I seriously ask the Treasurer to clear up the confusion about the appeals mechanism following the moving of the taxation boards of review across to the Administrative Appeals Tribunal. There is a very real and a very proper concern by taxpayers that a hitherto sacred right of appeal has suddenly, mysteriously, been taken away from them. If that is the case we have a serious erosion of the ordinary citizen's right to have what he regards as a proper consideration of his taxation obligations heard by the highest court in the land. If that is not to be the case in the future, it needs to be stated plainly and clearly for people to appreciate. I hope that the Government moves swiftly to eliminate this possible cause of confusion through its elimination of a very important right of appeal presently available to taxpayers in this country. Mrs KELLY(Canberra)(5.27) —I will surprise honourable members by actually speaking to the legislation that is before the House. I want to make particular reference to the foreign tax credit system which is outlined in the Taxation Laws Amendment (Foreign Tax Credits) Bill. This is a very important part of the legislative tax package before the House, and it has two main rationales. The first is to improve the equity and efficiency of the tax system, which is basically the aim of this total tax package, and the second is to assist in combating tax avoidance through the use of off-shore companies or other entities. The foreign tax credit system is a mechanism which ensures that income earned by Australians overseas is subject to the same rate of tax as income earned from Australian sources-at least to the extent that the income is remitted to Australia. The present tax system provides an incentive in some circumstances for Australians to invest overseas rather than in Australia, and this must be to Australia's detriment. Some people have argued against the foreign tax credit system on the grounds that Australian investment overseas helps our export performance and can create jobs in Australia. This is undoubtedly true in some circumstances but, to the extent that there are real benefits to companies from investing overseas, this investment will obviously take place in the absence of the tax incentives. The only additional overseas investment arising from tax incentives will occur in instances where that investment would otherwise have taken place in Australia. Almost by definition, such investment represents a loss of Australian jobs. The foreign tax credit system will go some way towards removing the existing tax incentives for overseas investment. The present possibility that foreign source income may be taxable at a low rate overseas and be exempt from Australian tax when remitted to Australia has led to the development of a number of tax avoidance schemes aimed at giving income a foreign source. Such overseas investment does nothing, or very little, for the foreign country and certainly it is not to Australia's benefit. The increasing internationalisation of business in general and the growing number of multinationals of all sizes have led to a spectacular growth in services designed to advise companies on the most tax efficient way of planning their international operations. These services indicate the best way of repatriating profits and income from overseas operations by exploiting international tax treaties through the passing of money via subsidiaries set up in intermediate countries. There are many examples of this, and I refer to one that has been devised by Touche Ross which explains the great need for this legislation. That company has developed a computerised network with a database covering the tax rates and rules of 185 countries and more than 800 international tax treaties. The computer system can devise the best method of repatriating profits from any particular country to the home country of the investor. An article in the Australian Financial Review of 11 October last year set out an example of a British company earning interest income in Brazil, Belgium, Italy and South Korea being advised to pass the income from Brazil and Italy through a subsidiary in West Germany; pass the income from Belgium and South Korea through a Dutch subsidiary; and, in addition, pass the income from South Korea through another subsidiary in Finland before sending it through to West Germany. They are some of the complex issues that that company goes through to avoid paying tax. What sorts of resources have gone into devising ways to avoid paying any Australian tax? The complexities of these arrangements illustrate to what lengths companies will go to exploit a particular feature of a country's international tax arrangements. The interplay of the domestic tax laws and international tax treaties can also be illustrated by the use of the so-called `stepping stone' strategy; for example, a tax haven company plans to invest funds as a loan in a high-tax state, A. The funds are channelled through a company set up for this purpose in a high-tax state, B. This latter company receives interest from state A at a rate of, say, 12 per cent and pays interest to the tax haven company at the rate of 11.5 per cent. State A levies a withholding tax on interest which is reduced to nil under the tax treaty between states A and B. State B does not levy a withholding tax on interest under domestic law. In such a case the tax haven company benefits from a treaty between the high-tax states A and B and is subject to tax in the latter state only to an insignificant degree. That shows the complexities of the situation and to what lengths companies will go to avoid paying these taxes. In the face of such sophistication and the preparedness to devote so many resources to such tax avoidance or tax minimisation schemes Australia must be prepared to protect the equity and integrity of its own tax system. The foreign tax credits system will nullify some of these tax avoidance activities and will provide a basis for further anti-avoidance measures if the Government decides such measures are warranted. The first main feature of this system being established under the legislation before the House is that the foreign tax credits system assesses foreign source income on a world-wide basis, allowing the excess foreign tax credits from investments in high tax countries to be offset against the Australian tax due on income from low tax countries. It also allows an unlimited number of tiers of subsidiaries to be included in the calculation of any underlying foreign tax. Both these features significantly reduce the potential impact of the foreign tax credits system on foreign source income. Certain foreign source, interest income will be assessed separately from all other income, with separate tax credit limits. This is an anti-avoidance measure as interest income is one of the main vehicles used in avoidance schemes. Rules will be developed to trace interest income through dividends received from foreign subsidiaries. Interest earned by a subsidiary carrying on its normal business activities, and interest received by banks and other financial institutions, will be excluded from the quarantining process. Under the Bill, losses incurred in any year in respect of an overseas branch operation or other particular business, commercial or investment activity will not be offset against domestic income in the same year, nor against other foreign source income, but will be available for offset against profits derived in any of the seven succeeding years from the same branch or activity. This provision is designed to ensure that losses are not used to reduce Australian tax liability on other income in circumstances where subsequent profits from the same investment will not be subject to commensurate Australian tax. A further essential part of this legislation is that a tax avoidance mechanism, which has been canvassed by some tax advisers, will be dealt with also. I am referring to Australian companies investing overseas in the form of a branch so that any initial losses would be offset against Australian source income and then converting the branch to a subsidiary when the operation becomes profitable. In this way the losses would be fully deductible for the purposes of Australian tax while the profits would escape Australian tax unless remitted to Australia. A second approach could be to set up both a branch and a subsidiary in a foreign country and arrange affairs between them so that the branch bore the losses while the subsidiary earned the profits. Once again, the losses would be fully deductible while the profits escaped taxation. The loss offset provisions in the Bill will prevent the use of such tax avoidance techniques. One can appreciate the very elaborate measures undertaken by many companies to avoid dutifully paying their tax. The Bill provides for tax sparing provisions to be granted in certain circumstances to developing countries. Developing countries may offer taxation incentives, such as tax holidays, to foreign investors; that is, these countries promise to forgo some of the tax revenue they would normally collect from foreign investors in order to encourage a greater level of investment and so lift their rate of development. By ensuring that foreign source income is taxed at Australian rates, the foreign tax credits system would simply result in the tax forgone by the developing country being collected by Australia, and the intended incentive for Australian investment in that country would be removed. Tax sparing provisions are designed to prevent such an outcome and Australia will consider granting tax sparing provisions on a case by case basis to developing countries both in the context of a comprehensive double tax treaty or by regulations pending the negotiation of such a treaty. Although this Bill is obviously complex, as a great deal of tax legislation is, it is important that it be considered as part of the tax package. It is pretty useless to provide a very comprehensive domestic tax package without at the same time dealing with the realities of the financial markets. As I said early in the speech, there is no doubt that the markets that we are looking at for business in Australia have become very sophisticated. They are on an international basis, and one cannot just look at the tax arrangements in isolation from the international operations of many of the companies which have an Australian base. I recommend this Bill to the House, as well as the other pieces of legislation, as they will be a very integral part of ensuring that our corporate citizens return a fair and equitable portion of profits to Australia. This legislation complements the domestic tax package which has been before the House over the last few weeks. Mr ROCHER(Curtin)(5.40) —Over the past couple of weeks we have noticed that the rhetoric of the Treasurer (Mr Keating) has not included reference to economic miracles and J-curves. Instead, his newly discovered holy writ is now morality. His new tax imposts are moral-if the Treasurer is to be believed-for the first time in the recorded history of taxes. Never mind the historical adage to the effect that there is no such thing as a moral tax, this Government can summon the gall to claim that, by some new miracle more likely to be seen at Lourdes than in this Parliament, its new and onerous taxes deserve a place in the hearts and minds of all taxpayers. That is plainly ridiculous. Even if it were so, if we were to examine briefly the Government's morality in a wholly but not exhaustive range of activities, we would see that it is severely flawed. In deciding the merits of the Government's and the Treasurer's newly discovered morality it is necessary to remember some unpleasant facts. Not so long ago the theme was not the Government's morality but its record. Of course, it is a record shattering Government, by any measure. It holds the all-time Australian record for expenditure, deficits and, especially relevant, taxation. So too is this Hawke Government the all-time record holder for the number of broken promises and undertakings it has perpetrated. The most relevant broken promise in the context of any debate on taxes and on any part of the Treasurer's so-called tax package is the solemn pledge of the Prime Minister (Mr Hawke) not to introduce a capital gains tax. That is a laugh-what a joke-because, as you know, Mr Deputy Speaker, capital gains taxes are to be debated tomorrow under the constraint of the guillotine, as are these Bills being debated under the constraint of the guillotine tonight. I turn briefly, as a surprising number of members have done already, to the Taxation Laws Amendment (Foreign Tax Credits) Bill 1986, which is being debated cognately with the Taxation Laws Amendment Bill (No. 2) 1986, the Income Tax (Securities and Agreements) (Withholding Tax Recoupment) Bill 1986 and the Taxation Boards of Review (Transfer of Jurisdiction) Bill 1986. The first Bill provides that all foreign source income of a foreign branch of an Australian company will be exposed to Australian tax, whereas such income is now exempt if it is subject to income tax in the source country. Of course, it is not confined to foreign branches of a particular Australian company. The Government's 1985 White Paper on taxation agreed that this basis for taxation was consistent with the approach adopted by many countries with general credit systems. Whether, after allowance of appropriate credits, there would be any practical discrimination in favour of the corporate form is a matter that could be settled only on the facts. However, one advantage of the corporate form has been the channelling of dividends into tax havens instead of direct remission to the Australian parent company. Largely, that would disappear under this legislation. Of course, to the extent that it succeeds in doing that the measure is welcome. The White Paper estimated a direct gain to revenue of $30m at 1984-85 levels of income. In paragraph 20.9 of the White Paper the Government argued: In addition there may be an indirect benefit as adoption of the system would diminish the tax advantages to Australians of establishing operations outside the country. All that is perfectly true and worth saying, of course. While I acknowledge that there could be, and undoubtedly will be, benefits in many ways, there could be down-side effects as well, particularly if we find that companies are driven off-shore. I know that it is very difficult with any legislation for anyone to be precise about that sort of prospect, but I wonder just how much work was done on this. I wonder how much we might fear that, instead of companies conducting their main operations in Australia, they will in fact be driven off-shore. The Government claims that it has considered representations from many sources and has held discussions with interested business groups. As if to give validity to that statement, I note an article by Louise Dodson in the Australian Financial Review of 23 May, when she reported that the Business Council of Australia had succeeded in winning a number of concessions which included an absence of limits on the number of subsidiaries that could get tax credits and the concession that overseas branches of Australian life insurance companies would be taxed only on income sent to Australia and not on all branch profits. That seems to bear out the Treasurer's claim about consultation. However, questions raised by the construction industry indicate that it was not consulted, or if it was consulted its doubts and questions were not satisfied. All should be aware that the construction industry operates in our region. It is a significant earner of overseas income and has the potential to expand even further. That industry has its doubts and queries. For instance, at present, in countries where taxation is lower than it is in Australia, Australian construction companies are still able to compete with locally based companies. I note that the nature of construction work is such that the contractor is subject to taxation in the country in which the project is located. A constructor cannot manufacture off-shore. Against the reasons for introducing this legislation, the construction industry is concerned that for some time Government Ministers have been promoting the export of goods and services to reduce our imbalance of imports over exports. Considerable focus has been concentrated on the competitiveness