Wednesday, 17 September 1986 Madam SPEAKER (Hon. Joan Child) took the chair at 10 a.m., and read prayers. Mr YOUNG(Port Adelaide-Leader of the House)(10.00) —I move: That, unless otherwise ordered, the following amendment to standing order 112 be adopted for the remainder of this session: Petition to be lodged with Clerk Standing order 112 be amended to read- 112. Every petition shall be lodged with the Clerk by 5 p.m. on the working day previous to the meeting of the House at which it is proposed that it be presented. Standing order 112 currently requires that every petition shall be lodged with the Clerk at least three hours previous to the meeting of the House for which it is proposed that it be presented. With the recent dramatic increase in the number of petitions being lodged, it has become increasingly difficult for the Table Office to check petitions for certification and to prepare the announcement within the lodgment cut-off time allowed by the standing order. The average number of petitions per sitting day has increased steadily over the last decade-from 25 in 1975 to 45 in 1985. At the autumn sittings of this year the daily average rose to 52 petitions per day, but for the first week of these Budget sittings the daily average rose to 148. Yesterday 214 petitions were lodged and the system was finally unable to cope. By moving this motion today I hope to provide some temporary relief for those involved in processing petitions. If, as appears likely, the current trend continues or worsens, a more permanent solution may have to be pursued. In any event, this and other problems related to petitions have been raised by the Standing Committee on Procedure and will be further canvassed when the Committee's report is debated in the House later in these sittings. Mr SINCLAIR(New England-Manager of Opposition Business)(10.02) —Whilst this matter is raised as a matter of procedure, the reality is that the Government has made such a mess of running the country that people naturally are resorting to every possible process in order to register their complaints. It really is appalling that the average citizen finds himself almost unable to get through the obfuscation that the Government creates around listening to the cries of ordinary Australians. The whole problem is that all that citizens can do is to send in petitions. So what is the Minister for long lunches doing? He comes into the House today and says: `Let us shovel those petitions off. We do not want to read them. We are not interested in them. We are not worried about the average Australian. We live up here in the glorious obscurity of Parliament House. Everybody out there in the real world can try the best they can'. But what chance have they got? The Government says: `No, you have to put your petitions in earlier. We are not going to consider them. We will not act on them. They are not going to be considered by us'. No Minister who has any responsibility for the running of government has a chance on earth of considering anything at all that citizens say. What has happened is that the Special Minister of State (Mr Young) has come in here this morning, all pious and terribly sombre, and has said that this is really just a matter of implementing the recommendations in the report of the Standing Committee on Procedure. He has played it down. He has said we should not worry about it, that it does not matter. But the reality is that petitions are one of those sacred rights of the people of Australia. It is one means by which the average Joe and the average Mabel, if they have a bit of concern, can hopefully get their real pleas-I emphasise that a petition is a plea from the average person-through to big government to ask: `Please will you help me?' This Government is so remote and lacking in concern about the average citizen that it is seeking to change the procedures and play them down so that nobody will know what is going to happen to them. I accept the reality that there are difficulties in the procedures. I hope that when the Procedure Committee is considering the matter of petitions it finds some way to get through to the steel-hearted soul of the Special Minister of State. The Prime Minister (Mr Hawke) might have no heart. We know that he has no common sense or leadership. But surely the Special Minister of State, with his steel-hearted physiognomy, will finally accept that, when those people out there in the community want to plead to get some of the malfunctions of their Government corrected, they want to be able to get through to him and have him listen to them. The Opposition will not oppose the change but, for goodness sake, I hope that the Government realises that petitions really express the increasing despair of the average Australian at the morass in which he finds himself, whether with the fringe benefits tax, the downgrading in our AAA borrowing rating, or the problems of the Minister for Immigration and Ethnic Affairs (Mr Hurford) trying to have his name blazoned across the nation through radio stations in his own State or elsewhere-or was it perhaps the Casey or John Laws program? The reality is that the Government has to listen to people. The reality of this move is that the Government once again has had registered the concern of a lot of people about the direction in which Australia is going at present. We all know what the result will be when the next election comes around. In the meantime, people are trying to make sure that they register with the Government that there is a need for change. We accept for the time being the adoption of this sessional order. However, we believe it to be more appropriate that the Government listen to the pleas of the people of Australia. If it did so, hopefully it would change dramatically most of its present policies. Question resolved in the affirmative. (Budget Debate) Debate resumed from 16 September, on motion by Mr Keating: That the Bill be now read a second time. upon which Mr Carlton had moved by way of amendment: That all words after ``That'' be omitted with a view to substituting the following words: `whilst not opposing the passage of this Bill, the House condemns the Government for- (1) the failure of the Budget to tackle Australia's fundamental economic problems, namely: (a) the record and rising level of overseas debt; (b) excessively high levels of government spending and taxation; (c) an inflation rate 4 times the average of our major trading partners; (d) interest rates once again approaching 20%; (e) a wages policy that does not take account of the capacity of individual enterprises to pay, and (f) the pernicious effects of the anti-business, anti-investment taxes such as the capital gains tax and the fringe benefits tax, and (2) the loss of Australia's AAA international credit rating following the failure of the Budget'. Mr SLIPPER(Fisher)(10.07) —It will not come as a surprise to those listening to know that the National Party of Australia does not support the Australian Labor Party's 1986-87 Budget proposals. It is obvious that we are not being negative, as we cannot back something which fails to meet the needs of contemporary Australia. The Leader of the Opposition (Mr Howard) mentioned that the National Party and the Liberal Party of Australia in government would implement six major changes of direction to turn around the Australian economy. He referred to the need to reduce government spending, taxation and union power, and to provide incentive for employees, to encourage overseas investment and to improve our transport and communications systems. I wholeheartedly back what the Leader of the Opposition has said. People throughout my electorate of Fisher will be hit hard by what can only be described as the Keating-Hawke tax and kick Budget. There is only a token gesture of cutting expenditure while large sections of the community have been hurt. There is a general consensus-if I might be excused for using that much discredited word-that the Budget has done little to address the long term problems facing Australia. It is a case of too little, too late. Mr Gear —I take a point of order. We are debating a change to the lodgment of petitions. The honourable member has said nothing about that. Madam SPEAKER —Order! I am afraid that the honourable member has not been listening. I have already put that question and it has been passed. We are now considering appropriations. Mr SLIPPER —The honourable member is still asleep. It is too early for him. Let me give examples of what some groups have been saying about the Budget effort of the Treasurer (Mr Keating). The Australian Merchant Bankers Association expressed deep disappointment that the Government had failed to keep to its trilogy commitment to control the growth of public sector spending. The Master Builders Federation of Australia Inc. expressed doubts about the Government's ability to meet the deficit target. The Australian Federation of Construction Contractors accused the Treasurer of hypocrisy. Some of the most perceptive remarks came from the Macquarie Bank Ltd. It said that a number of severe reservations may be raised about the Budget and its figuring. The bank has correctly stated: Overall the deficit has been achieved in a less than satisfactory way with too much reliance on tax increases rather than expenditure restraint. This Labor Government is in deep trouble. It knows that. One of Australia's most respected political commentators, Wallace Brown, saw fit to head his column in the Courier-Mail of 30 August with the words: `A long, hard road to sell the Budget'. Mr Cobb —Hard labour. Mr SLIPPER —It is hard labour, as the honourable member for Parkes points out. How right Wallace Brown is. One cannot sell the unsalable. Just what has the Budget achieved? The time-honoured socialist trilogy of higher tax and higher inflation, and even higher levels of unemployment will certainly result. On the taxation side of the ledger, Australians should now be aware that the Government's increased Medicare and fuel levies-these are more broken promises-and sales taxes on goods such as flavoured milk, fruit juices and other items, will quickly erode any anticipated benefits from Labor's delayed taxation cuts. It is little more than one step forward and two steps back. The 10 per cent sales tax on flavoured milk and fruit juices amounts virtually to a tax on the health of the children of Australia, who are the main consumers of these products. Road users especially have been hijacked by this Government, with over 60c in every dollar spent by them now going into the Government's coffers. Fuel excise has been increased from about 6c per litre to almost 24c per litre while at the same time Labor has steadfastly refused to pass on the large decline in world oil prices. The new 3c per litre levy on petrol and diesel fuel will reap a further $625m for the Government. Where will it all end? The Treasurer has the distinction of building on his record as the highest taxing Treasurer in Australia's history. His fourth Budget will collect some 25.5 per cent of gross domestic product in tax, compared with 25.2 per cent last year and 25 per cent in 1984-85. For the second year in succession, the Government has broken its promise not to increase the total tax take. Labour will now gain an extra $1.4 billion in added taxation revenue this year. In addition, Australia's inflation rate will remain significantly higher than that of our major trading partners. In the June quarter it was more than treble the Organisation for Economic Co-operation and Development average, and more than 16 times that of our main trading partner, Japan. The Budget is not likely to improve this situation. Our unemployed also received more bad news, with the Treasurer admitting that unemployment was most likely to rise during 1986-87, with Australia's youth hardest hit. In some parts of my electorate about 1 in 3 young people have had to join Labor's dole queues. Mr Cobb —A tragedy. Mr SLIPPER —It is a tragedy for the young people of Australia. Another aspect of the problem is that the average duration of unemployment among full time workers has increased from 40.4 weeks in June 1983 to 55.4 weeks in June 1986. This Government simply does not have the answers and the Budget can be described only as an abject failure in almost every respect. Our dropping dollar is set to join the ranks of dubious currencies such as those of Ethiopia, Argentina and the Monopoly board. The London Financial Times was quick to see through the Keating rhetoric with a front page story on 21 August headed `A$ slides on doubts over budget figures'. The article stated: Initial market enthusiasm for the . . . Budget turned sour yesterday as scepticism grew over the Government's economic forecasts. Government expenditure under the Prime Minister (Mr Hawke) and the Treasurer has increased in real terms by 3.9 per cent a year, reaching mammoth proportions. The Government's own rubbery and over-optimistic figures estimate total Budget outlays will be $74.1 billion compared with actual spending in the previous year of less than $70 billion, an increase of 6.9 per cent. On the other hand, the Opposition is committed to a spending freeze during its first three years in government. As the Leader of the Opposition said, our policy on restricting government expenditure will make possible the complete removal of the Budget deficit, a reduction in the Commonwealth's overseas debt and a reduction in the total tax burden. Compare this with Labor's record of more spending, more debt and more tax. Since Federation all governments had allowed Australia to accumulate a total foreign debt of less than $23 billion until Labor came to office. With less than three years of irresponsible Labor administration this almost trebled to $65 billion in the last year. It is tipped that in 1986-87 our foreign debt will balloon to a figure in excess of $90 billion. That is more than $6,000 for every man, woman and child in Australia. Nothing much has been done to boost exports, and Labor's fringe benefits tax, capital gains tax, and superannuation tax will remain, along with the vicious assets test on our senior citizens. There is no longer any reward for initiative, enterprise and hard work. Clearly, Labor has given the sign that it cannot properly manage the Australian economy. As the Leader of the National Party of Australia (Mr Sinclair) stated following the Budget: Keating . . . displayed the death rattle of a government with no hope, no ideas and no future. The Hawke-Keating Budget is a fraudulent document, based on an