of Australian manufacturing and service industries and their lack of application to overseas markets. At the same time, of course, proposals for the introduction of a foreign tax credit system, which appears likely to have an adverse effect on construction companies working overseas, is being adopted by this Government. That is a contradiction in policies if ever there was one. The Government is making noises about promoting the export of goods and services, and it is even providing incentives under the Export Market Development Grants Act, while at the same time it is disadvantaging or disincentiving constructors. I remind the House that tendering for construction work in foreign countries is very competitive. Some governments give more assistance to their construction companies operating overseas than do others. Where company and personal tax in a host country is lower than it is in Australia the Australian contractor can put in a lower bid price while retaining an acceptable after-tax return to the parent company in Australia. If the money returned to Australia is now to be taxed-as it is-to bring it up to Australian tax rates, the tender prices for new projects will have to increase in order to obtain the acceptable return from any one particular project. As we know, in any competitive situation that is likely to render that bid uncompetitive and therefore unacceptable to a client in an overseas situation. Let me give an example. In Hong Kong the company tax rate is about 18.5 per cent. A construction company, in order to maintain the same after-tax profit for a contract worth, say, $100m in the first instance, will need to increase that price to $106m as a result of this foreign tax credits legislation. This additional cost on the bid, together with the extra cost of expatriate personnel packages, would almost certainly lose the job for the Australian contractor if there were companies bidding who were subject only to Hong Kong taxation or who had a favourable foreign tax credit scheme. A foreign tax credit scheme may reduce tax avoidance when a company sets up a manufacturing plant in a tax haven. However, in construction, the tenderer or potential contractor has no ability to change the location of a project and must, of course, accept the tax laws of the country in which the project is situated. Therefore, it is a case not of selecting a tax haven country but of selecting a suitable project. A suitable project is one in which the contractor has the necessary expertise, can provide a suitable financial package if it is part of the deal, and believes that it can offer something more competitive than other contractors. In being competitive the most significant factors in assessing the tender profit margin are risk and, more importantly, taxation. A properly designed foreign tax credit system can assist a contractor to spread his risk over all his operation, thus enabling him to bid more competitively. Unfortunately, in the case of overseas contractors, I do not see those elements present. It is in the area of taxation that the Government continues to wrong-foot and destabilise the wealth creators in the private sector. Under what can only be described as this avaricious Government the stampede to raise more and more tax revenue has already caused it to abandon the long established practice of taxing income of any kind in the hands of a recipient or beneficiary, and in that I am talking about fringe benefits taxes. Just as it is deceitful to describe the Government's most recent tax proposals as tax reform-as I have heard honourable members on the other side do on occasions today-so is it stretching the meaning of the word `package' to describe a series of disparate tax measures as a tax package. These new taxes are designed to increase the total tax take-nothing more and nothing less. They have, of course, a decided anti-business and anti-rural bias. I remind the House that decisions on negative gearing and capital gains taxes, which are having a disastrous impact on residential accommodation, are included. Also, there is the quarantining of farm losses which, along with the capital gains tax, is having a similar effect on the rural sector. The foreign tax credit system will destroy our international competitiveness and will cause some Australian companies to move their whole Australian operation off-shore. I hope that the Taxation Laws Amendment (Foreign Tax Credits) Bill does not result in that happening, but I suspect it will. Then there is the fringe benefits tax treatment, which as a de facto payroll tax will significantly increase the cost of business and act as a disincentive to employment. It will also decrease the profitability and competitiveness of Australian companies. Jointly and severally, the measures contained in the entire so-called tax package have the potential to crush various areas of economic endeavour. So much for the claimed neutrality of these measures in total. I have heard that thrown around the chamber today on more than one occasion, and it is patently false. Because of the application of the guillotine by the Leader of the House (Mr Young) in relation to this legislation there is far too little time to debate these measures; we are simply, in a large part, left to examine the twisted thinking that is behind them. That is to be regretted. It has been dwelt on by more than one speaker other than myself. However, it still needs to be said that, if we were to make a contribution to improving the legislation, we should, of course, have been given an opportunity to debate many of these very complex Bills clause by clause at the Committee stage. That is not to be the case, which is to be deplored. Mr ROBERT BROWN(Charlton)(5.57) —This package of Bills represents an extremely important contribution to the Government's total taxation reform. The various elements of that reform have been progressively introduced into the Parliament in recent weeks. Of course, there are still some that need to be attended to. Mr Hodgman —That is a terrible photo of you in the Melbourne Herald. Mr DEPUTY SPEAKER(Mr Mildren) —Order! The honourable member for Denison will cease interjecting. I am sure that the honourable member for Charlton can get along without his assistance. Mr ROBERT BROWN —I can get along admirably without his assistance, I assure you, Mr Deputy Speaker. The only thing that the honourable member for Denison is likely to do is mislead and confuse me, as he has on previous occasions. Mr DEPUTY SPEAKER —Order! I ask the honourable member to return to the subject of the Bill. Mr ROBERT BROWN —I am delighted to do that. There was, I think by way of interjection, reference made to an article which appeared today in the Melbourne Herald and which was written by Mr Bob Ansett in relation to some of the more recent items of legislation, part of the total package that the Government has been putting in place. I think that it is fair enough for people in the community to express their concerns about aspects of Government legislation with any interpretation they feel appropriate to place on it. However, I think that it is extremely unfortunate when people take advantage of the opportunity sometimes available to them either deliberately to misunderstand or to misrepresent some of those provisions. I do not want to go into detail about that matter and refer to it in passing only. Mr Ansett suggests that the Government has made available to members of parliament under these arrangements concessions that are not available to other people. He quite grossly misrepresents, for example, the Government's approach to the fringe benefits tax when he refers to generous electoral allowances that are not taxable. That is a gross, and perhaps deliberate, misrepresentation of circumstances. It does neither Mr Ansett nor his case any credit. It does no credit to those people who are presenting what in many respects are quite legitimate concerns. They have the right to do that. They have the right to promote their concerns and to seek the support of the community in relation to those concerns. However, where either through lack of care, or deliberately, they set out to mislead people in order to secure that support it does, as I have said before, neither them nor their case any credit at all. You, Mr Deputy Speaker, and all members of this Parliament, know absolutely that part of the Government's essential approach to this whole question of tax reform, particularly in these areas, is to ensure without qualification that any of these measures relating to and affecting people generally within the community will affect members of parliament in exactly the same way. I am pleased to have an opportunity at least to correct that impression. I will now briefly mention one of the items of legislation in this package, that concerning the new foreign tax credit system. That has, of course, been introduced on a world-wide basis, unlike the previous arrangement which could have been introduced. That foreign tax credit arrangement would have quarantined dividends from the source country. That quarantining still applies to interest, but what we have done with this legislation is ensure that a world-wide approach is adopted. Of course, what that means is that it will allow credits from high tax countries to be offset against credits from low tax countries. The Government has also moved to close off the use of the section 46 rebate. There has been fairly widespread concern about the way in which that has been utilised and about the way in which it is possible for it to be misused. The present tax system has also encouraged Australians to avoid tax by arranging to give their income an artificial source, so that by various manipulative devices it has been possible for people with access to income from overseas sources to ensure that it appears that it originated in countries which had considerably lower tax structures than those existing in the actual country of origin or even in Australia. All of these measures, as people well know-and as increasing numbers of people are coming to understand-have been absolutely essential to restore to the total taxation system a level of equity, justice, fairness and efficiency which that system was entitled to have and which for too long it simply has not had. It will also guarantee more definitely in the future that that taxation system will contribute towards the greater economic efficiency of Australia. I wanted to make those few observations. I support the legislation and I commend the Government for having introduced it. Mr HURFORD(Adelaide-Minister for Immigration and Ethnic Affairs and Minister Assisting the Treasurer)(6.01) —I thank all honourable members who have taken part in this debate. Before responding on behalf of the Government, I seek leave to present the explanatory memoranda to the taxation Bills. Leave granted. Mr HURFORD —I present the explanatory memoranda to the following Bills: Taxation Laws Amendment Bill (No. 2) 1986, Income Tax (Securities and Agreements) (Withholding Tax Recoupment) Bill 1986, Taxation Laws Amendment (Foreign Tax Credits) Bill 1986, Income Tax Assessment Amendment (Capital Gains) Bill 1986, Income Tax (Rates) Amendment (Capital Gains) Bill 1986, and erratum to Taxation Boards of Review (Transfer of Jurisdiction) Bill 1986. I appreciate the opportunity to do that. I should like to respond firstly to the honourable member for Mackellar (Mr Carlton), who raised the following matters during the debate this morning: Firstly, that a Taxation Board of Review has three members, whereas the Administrative Appeals Tribunal may have only one member and that member may be a former taxation officer who might be biased against the taxpayer; secondly, that there will be no right of appeal to the High Court of Australia under the new arrangements; thirdly, that the proposed amendments will remove a taxpayer's present entitlement to the Commissioner's reasons for the decision on an objection. I shall respond to those three points. Firstly, the more flexible procedures of the AAT will allow single-member hearings. Single-member hearings, however, will largely involve questions of fact and not difficult questions of law. More complex cases will be heard by three-member tribunals. There is no evidence to support the statement that a former taxation officer sitting on the Tribunal might be biased against the taxpayer, but if there is such evidence I hope the honourable member will draw particular cases to our attention. We have no evidence of that. Former taxation officers have been appointed chairmen of boards of review for many years and have given distinguished service in that role. I have been a taxation practitioner in my capacity as a chartered accountant and I attest to that fact. There is no evidence that such chairmen have been biased in their decision making. In fact, decisions given by boards of review constituted in part by former taxation officers are so often, as we all know, in favour of the taxpayer. The honourable member was also incorrect in some other matters. There will be no change to a taxpayer's right of appeal to the High Court under the new arrangements. As is outlined on page 29 of the explanatory memorandum tabled at the time of the introduction of the Bill, a decision of the Administrative Appeals Tribunal may be taken on appeal to the Full Court of the Federal Court of Australia. A decision of that Court may be appealed from to the High Court by special leave of that Court. There is no present entitlement to reasons for a decision by the Commissioner on an objection. This will not change under the proposals contained in the Bill. It is the Commissioner's general practice, however, to provide reasons for a decision on disallowance of that objection. In addition, reasons for the decision may be discussed with the Commissioner's officers at the appeal stage. I add that under the new arrangements the Commissioner will, until 1 July 1988, provide to the AAT exactly the same statement of reasons and documents that he presently provides to a board of review. From 1 July 1988 a more detailed statement of reasons will be provided to the Tribunal in accordance with the normal practice of the Tribunal. The honourable member for Dawson (Mr Braithwaite) mentioned a letter he had received from a constituent who had been fined $200 for not lodging a taxation return when in fact the taxpayer was entitled to a refund. I respond by saying that taxation returns are normally due to be lodged by 31 August each year unless an extension of time to lodge has been granted. The taxpayer concerned apparently had not lodged the return in question by April the following year, some eight months after it was due. The Commissioner normally sends a final notice before commencing court proceedings to afford taxpayers a further opportunity to lodge an outstanding return. The fine of $200 imposed by the court was well below the level of penalty now applicable to such offences. I would say more about the contribution by the honourable member for Dawson but, as time is short, in his case and in the case of the contribution by the honourable member for Fairfax (Mr Adermann) I will respond in writing. The honourable member for Warringah (Mr MacKellar) queried whether the present rights of appeal to State supreme courts would be maintained in their entirety. This was made clear at page 7 of the second reading speech of the Treasurer (Mr Keating). Appeals from the AAT on a question of law will go to the Federal Court. Where a right of appeal directly from a decision of the Commission to a supreme court presently exists, that right will be maintained. The question of appeal rights from the AAT is dealt with in the note prepared by the Attorney-General's Department. I will send in the post, in response to what the honourable member had to say about the Taxation Boards of Review (Transfer of Jurisdiction) Bill 1986, the responses we have had from the Attorney-General's Department. I will also respond in writing to the honourable member for Mackellar because he raised some other points when he led for the Opposition in this debate. I recognise the contributions made by the honourable member for Dawson and the honourable member for Forde (Dr Watson) and, as I know the Opposition wants to have a Committee stage debate, I will not detain the House any longer. I say to those honourable members that they will receive