excess of optimism, fairy tale predictions, unrealistic expectations, and the desire to trick the public. The Prime Minister and the Treasurer stand condemned for their duplicity and deceit. Mr MARTIN(Macarthur)(10.17) —The honourable member for Fisher (Mr Slipper) obviously subscribes to the view that one should never let the facts get in the way of a good story. He must be one of the only honourable members in this chamber who cannot see the benefits that will flow to the Australian people from the Budget brought down by the Treasurer (Mr Keating). I will go quickly to some points to illustrate what I mean. Time and again we hear those on the other side say that this is a deceitful Budget, that the information provided in the Treasurer's estimates in the Budget generally are based on rubbery figures, rubbery assertions, and so on. That is nothing but wishful thinking on the part of those opposite. If one looks at the proud record of this Government over the last three years under this Treasurer one will see that those statements amount to nothing more than hot air. I seek leave to table a document which indicates a particular point I wish to address. Leave granted. Mr MARTIN —This document looks at the trilogy the Government put in place over the last three or four years. It clearly indicates that we have made one error, and that is in a projection for the 1986-87 Budget. I refer to the increase in tax revenue as a proportion of gross domestic product. The 1984-85 outcome was projected to be 25.3 per cent. It was met under our trilogy of commitments. In the 1985-86 Budget, 25.2 per cent was budgeted for; the actual outcome was 25 per cent. The projection was met. For 1986-87, 25 per cent is projected, and this is the only time under the trilogy that our commitment will not be met. It will miss by a miserable 0.5 per cent. If we look at the reductions in the proportion of GDP over the life of the Parliament, we see that the outcome in 1984-85 was 3.2 per cent. In the 1985-86 Budget the projection was 2.1 per cent and the result was 2.5 per cent. We have budgeted in the 1986-87 Budget for 1.4 per cent. The deficit is the most important and crucial factor here. The deficit in 1984-85 was $6,746 billion. Honourable members must not forget that we are talking about a deficit that has fallen from the $9 billion plus inherited from the former Treasurer, the Leader of the Opposition (Mr Howard), when he had the reins of power, to $6.74 billion. That says something about our achievements in our very first year. In 1985-86, the outcome was $5,726 billion. What about the outcome predicted for 1986-87? The deficit projected in this Budget is $3.5 billion. Progressively, we have seen the economic policies of this Government, of this Treasurer, take the deficit from the $9 billion we inherited from the present Opposition down to a predicted $3.5 billion in 1986-87. That is based on very real figures and the conservative estimates that have been built into this Budget, not on rubbery or inflated figures. They are conservative estimates that the economists in the newspapers of Australia, in the banks and in the private sector are starting to realise are valid statistics. That leads to a consideration of how the Budget has been received. We have heard in this place and in other places-the Prime Minister (Mr Hawke) gave our caucus a rundown of the reception that he has received while going round Australia-that the Budget has been wonderfully received. The day after the Budget, the Australian Financial Review described it as a `remarkable Budget'. It said: The Treasurer, Mr Keating has produced a remarkable Budget. He has met the most optimistic of market expectations, maintained a high level of welfare spending, confounded many of the criticisms which the Opposition had signalled in advance and taken the very real political and economic gamble that his measures might not be fully effective in time to save Labor at the next election. But it is also economically responsible and politically honest. That sums it up. That is a very good reaction to the Budget. What about the mob on the side? As usual, when we give the opportunity to the Leader of the Opposition to tell us what Opposition members would do and what their alternative Budget strategy is, he says that they will repeal the capital gains tax, the fringe benefits tax and all those other things. Honourable members opposite say that they will get away from import parity pricing for oil. The honourable member for Fisher mentioned that a minute ago. He said that we should get away from that, that we should have passed on all the oil revenue decreases that the Australian people have come to expect. That is just great. It is fabulous to do those sorts of things. How will the Opposition pay for all those programs? There is the four-point plan referred to by the honourable member for Bennelong (Mr Howard) yesterday and the nine-point plan which the National Party had some months ago, which was expanded to an 11-point plan and then to a 14-point plan. It is probably a 150-point plan by now. But where will the money come from? Where will the Opposition find the dollars to pay for all these programs that are going to save the world? Opposition members are talking about dropping the tax rates even lower than the Government proposes. They talk about a flat tax of 30 per cent, and I even read somewhere about a tax of 24 per cent. How will they pay for all the programs that they still believe they will put in place? It cannot be done. We are waiting to hear. Interestingly, the honourable member for Fisher also talked about indirect taxes, saying that it was a scandal and shameful that the poor little kids in the street have to worry about the price of their flavoured milk going up by a few cents. What rubbish! The Leader of the Opposition in his response to the Budget said that there would be a greater reliance on indirect taxes if the Opposition got back into power. Where is the sense in it? Where is the consistency? Do the Liberals talk to the National Party? Mr Lee —Dangerous. Mr MARTIN —It is dangerous, as the honourable member for Dobell says. It will be dangerous if those two start to talk to each other because they will find that their policies do not match. They do not balance in any way. What they propose in all their alternative Budgets is a total blowout. It is hypocrisy. They would present to the people of Australia exactly what they did before-nothing but deceit and a Budget that was totally underestimated. When the people of Australia realised what had happened in the days of the coalition, that lot went out the door. More importantly, the people of Australia should refer to the document that has been put out by the Government as a guide to the 1986-87 Commonwealth Budget, because it offers a clear and concise guide to the direction in which the Government proposes to move and the reasons why the decisions in the Budget were taken. No one can do better than to look at the attachment at the back of this document, which talks about recent trends in Australia's major commodity exports. Members of the National Party should read this over and over again, because they purport to represent those people who would like to export more and more of such commodities as wheat, wool, beef, sugar and barley. If they take the time to look at what is reported in the document, they will see why Australia's terms of trade and balance of payments are in their present position. The reason is historically low prices overseas. We cannot afford to sit back in this economy and wait for such matters to improve. The Government has to make some decisions within the economy itself and decisions have to be made in the market place to try to improve the situation. It has to be a unified effort from the Government, the community generally and in particular secondary manufacturing industry. They all have to decide for themselves that it is no good continuing to come to government, be it our Government or a government of those on the other side when in power, and saying when times are tough that government has to come to their assistance by putting in tariffs, increasing protectionism or providing subsidies through the steel industry plan type of thing-whatever it happens to be. They have to look at ways in which to improve the situation for every Australian. They have to look at how they, as the industrial base of this great country, can diversify more. They have to look for markets overseas and start to sell their products there. This Government has embarked upon a `buy Australia' campaign as part of its Budget strategy. I endorse that campaign 150 per cent. I think it is about time that we in this country looked more and more towards buying Australian made products as a substitute for foreign products. In that way the employment opportunities in Australia will be improved. Having quickly gone through what I consider to be the most positive aspects of the Budget strategy and the Budget itself, in the time remaining to me I would like to make a few comments on what I think the Budget is lacking. Quite frankly, I am a very strong supporter-I make no apology for this-of the belief that what was done in respect of the family allowance did not go far enough. I am of the view that there is too much middle class welfare operating in this country at the present time. We on this side of the House are responsible-indeed it is our political credo, our political philosophy to do this-for looking after those people who are in desperate need. Our philosophy is based upon the redistribution of wealth from those who have it to those who do not, so that everyone can have a reasonable living standard. The family allowance is a very important area in which to start looking at how this redistribution might occur. We could have a system whereby family allowance is granted to growing families with multiple children, and then we could start looking at how that might apply across the board. In days gone by, when the family allowance was introduced as a social security benefit for those in need, I really do not think it was meant for people on incomes of $30,000, $40,000, $50,000 and $60,000 a year or more, including two-income families. I do not believe it was envisaged that we should be paying out the moneys we are now paying to people who obviously have the financial resources to look after their children. I would like to look at means testing the family allowance across the board. I think, in fact I suggest, that the Treasurer (Mr Keating), when considering the Budget and our Budget strategy next year, should look at that as one possible way of eliminating a lot of the middle class rorts that occur and should look at how we might help those people in real need. I believe the Budget strategy that we have put in place is a good one and I commend it to the House. Mr HAWKER(Wannon)(10.28) —In speaking in support of the amendment moved by my colleague the honourable member for Mackellar (Mr Carlton), to the motion for the second reading of Appropriation Bill (No. 1) 1986-87, I would first like to take up a couple of points that the honourable member for Macarthur (Mr Martin) and the honourable member for Capricornia (Mr Wright) made in their speeches on this matter and to correct a myth-it goes very close to what I would call a misleading statement-which is often spread by many honourable members on the other side of this chamber. We hear so much about the Budget deficit that this Government inherited. The statements really are extremely misleading. In 1982, when the last Budget was brought down by the now Leader of the Opposition (Mr Howard) when in government, the deficit was something like $4.3 billion. The Australian Labor Party came to power in early 1983 and, by the time it had had a chance to prepare its Budget in 1983, it had let the deficit blow out to something approaching $8.7 billion. Talk about inheriting a $9.6 billion deficit is a total myth. If we go further we find that the following year, when the Treasurer (Mr Keating)-the one man who wanted to cite these figures-was asked what the Forward Estimates for 1984 were, he said: `They don't matter. We don't even publish those any more. They only matter if they are to our advantage electorally'. The Government ought to give up on this. The fact is that the previous Government's worst effort was a deficit of $4.3 billion in the 1982-83 Budget. That occurred in the year in which we had the worst drought this century, a world-wide downturn and, generally, the economy was not looking good. But the deficit was certainly less than half of the mythical $9.6 billion figure. The honourable member for Macarthur also talked about low commodity prices. I am sure that everyone knows about that. But the Government, instead of trying to blame everything on that, should be saying: `What are we going to do to help those who are suffering as a result of these rising costs, particularly the exporters and the farmers'. But what has the Government done? It has increased fuel prices and other costs which I will return to later. This Budget is a bit of a pea and thimble trick. We have seen yet again the introduction of higher taxes. We have seen a direct hit on families. But we have seen virtually no cuts in government spending. There has been talk about a tough Budget and so on. But where are the cuts? There are virtually none. We see figures which refer to modest growth. But where on earth will this modest growth occur? By looking at the Budget figures, the only way in which I can see this growth occurring is by a Public Service led recovery. That is the only sector that might have any chance of achieving some growth. The Budget also has a fundamental flaw-that is, wages policy. I know that this has been mentioned previously in this place, but it must be repeated that the fundamental flaw of this Budget is wages policy. While wages continue to grow, while we continue to be in so much trouble, there is no doubt that the Treasurer's dire predictions about the banana republic will become more and more real. We then come to the question of higher taxes. The Government tries to talk about tax cuts. However, this year the tax collected by the Federal Government will be equal to 25 1/2 per cent of gross domestic product. Last year it was 25.2 per cent and in 1984-85 it was 25 per cent. So taxes are still rising. We can talk about tax cuts, but the overall tax take is still increasing. If we were to give the Treasurer an award, he would get my vote as the world's No. 1 taxer. What are