a response in writing. I thank the House and I commend the Bills to the House. Question resolved in the affirmative. Bill read a second time. Clauses 1 to 3-by leave-taken together. Mr HODGMAN(Denison)(6.08) —Mr Chairman, I am delighted to be given the opportunity to speak on this legislation in the Committee stage. If ever I have seen a package of legislation which has been so correctly designated by the shadow Treasurer, the honourable member for Mackellar (Mr Carlton), as legislation that will further increase and, I think, substantially increase, the power of the Australian Taxation Office vis-a-vis the citizens of Australia, it is this legislation. I suppose it is only a matter of time before our national anthem is changed Advance Australia Fair to `Advance Taxtralia Fair'. I say quite bluntly that a high taxing government must legislate in this manner to obtain the revenues that are so essential for it to pay for its very expensive policies. If I could write a two-word policy for a potentially successful political party in this country, I would write the words `cut taxes', because everything flows from there. If we cut taxes, we have to have better housekeeping. It means we have to be far better in our handling of expenditure. It also means that more people in Australia have more money in their pockets to do their thing, which is basic to our philosophy and, of course, complete anathema to the philosphy of the honourable member for Charlton (Mr Robert Brown) and the other members of the Hawke socialist Government. They believe they can do a better job with your money, Mr Chairman, and my money, than we can do ourselves. Believe it or not, I am not a critic of the Australian Taxation Office. Indeed, I admire the Office for working under the worst piece of legislation that I have come across in 22 years of legal practice. Effectively, we are looking at legislation now with more than 1,100 clauses. If we take into account board of review decisions, Australian Taxation Office official directions and the like, we have an enormous Office but, more importantly, we have a very significant number of Australians who probably have to bear in mind on any day of the week about 2,000 taxation provisions. I will not have a bar of seeing the Australian Taxation Office criticised because we in this Parliament have permitted the Income Tax Assessment Act to be amended in excess of 93 times since 7 December 1936. That is two years before I was born, Mr McLeay, and even more years before you were born. I wonder whether one day someone will have the guts to say that the sooner the Income Tax Assessment Act is torn up, the better; the sooner we get legislation which is understandably to the men and women of Australia who are obliged to pay their taxes, the better. We now have a situation in which the High Court of Australia is able to take into account extrinsic material in interpreting tax legislation. That is very important, because we have now passed out of an era in which there was strict and literal interpretation, which, in the opinion of many, quite apolitically, produced results which were not in the national interest. Would it not be marvellous to say to the people of Australia: `There is the tax law of this country-100 clauses, 30 pages in; simple English; there for you to understand'? It is a national disgrace that at present the system has created a situation in which some 80,000 appeals are awaiting hearing and determination. The average waiting time can be as long as three years. To the extent that the Government has said that this is wrong and has moved to provide an alternative system of appeal, one would say that that is an encouraging sign. Very properly, the honourable member for Mackellar said: `If it will improve the system, that is good'. But will it improve the system? I am involved, in an honorary capacity, in a number of matters before the Administrative Appeals Tribunal. I believe the Administrative Appeals Tribunal to be more formal in its hearing and, therefore, more protracted in its deliberations than would a board of review be, so I have a question mark in my mind as to whether the move to the Administrative Appeals Tribunal will necessarily mean better service both for the taxpayer and for the Australian Taxation Office. Of course, the taxpayer is in a totally different position from that of any other litigant in Australia, because he or she can lodge an appeal for a very small sum. I think that $3 is the deposit; it used to be. But the rules are these: `You appeal; fair enough. But you pay in advance'. I have grave reservations about the justice of that, because I am aware of cases in which persons have paid and in which the matter has dragged and dragged, and finally they have just given it up as a bad job. I do not know of any other jurisdiction which says to a litigant: `Before you come before us, you have to pay up'. It almost presumes that the litigant will lose. I question, too-and again, this is a criticism not of the Australian Taxation Office but of the wretched system that we have in this country-the variation of interest rates payable depending on whether one is receiving a refund or paying taxation which is due but which is in arrears; 14 per cent for one, but 20 per cent for the other. It does not seem very fair to me. I take the very thoughtful point made by the honourable member for Mackellar about the situation in which a member of a board of review goes on to the taxation section of the Administrative Appeals Tribunal and happens to be a former Deputy Commissioner. I am not for a moment suggesting that such persons should be disqualified, but it is rather like putting up a defendant before the arresting sergeant or, as the honourable member for Mackellar said, inviting the poacher to plead his case before the gamekeeper. The question of the appearance of justice is very important indeed. Remember the maxim: Justice must not only be done; justice must be manifestly-many people forget that word `manifestly'-seen to be done. I question the action of this Government in ramming this legislation through a parliament which day by day becomes more like Moscow and less like Canberra and saying: `The law will come into effect on 1 July'. It does not sit well with the calm and placid nature of the Minister Assisting the Treasurer-the Minister for Immigration and Ethnic Affairs (Mr Hurford)-who is sitting at the table. It does not sit well with the sort of constructive and thoughtful law reform which I know that he, in his heart of hearts, would espouse. What is this rush? Why does this legislation have to be rammed through? It is not for me to presume. Mr Hurford —Ask the Democrats. They insist that we get it through. Mr HODGMAN —Are the Australian Democrats running the country now, Minister? Mr Hurford —They have the balance up there now. Mr HODGMAN —I think that it is a case of the tail wagging the dog. Mr Hurford —If you have any influence, perhaps you could help. Mr HODGMAN —I have so little influence on the Democrats that I would not be assisting the Minister, myself or the honourable member for Mackellar if I uttered one word. Mr Carlton —Call a double dissolution. Mr HODGMAN —I am starting to wonder what is happening. An ideal double dissolution issue does not happen very often in Australian politics, but I seem to remember that there were some tax Bills floating around in 1983. I do not recall personally campaigning vigorously on increased taxation during that campaign. However, perhaps the Government would like an election on taxation reform, or the fringe benefits tax, or the capital gains tax-in relation to which it will be dipping its hand into the graves of the deceased. It makes the old gold fillings saga look very puny, Mr McLeay. I think that out there in the real world-- The CHAIRMAN —I think that the honourable member for Denison had better make it clear that he is addressing the Minister, and not the Chair. Mr HODGMAN —My word I am, Mr McLeay. The fact is that the Government is tax crazy. I am sorry that the honourable member for Charlton has fled from the chamber. He says that this Government has cut taxes. That is just not true. A little short man with silver hair did stand on the steps of the Sydney Opera House in 1983 and promise tax cuts for 98 per cent of all Australian workers-and they are still waiting. If people add up their income tax and company tax receipts for the last three years, they will find that those taxes have risen by 43.6 per cent over that period. The present Government has raised those taxes more in three years than even the Whitlam Government did. It does not surprise me that this highest taxing Government, this biggest spending Government, this heaviest borrowing Government is leading us down an economic gurgle hole of national bankruptcy. I cannot talk about the bandicoot and the ferret. I cannot talk about what the Government has done to this country by taking away incentives. But I will tell the Committee one thing: Tax is the thing that will break this Government. In particular, its fringe benefits tax and its capital gains tax will see it out of office at the next election, and the sooner the better. The CHAIRMAN —Order! The honourable member's time has expired. Mr STEELE HALL(Boothby)(6.18) —These Bills are the result of a long grind, a long journey, from the first summit on the way to the second. It is rather interesting that when the Treasurer (Mr Keating) came down from the mount at the first summit, he had achieved only a shadow of the projected results he had wanted when he went to that summit. Since then, these Bills have been forecast so long ahead of time and so long ahead of execution that, really, we have been through a period of government by decree, in which people have been making decisions in the community unknowing of the final consequences that might result from those decisions and unknowing of the details which would surround the actual legislation when it was presented. We have the details now, which we are considering, but many people have made decisions or withheld their decision-making to the detriment of the industrial and commercial community because of the traditional way that this Government has insulted the Australian people and really treated them with contempt when it comes to decision-making about some of their most important areas of conduct. The same rules have been applied to this legislation as those which were applied to the assets test, for instance, which had a gestation period of about 11 months. This legislation has not been quite as long as 11 months in coming, but the wait seems much longer to those who have been inconvenienced by this very long period. We have seen the emergence of capital gains legislation, which will be discussed in another period in this House, and the negative gearing, the entertainment expenses and the fringe benefits legislation. All of these have been really government by decree whilst all of the population has awaited the detail, which has now finally arrived in these Bills. The Treasurer has continued to say in answer to questions in this House and in debate that these measures are part of a package. When one examines it, it is a pretty shonky package. He keeps on saying that the moves are revenue neutral and that we will be looking at a reduced maximum taxation level of 49 per cent. First of all, 49 per cent is not the proper figure on which Australians' income is taxed. The figure is 50 per cent. That is only a subterfuge to separate the Medicare levy from the general level of income taxation. We have been through this question in prior decades when previous Australian governments have separated social service contributions from taxation. It may not be long before these will be melded. On the other hand, the Medicare levy may be kept separate as a subterfuge, because the levy will not stay at one per cent. The much vaunted figure of 49 per cent-that magic figure which is below 50 per cent-that the Treasurer uses for the top level taxation rate is not really 49 per cent; it is 50 per cent. In the present financial crisis in which we are living in Australia, on the road to the banana republic, we can expect that Medicare levy figure to come closer and closer to the actual cost of Medicare in the community. One honourable member on this side of the House said the other night that the closest figure that he could work out was a levy of 3 1/2 per cent. If the Government gets around to having the courage of its stated convictions that it will do the proper and hard things in the economic decision-making area, we can expect the top level taxation rate to be something over 52 per cent. That will make a monkey once again out of the Treasurer when he refers to the economic parameters which he uses from time to time. The same types of statements were made about the fringe benefits tax legislation. As the Australian Financial Review pointed out in one of the articles it ran soon after the introduction of that tax, the employers liable to pay the fringe benefits tax would not have to pay 100 per cent of the tax; they would have to pay closer to 198 per cent of the tax, because it is a non-claimable expense. If a company pays 100 per cent of the fringe benefits tax, at present it will be taxed at a rate of 46 per cent. After the changes in taxation are effected the rate will be 49 or 50 per cent. That means that employers, after they have paid their company, personal or partnership tax, will be paying nearly twice the actual tax. All of these proposals are tied together in what is called the tax package, which relies so much on the prices and incomes accord. At every turn that the Treasurer takes in relation to his financial plans, he goes back to the accord. It must be admitted that the accord, probably in its first year of operation, had a dampening effect on wage rises in this community. It certainly does not have that dampening effect now. It was always a device to get around the discipline of floating the dollar. The accord, with its magical indexation of wages to costs, is an automatic way of getting around the discipline of floating the dollar. The Government set about trying to separate from the local economy the effects of overseas trading on the Australian economy. The Treasurer, right to this day, maintains the separateness of what he calls the domestic economy, because that is where he sees that the votes reside. Of course, as he sees it, the votes are dependent on how he can sell the health of Australia's domestic economy, so he continues falsely to separate the economic effect of the overseas trade imbalances from the domestic economy. He uses the lowering of the price of the products that we export as basically the sole reason for the present balance of trade defect. We know that if the inflation rate in Australia continues to rise at about 9 per cent per annum, people who produce coal, wheat, iron ore and aluminium, for instance, will simply be unable to continue their production, because they cannot produce at a loss. That will be the final test of whether the Treasurer can give some sensible responses to the challenges which are in front of him. In these Bills that are part of a package we are seeing again pathetic attempts by the Treasurer to implement what is only a small proportion of what he attempted to get at the National Taxation Summit in the face of his inability to control inflation and costs in Australia. Clauses agreed to. Clause 4 (Officers to observe secrecy). Mr CARLTON(Mackellar)(6.26) —Before I address myself specifically to clause 4-in the interests of time I did not speak during the previous segment of the debate-I acknowledge the tabling by the Minister for Immigration and Ethnic Affairs and Minister Assisting the Treasurer (Mr Hurford) of the explanatory memoranda for most of the tax Bills which were introduced last Thursday night. It certainly ought to be recorded in the Hansard that on Thursday night the Government introduced some 275 pages of legislation and tonight-in the following week at the end of the debate by the House of Representatives on four of the tax Bills-it has tabled the explanatory memoranda for all but one of those measures. I think that is a disgrace. The CHAIRMAN —Order! I ask the honourable member for Mackellar to address himself to clause 4. Mr CARLTON —I know I am taking a little licence, but I could have mentioned that in the debate on clauses 1 to 3, but in the interests of time and under the guillotine- Mr Hurford —You will mention that they have now all been tabled. One was tabled last week. Mr CARLTON —Yes, they have now all been tabled, but at the end of the debate. It is most enlightening for honourable members to be in that position! I acknowledge the concern that the Minister expresses in this regard. He has been asked by the Treasurer (Mr Keating), to come into the House, as is usually the case, at the end of a full day's debate on complicated taxation measures. The Treasurer should be here. The CHAIRMAN —Order! The purpose of the Committee stage is to discuss clauses. The explanatory memoranda have nothing to do with the clauses. The Treasurer being here or not being here has nothing to do with them either. I ask the honourable member to deal with clause 4, `Officers to observe secrecy'. Mr CARLTON —I will desist from any further comment on this. The Minister sitting opposite, unlike the person who asked him to come in here, is a gentleman, and I do not want to embarrass him further. I will address myself to the clause, but I feel very strongly about that issue. It is quite unacceptable. This clause relates to the quite astonishing proposal that the Parliament be asked to relax the secrecy provisions of the Income Tax Assessment Act to allow the Commissioner of Taxation to divulge material about the taxation of superannuation funds and similar bodies-similar vehicles-to a body yet to be set up whose constitution is yet to be determined. The full input of this proposal will hardly have dawned on honourable members. Before the Government has even made up its mind about new regulatory arrangements for superannuation funds, the Parliament is being asked to make a major change to the secrecy provisions of the Income Tax Assessment Act. It is being asked to say that previously secret material will be disclosed to a committee, a group or a regulatory body as yet unnamed. That proposal is totally unacceptable. We oppose it utterly. We will expose it publicly. We will fight it in this chamber and we will fight it in the Senate. We will not agree to a pig in a poke. Heaven forbid, the Government might want to disclose this information to a committee of public safety of some kind. This body might be headed by the present Ambassador to the United Nations Education, Scientific and Cultural Organisation when he returns to Australia. It might be headed by Mr Al Grassby. I have a very great regard for Mr Grassby in other matters but I would not see him as a suitable appointee to run body like this. In a more sinister context, it might be Mr Gary Weaven of the Australian Council of Trade Unions who is chosen to head this regulatory body running superannuation funds in Australia. After all, the Government has already delegated responsibility for retirement security of Australians to the trade union movement and the Treasurer has already suggested to his friends such as Mr Hodgson and Mr Gallagher that they should extract agreements from employers in the field to pay superannuation moneys into superannuation funds controlled by the trade union movement. I am not opposed in principle to trade unions running superannuation funds but I am absolutely opposed to money being compulsorily acquired under any form of threat, blackmail or pressure into those funds where there is not a clear agreement from both the employers' and employees' sides-and I am talking about individual employees, not trade unions. Where there is agreement it is a different matter. That would fall within suitable guidelines. Here we have a situation in which the Government is highly suspect on the problem of superannuation. It is not legislating openly in the Parliament for a change in the retirement security arrangements for Australians; it has abdicated that responsibility to trade union action in the field where the likes of Mr Ivan Hodgson, of the Transport Workers Union, bully people into submission on this matter. Some decision will be made in the Australian Conciliation and Arbitration Commission. It will be made under pressure from the trade union movement. Various agreements are already being signed up under pressure with blackmail and bullying in certain instances and we are being asked to agree in advance to secret taxation details currently within the control of the Commissioner being made available to a body yet to be set up. There is some considerable difficulty on both sides of this Parliament in keeping material secret. This is fairly well known. Honourable members realise that from time to time the practice of `leaking' occurs. It occurs in the Government and the Opposition and it is more or less a fact of life around here. But one area in which there are no leaks is the Taxation Office. I have been very critical of various aspects of the administration of the Australian Taxation Office, but I must say that its record for secrecy of the material entrusted to it is impeccable. It has a remarkable record throughout its history and this is something that must be jealously guarded. Tonight the Government, in the person of the Minister Assisting the Treasurer-not the person who postures as the Treasurer and treats us with total arrogance and contempt-is seriously asking us to make secret information available in advance to a body as yet to be constituted. We are told a decision on the composition of this body will be made during the Parliament recess-no doubt during one of the Prime Minister's visits to Australia. All I can say on behalf of the Opposition members of the House of Representatives is that we will not put up with that. We will vote against the proposal here and the Opposition will vote against it in the Senate and we will get whatever support we can in the community to oppose this absurd measure. Mr Gear —There is no support for you. Mr CARLTON —If the honourable member from Western Australia wishes to come into the chamber informed, he should read the particular clause to find out what he is supporting because I assure him it will do him no good in his electorate. That will be seen at the next election. Mr HURFORD(Adelaide-Minister for Immigration and Ethnic Affairs and Minister Assisting the Treasurer)(6.34) —The Government opposes this Opposition amendment to omit clause 4. The amendment of the secrecy provisions of the income tax law is purely an administrative measure to facilitate any transfer of responsibility for the superannuation funds. There have been suggestions from time to time that the non-revenue aspects of supervision of superannuation funds are more appropriately located with an agency other than the Australian Taxation Office. However, the Government has this matter under consideration. We have not put it aside-we are still actively considering it-and it would be administratively convenient to effect any transfer that might be decided upon on 1 July, that is, the start of the new financial year. Although no final decision has been taken, this is the last piece of tax legislation scheduled for passage in the current sittings and, therefore, it is necessary if any transfer is to occur on 1 July-and we would be administratively inept if we did not plan for this-for the legislation to be contained in this Bill. The provision is not, as suggested, open ended. The honourable member for Mackellar (Mr Carlton) was very fanciful in his comments as to who might receive this information. He knows that he was allowing his imagination and rhetoric to run away with him and that he was not being objective. I repeat that this provision is not open ended. It is tightly drafted to limit the kind of information that may be communicated by the Commissioner of Taxation. In practice, if responsibilities are transferred, the Commissioner will hand over trust deeds and other non-taxation records-I emphasise non-taxation records- concerning existing superannuation funds. It is necessary to provide for handover to the Secretary to the Treasury or the prescribed statutory office holders because no decision has yet been taken whether, if supervision is transferred, it will be to a unit within the Public Service structure under the Secretary to the Treasury, to an existing statutory office holder or to a new statutory agency created for that purpose. I repeat that this is a very sensible arrangement. The Government therefore opposes the amendment moved by the Opposition. Mr HODGMAN(Denison)(6.38) —I rise to support the amendment moved by the honourable member for Mackellar (Mr Carlton) and I commend him for his remarks and endorse them completely. The Minister for Immigration and Ethnic Affairs (Mr Hurford) did not even respond to the principal fundamental point put by the honourable member for Mackellar. Perhaps I can tell the Minister something which he does not know but which he ought to know-the Australian Taxation Office itself is uneasy about this provision. The reason it is uneasy is that once the inviolate principle of secrecy is broken, no matter how innocuous that breach might be made to look in the first instance, no matter how pleasantly it is spelt out in the gobbledegook that the Minister has just read into Hansard, once that foot is in the door, who is to say that further down the track less responsible and more adventurous Ministers than he will not take advantage of the opportunity? As the honourable member for Mackellar says, it is a matter of fundamental principle. The Minister is talking about what has previously been regarded as absolutely sacrosanct, namely, secrecy and confidentiality. The explanation that the Minister has just read into Hansard did not even attempt to answer the cogent, logical and absolutely convincing arguments of the shadow Treasurer. I would prefer to believe that the Minister spoke in ignorance and that he is not an accomplice to the breaching of a tradition which has been basic, fundamental and axiomatic to the administration of taxation law in this country for more decades than he and I have been on this earth. To invite the Parliament to approve this before we even know who will be the recipient of this information is outrageous. One of the Minister's colleagues stood in this House this afternoon and proclaimed that it was wrong for a person to advocate the breaching of `an impending law'. That is a novel proposition which I have never heard before. But the Minister is inviting this Parliament to do something which I find offensive-to give access of information to a body that is not yet in existence. I smell a rat. I am delighted that the honourable member for Mackellar has moved the amendment. It may not be carried in this House but hopefully there will be sufficient numbers in the Senate who will realise how dangerous, sinister and thoroughly unacceptable this provision is. I hope they will toss it out, neck and crop. The CHAIRMAN —Order! The time allotted for the remaining stages of the Bill has expired. Question put: That the clause be agreed to. The Committee divided. (The Chairman-Mr Leo McLeay) Ayes . . . . . . . . . . . 72 Noes . . . . . . . . . . . 55 —— Majority . . . . . . . . . 17 —— Baldwin, P. J. Jones, BarryBeazley, K. C. Keating, P. J. Beddall, D. P. Kelly, R. J. Bilney, G. N. Kent, L. Blanchard, C. A. Keogh, L. J. Blewett, N. Kerin, J. C. Bowen, Lionel Klugman, R. E. Brown, John Lamb, A. H. Brown, Robert Langmore, J. V. Brumby, J. M. Lee, M. Charles, D. E. Lindsay, E. J. Charlesworth, R. I. McHugh, J. Chynoweth, R. L. Maher, M. J. Cleeland, P. R. Martin, S. P. Cross, M. D. Mayer, H. Cunningham, B. T. (Teller) Mildren, J. B. Darling, E. E. Milton, P. Dawkins, J. S. Morris, AllanDubois, S. G. Morris, PeterFatin, W. F. Mountford, J. G. Fitzgibbon, E. J. O'Keefe, N. P. Free, R. V. O'Neil, L. R. T. Gayler, J. Price, L. R. S. Gear, G. Punch, G. F. Gorman, R. N. J. Saunderson, J. Grace, E. L. Scholes, G. G. D. Griffiths, A. G. Scott, J. L. (Teller)Hand, G. L. Simmons, D. W. Hayden, W. G. Snow, J. H. Holding, A. C. Staples, P. R. Hollis, C. Tickner, R. E. Howe, B. L. Uren, T. Hurford, C. J. West, S. J. Jacobi, R. Willis, R. Jakobsen, C. A. Wright, K. W. Jenkins, H. A. Young, M. J. Adermann, A. E. Hicks, N. J. (Teller)Aldred, K. J. Hodges, J. C. Andrew, J. N. (Teller) Hodgman, W. M. Beale, J. H. Hunt, R. J. D. Blunt, C. W. Jull, D. F. Braithwaite, R. A. Lloyd, B. Brown, N. A. McArthur, F. S. Burr, M. A. MacKellar, M. J. R. Cadman, A. G. McVeigh, D. T. Cameron, Donald Macphee, I. M. Cameron, Ewen Miles, C. G. Cameron, Ian Millar, P. C. Carlton, J. J. Nehl, G. B. Coleman, W. P. Porter, J. R. Connolly, D. M. Reith, P. K. Conquest, B. J. Rocher, A. C. Cowan, D. B. Ruddock, P. M. Downer, A. J. G. Shack, P. D. Drummond, P. H. Sharp, J. Edwards, Harry Shipton, R. F. Everingham, P. A. E. Slipper, P. N. Fife, W. C. Spender, J. M. Fischer, Tim Sullivan, K. J. Fisher, Peter Watson, DavidGoodluck, B. J. Webster, A. P. Hall, Steele White, P. N. D. Halverson, R. G. Wilson, I. B. C. Hawker, D. P. M. Cohen, B. Smith, W. Humphreys, B. C. Dobie, J. D. M. Duffy, M. J. Peacock, A. S. Campbell, G. Cobb, M. R. Question so resolved in the affirmative. The CHAIRMAN —The question now is: That the remainder of the Bill be agreed to and that the Bill be reported without amendment. Question resolved in the affirmative. Bill reported without amendment. Adoption of Report and Third Reading Mr DEPUTY SPEAKER(Mr Mildren) —Order! The question is: That the report be adopted and that the Bill be now read a third time. Question resolved in the affirmative. Bill read a third time. Consideration resumed from 22 May, on motion by Mr Keating: That the Bill be now read a second time. Question resolved in the affirmative. Bill read a second time. Leave granted for third reading to be moved forthwith. Bill (on motion by Mr Hurford) read a third time. Consideration resumed from 22 May, on motion by Mr Keating: That the Bill be now read a second time. Question put. The House divided. (Mr Deputy Speaker-Mr Leo McLeay) Ayes ... 72 Noes ... 55 Majority ... 17 AYES Baldwin, P. J. Jones, Barry Beazley, K. C. Keating, P. J. Beddall, D. P. Kelly, R. J. Bilney, G. N. Kent, L. Blanchard, C. A. Keogh, L. J. Blewett, N. Kerin, J. C. Bowen, Lionel Klugman, R. E. Brown, John Lamb, A. H. Brown, Robert Langmore, J. V. Brumby, J. M. Lee, M. Charles, D. E. Lindsay, E. J. Charlesworth, R. I. McHugh, J. Chynoweth, R. L. Maher, M. J. Cleeland, P. R. Martin, S. P. Cross, M. D. Mayer, H. Cunningham, B. (Teller) Mildren, J. B. Darling, E. E. Milton, P. Dawkins, J. S. Morris, Allan Dubois, S. G. Morris, Peter Fatin, W. F. Mountford, J. G. Fitzgibbon, E. J. O'Keefe, N. P. Free, R. V. O'Neil, L. R. T. Gayler, J. Price, L. R. S. Gear, J. Punch, G. F. Gorman, R. N. J. Saunderson, J. Grace, E. L. Scholes, G. G. D. Griffiths, A. G. Scott, J. (Teller) Hand, G. L. Simmons, D. W. Hayden, W. G. Snow, J. H. Holding, A. C. Staples, P. R. Hollis, C. Tickner, R. E. Howe, B. L. Uren, T. Hurford, C. J. West, S. J. Jacobi, R. Willis, R. Jakobsen, C. A. Wright, K. W. Jenkins, H. A. Young, M. J. NOES Adermann, A. E. Hicks, N. (Teller) Aldred, K. J. Hodges, J. C. Andrew, J. N. (Teller) Hodgman, W. M. Beale, J. H. Hunt, R. J. D. Blunt, C. W. Jull, D. F. Braithwaite, R. A. Lloyd, B. Brown, N. A. McArthur, F. S. Burr, M. A. MacKellar, M. J. R. Cadman, A. G. McVeigh, D. T. Cameron, Donald Macphee, I. M. Cameron, Ewen Miles, C. G. Cameron, Ian Millar, P. C. Carlton, J. J. Nehl, G. B. Coleman, W. P. Porter, J. R. Connolly, D. M. Reith, P. K. Conquest, B. J. Rocher, A. C. Cowan, D. B. Ruddock, P. M. Downer, A. J. G. Shack, P. D. Drummond, P. H. Sharp, J. Edwards, Harry Shipton, R. F. Everingham, P. A. E. Slipper, P. N. Fife, W. C. Spender, J. M. Fischer, Tim Sullivan, K. J. Fisher, Peter Watson, David Goodluck, B. J. Webster, A. P. Hall, Steele White, P. N. D. Halverson, R. G. Wilson, I. B. C. Hawker, D. P. M. PAIRS Cohen, B. Smith, W. Humphreys, B. C. Dobie, J. D. M. Duffy, M. J. Peacock, A. S. Campbell, G. Cobb, M. R. Question so resolved in the affirmative. Bill read a second time. Remaining Stages Mr DEPUTY SPEAKER(Mr Leo McLeay) —The time allotted for the remaining stages of the Bill has expired. The question now is: That the remaining stages of the Bill be agreed to. Question resolved in the affirmative. Bill read a third time. Consideration resumed from 22 May, on motion by Mr Keating: That the Bill be now read a second time. Question resolved in the affirmative. Mr Adermann-I will not call for a division but I would like my vote to be