these new taxes? I have mentioned the tax on fuel. People in country areas in particular rely on fuel, not only for their cars but also for the transport of goods. Everything that comes into the country and everything that is freighted out is affected by the price of fuel. What do we find? The price of fuel has increased by 3c a litre. A couple of weeks after the Budget was brought down, it increased by another 2c a litre. At the beginning of next year, because of indexation, it will increase by another 2c. The Government talks about things being tough. But what has it done? It has made sure that things will be even tougher for those who must bear the brunt of the downturn in world-wide commodity prices. In respect of these fuel price rises, I think we might use the phrase that has been used before-that is, that this Government has turned every petrol pump into a branch of the Australian Taxation Office. When the Government came to office in 1983, excise was 6c a litre. I seem to recall that the Prime Minister (Mr Hawke) even made a promise that he would cut fuel prices by 3c a litre if he was elected. Excise is now almost 24c a litre and that fourfold increase does not take into account the increase that will occur shortly. Mr White —What was the promise he made? Mr HAWKER —He promised that he would cut prices by 3c a litre. Mr White —They have gone up 24c. Mr HAWKER —Excise has increased from 6c a litre to 24c a litre. The Government's attack on families in this Budget is really quite scandalous. It is the biggest attack on families that I have seen. At a time when there is an economic downturn and families are probably the ones who are feeling it the most, we see that, despite the so-called tax cuts that will be implemented in December, the average Australian family will still be $23.50 a week worse off. Families will be hurt; they will be hit hard. Families will be hit by health costs. The Medicare tax has been increased by 25 per cent. We have seen an increase in chemist prescription charges. Of course, as I have mentioned, all families also have to buy petrol. We have seen the means testing of family allowances for 16- and 17-year olds. The previous speaker, the honourable member for Macarthur, said that he would like to see all family allowances means tested. Most honourable members would know that it is when children get to the age of 16 or 17 years that they cost their families the most. We have a crying need in this country for more children to stay at school, but what is the Government doing? It is cutting out family allowances and encouraging people either to get a job or, in many cases because they cannot get a job, to go on the dole. By any analysis, by any commonsense approach, such a move is just plain stupid. One of the most interesting things in the Treasurer's Budget Speech is how he used the word `cut'. I went through the Budget Speech fairly quickly and I may have missed a couple of instances, but I found that he used the word `cut' at least 25 times. Page 3 of his Budget Speech states in part: For these reasons, the Budget incorporates a very large cut in spending. On page 4 in relation to outlays the Treasurer stated: We have cut back to zero real growth. That is interesting. In other words, there have been no cuts. I guess this is another example of what one might call Keatingspeak at its worst. They are cuts and yet they are not cuts. In the mind of the Treasurer the word `cut' is one with which he tries to mislead people. What he should be saying is: `We have held growth at its current level. In dollar terms it is increasing but in real terms it is remaining static.' The Treasurer is asking the rest of the community to bear cuts. He has even told the Australian Council of Trade Unions that it should accept cuts. But when it comes to his Government's outlays, his Government's expenditure, there are no cuts. As time is running short I will repeat briefly what I said earlier. The fundamental flaw in the Budget is without doubt the wages policy. Even the Budget Papers forecast an increase in unemployment. What does the Government do? It goes mealy-mouthed to the ACTU and says: `You can still have a pay rise but it might not be quite the full amount of indexation'. Indexation seems to be one of the few things this country has not learned from the rest of the world. We can do without it. It only builds in inflation and rising unemployment, as the Budget Papers tell us. Yet the Government still does not have the strength of character to say to the union movement `The party is over, fellows; we have told the rest of Australia it is finito', to use that great word. The Government cannot go to its bosses in the trade union and say: `We have to cut wages and you will have to accept a wage freeze'. The saddest thing about this matter, as my colleagues the honourable member for Corangamite (Mr McArthur) and the honourable member for Wakefield (Mr Andrew) would be the first to tell us, is that when one talks to Australians one learns that they would accept such an approach. They say: `We know things are tough'. People are worried. Wherever one goes people ask what is going on. They are very uneasy. If the Government only had the strength to say that it wants a wages pause, as the previous Government had the strength to do, I am sure that Australians would go along with it. If the Prime Minister got out of his little ivory tower occasionally and spoke to the real Australians he would find that a wage pause would be acceptable. Mr White —Out of the bunker. Mr HAWKER —Yes, out of the bunker. In conclusion, this Budget has been a bitter disappointment. The reaction of the media, which the honourable member for Macarthur was quick to quote, was a one-day wonder. Initially the media was conned but it soon woke up, and as it analysed the Budget in more detail it realised that the Budget really was a non-event. As I have said, the Government has talked about the party being over, and this wonderful new word `finito' is coming into use in our language. Despite the use of the word `cut' in the Treasurer's Budget Speech, when we look at the so-called cuts we find there are absolutely none in government expenditure. Yet taxes have been raised even to the point of taxing children, as the honourable member for Fisher (Mr Slipper) has mentioned. We are taxing children who buy fruit juice and flavoured milk. There is a tax on what should be the nutritious drinks, the things this Government and all Australians would like to see children encouraged to drink. We will send them off to drink soft drinks which everyone knows are not nearly as healthy for them. Probably the most damning comment on this Budget comes from the former Head of the Treasury, Mr Stone-someone who really knows what he is talking about. He said: 1974-75 aside, when measured against the yardstick of the economic crisis confronting Australia today this must truly be one of the worst Budgets by any government during the post-war period. From the point of view of this side of the House, the Budget has been a bitter disappointment. The Government will rue the day when it built up the expectations of the people of Australia to think that the 1986-87 Budget was to be the cure for our economic ills. Sadly, all Australians will pay, and pay very dearly, for the Government's mismanagement. Mr FITZGIBBON(Hunter)(10.42) —Of course the Budget has been a disappointment for the Tories on the other side of the House. It has been disappointing for them because it has been accepted by the overwhelming majority of Australian people. The honourable member for Wannon (Mr Hawker) very cleverly tried to throw up a smokescreen. But no matter what he does, the Australian people will never forget the inarguable fact that, when this Government came to office, it inherited from the present Leader of the Opposition (Mr Howard), the former Treasurer, a Budget deficit of $9.6 billion. If we want to judge the success of the Budget, let us not go to biased people such as John Stone. Let us look at what has happened in New South Wales since this Budget came down. Let us forget about Bass Hill and Rockdale. Let us look at the Newcastle City Council elections last Saturday when the people voted solidly for a Labor administration. It is very interesting to remember that in the Newcastle City Council election Labor ran first, Independents ran second and third and trailing miserably behind in fourth position was the Liberal Party of Australia. The people of Newcastle and the Hunter Valley showed what they think of the Liberal Party's answer to the economic problems confronting this country. The dollar has stabilised as a result of this Budget. While the United States and British share markets are tumbling, a remarkable buoyancy remains in the money market in Australia. The Liberals and the Nationals have been making whistle-stop tours of my electorate but the crowds they have attracted required accommodation no larger than a telephone booth. They have failed dismally to stir up any concern about this Budget. A chap walked into my office the other day and said: `I do not understand all the economic jargon being preached to us. What has happened to our economy?'. I said: `How much do you earn a week?'. He said: `I earn $400.' I said: `Supposing your right arm fell off. How much would you earn then?'. He said: `I would be lucky to earn half'. That is exactly what has happened in this country. There has been a massive turnaround in our terms of trade. There has been a glut of minerals and agricultural products on world markets, and Australia's primary products and minerals are largely unwanted. The trade war between the United States of America and the European Economic Community has slashed our national income by over $6 billion. Other speakers have shown how the prices for our minerals and primary products, such as coal, wheat, wool, iron ore, aluminium, beef, sugar and lead have tumbled amazingly. I would say that, taking a guesstimate, the prices for most of these commodities are down by some 35 per cent. The list goes on. All told, there has been a 15 per cent fall in our terms of trade. The same chap said to me: `All right, you have explained it to me simply. Who is to blame for all this?'. I said: `It has been coming for a long time. No one is really to blame. What happened is that some time ago Mr Fraser and Mr Howard decided-with the advantage of hindsight I can say that they were wrong-to pursue a resources boom. They decided that we would not try to compete with overseas manufacturing and that we would place all our eggs in two baskets. They decided that we would place all our hopes on minerals and agriculture and the export of those commodities'. Unfortunately, Fraser and Howard made a mistake and they allowed our manufacturing industries to wind down. Mr DEPUTY SPEAKER(Mr Millar) — Order! The honourable member will refer to honourable members in the correct form. Mr FITZGIBBON —I am sorry-the Leader of the Opposition and the previous Prime Minister. The chap then said to me: Is there a solution to all this?' I said: `Yes, the solution is outlined in the Budget. We must tighten our belts so that we can stay competitive with the rest of the world. Also, we must restructure our industry base so that we can lift our export performance and win back markets. We must buy Australian and reduce our imports'. The chap then said to me: `Yes, we can do those things, and I understand and respect that the Government is trying to do that, but is there any other danger for Australia?'. I said: `Not really, not if we handle the economy responsibly and sensibly, as this Government is doing, but there is a good deal of danger if demagogues mislead voters with an impossible grab-bag of promises'. How economically and politically dishonest are those opposite who promise the world and give not the simplest explanation as to how they will fulfil their ridiculous promises? The Leader of the Opposition, who left this Government with a deficit of $9.6 billion, now wants to bat again, and to give Australia a deficit of over $10 billion. But I have this absolutely positive feeling that the Australian people do not want a second batting performance from the person who now occupies the leadership of the Opposition and that they will not give him a second innings. The chap said to me: `Is there a greater danger for Australia?'. I said: `Yes, there is a far greater danger, and that far greater danger is a drift to the extreme right, to fascism'. Consider what happened to other countries which moved to the extreme right to solve their economic ills: During the Great Depression, in Italy, Mussolini had just started to get the trains to run on time when the Depression and the economic ills gave him the chance to establish a dictatorship. We all know that in Germany in 1933, as a result of the economic problems that confronted it, Hitler came to power. As a result of the Depression in Japan, a moderate government was replaced by a government that sought to end its economic problems through militaristic imperialism, and from that we had World War II. The truth is that this country can solve its problems if we treat all citizens fairly. We can have restraint with equity and restore our economic prosperity. With a fair tax system, an ID card and a fair deal for all Australians, we can restore this nation's health. This Budget has its critics, certainly, but they are few and far between. Most people recognise that this Budget is a budget that is fair to all sectors of society. Extremism in any form is abhorrent to all Australians. People do not want divisions created in our society. The conservatives-those who believe they were born to rule-are trying to establish two divisions within Australian society: They want a creation of one class, namely, the haves, and the creation of a second class, namely, the have-nots. Australians face the spectre of jack-booted conservatives marching throughout Australia disciplining the unions, the unemployed and anyone and everyone who points to their absurd megalomania. At a time when real wages are at their lowest level in 17 years and big business profits are at their highest level since World War II, we have the Howards, the Copemans and members of the H. R. Nicholls Society running around endeavouring to kneecap workers and to moderate union leaders. While Crean, Kelty and company talk sense, Copeman and his cronies talk nonsense and confrontation. While senior management gains record salary increases and directors' fees rise by up to 34 per cent, we have an absurd