recorded in Hansard as cast against this Bill. Mr McVeigh-So would I. Mr Adermann-We are not calling for a division. Mr DEPUTY SPEAKER(Mr Leo McLeay) —I make it clear to the honourable member that one person can have his name recorded; two members calling for their names to be recorded, as the honourable member for Groom should well know, means that there will be a division. I take it that only the honourable member for Fairfax wants his name recorded. Bill read a second time. The Bill. Mr CARLTON(Mackellar)(7.02) —I want to respond to the remarks made by the Minister for Immigration and Ethnic Affairs and Minister Assisting the Treasurer (Mr Hurford). We are talking about the transfer of jurisdiction of appeals on taxation assessments from taxation boards of review to the Administrative Appeals Tribunal. The concern that the Opposition expressed during the second reading debate on this legislation package was really that this represented a major change in the way that appeals on assessment are dealt with. It is derived from the recommendations of the Administrative Review Council of June 1983. It is timed to take effect from 1 July 1986. The legislation was introduced into the House of Representatives late last Thursday night. We have had very little time to examine what is a very complicated measure. It affects the rights of taxpayers in most fundamental ways. The Minister Assisting the Treasurer has given the most cursory set of replies, almost contemptuous replies, to the concerns that I raised here in the House and those also raised by my friend the honourable member for Denison (Mr Hodgman). Therefore, although we will not oppose this Bill here we are still of the view that it requires much closer parliamentary scrutiny. It really is the kind of Bill that at the very least should be laid on the table over the winter recess to be looked at carefully. Although this is the one measure of the whole package of 275 pages brought down on Thursday night for which an explanatory memorandum was available-we will concede the Government that, but it was the only one in respect of which an explanatory memorandum was available-it simply has not been possible since Thursday night to adequately consider the matter. It is just not sensible to have 275 pages of new tax legislation rammed through both Houses within the course of a couple of weeks. Mr Robert Brown —But it is good legislation. Mr CARLTON —I am prepared to take the word of the honourable member for Charlton on many, many things. The DEPUTY CHAIRMAN(Mr Mildren) —Order! I would rather the honourable member ignored it. Mr CARLTON —The honourable member for Charlton has made a point, Mr Deputy Chairman, which I think I am entitled to respond to, under Standing Orders. The DEPUTY CHAIRMAN —Order! Normally the honourable member is permitted to make his point when he seeks the permission of the Chair to address the Committee. Mr CARLTON —I understand that the honourable member for Charlton may well have a thought in a certain direction to which I would like to respond. I have the highest regard for the honourable member and I would be certain that the Bill had the merits that he suggests if I were certain that he had had an opportunity to read the whole of the Bill and the explanatory memorandum since Thursday night. I am not certain that he has. Therefore, I would like the honourable member to have the opportunity over the parliamentary recess to read the Bill and the explanatory memorandum in detail and perhaps to consult with external advisers, with people in the taxation business, lawyers and tax accountants, and with people in industry and commerce. I am not making a political partisan point here. I am really talking about plain common sense, because it is not in the interests of the Government or the Australian Taxation Office to have a major change of this kind rammed through without adequate consideration. That is all I am saying. I made that point this morning. One or two of the points that I made were answered satisfactorily by the Minister, but the rest were just dismissed. The central point that I made this morning, which the Minister did not address, was that there simply has not been adequate consideration in the Parliament of this measure. That is what I am saying. Therefore, we will persist in our efforts, in consultation with the leadership in the Senate, which often displays more gentlemanly qualities than the Treasurer (Mr Keating) does in this House. We will consult with the Government Ministers in the Senate through our Senate leaders. We will also consult with the Australian Democrats and with independent senators to see whether it is possible to take action to have this legislation laid on the table in the Senate or possibly examined by a Senate committee. We will examine both those possibilities and discuss them in a reasonable way. We do not seem to be able to get anywhere in this House in any reasonable discussion. This House is treated with total contempt by the Treasurer and the Government on these matters. We do not find that acceptable. We will take other steps. However, we will not deny passage of the measure through this chamber. We will not vote against it here, with those qualifications. Mr HODGMAN(Denison)(7.08) —This outrageous Hawke socialist Government legislation is a classic example of legislative assault and battery, if not rape, of the taxpayers of Australia. I agree with all the remarks of the honourable member for Mackellar (Mr Carlton). The legislation is being rammed through this Moscow-like Parliament with a haste which makes me suspicious. The honourable member for Mackellar has asked: Why does it have to be through before 1 July? The current situation is that an aggrieved taxpayer with all the disabilities to which I adverted earlier still has the right to go before a board of review or the Supreme Court in his or her State. From the Board of Review the taxpayer can go to the Supreme Court on appeal, the Federal Court of Australia on appeal, or, by leave, to the High Court of Australia. Under this legislation the whole system of boards of review goes and is replaced by the Administrative Appeals Tribunals, a taxation division thereof which may well contain former senior experienced deputy commissioners and senior officers of the Australian Taxation Office. So, there would be what would appear to the public as an appeal from Caesar unto Caesar. The honourable member for Mackellar described it as the poacher coming up from a hearing before the gamekeeper, or, as I put it, the culprit is put on trial before the arresting sergeant. These are vital matters affecting proprietary rights and basic natural justice. Why has the Government rushed this through in a totally unsatisfactory manner? As the honourable member for Mackellar said, we have only just got the explanatory memoranda at the end of the debate. I want to say to people who will read these debates in Hansard or comments about them in the professional journals of Australia, legal, accounting and the like, that if they think that we were a little off beat or misguided in our remarks they should remember that we had to debate these measures without even the explanatory memorandum. We debated these measures in the absence of a Treasurer (Mr Keating) who was not prepared to come into this chamber and debate them with the shadow Treasurer, the honourable member for Mackellar. We had to deal with the measures in the absence of a Treasurer, who was not prepared even to respond to questions and suggestions. The arrogance of this Treasurer has now reached intolerable limits. The Treasurer will have to learn that pride comes before the fall. His fall will be a very big one indeed. The DEPUTY CHAIRMAN(Mr Mildren) —Order! The time allotted for the remaining stages of the Bill has expired. Bill agreed to. Bill reported without amendment. Message from the Governor-General recommending appropriation announced. Adoption of Report and Third Reading Mr DEPUTY SPEAKER(Mr Leo McLeay) —The question is: That the report be adopted and that the Bill be now read a third time. Question resolved in the affirmative. Mr Hodgman —Mr Deputy Speaker, may I have my opposition recorded? Mr DEPUTY SPEAKER —The honourable member for Denison wishes to have his name recorded in opposition to the Bill. Bill read a third time. Motion (by Mr Peter Morris) proposed: That the House do now adjourn. Mr HALVERSON(Casey)(7.12) —Tonight I and a number of my colleagues will demonstrate the harsh reality of the Government's proposed fringe benefits taxation legislation-the reality versus the myth, a myth sold constantly to an unsuspecting people about a whole array of new taxes by a government propaganda machine that would make the infamous Dr Goebbles green with envy. Whilst my example is drawn from Victoria, the situation I will describe can be multiplied thousands of times over throughout the nation, including my own electorate of Casey. There is absolutely no doubt that this Government's fringe benefits taxation legislation is studded with anomalies, legal problems and inequities that render it one of the most iniquitous and poorly conceived and absurd pieces of legislation ever introduced in this Parliament. Its gestation period stems from the 1985 Budget. The Government has conceived a monster of Frankensteinian proportions. Among the many groups to be sorely disadvantaged will be the non-governmental charitable and welfare organisations which are otherwise tax exempt. These bodies, the demand for whose services always outstrips their ability to respond, struggle constantly to make ends meet. Under the fringe benefits taxation legislation they could be virtually destroyed. In times such as we have at present-during the first signs of an economic downturn aggravated by high levels of growing unemployment-such restrictive measures can only cause the disadvantaged to place much greater reliance on non-governmental welfare services. Consequently, the continuing financial viability of the considerable number of community welfare and charitable organisations will be severely threatened by the Government's new taxation policies. Coincidentally, the many public-spirited citizens on whom these organisations rely will be less willing to help when an ever-greater proportion of their donations will be absorbed by the administrative costs of the organisation through the extra clerical work demanded by the fringe benefits taxation legislation and, of course, through having to pay taxes when none had been required previously. Over the past 20 years or so national attitudes towards community service have changed dramatically with the numbers of young and enthusiastic members of the community prepared to volunteer their services for community welfare work declining markedly. Unfortunately, whereas it was once expected that many responsible and concerned citizens in the community would be involved in the various and extensive forms of community service, increasingly large numbers of these supporters now leave welfare to the Government and its various expensive-to-run and highly bureaucratised agencies. The fringe benefits tax will merely aggravate a process already in train. It is little wonder that these valuable and vital organisations speculate about whether they can survive. On the one hand, we in the Opposition cast doubts about the survival of such organisations while, on the other hand, we assure the Government that it will face inexorable and substantial increases in its already excessive appropriations for and expenditure on its social welfare bill. Inevitably, additional Government-sponsored welfare services will be required to compensate for those provided in the past from non-governmental sources. Mr Hodgman —It will cost them more. Mr HALVERSON —Of course it will cost the Government more. By way of specific example, I now mention the Victorian Council for the Mentally Retarded. The Council has one car-a four-year-old Camira which is used extensively by its Executive Director. The impact of the fringe benefits tax on the Council will be dramatic. In reality, this new tax is a dead charge on the charity dollar. On the one hand, the Government props up the organisation financially but, on the other hand, it proposes to recover funds through taxation. The car is used extensively and the director wears many hats. He travels to meetings most evenings, visits centres daily and travels to seminars at weekends. This is all voluntary work done in his own time. It is far cheaper to use a car than to hire a taxi. As an indication of the director's involvement and integrity, he pays separately for his own petrol and considers his contribution of over $1,000 a year a donation to the Council. The Council's budget is $2.2m annually, about $2m of which it receives from the Government. The shortfall of $200,000 is raised by the hard-working volunteers to whom I alluded earlier. Within the umbrella of the 108-member organisation- Madam SPEAKER —Order! The honourable member's time has expired. Mr GEAR(Canning)(7.17) —I would like to bring to the attention of the House a case of double standards in relation to the activities of the so-called Waste Watch Committee. In particular, I wish to refer to its activities and the cost to the public purse involved in the collection of information. This collection of publicity seekers has issued Press releases condemning the disbursement of funds by organisations such as the Australia Council as though there is some misuse of funds and the Government is directly responsible. That Committee knows that the Government does not make any decisions on who receives funds. Professor Horne, Chairperson of the Australia Council, said: Unionists, who comprise a substantial proportion of wage and salary earners, are as entitled as any other group in Australian society to enjoy the benefits of the Commonwealth Government's subsidy of the art. It is interesting to note that the art and working life program, whose grants the Waste Watch Committee criticises, was established by the Australia Council in September 1982 when the Fraser Government was in office and that significant grants to trade unions were made under it. The Waste Watch Committee has as its aim: Cut waste to cut taxes. It is necessary only to point out that it has not contacted any of the Ministers responsible for the spending that it criticises to offer advice on ways in which taxpayers' money can be saved. I believe that this shows that the Committee is not interested in playing a constructive role in saving money or lowering taxes. To illustrate this further and once again to show the double standards of the Waste Watch Committee, I refer to a report in the West Australian newspaper of 16 May by Lindsay Olney entitled `Ex P.M.'s Cost Nation $370,000'. The report stated: The Chairman of the Opposition's Waste Watch Committee, Senator Michael Baume (New South Wales), said he did not think that the bills incurred by former Prime Ministers would attract the Committee's attention unless there was some evidence of misallocation. What an amazing admission. The Committee criticised the granting of $400 for a peace mark march in Perth, yet said that $370,000 for ex-Prime Ministers is quite okay. It is my belief that the Waste Watch Committee has cost Public Service revenue more than it has exposed. This is because it uses the Freedom of Information Act and questions on notice to gather its information. Let me illustrate this by referring to one member of this House who has placed 432 questions on notice. In particular, I refer to question No. 1255, dealing with consultants to the Minister for Territories (Mr Uren). The cost of answering this one question was $6,500. This question was one in a series of 18 questions addressed to other Ministers. That same honourable member asked multiple questions of similar complexity on four other occasions. Assuming the cost to be about the same for those 86 questions involved, the amount is a staggering $559,000. It is quite possible that the cost of answering the other 346 questions on the Notice Paper when added to this amount would exceed $1m, and that is a conservative estimate. The honourable member concerned is the honourable member for Richmond (Mr Blunt), who recently called on Australians to dob in social security cheats as his way of showing concern for the poor. The most active member of the Waste Watch Committee with questions on notice