attack on wages, working conditions and holiday loadings. Anyone who cannot recognise the benefits derived for this nation as a result of the accord is either blind or demented. Australia has led the world in economic growth. We have led the world in employment growth. We have delivered wage restraint. We have slashed the incidence of industrial disputes. This Hawke Government Budget has the ideal strategy. It is light years ahead of the extremist solutions advocated by the conservatives. Consider the nonsense spoken about holiday leave loadings: When one looks at the figures-I thank Ross Gittins of the Sydney Morning Herald for these figures-one finds that the leave loading applicable to workers in Australia is insignificant really when compared with the leave loading applicable in other Organisation for Economic Co-operation and Development countries. Our average 17 1/2 per cent leave loading compares favourably with the conditions that apply in other countries. There are perhaps a great number of things we should talk about here, but each speaker is restricted to 10 minutes. I shall tell honourable members on the other side of the House what they are doing. They are frightening the Australian people with extremist talk. The people are being scared out of their pants by the deeds of the New Right, the Copemans of this world, and honourable members opposite are giving us more support than we could hope to gain through any argument out there in the market-place. This is an extremely sensible and extremely responsible Budget. It is the very Budget which is designed to get Australia back to economic health and it is light years ahead of any proposals that honourable members have come up with. Mr BRAITHWAITE(Dawson)(10.53) —Australians have all awaited this Budget for the Government's response to what is the deep Australian economic malaise and certainly the trade crisis that we are facing. The national accounts estimates for the June 1986 quarter showed that the economy had entered a very serious recession, much worse than had been previously reported and previously thought. The non-farm gross domestic product fell in each of the last three quarters, being minus 0.6 per cent in the December 1985 quarter and minus 0.2 per cent in both the March and the June 1986 quarters. Australians were told we had to tighten our belts. We were told also that our economic problems were due to external forces. It was said that the European Economic Community and the United States of America were to blame for our trouble by corrupting world commodity markets. The fact is that it is this Government which has corrupted the domestic economy, and the Budget has failed to address the real reasons for our economic malaise. These reasons are: The rigid inflexible wage system that Australia is particularly faced with, a massive growth in the public sector over many years, high taxation-particularly high direct taxation-and high government expenditure. Obviously, following this Budget sacrifices will have to be made by some, but not by all Australians. Unfortunately these sacrifices will be borne by the private and the productive sectors of Australia. They will be the ones to suffer. Australia's inflation rate remains well above the inflation rates of our trading partners. I seek leave to incorporate in Hansard a schedule which shows what these inflation rates are. Leave granted. The schedule read as follows- SCHEDULE 1 Inflation Australia's inflation rate remains well above the inflation rates of our trading competitors. The Budget forecast of 8 per cent inflation confirms this view. In May the OECD forecast the following inflation rates for Australia and other countries for 1986 and 1987: 1986 1987 per cent per cent Australia... 7.75 6.25 Japan... 0.5 0.0 West Germany... 0.0 0.25 U.S.A.... 2.75 2.5 OECD Average... 3.5 3.0 Mr BRAITHWAITE —This schedule shows that in 1986 and 1987 it is forecast that Australia will be well in advance of its trading partners in terms of inflation. That is one of the economic indicators we are faced with. At the time of the presentation of the Budget we were faced with a realisation of where Australia is in comparison with the rest of the world and the rest of the productive world. That was given in two graphs that were published in the Australian on 26 June, showing the cost of manufacturing labour at the end of December 1983 and the hours worked per week. These two graphs indicate to me quite clearly that, in the productivity stakes, in spite of what the Government is saying, Australia is well down the list. In terms of the cost of labour per hour, in the common terms of American currency, at that time Australians were paid $9.55 per hour, compared with these figures for our major competitors: Japan, $8.29; Korea, $1.52; down to 22c per hour for China. Also, we find that Australians work the least number of hours per week, compared with our competitors. The figure for Australia is 35.6 hours per week in the manufacturing trade, compared with a figure for Japan, a major competitor, of 44.3 hours and for Korea, an emerging developing nation of 52 hours per week. Those figures speak for themselves. Before the presentation of the Budget Australians were looking for some guidance. We were told to wait for it. I believe the guides to getting economic growth again that we were waiting for in that response were four in number: Firstly, we had to cut taxation in real terms; secondly, we had to cut our expenditure, particularly on programs; thirdly, we had to bring our deficit into a situation where we could balance it within the coming 12 months, that is, 12 months after this; and, fourthly, there should have been a wage freeze until productivity caught up with this. As I tried to indicate, productivity is not one of our main points. The Budget responded in only one regard, and that was in the Budget deficit coming down to the figure of $3.5 billion. I am more than happy to pay credit to the Government for having done that. Mr Hicks —A bit rubbery. Mr BRAITHWAITE —It is very rubbery, because the $3.5 billion figure was achieved by actual increases in taxation and hiving off to the private sector such things as health and education costs. In that regard, I believe the Budget has failed dismally. As I say, the deficit was achieved by rigging the figures. In all of this, Labor is trying to tell us that the Budget is a fair one. It argues the success of the accord in reducing real labour costs without taking into account those negative growth figures that I mentioned for the last three quarters or the wages blowout in the early 1970s under the then Prime Minister, Mr Whitlam, particularly in the Public Service, and again in the early 1980s. I think we should note that the blowout in the early 1980s was under the jurisdiction of Mr Hawke as President of the Australian Council of Trade Unions. The other aspect that is very important as far as economic indicators are concerned is the Australian current account deficit for 1985-86, which was $13.7 billion, or nearly 6 per cent of GDP. The value of the Australian dollar has fallen substantially under the Labor Government. In that regard, I present another schedule showing Australia's current account deficit as a percentage of GDP compared with the Organisation for Economic Co-operation and Development forecast of the current account deficits as a percentage of GDP of various other countries. It will not surprise honourable members to learn that for Australia, with a negative balance in the current account, the figure is 6 per cent of GDP whereas countries that are trading in credit, such as Japan, West Germany and France, all have smaller percentages in relation to GDP, on the positive side. I seek leave to have the document incorporated in Hansard. Leave granted. The document read as follows- BALANCE OF PAYMENTS Australia's current account deficit for 1985-86 was $13.7b, or nearly 6% of GDP. This is estimated to increase to $14.6b in 1986-87, which is 5.75% of GDP. The following OECD forecasts of CAD's as a percentage of GDP shows how serious Australia's balance of payments difficulties are compared with other countries: Australia (est)...-6.0% Japan...4.2% West Germany...3.4% U.S.A....-3.1% France...1.1% Canada...-1.5% Italy...0.9% Mr BRAITHWAITE —I also indicate the situation that we were faced with in relation to interest prior to the presentation of the Budget. Again, these interest rates are shown in comparison with those of our trading competitors. I have a schedule which shows figures for the Australian short term money market and long term money market compared with those of the rest of the world. I seek leave to have that document incorporated in Hansard. Leave granted. The document read as follows- INTEREST RATES Australia's interest rates are also well above those of our trading competitors, and are likely to remain so throughout 1986-87. Current rates are as follows: short-term long-term Australia... 17.4% 13.9% Japan... 4.7% 5.0% West Germany... 4.4% 5.6% U.S.A.... 5.6% 7.2% France... 7.1% 8.0% Canada... 8.4% 8.7% Mr McVeigh —The interest rates have gone up a bit since then, too. Mr BRAITHWAITE —They probably have, but I will mention the main indicators in the short term money market. Australians pay 17.4 per cent as a prime rate; that is the best rate available in Australia. In Japan the prime rate is 4.7 per cent; in West Germany it is 4.4 per cent; in the United States of America it is 5.6 per cent; in France it is 7.1 per cent; and in Canada, which is the worst as far as that is concerned, it is 8.4 per cent. Mr McVeigh —Surely these blokes can understand those sorts of figures. Mr BRAITHWAITE —If they cannot understand this, I suggest that they read Hansard tomorrow, just to get the benefit of that incorporation. Mr McVeigh —They should throw their Rhodes scholarships away if they cannot understand that. Mr BRAITHWAITE —It would be clear enough to them, but we do have problems with the Labor Party or the Labor Government understanding anything. I also indicate that, while in office in the last three and a half years, this Labor Government has been the biggest spending government in Australia's history. In its first three years Labor achieved record deficits totalling $20.3 billion. This is a record, even in terms of the last deficit which was recorded by the Fraser Government of some $4.4 billion, which was arrived at because of a severe drought and at a time when a wage pause had been implemented to try to bring that into balance. In all of this we have Labor trying to indicate that there was a real record Budget deficit of $9.6 billion. I say once and for all those Labor Government members who do not seem to understand economic philosophy that the $9.6 billion was never a deficit; it was a Forward Estimates first bid. The only one to compare it with was the deficit of $4.4 billion for 1982-83. It is interesting to note that at June 1986 Australia's gross external debt stood at some $88 billion. We should note the growth in that figure over the years under Labor, but more particularly in the last three and a half years. It is recorded that Australia took nearly 82 years to arrive at a net overseas debt of $22 billion. Mr Lloyd —How many years? Mr BRAITHWAITE —It was over 82 years of federation. In the last three years the Government has been able to triple that figure by the same amount. As at the end of 1985-86 the net debt stood at $66 billion, which is three times greater than it was three years previously. Mr Nehl —Shameful! Mr BRAITHWAITE —It is shameful. It is an indictment of the treasurership and the people in whose hands the economic responsibility is placed, who tried to hide that fact by saying that it is a result of external factors. These are the internal factors that are very important. The public sector growth figure has grown from 14 per cent of Australia's net external debt in June 1983 to 34 per cent at the end of 1985. Clearly these economic indicators paint a sorry picture of the Australian economy and the prospects for Australia's export sector, the sector on which Australia has to rely if it is to pull itself out of this economic morass. The pictures are there and the economic indicators are there, but the Budget did not address them. Australians were looking forward to a Budget which would cut government spending and lift the constraints on enterprise, but Australians have been disappointed by this Budget. I must say to the Government that Australians have been disappointed because the Budget was flawed in its assumptions, flawed in its approach and flawed in its preparation. It is a taxing Budget, and that is what we have to remember. It is a taxing Budget which increases by some 13 per cent the pressure on direct taxation, in spite of an inflation forecast of 8 per cent. As the Leader of the Opposition (Mr Howard) says, it is a taxing, not an axing Budget. At this time it is precisely the wrong remedy for Australia's economic ills. It is not a time when the Government should be putting out its greedy hand and taking more; it is a time when it should be measuring growth in terms of a reduction, not an increase, in taxation. The lowest deficit figure of $3.5 billion sounds good, but it has been brought about, as I said, by lifting taxes by some $1.4 billion and it is based on the heroic assumptions about economic growth and employment projections, all of which have been questioned by the private sector and many Australians. The Budget forecast of 2.25 per cent growth in GDP for 1986-87 is, of course, overly optimistic, particularly when one judges it in relation to performance in the December, March and June quarters of this year, and it requires a June on June growth of over 5 per cent. Most of Australia's growth is expected to come from net exports of 1.75 per cent. However, it is clear that this will result more from driving the economy into recession and reducing imports than from the J-curve effect. With its added-on taxation, the Budget gives no incentive to manufacturers to export, and very little incentive to import substitutes. Despite the fall in imports associated with the recession, the current account deficit is forecast in the Budget to be around $14.6 billion, which will be worse still than the record of the previous year. The Budget forecast of 8 per cent inflation confirms the view that inflation will remain high, particularly in comparison with our overseas competitors. The continued large external imbalance and the forecast high inflation rate will keep interest rates high and continue to make the dollar vulnerable. We saw the effects immediately before the Budget when the dollar collapsed as a result of high inflation, the record high current account deficit, industrial award increases, indexation and superannuation decisions. That was followed by a further downward march as a result of the Budget itself. When we take into consideration a 1986-87 current account deficit of at least $14 billion, a forecast inflation rate of 8 per cent and the 10 per cent depreciation of the dollar since June 1986, Australia is looking at a gross level of external debt at June 1987 of something in excess of $110 billion. I do not want to compare that with the debts of South American countries, but this debt will be the equivalent of nearly $7,000 per person in Australia. It is clear that the Budget has failed to address this country's fundamental economic problem. Indeed, the Government has sought even in this debate to divert attention from the disastrous Budget by claiming again international corruption, while it sweeps under the carpet its own corruption of the Australian economy over the past three and a half years. It diverts attention from the domination of the Government by the kingmakers of the Australian Council of Trade Unions, Mr Crean, Mr Kelty, Mr Halfpenny and Mr MacBean, by ranting against the New Right. We heard a short while ago of an attempt to try to stampede the Australian people by talking about the terror that might be associated with such a move, and that attempt has been repeated in this debate. More importantly, the Government tries to buy off the union leadership with free fact-finding trips to Europe. For what purpose have these trips been arranged and just what are they intended to achieve? During the course of the past three weeks uranium has been raised as a major social issue. Again, the purpose has been to try to divert attention from the real issues of the Budget. I wish to deal with some of the trade specifics. As a result of a suggestion by the Minister for Trade (Mr Dawkins), the Government, in the Budget, lifted the ban on sales of uranium to France to sell its $66m stockpile. However, it did not take the further step of deciding that all exports of uranium would be good. The House will be aware that some uranium in Australia is good and that other uranium is bad. In some cases the ACTU can still dictate whether the export of uranium will be banned. The Kakadu National Park comprises almost 20,000 square kilometres in the Alligator Rivers area and, I am sure that we can all agree that it is a truly beautiful part of Australia. It is rich in all sorts of minerals, but particularly in uranium. Mr Hollis —You want to mine it. Mr BRAITHWAITE —The honourable gentleman should not talk to me about that. Let him remember that his own Prime Minister (Mr Hawke) wanted to mine it. If I were the honourable gentleman, I would sit in my place and keep quiet while trying to take a few lessons. Economic knowledge is not a high point of the honourable gentleman's fortes nor one of the Government's. I suggest that the honourable gentleman sits down and listens. We should all know that the Kakadu National Park is rich in all sorts of minerals, but especially in uranium. Last year, its two relatively small operational mines exported $428m worth of yellowcake. That is regarded as good uranium. A radiometric survey carried out from the air over the Kakadu region by the Department of Mines and Energy in 1982 found that there is $40 billion worth of proven uranium deposits at current prices, and in 1982 dollar values. This does not include the other mineral wealth in the area. Active mining exploration was banned in the Kakadu region 14 years ago, because of the area's proposed future as Aboriginal land and as a national park. This is holding up exports from Australian mines such as Pancontinental's Jabiluka and Denison's Koongarra. Both mines have reached agreement with traditional owners and they are anxious to proceed. Obviously these owners, together with the miners, recognise that mining, sacred rites and national parks are not necessarily incompatible. Yesterday the Prime Minister said that there would be no new mining in existing stages 1 and 2 of Kakadu, and that in relation to stage 3 there would be no mining of uranium. So we get the hard socialist Left ensuring that their theories prevail over and above economic logic. By responsibly mining the uranium in Kakadu, the Government could quite easily wipe off a significant proportion of Australia's overseas debt. One must ask whether the Government is serious about trying to rectify Australia's economic problems. In his address to the nation in June, the Prime Minister announced the new small exporters scheme and the high technology exporters scheme. But as a result of the Budget, the new small exporters scheme is redundant. The high technology exporters scheme was given a minuscule budget of just $1m and will help only a handful of high technology exporters, the people whom we want so desperately in this country. The mixed credit scheme operated by Austrade has had its budget reduced. Also, as a result of the Budget, the overall expenditure on export development schemes has declined massively to $92m. These moves will not enthuse exporters, who are relying on some assistance, given that during the last three years of coalition government under Mr Fraser export incentives averaged $267m. With Australia's trade in the Middle East decreasing, the Budget also closed Austrade's offices in Bahrain, Dubai and Kuwait which have been important windows for Australia in its efforts to find a place in that fast developing market. Now the United States of America will be quite happy to step into our markets, having just commissioned a $200,000 study into market opportunities for United States sheepmeat in the Middle East. So within the trade portfolio itself, the Budget has failed clearly to address the current trade and economic crisis facing Australia. It has failed to grasp opportunities to reinvigorate our export and trade sectors, which is something that the private sector is more than willing to do. It has failed also to expand Australia's intelligence in world markets, particularly the Middle East. Mr DEPUTY SPEAKER(Mr Millar) —Order! The honourable gentleman's time has expired. Mr HOLLIS(Throsby)(11.12) —I am pleased to join this debate on the Appropriation Bill (No. 1) 1986-87. I support the Budget and, obviously, reject the amendment moved by the honourable member for Mackellar (Mr Carlton). I refer to one small aspect of the speech of the honourable member for Dawson (Mr Braithwaite)-namely, his remarks about whether or not Kakadu National Park should be mined. As secretary of the Caucus trade and resources committee, I have been very involved in mining and mineral questions and I welcomed the decision not to mine under stages 1 and 2 at Kakadu National Park. I would say to honourable members that its beauty and uniqueness would not remain for very long if mining were permitted to take place. Listening to the Opposition, one would think that all the problems in Australia, including those responsible for the uncompetitive nature of Australian industry, are the fault of the workers. It is about time that the Opposition and manufacturing industries in Australia faced a few hard facts. There are a few exceptions, but overall Australian manufacturers have been content to hide behind protective tariffs and quotas, taking full advantage of government tax incentives, subsidies and other forms of assistance, and to give nothing in return. They have not looked to innovation, technological change and improved managerial and marketing techniques. Still less have they sought to pull their weight by investing part of their profits in research and development. The result is that Australian manufacturing industry has stagnated. It has become less and less competitive on the domestic market and almost totally ineffectual on the international market. To compound the problem, rather than being honest with itself and with the Australian public, our manufacturing industry has sought to divert public opinion from the real source of its problem-its own incompetence, ineptitude and shortsightedness-by putting the blame on workers and rising wage costs. This has been done at a time when the floating of the Australian dollar and its subsequent devaluation has given the industry an unparalleled opportunity to become more competitive on the domestic and international markets. The Australian dollar has been devalued by something like 40 per cent, which gives our manufacturing industry a 40 per cent comparative cost advantage. If industry cannot export and take advantaged of the market with this devaluation then it should have a very good look at itself. As the Australian Manufacturing Council admitted in its 1984 statement to the Economic Planning Advisory Council: The Australian economy has grown up around a framework of government intervention in industries . . . too great a concentration on tariff rates and quotas. This is, of course, essentially a short term band-aid approach in that it seeks to protect our manufacturing industry rather than to develop it. It is an approach which has led to defending the status quo, protecting industry from the threat and challenge of innovation and technological change. What is needed is a more dynamic approach which pushes the Australian manufacturing industry towards innovation and change. The key to this is research and development. A key aspect of Australia's existing export trade is that exports are heavily weighted towards a limited number of unprocessed mineral and agricultural commodities which we are able to deliver to a limited number of customer countries. Mineral and agricultural exports together account for about 65 per cent of our total exports, of which some 30 per cent go to Japan. As recent events have so clearly illustrated, there is every indication that these exports face a most uncertain future. We would be complete idiots to think that we can continue to place all, or even most, of our eggs in the primary industry basket. In the 1890s our nation experienced a remarkable burst of creative energy. We were pioneers in agricultural technology, refrigeration techniques, welding, ferro-concrete construction, pharmaceuticals, medical technologies and scientific instrumentation. By 1900 Australia was a world leader in technology and our per capita income was the highest in the world. Sadly, we did not use our initial success as a springboard for continued industrial growth. Instead, we were content to rely on our agricultural and mining industries, and allowed our manufacturing industries to remain poorly developed and immature. Other nations, however, have made the successful transition from a resource-based economy to one based on intellectual skill and the development of an efficient and innovative manufacturing industry. One such nation, comparable in many ways to Australia, is Sweden. Just over 100 years ago, about the same time that we witnessed that extraordinary burst of creative technology, Sweden was emerging from an agricultural economy based on subsistence farming. It was then one of the poorest countries in Europe and a large proportion of its population was emigrating because they lacked the opportunity to make a decent living. Like Australia, Sweden's emergence as an industrial nation was based on its raw material resources. Like Australia, too, Sweden went through an economic crisis in the mid-1970s. There had been a cost explosion, with a 40 per cent increase in wages over a two-year period. The decline in export income, coupled as it was to the world-wide increase in oil prices, resulted in a major recession. Today, the situation is in striking contrast. Sweden's balance of trade is favourable, its budget deficit, though considerably larger than Australia's, is declining, unemployment is down to 3 per cent, and the foreign debt is being reduced. The key to all this is the great success of the Swedish manufacturing industry, particularly in the export field. Significantly, the Swedish Government in 1984 decreed that 10 per cent of all profits made by industrial organisations should be deposited with the Bank of Sweden. These renewable funds, amounting to approximately $A2 billion, are only now becoming available to the companies on condition that they are used for purposes of research and development, employee education and employee retraining. There are four major identifiable elements in Sweden's economic recovery. First, there were two currency devaluations-one in 1981 and the second in 1982-amounting to about 30 per cent overall. Secondly, there was a major restructuring of Swedish industry, involving close collaboration between the Government, business management and the trade unions. Amongst other things, this involved the closure of the Swedish shipbuilding industry and the Swedish textile industry, but it also involved massive retraining and re-employment programs, which meant that workers changed jobs rather than losing them and that they continued to reside in the same towns, cities and regions. There is an awareness on the part of unions that they will benefit from the 10 per cent of all profits paid by Swedish manufacturers into renewal funds. Such a program, I might add, would not have been possible were it not for the policy of worker participation in Swedish industry, as embodied, for example, in the 1977 Act on employee participation in decision making. Such an approach to industrial relations is in stark contrast to that proposed by the New Right and its many supporters, tacit or otherwise, sitting on the Opposition benches. The Swedish model, based as it is on national negotiation, points the way to the future. The New Right's approach of mindless confrontation can but lead down the path of managerial anarchy and the ultimate destruction of Australian society. The third element of the recovery is the expanded investment in research and development by both industry and government. It is this element especially which I would like to emphasise. Expenditure on research and development in Sweden is among the highest in the world, being approximately 2.3 per cent of gross domestic product. In Australia, by comparison, expenditure on research and development is only one per cent of GDP. When one compares government expenditure to private sector expenditure, the figures are even more telling. In Australia, our figure of one per cent GDP expenditure on research and development is made up of 