is the honourable member for Mayo (Mr Downer) with 80 questions. Unlike the Waste Watch Committee, I have done something positive about this abuse by requesting the Minister for Finance (Senator Walsh) to require all questions on notice to be costed so that an accurate cost of any abuse of this research service can be identified. The other extravagance relates to requests under the Freedom of Information Act. Once again the honourable member for Richmond topped the number of requests with 47, over one and a half times that of second placegetter, the honourable member for Menzies (Mr N.A. Brown) with 30 requests. The cost of furnishing these answers can be up to $20,000. This is the amount charged by the Department of Employment and Industrial Relations. It is difficult to escape the fact that most of the information requested under the Freedom of Information Act, and questions on notice, is being used by the Waste Watch Committee for its political point scoring exercises. The waste watchers should be exposed for what they are, and that is a poorly talented group of political opportunists who must rely on the Public Service they criticise to give them the information they need for their grubby operation, and who display a breathtaking set of double standards in what they report. Mr CONQUEST(Hinkler)(7.22) —The fringe benefits tax has been introduced under a surreptitious principle of levying a tax, not against the recipient of the benefit, but against the employer. This ploy is a devious means of allaying a damaging political backlash against this Government. However, it is the employees who have not declared these benefits in the past, so any attack by the Government suggesting a rort on the taxation system is a charge of impropriety against every employee who has accepted a fringe benefit; a denigrating observation by the Hawke Labor Government that such employees are rorters. It is the work force that will bear the brunt of the financial impact, because it is more than reasonable to assume that benefits currently being enjoyed by employees will be reduced or eliminated. The belief being deliberately engendered in the minds of employees that they will not be financially affected by this ill-conceived legislation should be laid to rest now because it is erroneous. Nobody would suggest that all fringe benefits should be tax free. The Government has always had the power to redress this problem under current legislation. However, we must be cognisant of the fact that certain practices have been accepted over time as a necessary prerequisite to engage labour and to encourage a work force to remote areas. By a convention of reality, this has been an accepted principle for developing our extractive industries. This principle is most pertinent to the mining companies and their pioneering activities. These companies have outlayed considerable development funds to construct accommodation for the work force. In addition, they have substantially funded the necessary infrastructure which could have burdened the local authority. The housing for employees has never been considered as anything other than an operational cost. It is ludicrous to penalise the companies now for being willing to invest in this country's future and to provide jobs, and to now turn around and tax those concessions so necessary to operations. The Thiess Dampier Mitsui-TDM-company has demonstrated a most responsible attitude to its perceived obligation to provide for the welfare and social needs of the communities in which the work force resides. Now they are to be penalised for their efforts. At a time when this Government should be supporting an export enhancement program it is hell-bent on imposing a new range of unreasonable taxes. How does it equate this action with the dire need to correct a serious balance of payments problem? If fringe benefits taxes become law and conflict develops between employers and employees over the cashing out of fringe benefits there can be two possible scenarios. Employers may want to convert the non-cash benefit to an increased salary before tax. On the other hand the employees may want to continue receiving the fringe benefits or the equivalent value in cash after tax. In the first instance, for every $1,000 annual wage substitution the employer will have the added impost of on-costs resulting from leave loading, workers compensation and the like of around $300 minimum. In the second instance of a cash payment after tax to achieve the same equation, the employer could be up for around $2,000 gross annually to replace every $1,000 non-cash fringe benefit. TDM's area of concern in my electorate is the fringe benefit tax on remote area housing. Using the statutory formula method of averaging mining wages by statistical rent fraction by 60 per cent less employee contribution, and working on an average weekly wage of $649.20, a dwelling rent component of $28,495 and total private consumption expenditure of $134,274 yields a figure-assuming no employee contribution-of $4,298 prima facie taxable value which, over 9 months at 46 per cent, will incur a tax up to 31 March 1987 of $1, 482, to be paid by the company for each unit of remote area housing. I understand that many employees of this company pay $16 per week rent. That still means the tax on each of those units will be around $650. Extrapolating this latter figuring over all units, the housing component alone will impose a most significant annual cost on this company. This new tax is a levy on business before profit is achieved. It is confiscatory and is targeted in a class conscious manner in the belief that only the boss will be affected. That will not be so; it is the worker who will, in finality, bear the brunt of these measures. In the matter of isolated rural properties, I mention that a car is a social necessity in such areas; in fact, if some of the costs of fuel are charged against farm operational costs so be it, but one has to understand that these people do not enjoy the luxury of tax funded benefits available- Madam SPEAKER —Order! The honourable member's time has expired. Mr O'KEEFE(Burke)(7.27) —I will briefly mention tonight my astonishment at the discovery in the Opposition's housing policy, leaked in this Parliament last week, a proposal to abolish the first home owners scheme. I do not understand how anyone could come up with a suggestion like this. It simply shows a complete lack of understanding by the Opposition of the operation of the economy. It shows also a complete lack of understanding of the role of the building industry as a prime mover in our domestic economy. In my electorate of Burke over $5.4m has been paid out in the past three years in first home owners grants. There is a further $2m in the pipeline for young couples and the likes who are building new homes. Those who understand these things, the importance of the building industry and that the economy needs to be as finely tuned as the strings of a finicky guitar, would know that this proposal is absolute nonsense. The Leader of the Opposition (Mr Howard) revealed, once it was leaked, that they were talking in these terms. Mr Hand —Who leaked it? That is what we want to know. Mr Staples —Was it a wet or a dry? Mr O'KEEFE —That is an excellent question raised by my colleague the honourable member for Melbourne. I think it was document No. 9, but I do not know who No. 9 is. It was leaked by one of the wets, I think the Leader of the House (Mr Young) said, who came from the dries. One of the comments made by the Leader of the Opposition when he suddenly had to defend this proposal was that the Opposition was not planning to scrap it; it was simply planning to have the money that otherwise would have been first home buyers grants given to the States as untied grants for housing. All I can say about that is that to give the Queensland Government, for instance, money in any sort of untied way and expect that that would usefully find its way through to first home buyers who need it to help an economy that needs a booming building industry is stretching expectations well beyond the limits of anything reasonable. My electorate stretches from Broadmeadows to Bendigo and from Craigieburn to Ballarat and has in it one of the fastest growing residential sections in Victoria. The first home owners scheme has been a principal element in the regeneration of an industry which had slumped to a record low of 95,000 new starts. It should be remembered that when this Government came to office the figure of 95,000 new starts per annum showed the depths to which this vital industry had sunk under the previous Government's administration. This Government, through the use of the first home owners scheme and other injections of funds into public sector capital works, has boosted the building industry so that the figure is now about 140,000 to 150,000 starts. The Government will continue to maintain that sort of activity in the industry. Mr Hodges —Tell us about interest rates. Mr O'KEEFE —The honourable member interjects about interest rates. That is very interesting because one ought to remember that he was part of a government which presided over the worst period of economic recession in this country since the Depression. He now tries to tell us how to administer the economy and how to run interest rate policy. Interest rates are tied to the honourable member's popularity-they are on the way down, and so is the popularity of the honourable member's Party. I conclude by saying that the proposal to scrap the first home owners scheme is nonsense. It is seen in the electorate as nonsense. Now we see the scurrying attempts to try to cover up the fact that the Opposition intended to scrap it. I bet that version No. 3 of the document again includes the first home owners scheme because the Opposition knows that it is a winner and it will stay a winner. Mr COWAN(Lyne)(7.32) —Today the Government imposed the gag on the taxation legislation that had been before the House. I certainly would like to have said something concerning the fringe benefits tax. In Question Time, both today and yesterday, the Opposition asked questions of the Treasurer (Mr Keating), who was embarrassed by the fact that he could not give replies. He was not able to give replies because the Government is suddenly finding that it is such intricate legislation that it is very hard to give a reply. This will mean that the Commissioner of Taxation must have tremendous discretion so far as these Bills are concerned. I am sure, from my travels around the country, that members of the Government do not understand the deep-seated concern about the tax Bills, the Australian Bill of Rights Bill and other pieces of legislation the Government is bringing before the Parliament. Some Government members will not be here during the life of the next Parliament. They do not understand how people are concerned about or affected by the legislation. The Australian people will not accept this. The questions that have arisen are an indication that the Treasurer and the Government have not done their homework. They do not have the answers to the questions. They forget that the effect of these Bills will be felt by the consumer-the very person they say they represent who needs a fair deal within the community. The wage earner, the unemployed and the pensioner are the ones who will suffer because of the imposition of these Bills. There has been tremendous opposition to the fringe benefits tax and there is a reason for this. It is very simple and it has been explained in this House time and time again. On every parliamentary sitting day new parts of the problem are raised. The answers to the problems are not given. The Government should wake up, think about these things, and tell the Treasurer to do his homework. I emphasise a matter that has been spoken of earlier this evening-the effect of the fringe benefits tax on farmers. They will be liable to pay taxation on certain concessions that they have granted to people who are assisting them to work their properties. Goodness gracious, it is hard enough today to get people to go on to a farm and work the hours that are necessary. The fact is that these taxes will eventually come out of the pockets of those poor people who are employed on the land. The other evening I attended a real estate agents dinner within my electorate. Mr Hollis —Ha, ha! Mr COWAN —The honourable member can laugh, but they are human beings and hard workers. They are the ones who are affected. If the honourable member had a property to sell, he would go to them and expect to get a fair return for the property. There were 40 to 50 real estate agents at that dinner, and it was said that each vehicle they use in their businesses will cost them between $2,500 and $3,000 a year. They will also have to submit quarterly returns, as I understand it, and they will have to deal with all the bookwork that is involved. We should remember the imposition of regulations, both Commonwealth and State, that businesses today must put up with. This is a further imposition upon them. Members of the Government can look serious. I know that members of the Opposition are serious, because we understand-one does not need to search very far to find out-what the effect will be upon the community. I refer also to the charities within my electorate and elsewhere-charities that are run by churches and social service groups within the community-and the taxation troubles the Government is imposing on these groups. What about the poor old pony clubs at which kids-good country kids and town kids-learn to ride horses? We now find that the pony clubs-not all, but some-will have to pay tax that they did not have to pay previously. I know that Government members believe in this policy. This is exactly what will happen. These charities and sporting clubs we have within our electorates will find that they have to put in returns. They will have to go to great trouble to do these things. The fringe benefits legislation is unacceptable, and the Government will find this out as time goes on. If it does not wake up to this, as with the Bill of Rights Bill before the Senate, which it should pull out tomorrow, if it wants to be returned to government it will find at the next election-- Madam SPEAKER —Order! the honourable member's time has expired. Mr CHYNOWETH(Dunkley)(7.37) —Today at Question Time a question was asked about prisoners receiving social security benefits in prison. I notice that the Minister for Social Security (Mr Howe) is present this evening. I trust that somehow or other he will be able to answer that question later. Tonight I rise to speak about something that I feel is very important and which I believe should be read into Hansard because many people in the community do not have access to the New England Journal of Medicine. I hope that over the next few nights I will be able to read into the record the Nobel Peace Prize lecture entitled `A Prescription for Hope`. It was written and delivered by Bernard Lown, MD. It is a slightly abridged version which was presented in Oslo, Norway, on 11 December. It reads: When Alfred Nobel drafted his final will in late 1895, thus providing this enduring and monumental legacy, the world was changed with anticipation and optimism for the 20th century. Mind and hand, the distinctive attributes of our species, were at last finding their intertwined fulfillment in science and technology. Science promised mastery of a hostile environment and an end to chaotic societal relations punctuated by war and brutality. Advancing technology augured unlimited potential for human power, inspiring a dream for an end to drudgery and for an age of abundance. The hope of a benevolent civilization was shattered in the blood-soaked trenches of the First World War. The ``war to end all wars'' claimed 16 million lives and left embers that kindled an even more catastrophic conflagration. Over the sorry course of 5000 years of endless conflicts, some limits had been set on human savagery. Moral safeguards proscribed killing unarmed civilians and health workers, poisoning drinking waters, spreading infection among children and the disabled, and burning defenseless cities. But the Second World War introduced total war-unprincipled in method, unlimited in violence, and indiscriminate in victims. The ovens of Auschwitz and the atomic incineration of Hiroshima and Nagasaki inscribed a still-darker