0.8 per cent government expenditure and a paltry 0.2 per cent private sector expenditure. In Sweden, by contrast, the 2.3 per cent GDP expenditure is made up of 1 per cent Government expenditure-only slightly more than our Government's expenditure-and 1.3 per cent private sector expenditure. There is the difference. The Swedish manufacturing industry outspends its Australian counterpart by more than 6:1. Is this the reason why the world drives Volvos and Saabs, rather than Holdens? Is this the reason why we import so many more manufactured goods from Sweden than they do from us? To make matters worse, our meagre efforts in research and development actually declined during the 1970s and early 1980s, the same period in which Sweden so dramatically lifted its game. During the early 1980s, our manufacturing industry was outlaying on research and development only 40 per cent of what it had been doing during the 1960's. Fortunately, things are beginning to change, thanks to the initiatives of the present Hawke Labor Government. The Government's response to the failure of Australian manufacturers to look to their future, and the future of all Australians, has centred on the 150 per cent tax concession for firms spending money on research and development. This policy was introduced in the 1985 Budget, and I am pleased to note that it has been retained in this year's Budget. The results to date are encouraging. Approximately 1,000 firms are currently taking advantage of the scheme, and 1985-86 tax concessions are likely to cost the Government something of the order of $100m. The pay-off is that spending on research and development by those companies is anticipated to rise by $200m. To use another set of figures, private sector expenditure on research and development has risen from the absurdly low level of 0.2 per cent of GDP in 1981 to about 0.3 per cent in 1985, and the Government initiative should get the figure up to 0.4 per cent or even 0.5 per cent by 1987. That will do nothing more than get us back to where we were in the late 1960s. In other words, we are still a long way behind just about every other country we could reasonably use by way of comparison. Clearly, it is now up to Australian manufacturers to shake off their inertia and apathy and to pull their weight. Sweden has pointed the way. There is no reason why we cannot pursue the same path. The 150 per cent tax concession scheme for research and development expenditure is but one component of this Government's budgetary program for technology development. Other programs include the grants for industrial research and development scheme, which will provide up to 50 per cent funding for approved research and development projects, with the emphasis on assisting small, innovative start-up firms; the continued commitment to the former Australian industrial research and development incentives scheme; the National Industry Extension Service; the management and investment companies program; and of course, the continuation of the steel industry plan. All in all, the 1986-87 budgetary allocation for industry, technology and commerce programs amounts to $380m, which represents a rise of 7.6 per cent on actual expenditure in 1985-86. I commend these measures to the House. Mr MOORE(Ryan)(11.25) —Seldom in my years in Parliament have I seen a Budget which has been so signally unsuccessful. In all the pre-Budget presentation to the public we were led to believe that a national disaster was on our hands and that the Budget would bring some stability to the exchange rate, to the lenders to this nation and to the performing sector. Instead of that, we have been saddled with a Budget which is in error in its presentation of a deficit of $3.5 billion and which is grossly optimistic in its assessment of economic growth and of government spending levels. As a consequence, the general public's perception of the Budget is poor and the response by commentators and those responsible for economic decisions is negative, so much so that Ministers are now walking round saying, `We will have to have another try at it.' Three Ministers have already said that publicly, fewer than 10 days after the Budget came down. This morning I wish to address myself to the question of public debt. It is a very serious matter that the whole of Australia should look at. The balance of payments as depicted in the Budget would lead me to believe that we will have a deficit in the current year at least as large as that in the previous year. In consequence, we will expect to see some pressure on the exchange rate. That in itself will lead the nation to experience further declining business and employment opportunities unless we address ourselves to the problems of external debt. Figures provided by the Parliamentary Library show that between 1981 and 1985 the gross external debt rose from $15.7 billion to $68.4 billion or, in terms of gross domestic product, from 11 per cent to 33 per cent. That is a staggering growth in anybody's language. This is made up from government borrowings and private operations. It is true that, without the heavy capital inflow of the past year or two, the additions to the country's stock of real capital would probably have been even lower, but the evidence suggests that of late we have been going into debt on an increasing scale, mainly to maintain the levels of current consumption. This implies the likely need for a severe contraction of consumption at some future time as and when the debt has to be serviced, and even more so if the point comes at which overseas investors decline to continue to lend to us on anything close to the recent scale, which could happen at any time. It is certainly unwise to allow our present level of consumption to depend upon a net inflow of capital which may not continue at anywhere near its present rate. It is true that many countries-although for the most part we would not wish to be one of them-have succeeded in borrowing externally to an unwise and unjustifiable extent. This implies that in recent years there have been lenders around the world willing to continue to lend to such countries even when further increases of their indebtedness appear to be unwise. But it would be unjustifiable for Australia to take any comfort from these facts. In the first place, we would not wish to fall into the serious economic problems that face so many of the heavily indebted developing countries. Secondly, we may reasonably suppose that the institutional lenders around the globe will look with increasing suspicion in future upon any country that appears to be borrowing excessively and will be much less likely to make the same mistakes again. Thirdly, Australia is not such a large and significant borrower that the lenders are likely to feel obliged to keep renewing loans merely to ensure the servicing of the loans that they have already made. That is a very significant state of affairs, and because of that I would urge the Government to look at the problems in the balance of payments. Since 1981 we have borrowed extensively to maintain current consumption. This has been reflected not only in the extent of foreign loans but in the percentage of the Government's budget that is now directed towards interest payments-some 10 per cent of total outlays. This is likely to increase and so leads us to the question of where we will go in the future to supplement these quantities of money. The role of the Reserve Bank of Australia is critical in this area. I refer to the way in which it operates in the market today to support the exchange rate at about 60c to the American dollar and the way in which the reserves held it are being applied to that support. If the balance of payments deficits continue at their current levels, it is unlikely that the Reserve Bank will be able to maintain that position from current reserves. The Government will then be forced into considering special borrowings to support the balance of payments or to take other actions to contract imports to Australia. I would suspect that the trade union movement would be the first to call up the IOUs and demand import restrictions, whereas the answer lies in a far more competitive economy, a far more open labour market and a far more progressive approach to exports from this nation. If those measures are not taken, it is unlikely that we can maintain the exchange rate at these levels. If that is the case, what is the implication for the economy? Firstly, the inflation rate is likely to increase even above its high level of 8 per cent. That would make our competitive position weaker than it has been over the last five years. Secondly, it is unlikely that import substitution investment, which is so necessary for the external payments to be reduced, will take place unless there is real profitability in the manufacturing sector. To ensure that this occurs, we will need to ensure that the competitive advantages and the opportunities that are gained by devaluation are maximised. This can be done only through the labour market and export opportunities. The final area of the balance of payments which requires considerable thought is exports. In the last five years or so we have failed to maintain our position of advantage in the South East Asian markets. We have a natural advantage in this area and we should go into it competitively with much more promotion and a far greater sales drive. Corporations must address themselves to genuine risk investment and to the impact of foreign investment outside Australia. This will be necessary if we are to develop and maintain what footholds we have in the South East Asian continent. All of those measures put together will bring about a reversal in our balance of payments only if there is a combined and concerted effort by private enterprise and by government. I believe that it can be achieved, but it will not do anything for the balance of payments in the short term. As a consequence, I must continue to be gloomy in predicting Australia's economic outlook for the next two years. As a consequence, the Government's Budget is wholly inadequate in every respect. It does not address the balance of payments problem, which is the most critical for Australia. It does not address the question of government debt in terms of fiscal policy and it does not address itself to the record levels of taxation, which can only add to unemployment. The higher the level of taxation, the lower the probabilities of employment. Higher levels of government spending are no substitute for encouraging employment. One of the fallacies of socialist economics is that if governments spend excessively employment will increase. The truth is indeed quite the opposite. Large amounts of government spending are more likely to lead to employment contraction in the longer term. In the 10 minutes I have been given I conclude by saying that I find the Government's Budget presentation to be wholly inadequate and I notice that the Ministers themselves also think so. Mrs DARLING(Lilley)(11.36) —On 19 August the Treasurer (Mr Keating) brought down one of Australia's most important Budgets. It was important because Australia's position has changed since the days when we were able to live off the golden fleece, not affected by international markets. Australia's international debt, affected by market fluctuations in 1985, grew to a stage where it was impossible for the Government and the taxpayer to meet the enormous interest on that debt. That should have been revealed many years ago. This debt has been of concern to previous governments of all persuasions, but it built up to a stage where the Hawke Government was the Government which was faced with a possible recession if it did not reduce the deficit. The Prime Minister (Mr Hawke) therefore alerted all Australians to the crisis-that is now history-and appealed for their support in bringing down the deficit, the amount overspent annually in the Budget. The 1986-87 Budget, with a deficit reduced from $5.7 billion to $3.5 billion, is the result, In 1984-85 the deficit was $6.7 billion and in 1983-84 it was $7.9 billion. Considering the highly publicised national economic circumstances under which the 1986-87 Federal Budget was brought down, this was no mean achievement. I can witness to the fact that our Federal Ministers, who spent weeks and months weighing up natural priorities against available money, looked traumatised and fatigued by the exercise. I believe it was particularly difficult for members of the Expenditure Review Committee who took on the task of paring down Budget allocations to the desired $3.5 billion as evenly and as fairly as possible. I understand that this entailed the onerous and soul destroying task of going over and over the Estimates on a line by line basis in the search for another area of saving. Not everyone could be satisfied with any outcome in any Budget, but it is important for us to reflect on the fact that the Ministers concerned did not want to reduce expenditure on items which they ideologically supported. As they have reported, it was a case of doing so or of exposing those Australians whom the Labor movement supports to a depression of dimensions which could have exceeded that of the 1930s Great Depression. This Budget, in cutting the deficit so drastically while actually increasing expenditure on programs for the handicapped and the unemployed, is really a great achievement. Regardless of diverse opinions of political commentators as to whether this or another tactical or economic direction would have best achieved the desired result, it is up to all people honestly concerned with the future of our nation to do their utmost to see that the provisions of this Budget are given a fair go. For this to happen and for us to play our part it is important that we understand just what those provisions are. I am thankful that in making the necessary cuts the Government did not cut pensions. This would have been unthinkable, as I believe a nation is only as strong as its most needy person. I am therefore also pleased that funding has increased in the important areas of the disabled and training for the unemployed. It is important that the Budget measures be understood at a time when the future of our wonderful country is at stake. It is not a time for party politicking. I would therefore like to touch on some of the major elements of the 1986 Budget as clearly and factually as possible. One of the major areas in which the facts have been distorted for political gain in the past is, regrettably, that of pensions and social security