chapter in the chronicle of human brutality. The prolonged agony that left 50 million dead did not provide an enduring basis for an armistice against barbarism. On the contrary, arsenals soon burgeoned with genocidal weapons capable of equivalent of many of thousands of World War IIs. The advent of the nuclear age posed an unprecedented question-not whether war would exact yet more lives, but whether war would preclude human existence altogether. Every historic period has its Cassandras. Our era is the first in which prophecies of doom stem from objectives scientific analyses. Nearly a quarter of a century ago, a study by American physicians concluded that medicine, which in past wars had mitigated misery and saved lives, would have nothing to offer after a nuclear war. This conclusion was extrapolated from the destruction wrought by blast, fire, and radiation on Hiroshima and Nagasaki. Astonishingly, nearly 40 years elapsed before scientists first discovered additional ecological consequences. Nuclear war, they found, could blanket the sky with smoke, dust, and soot, creating a pall of all-pervasive darkness and frigid cold. The impact on climate could last for several years and would not spare the Southern Hemisphere. But there is more. Since cities are enormous storehouses of combustible synthetics, raging firestorms would release into the air a Pandora's box of deadly toxins. When the dust, poisons, and soot finally cleared, another plague would be visited on the unfortunate survivors; high levels of ultraviolet light caused by depletion of atmospheric ozone would take an additional tall. This scenario may not constitute a complete appraisal of the dire biological and ecological aftermath. We know little or nothing of the synergistic effects on out fragile ecosystem of subfreezing temperatures, darkness, high levels of radiation, massive release of toxins, excessive ultraviolet emissions, and other events still unforeseen. Madam SPEAKER —Order! The honourable member's time has expired. Mr MILES(Braddon)(7.42) —This time last year Australians were treated to the charade of a tax summit, so-called by the Government-an idea grabbed by the Prime Minister (Mr Hawke) on the run from a creative journalist in Perth during the 1984 election campaign, when suddenly he became acutely aware that taxation was an issue but the Government had no policy; so the idea seemed attractive to him. In hindsight that summit could be best called the `Rocky Horror Tax Show' that revealed that neither option A, nor B, nor C was acceptable but, rather, option ACTU. Then, more than eight months ago, on 19 September, the Treasurer (Mr Keating) would have us believe that we obtained the unequivocal, irrefutable and most devastating tax reform ever carried out in Australia's history. Now, almost a year later, the tax cuts promised for 1 September are in doubt and the Government is divided and in disarray. But one thing is certain: The tax-raising measures are coming in on 1 July. The fringe benefits tax is estimated to net the Government coffers $320m in 1986-87 and $516m in 1987-88. How the Government is going to do this is now becoming painfully clear. It will extend the long arm of government into every private employment arrangement that exists in the country. We could liken it to a huge, powerfully generated, multi-headed vacuum cleaner that sucks the money from every nook and cranny. It will leave few untouched or unscathed. To illustrate the extent to which this uncaring, intrusive and big spending Government is prepared to go to gather in revenue to fund its extravagant programs, I give the following examples. A farm hand, who is often a family man with two or three children and a wife to care for, is hard-working and earns his wage of $238 per week. On the north-west coast of Tasmania that sometimes means driving a tractor in cold, wet and windy conditions, harvesting potatoes, carrots or cabbages. The work is tiring, arduous and vital for wealth generation for this country; yet if his employer gives him a few tonnes of wood to keep his family warm on cold wet winter nights, he is going to be taxed. He is caught under the sub-heading `Property Fringe Benefits' on page 36 of the booklet `Fringe Benefits Tax-a guide for employers', which states: A taxable fringe benefits arises where an employee is provided with property, free or at a discount by an employer. And wood is property of the employer. How far will this Government go in poking its nose into small, in-house arrangements between the farmer and his workers? Where do this Government's sticky fingers not reach when it comes to taxing people? This Government attempts to rip off the small, meagre side benefits given to farm workers whose disposable income is less than if they were on the dole. The disposable income for a man and wife on the dole with two children is $252 per week. The Treasurer (Mr Keating) has tried to make people feel guilty by referring to these arrangements as rorts. These dedicated, hardworking, genuine family people have never in their wildest dreams tried to evade or bypass the tax system. They are genuine, decent upstanding citizens who have an integrity beyond reproach, but that does not satisfy this dollar pirating Treasurer. He does not know what it is to get grease in his hair, dirt under his fingernails and skin off his knuckles in earning a living, yet he is happy to make the hardworking, productive farm worker and his employer suffer. Another area in which this fringe benefits tax will cause hardship, dislocation and frustration is in the maintenance of our national heritage. The National Trust is Australia's largest voluntary conservation organisation with 80,000 members. In Tasmania alone the Trust maintains, restores and protects 20 properties. This includes `Homehill', the residence of one of Australia's most distinguished families, the Rt Hon. Joe Lyons and Dame Enid Lyons. To maintain these heritage buildings the Trust has obtained the services of people to provide security in return for three or minimal cost accommodation. Many of these properties are in locations that would attract a high commercial rent and, therefore, the burden of this fringe benefits tax would weigh heavily on the resources of the Trust. I call on the Government to make amendments that will prevent this situation occurring. This is a debilitating, nitpicking and ill-conceived tax reform that is strongly opposed by the Liberal and National parties. Madam SPEAKER —Order! The honourable member's time has expired. Mr MARTIN(Macarthur)(7.47) —The Royal Guide Dogs for the Blind Association of Australia commenced a remedial dog scheme in 1976, following many requests from disabled people, elderly persons, parents of disturbed and sick children and institutions such as nursing homes who felt that the presence of a well behaved and devoted companion dog would break down social isolation, provide comfort and enjoyment and encourage trust, sharing and a sense of responsibility in caring for a fellow creature. Recognising the growing need for pet therapy dogs, the Guide Dog Association of New South Wales has developed this program further, establishing special kennels and employing a qualified instructor who is working full time on the training, careful selection and placement of these companion dogs which are to be known as PAT dogs, that is, pets as therapy. The training centre is on a five-acre property at Catherine Field, New South Wales, which is located within my electorate, just to the north of Camden. There are 10 existing kennels with play and exercise areas. Another 10 kennels are to be completed in the not too distant future. All New South Wales placements are handled through this facility. It was my great pleasure to attend that facility on Monday to have a look at the expansion that has taken place there. Quite frankly, it was an eye-opener. I do not think many people would realise the extent to which the Association has gone in New South Wales to provide first class facilities for the training of these dogs for pets as therapy and the great benefit this will have for the community in New South Wales generally. I pay particular tribute to Mr Roger Bush, the program manager of pets as therapy and his hardworking staff at the kennels. I wish them every success at the formal opening of the kennels in a couple of weeks' time by the Governor of New South Wales. It was also my very great pleasure on Monday of this week when I visited the Association's kennels, to present a cheque for $36,903 to the Guide Dog Association of New South Wales on behalf of the Government at the Association's Pet Therapy Centre at Catherine Field. The grant was one of five under the young Australia community service volunteers scheme. What exactly is that scheme? It is an innovative voluntary scheme that is part of the Hawke Government's Priority One: Young Australia strategy that aims to enable young people to develop self-confidence and new skills and perform useful community service on a completely voluntary basis. However, the scheme's future depends on the success of projects such as the project at Catherine Field, particularly in terms of community support and involvement and the benefit gained by the volunteers. The grant to the Guide Dog Association is for the development of a full time residential animal welfare community service project, aimed at developing volunteers' work skills, personal skills and community and lifestyle skills through their involvement in Animal Welfare Week, the establishment of animal awareness programs, the opening of a pet therapy centre and the conducting animal awareness programs at schools. The project co-ordinator who has been selected and appointed is Mr David Baker. I also extend my congratulations to him and wish him every success in the project as it gets underway. During my inspection of the facility, some of the problems that still exist for blind people who have seeing eye dogs and for people who use pets as therapy were brought to my attention. As we all know, in Australia generally, restaurants and other places allow guide dogs to accompany the people who use them to go into restaurants, use public transport, et cetera. Unfortunately, the problem that exists today is that the people who have pets as therapy or who have guide dogs have a card that they can carry around, but that card is signed only by somebody from the Association. It is felt that if the card carried more weight-if it had been signed by the Premier or the Attorney-General of the State concerned-it might open up a few avenues that are presently closed to people. Some restaurant owners are still worried about State health regulations, some taxi drivers refuse to have animals in their cabs, and so on. I feel that if we could approach this problem by introducing a national scheme or a national law, it might be to the greater benefit of those people. The pets as therapy program is an excellent program. I commend honourable members of this House to follow it up further, and, if they happen to be in the Camden area at any time, to drop in and have a look at the facility because I think it is an eye-opener. They would be quite impressed by the facility and by the training facilities that have been put in place by the Guide Dog Association of New South Wales. Mr SHARP(Gilmore)(7.52) —Next month, on 21 June, I shall be attending the opening of the Goulburn region's Life Education Centre mobile van. This will be the first of a series of three openings that will be carried out in the electorate of Gilmore during 1986. The second will be the opening of the south-west Life Education Centre van in Young on 14 July and, later on in the year, a van will be opened down at Nowra to operate throughout the Shoalhaven region. These Life Education Centre vans have come about through the efforts of hundreds of people who live within the electorate of Gilmore. The people who have raised hundreds of thousands of dollars have done so because they recognise, as do so many people around the world today, that the Life Education Centre technique of educating young children about the dangers of drugs are the best techniques for educating them in how to avoid becoming involved with drugs. Those hundreds of people who live within the electorate of Gilmore are trying to do something positive to overcome the risks that the children who live within their communities might come up against in the future-risks which might cause them to become involved in the drug business. The people who have raised all of that money have done so at great personal expense. They are ordinary working men and women who have carried out doorknocks. For example, I know that a doorknock was carried out in Cowra and I think $25,000 was raised in one day. In Young, dinners were held. In Nowra there were art exhibitions. I know that in one town the largest private employer asked his employees to donate a certain amount of money from their pay- packets each week. If the employees did that, the employer would match the equivalent payment from the employees. All of these methods have come about because people are worried about the drug problem in Australia and want to have something done about it. They recognise, as I do, that the drug problem is probably Australia's No. 1 social issue. It is the No. 1 social issue because of the lives that are lost and ruined; the amount of crime, in particular violent crime, generated by the people who need to steal in order to buy their drugs; and the tremendous amount of corruption because of the huge profits that can be generated from the sale and distribution of drugs throughout this country. I was in Thailand earlier this year, where the raw product to make opium can be brought for $5 a kilogram and on the streets of Sydney that $5 turns into a $1m a kilogram. Those are the huge profits that can be generated from the sale and distribution of drugs, which are being used to erode the very fabric of our society. It would be irresponsible of me to try to mention the names of individuals within the electorate of Gilmore who have worked to raise money for these three Life Education Centres. It would be irresponsible because I would be sure to miss out on somebody who had played an important role. Rather than mention individuals within the electorate, I pay tribute to the Reverend Ted Noffs who was the innovator of the Life Education Centres and who has been the driving force behind the establishment of these three mobile Life Education Centres that will soon be open in the electorate of Gilmore. I have been proud to be associated with these Life Education Centres. Through my involvement and the involvement of the State member for Goulburn, Robert Webster, we have been able to get these Life Education Centre committees up and running and we have done our bit to ensure that the young Australians who live in our electorates will have as much chance as possible not to become involved in drugs. I congratulate the hundreds of people within the electorate of Gilmore who have contributed in one form or another to the establishment of the three mobile Life Education Centres. I challenge every member of this House here tonight, and those members not in the chamber, to try to establish one mobile Life Education Centre in their electorate, because if that could be done the No. 1 social concern facing Australia would become a minor concern. Madam SPEAKER —Order! The honourable member's time has expired. Mr HOWE(Batman-Minister for Social Security)(7.57) —The honourable member for Dunkley (Mr Chynoweth) raised a question concerning some issues raised by the honourable member for Richmond (Mr Blunt) at Question Time today and I now provide some additional information. The question from the honourable member for Richmond, which implicitly suggested that people on remand in prisons are getting sickness benefits because of loopholes in the legislation, is a furphy. The loophole to which he referred forms the basis of our legal system; that is, that one is innocent until proven guilty. Since 1947, section 135THA of the Social Security Act has embodied this principle of law. If a person on sickness benefit has been convicted of an offence and imprisoned, no sickness benefit is payable for the period of the imprisonment. If a person on sickness benefit is placed on remand, however, sickness benefit may be paid if other conditions of eligibility are met; for instance, by continuing coverage under a medical certificate. No prisoner, on remand or otherwise, is eligible to receive unemployment benefits because he or she could not comply with the work test requirement of being available for work. However, special benefit may be granted to prisoners on remand where they have dependants or face severe hardships through financial commitments. I point out to the honourable member for Richmond, who I see is now in the House, that remand periods for most prisoners are short. Claims have been made that some prisoners are receiving benefits and those claims have been subject to investigation by officers of my Department for some time. Indeed, for several months the Department has been investigating claims that a number of people who are not eligible are receiving benefits. That investigation is very comprehensive and goes not only to the question of prisoners in New South Wales but generally throughout the Commonwealth. I would have thought it would have been known to the honourable member that those investigations have been proceeding. I might say that we are not without our difficulties in pursuing those investigations, because obviously we are dealing with State governments and State responsibilities. In the case of New South Wales, the progress of these investigations has been inhibited by the difficulties in gaining access to prisoners' files held by State governments. Madam SPEAKER —Order! It being 8 p.m., the debate is interrupted. Mr HOWE —Madam Speaker, I require that the debate be extended. Madam SPEAKER —The debate may continue until 8.10 p.m. Mr HOWE —For instance, the New South Wales Privacy Committee has questioned giving my Department access to prison files because of what it sees as a possible breach of civil liberties. Despite these difficulties, the Department's inquiries and investigations are continuing and a report on this matter should be delivered to me shortly. Once it is completed, all issues concerning prisoners receiving social security payments within that context will be reviewed. Finally, the whole tenor of the Act and its administration rests primarily with seeking to ensure the welfare of the dependants of remanded prisoners who have not yet been convicted and who may, in fact, be found not guilty. On the question of those remanded in relation to the so-called Milperra massacre, I must point out that the case itself and the length of remand of those involved are an extraordinary aberration in the legal history of this country. It is a unique occurrence. Given that the trial is now under way and my Department's policy is one of confidentiality, I do not propose to go into specifics about individuals receiving sickness benefits. In summary, the issue that was raised earlier today is not new in any real sense. Presumably previous governments have administered the Act in a consistent way. The particular example raised is one that has a great deal of public interest associated with it. However, one cannot treat any individual's circumstance without regard to the implications of consistency of application of legislation across the board. That is what the Department has sought to do. I have seen several documents of which I was certainly not aware. These have been brought to my attention largely as a result of the question raised and the information that was in the possession of the honourable member for Richmond. Those documents indicate a legitimate concern on the part of the Chief Medical Officer of the New South Wales prison system. Madam SPEAKER —Order! The Minister's time has expired. As no other Minister has risen, the Minister may continue. Mr HOWE —They also indicate a concern on the part of an officer in my Department. Essentially it is not a question of there being a loophole in the law; the law is clear. There are some questions which should properly be the subject of review and I thank the honourable member for Richmond for raising the issue. I will ensure that the narrower question which was raised today and which I did not hear completely at the time the honourable member raised it is thoroughly investigated. I would like it to be investigated in the context of the investigations that are being carried out generally in my Department into the possibilities of fraud associated with social security payments within the various prison systems in Australia. Madam SPEAKER —The debate having concluded, the House stands adjourned until 10 a.m. tomorrow. House adjourned at 8.04 p.m. The following papers were deemed to have been presented on 28 May 1986: Banks (Shareholdings) Act-Regulation-Statutory Rules 1986, No. 107. Canberra College of Advanced Education Act-Statute-No. 58-Courses and Awards Amendment 1986. Remuneration Tribunals Act-Remuneration Tribunal-Determination-1986/4-Part-time holders of public offices. The following answers to questions were circulated: (Question No. 2888) Mr Tickner asked the Special Minister of State, upon notice, on 29 November 1985: (1) What action is taken by the Australian Electoral Commission to encourage people to become entitled to electoral enrolment to enrol. (2) What has been the level of funding to any existing program of this nature since 1979-80. Mr Young —The answer to the honourable member's question is as follows: (1) The Australian Electoral Commission undertakes a range of educational activities designed to increase public awareness and understanding of electoral matters, including the obligation to enrol. Such activities include publication of brochures, posters and other material, mounting public displays at shows and shopping centres, visits to schools and maintenance of the Aboriginal Electoral Information Service (formerly the Aboriginal Electoral Education Program). The latter was initiated in 1979 and now operates in the Northern Territory, Western Australia, South Australia and Tasmania. As enrolment is only one aspect of the aim of these activities, no separate costings can be given. The Commission has, however, undertaken specific programs to encourage enrolment. Three major media campaigns have been conducted-the first in 1983 was directed at 18 year olds; the second, in 1983-84, was a general campaign to encourage enrolment; and the third immediately preceded the 1984 election. In addition, habitation reviews, which are required by the Commonwealth Electoral Act to be undertaken at least once in every two year period, are intended to ensure the accuracy of the rolls by fostering new enrolments and transfers of enrolments. Costs for these activities are given below. The Commission also utilises lists of recently naturalised citizens from the Department of Immigration and Ethnic Affairs in increasing enrolments. If the relevant Divisional Returning Officer finds that a new citizen is not already enrolled, that citizen is sent a letter containing the information about electoral rights and responsibilities, and an enrolment card. There is no cost to the Commission for the Department of Immigration and Ethnic Affairs' service in supplying the lists and, as subsequent work by the Divisional Returning Officers is part of their general duties, no separate costs can be given for this program. (2) Costs for specific programs: Year 1983 18-year-old enrolment campaign 1983-84 enrolment campaign 1984 pre-election enrolment campaign Habitation reviews $ $ $ $ 1979-80... . . . . . . 1,795,480 1980-81... . . . . . . 1,547,897 1981-82... . . . . . . 1,116,691 1982-83... 59,864 . . . . 1,961,744 1983-84... 72 2,949,002 . . 2,461,009 1984-85... . . 170,839 1,098,197 826,404 1985 to 15.5.86... . . . . . . 102,232 (Question No. 3112) Mr McVeigh asked the Minister for Defence, upon notice, on 29 November: (1) Is it always a requirement for an indemnity guaranteeing payment of damages to Commonwealth property and injuries to Commonwealth personnel to be signed on behalf of the requesting State by the Premier of the State which seeks the use of the property and personnel for the purposes of arresting drug traffickers and the seizure of plants grown on drug farms; if so, was the Queensland Premier required to sign such an indemnity in the instance of the recent Charleville drug farm raid. (2) Is he required to approve the use of Commonwealth equipment and personnel in such cases; if so, was there any delay in his approval in the Charleville drug farm raid which could have resulted in unnecessary risk to life and the opportunity of people to escape from the drug farm. Mr Beazley —The answer to the honourable member's question is as follows: (1) The requirement for an indemnity guaranteeing payment of damages to Commonwealth property and injuries to Commonwealth personnel in regard to aid to the civil power by the Australian Defence Force is determined in each case by consultation with the appropriate financial and legal authorities. In the case of the Charleville drug farm raid, it was determined that indemnification of the Commonwealth by the Queensland Police was appropriate. Accordingly, the Queensland Police Commissioner signed, on 5 November 1985, a document of indemnification for that operation. The requirement to sign this indemnification delayed the operation, without detriment, for twenty-four hours. (2) The Minister for Defence is not required, in all cases, to approve the use of Commonwealth equipment and personnel in the event of Defence Force aid to the civil power. The Minister's approval is required in situations where there is a likelihood that Defence Force personnel may be required to use force. Where there is no likelihood of Defence Force personnel being required to use force, approval is given by the Chief of the Defence Force. In the case of the Charleville drug farm raid, approval was correctly given by the Chief of the Defence Force, and there was no delay in approval. (Question No. 3405) Mr Conquest asked the Minister representing the Minister for Industry, Technology and Commerce, upon notice, on 14 March 1986: What are the (a) sources and (b) amounts of Commonwealth revenue derived from 1 litre of (i) motor spirit, (ii) diesel fuel and (iii) aviation fuel. Mr Barry Jones —The Minister for Industry, Technology and Commerce has provided the following answer to the honourable member's question: There are several sources of Commonwealth revenue from the production and marketing of petroleum in Australia. These include excise taxes on the sale of indigenous crude oil and LPG, excise taxes on petroleum products, royalty and licence fees paid by producers of petroleum from offshore areas as well as company tax paid by producers, refiners, marketers, retail outlets, etc. The amount of these taxes that can be attributable to each litre of petroleum product will vary with the type of product, the proportion of imports of crude oil and petroleum products, the cost of oil, as well as between each producing area in Australia, and the method chosen to allocate joint costs, such as the cost of crude oil, to each petroleum product. Indicative estimates of some of the cost components for petrol have been prepared by the Department of Resources and Energy, based on the Import Parity Price set with effect from 1 May 1986, and the product excise rates expected to be applicable from mid May 1986. On that basis, Commonwealth excise and royalty receipts from a litre of petrol would amount to approximately 26 cents. As noted above this amount will differ between each petroleum product. While diesel fuel attracts the same rate of product excise as for motor spirit, certain users are eligible for partial or full rebates of their excise. Further, the contribution of the crude oil excise and royalty to the cost of a litre of diesel would probably be lower than for motor spirit, reflecting the lower proportion of indigenous feedstocks used in the production of diesel. The total figures are not available for diesel fuel and aviation fuel however excise and customs duties on the refined products, expected to be applicable from mid May 1986, are: Motor spirit-19.2 cents per litre. Diesel fuel (unrebated)-19.2 cents per litre. Aviation gasoline-16.163 cents per litre. Aviation turbine kerosene-15.354 cents per litre. (Question No. 3432) Mr Lloyd asked the Minister for Defence, upon notice, on 19 March 1986: (1) Will proposals utilising airships be eligible for the supply of Airborne Surveillance Warning and Control Systems. (2) When (a) the proposals be considered, and (b) a decision be made. Mr Beazley —The answer to the honourable member's question is as follows: (1) There are several studies underway in the Department of Defence examining the potential contribution of various sensor systems to airspace surveillance and control in Australia. The systems being evaluated include airships, airborne early warning and control aircraft, and ground based systems such as over-the-horizon radar. A Request for Proposal (RFP), specifically for Airborne Surveillance Warning and Control Systems and explicitly mentioning airships, was issued by my Department on 13 December 1985. The information expected to be made available in the responses to the RFP will help considerably in judgments on how best to develop further our capabilities in airspace surveillance and control. (2) (a) Detailed consideration of the responses to the RFP will start after the closing date of 28 May 1986. (b) Decisions on surveillance and control systems will be made progressively following the completion of the various studies. The possible way ahead for, specifically, airborne systems should become clearer within about a year, when there is the prospect that we would place funded studies with industry to develop tenders. It is too early to tell whether we shall pursue airships in these funded studies. (Question No. 3719) Mr Jacobi asked the Attorney-General, upon notice, on 10 April 1986: (1) Further to his answer to my question No. 728 (Hansard, 30 November 1983, page 3130) concerning the Victorian Penalty Unit System, has the review of the Crimes Act 1914 been completed. (2) If so, what recommendations were made for changes to the Crimes Act to provide for the adoption of (a) a similar penalty unit system and (b) an alternative penalty structure whereby offences would be categorised with a penalty being provided for each category of offences. Mr Lionel Bowen —The answer to the honourable member's question is as follows: (1) No. The review of the Crimes Act 1914 referred to in the answer to question No. 728 (Hansard, 30 November 1983) is being conducted by his Honour Mr Justice Watson. His Honour's terms of reference do not require him to report until June 1987. (Question No. 3767) Mr Downer asked the Minister for Social Security, upon notice, on 14 April 1986: What (a) were the amounts paid to and (b) projects undertaken by Mr Phillip Adams and Mr Rod Cameron, their associated companies or principals of these companies, for work on behalf of the Minister's department or authorities under the Minister's control in (i) 1983-84, (ii) 1984-85 and (iii) 1985-86 to the date of answering this question. Mr Howe —The answer to the honourable member's question is as follows: (a) (i) $5,912.00. (ii) 28,830.16. (iii) $90,086.07. (b) All payments made relate to advertising charges for the National Amnesty Campaign, Handicapped Children Campaign and the Assets Test Campaign, levied by Monahan, Dayman Adam Ltd, the Government's placement agency for radio advertising. (Question No. 3830) Mr Coleman asked the Minister for Defence, upon notice, on 1 May 1986: (1) Has the Department received a request from the New South Wales Government for the re-siting of the Sydney Heliport at Garden Island. (2) If so, what was the response to the request. Mr Beazley —The answer to the honourable member's question is as follows: (1) I have received a request from the New South Wales Government concerning the re-siting of the Sydney Heliport on to the northern end of Garden Island. (2) My initial response outlined the difficulties I saw with using the site-it is already congested; it is a secure area; and there will possibly be additional noise problems. To assist the New South Wales Government with their investigations I agreed that officers from my Department would participate in a joint Commonwealth/State working party to advise on the feasibility of the Garden Island site. Following a full review of the situation I will consult with my colleagues before providing a final response to the New South Wales Government.