generally. Indeed, this abuse of aged people by conservative opponents of the Hawke Government emerged at its ugliest during the 1984 election campaign, when certain Liberal Party and National Party of Australia candidates actually visited nursing homes, giving residents false information regarding the assets test. I am not saying that they all did this but I came in contact with some of this and I was not impressed. People who were entirely unaffected by the test-and that is the vast majority of aged people-were frightened into believing they would be left destitute. Of course they now know that this is not so. So that the same abuse of our aged citizens does not occur following the 1986-87 Budget, I would like to emphasise some facts regarding this Government's priorities as reflected in this and, indeed, preceding Budgets. The pension has actually increased from 22.7 per cent of average weekly earnings-the rate when we took office in March 1983-to 24.2 per cent of average weekly earnings; the figure for the end of this year. As stated in 1983, we are committed to raising the pension to 25 per cent of average weekly earnings. Under the previous Fraser-Howard Government the pension actually fell from 24.7 per cent in December 1975, the last quarter under Labor, to 22.7 per cent in March 1983, the last quarter under the Liberals. This decrease occurred in seven and a half years. By the May quarter of 1986 pensions stood at 24 per cent of average weekly earnings. The Government will spend more than $300m increasing pensions and benefits this financial year, taking these payments close to the 25 per cent which must be reached even in, and in fact because of, these difficult times. By the end of this year, the pension will stand at 24.2 per cent. This has been achieved in three years. The single and adult pension will have increased by 37.5 per cent since the Hawke Government came to office. Further, despite difficult economic circumstances, the six-monthly indexation which the Government provides to pensioners to keep up with the cost of living will also be maintained, but the November increase will be deferred for six weeks. This will change the automatic six-monthly pension increase to December and June instead of the present rises in November and May. Other increases in this Budget are the additional benefit for dependent children of pensioners and other recipients and the family income supplement, which will also be increased to $17 a week. From 1 January family allowance for 16 and 17 year olds will be income tested, but only for families earning more than $39,000 a year. From 1 November the following increases will apply: The handicapped child's allowance will increase by $7 a month to $92 a month. The orphan's pension will increase to $60 a month after a very small 30c increase and the mobility allowance for disabled people will increase to $11 a week after a $1 increase. The point is that these amounts have been maintained and increased at times when the deficit has been cut. The threshold on rent assistance-one of the most vital aspects of welfare assistance-will also be increased by $5 a week so that recipients renting at more than $15 a week may also be eligible for rent assistance. Pensioners seeking to earn money outside their pension without adversely affecting their benefit or concessions will be assisted by an easing of their income test limit from July next year. The easing of these poverty traps, originally intended for November this year but postponed because of budgetary restraint, will lift the weekly income test for single pensioners from $30 to $40 a week and from $50 to $70 a week for married couples. It is significant that, within the context of this budgetary restraint, funding for community services and assistance to families has been increased. The Minister for Community Services (Senator Grimes) has managed an 11 per cent increase in this important area. Spending on aged and disabled care has been increased in the Budget, and in line with government policy greater emphasis will be given to home based and community care rather than to nursing homes because care in the home is more cost efficient and the home can be a more helpful environment for aged and disabled people. An amount of $94m has been set aside for the home and community care program for four years from July 1987. These funds are in addition to the $65m allocated to the program in the 1984-85 Budget. A most important fact to emerge from a factual reading of the 1986-87 Budget is this Government's continuing support for families in Australia. We see the family unit as occupying a central position in Australian society. There have been a number of changes, but in the four Budgets over which we have presided since taking the reins of government the family income supplement has been increased by 70 per cent, from $10 a week to $17 a week. In the past three Budgets the Labor Government has increased the additional pension for children by $2 a week, taking it from $10 to $16. Similarly, the Government has progressively doubled the mothers-guardians allowance paid to single parents receiving social security benefits, taking the allowance from $6 a week to $12. Another issue of prime importance to families and, indeed, to all Australians, is that of health care. I would therefore like to clarify the main changes which have occurred in the Medicare system and prescription charges. For working people, the 85 per cent rebate for doctors' fees will still apply following the increase in the Medicare levy to 1.25 per cent, and the standardisation of doctors' fees will be introduced before the end of the year. This will mean that the variance in the amount of rebate provided by Medicare when patients visit their doctor will be the same in all States. The Federal Government had intended to introduce this initiative in August, to remove the anomalies which had existed under previous health systems. But this change will now come into effect from 1 November. That is the same date on which the new `safety net' system for prescription charges on pharmaceuticals will be introduced. Under this system patients will pay between $5 and $10 for their scripts, but once they have purchased 25 single prescribed drugs in a year, additional purchases will be free of charge. I think it is important to note that if one prescription form contains three different items, this will count as three out of the 25 needed for a free entitlement. When the new system begins, a card will be available from pharmacists on which each separate prescribed drug will be entered. When 25 entries have been made, a free entitlement card will be issued and future prescriptions for the year will be free. This will definitely benefit families. Pensioners will continue to receive all drugs on the pharmaceutical benefits list free of charge. Before closing, I will comment briefly on major employment initiatives which have received funding increases in the Budget. I point out that the community youth support scheme will receive a 12 per cent increase. Funding for the Australian traineeship scheme-part of the Priority One program-will be increased by $35m in 1986-87, in anticipation of 15,000 trainee places. Funding for other work and training programs, including Jobstart, the community training program and the adult training program, also will be increased. The Prime Minister, during his address to the nation, proposed a system of community work for unemployed people. An amount of $2.5m will therefore be put into the volunteer youth program so that young unemployed people can voluntarily help the community and gain useful work experience. It is obvious that even within the tight budgetary restraints of the 1986-87 Budget, the Labor Government has indicated its priorities by maintaining and/or expanding programs for those Australians most in need who absolutely cannot take part in a national belt-tightening exercise. Mr McVEIGH(Groom)(11.48) —I begin my contribution to the Budget debate by congratulating the Prime Minister (Mr Hawke) and his Treasurer (Mr Keating) for bringing down what appeared on first reading to be a very clever Budget. It was so clever that I, like many Australians who heard the Budget Speech, was at a loss to figure out what the pre-selling of it as a draconian document was all about. But alas, the Australian Labor Party sought to hoodwink the public into thinking that the Government was going to make the difficult decisions necessary to improve our balance of trade problems. Sadly, and unfortunately, that is not the case. I trust, now that the Labor Party, the Prime Minister and the Treasurer have been caught out in this duplicity, as well as in regard to the overstated trade figure projections, that they will not use this tactic again as a method of conning the community. The Prime Minister and the Treasurer may treat people such as the Minister for Health (Dr Blewett), who is at the table, and their back benchers as a pack of mental pygmies or, in the Treasurer's famous words, a group of fourth graders. But I say to them that they should beware of doing this to the rest of the people of Australia, which is what they have been doing in recent times. The public is more sophisticated and more knowledgeable than they would like to think. They understand when performance does not match rhetoric. If any of the Labor socialists are in doubt about that, I will read to them the results of the opinion polls. I will explain those results to them, if they cannot understand them. The results reflect the judgment of the Australian public on the conning that the Government has undertaken. The Prime Minister, in his build-up to the Budget, led us to believe that there would be equity with sacrifice. But there is no equity with sacrifice in this document. The Labor Party has taken the line of least resistance and has not looked in depth at the real needs of the public, which is suffering from the weight of the bureaucracy, high structural costs and outmoded work practices. Taxes were raised and some benefits were withdrawn. But, very importantly, the size and cost of government were maintained. The Government did nothing about doing away with bureaucratic control and waste. The Treasurer offered no incentives, no blueprint for the future, and no long term hope for our nation. Instead, as he said in his speech, unemployment is expected to rise. I cannot understand how socialists will go along with that. Inflation will increase and private investment will decline. I can understand why they do not want private investment to increase-they want the public sector to grow. I suggest to the socialists opposite that it is time for them to get off the backs of the taxpayers. After all, they did increase taxes by $1.5 billion. It is about time that they began to reduce their costs. They should cut back government spending, just as they have forced the family to cut back on its budget. I suggest that they could begin by eliminating or reducing the amount of overlap between Federal and State government departments. Why do we need a Federal department of sport? Thank heavens, the Minister for Sport, Recreation and Tourism (Mr John Brown) is a beauty from our point of view. He visited Queensland in the middle of a State election campaign and said: `I am delighted to be here in the fastest growing region of this great country'. Joh Bjelke-Petersen thought that was great. Mr Hicks —He was right. Mr McVEIGH —Of course, he was right and the Minister was right. I suggest to the socialists that State governments are more than capable of administering the functions and programs in regard to health, housing, welfare, education and community services. We do not want duplication. The Ministry and corresponding departments, as well as some statutory bodies, could be reduced. I am delighted to read the statements of the Leader of the Opposition (Mr Howard), who will soon be Prime Minister of this country, indicating that he will have fewer Ministers and less government involvement in his first Ministry. This move would not only cut out expenditure on the Public Service, but also would make for a leaner, more efficient public sector at less expense to the private sector. If we are to have an export-led recovery, as prophesied by the Treasurer, where are the incentives for the business community to invest? He should talk to the ordinary people-the home owners, farmers and small business people-who have seen since Budget night that interest rates have become unstable and the dollar has declined in value as a reaction to the Government's inability to make the difficult decisions. This is not the environment in which an aware businessman ventures. There is no security for his investment. I am conscious of the fact that the Budget aims to stabilise this situation. But surely, other alternatives can be tried. The Government has exhibited some sensitivity to the variation in income received by artists, sportspeople and authors, by allowing them to average their earnings over time. I ask: Why cannot this relief be extended to genuine new Australian businesses and existing businesses which are seeking to export or to be import replacement oriented? Certainly, it is in the Government's interests for those businesses to succeed and prosper. To that extent, it should offer some relief from the burdens of high current account figures. This proposal would be an incentive to those business people who are too timid to venture into the market-place because of the uncertainty of the present economic climate and it would also offer some relief to our unemployment problem. This proposition has merit and the Government should give careful consideration to it. As the Treasurer mentioned in his Budget Speech, some $6 billion of our international income has been slashed because of several factors beyond our control. Not only have international investors pulled out of the Australian market-place but commodity prices have fallen across the board, indicating that recessionary pressures are at work on a world scale. However, once these pressures are lifted and more prosperous times are at hand demand for our commodities will surge into prominence again. Therefore, it is necessary to take a longer term view of our current rural export situation and not jeopardise our close relationships with our long time friends and neighbours. After all, our security as a nation is paramount and should not be used as a bargaining tool or incorporated with trade matters. Farmers and businessmen alike are aware that cycles exist in all enterprises and numerous factors influence these cycles. For instance, three weeks ago the cotton industry was giving up this year. Sales were not forthcoming or, if they were, prices were rather low. Yet since that time, prices have jumped by almost $100 per bale because of factors beyond everyone's control. Hence, it is absolutely vital to remain flexible and forward thinking about our longer term gains and not to react to a situation because it appears to be popular to do so at a particular time. The Budget, like society, has placed little value or importance on the family. It is a sad comment that the family as a unit comes far down the line when concern is expressed about the welfare of our nation. Previous speakers from the National Party have given details of where the family has been hit. I do not want to reiterate those details because others have done it very well indeed. Some of my colleagues who will follow in this debate will also have something to say about that matter. It has been estimated that middle and low income families will be $12 to $15 per week worse off after the full effects of this Budget and the tax cuts come into play. The Government is not interested in the family. I just happen to be old fashioned. I believe that the family is the basis of society and that we should be building a nation on the family. Honourable members opposite do not believe in that. They attack the family because obviously they want to destroy society and build up a socialist society where the state is supreme. Neither I nor the National Party want to have a bar of that, and there are several reasons why I say that. There are some good people who are socialists. They talk a lot, but I just cannot understand why they have allowed the Prime Minister, the Treasurer, the Cabinet and the Ministry to get away with this savage onslaught on the family. I think it is about time that all of us stood up and fought for the family. Why does the family have to put up with such things as the increased cost of petrol, which is a rip-off, bracket creep into higher levels of income tax and increased indirect taxation of food items such as chocolate milk and juices? What child does not like a glass of chocolate milk? Members of the Government have forgotten that they were children once. We also have the higher cost of Medicare and prescriptions. The Minister for Health went around Australia saying: `There will be no increases in Medicare'. Mr Cobb —Broken promises. Mr McVEIGH —They are broken promises, as the honourable member for Parkes says. Mr McGauran —Are they lies? Mr McVEIGH —I would not go quite as far as calling them lies, but I just have difficulty in understanding how someone can sit in a chair- Mr DEPUTY SPEAKER(Mr Ruddock) —Order! I do not think the interjection in that form was appropriate. Mr McGauran —I withdraw the interjection, Mr Deputy Speaker. Mr McVEIGH —I can understand why the honourable member is excited; he is a very honest man. He has never told a fib or a lie in his life and he gets upset when other people do not treat the truth with such delicate care and tenderness as he does. The Minister for Local Government and Administrative Services (Mr Uren) has entered the chamber. I know that he does not go along with this attack on the family. He is one of the better members who sit opposite and it must be upsetting for him to have to sit around a table and listen to an attack on the family. He will not have a bar of it, but he should convince some of his colleagues. Food, clothing and transport are all items which come out of the disposable income of families. With less disposable income families with children have to bear a disproportionate burden of maintaining their offspring. Added to this, the family allowance for 16- and 17-year-olds has been discontinued. This will affect an estimated 60,000 families and reflects a decreased redistribution of tax money to families. The Government has clearly stated that it puts no value on the family. We in the National Party and the Opposition put all value on the family. The redistribution of tax burdens rests not only at the family level but also at the business level. Our businesses have been weighed down with increases in taxes, inefficient work practices and an inflexible wages structure. At the same time calls have been made for an export led recovery and a greater degree of international competitiveness. If this is to be the case, we need to restructure our operations to reflect more closely our international position. The concept of using an export earnings index, rather than the consumer price index figure, as the main foundation for our wage adjustments has been around for some time. If we used this alternative index we would see a more rapid adjustment in our real wages level and all Australians would become more fully aware of our international performance as a trading nation. How can the farmers of this nation pay higher wages this year when they are getting only $55 a tonne for their barley while last year the price was $120 a tonne? Last year the price for sorghum was $140; this year it is $99, yet our wages have gone up. If we are to have equity with sacrifice let all of us carry a punch and hammer around with us, take off our belts and put in an extra hole when overseas prices come down. We should not have this silly arrangement that wages go up, export income comes down and everyone goes broke. One does not have to be a Rhodes scholar to understand that the system cannot work if one adopts that stupid sort of economics. Our living standards would adjust according to how well we were performing on the world scale. We are just a small nation of a few people. We cannot influence world market conditions except in the case of wool. We are price takers on world markets and consequently our labour force also has to be a price taker according to world market conditions. This would in turn give the Australian community the incentive to buy more Australian-made products, become more productive, eliminate wasteful work practices and become more efficient. It could be like a national profit sharing project in which the whole of the country would participate. As it is not, wages only go up. If we have a depressed commodities market and a declining manufacturing base we simply tax our way out of the situation. For the sake of our survival we need to get out of this high inflation and interest rate cycle. Like all my colleagues, I sincerely hoped that this Budget would make the tough decisions required for our tough times, but it failed to do so. Not only did the Government let itself down, but it also let down the Australian people. To summarise, the socialists handed out more taxes and took away incentives. What good is a capital gains tax if there are no gains? What good is a fringe benefit if there is no business or job? What good is an assets test if one has nothing to show for a lifetime of work? Australia must respond strongly to the adjustments necessary so we can get out of this disincentive, high taxing situation we have found ourselves in. We need to adopt the attitude of going into business to make products people will buy and not just to make money. The objectives of management and staff must be complementary in order to achieve the goals necessary to make us competitive. We must begin to attract our best brains and talent into the manufacturing sector, but this can be achieved only if the right economic climate exists. Working together we can produce this climate but it is up to all Australians. We, as Australians, must stop blaming the world for our problems and instead take a positive approach to how, as a nation, we can overcome them and regain our rightful place as a premier exporting nation. Mr MILDREN(Ballarat)(12.05) —The comments made by the honourable member for Groom (Mr McVeigh) remind me of the guest who comes to dinner and propounds his moral virtues and the old saying about such a guest: `The louder he talked of his honour, the faster we counted our spoons'. Mr McVeigh —Mr Deputy Speaker, I am a rather sensitive sort of character. I thought the honourable member's remarks were rather hurtful. I ask that they be withdrawn. Mr DEPUTY SPEAKER(Mr Ruddock) —My impression is that the remarks were not directed to any particular honourable member. Mr McVeigh —I disagree, Mr Deputy Speaker. The honourable member said: `The remarks of the previous member reminded me of . . .' That is rather precise and pertinent. I ask that his remarks be withdrawn. Mr DEPUTY SPEAKER —I ask the honourable member for Ballarat, if his remarks were directed to a particular honourable member, to withdraw them. Mr MILDREN —With all due regard to the honourable member's sensitivity, I withdraw. I congratulate the Treasurer (Mr Keating) on bringing down a Budget which stands as a first class response to Australia's current economic position. The context in which this Budget has been put together is one of a massive decline in Australia's terms of trade, brought about by a significant decline in prices for raw materials and farm products. At the same time, the rate of growth of imports, brought about by a remarkably strong domestic economy, had made the position more difficult because of the structural inability of the manufacturing sector to take advantage of dramatically improved international competitiveness consequent upon the floating of the Australian dollar. In addition to adverse terms of trade factors, we have watched the United States and the European Economic Community plunder world agricultural markets via the ill-advised and globally destabilising practice of providing to buyers of all shapes and sizes farm products at subsidised prices. This is a Budget over which the Government has agonised. Programs and departments have been affected, which no one on the Government side would have felt particularly happy about. But feeling happy or unhappy is not what this Budget is all about. Responsibility and necessity have imposed other demands. Cuts have been made in areas which, in the best of all possible worlds, would have seen increased expenditure properly targeted for need. But this is not currently the best of all possible worlds. The significant pruning of the Budget deficit has come to be talked about as an end in itself. The simplistic utterances of many on the other side of the House and, I am sorry to say, in the community, have centred on the need to rein in the deficit to an ever lower figure, the object of the game being nothing more than to quote a figure lower than the last self-styled commentator. The deficit gain is one that the Leader of the Opposition (Mr Howard) has failed at before. We remember the $9.6 billion deficit in prospect in March 1983 when this Government was first elected. It is perhaps not surprising that he kept revising his preferred deficit figure downward because, as usual, he was being outflanked. It is a measure of his economic credibility when it comes to deficits that the only way anyone would pay any attention to his statements was when he came up with a lower figure than the last one he had heard. The pruning of the deficit, as I said, was not an end in itself. It was not just a matter of chopping away for the sake of coming up with cuts and a figure that looked tough. The pruning of government expenditure has come about because restraint is absolutely necessary, given the current state of world markets and our unfortunate legacy of several decades or more in which our ability to compete as manufacturers has slipped. This Government has worked hard at industry policy. It has pressed for a revitalisation of industry and has encouraged restructuring that would put the bulk of our manufacturing sector firmly on the path to the 1990s and beyond. It will continue to do these things. Obviously, it takes more than a few years to turn around the neglect of so many decades. So we find ourselves in a hiatus, as our traditional export markets have gone sour and as our industry is in the early stages of restructuring itself and taking on an export orientation. It is all right to come up with a lot of rhetoric about what is good for the family but if, as happened with the previous Government, there is no attempt to restructure and reform the tax regime and the income of families is allowed to be eroded by fiscal drag, I do not think much of that rhetoric. It is nothing short of a kind of parasitism. The lowering of the deficit is an express recognition by this Government that under present circumstances we have to accept for the time being, a lower standard of living as a nation. A lower standard of living implies lower levels of government expenditure as much as it implies lower income levels for all Australians. One cannot pass the buck to the bloke down the road because the buck is not there. This Government is saying, without fear or any attempt at sweetening or covering-up, that we are going to spend what we can afford to spend, not what we would like to spend. A rather different approach is that taken by the gentleman who had the $9.6 billion deficit. The Government, under the leadership of the Prime Minister (Mr Hawke) and the Treasurer, has done its job in bringing the deficit to well under half that which it inherited on coming to office. Instead of defending and applauding the Government's efforts for the nation's best long term interests, even if they do not like the details of the Budget, the Opposition, including the Australian Democrats, has publicly toyed with, or not expressly denied, entertaining the idea of knocking out parts of the Budget provisions. Such proposals are the height of irresponsibility. The Democrats are prepared, if they really do fly their kite, to mortgage Australia's future in a fruitless attempt to save their own. Those whom they say they quite genuinely wish to protect, they will grievously harm. It is the response of this Government which will in the longer term give those people the greatest protection and the best future. I want to make a couple of comments about a development which has taken place in Australia over the last 12 months or so and which is now reaching crescendo level. I speak of the difficulty of some people who in many respects are the legatees of those responsible for allowing Australian industry to run down. These people are classified as the New Right. I think it is incumbent upon those people to examine what they are doing to the fabric of Australian society. If ever it was necessary for all elements of Australian society to pull together and to recognise that it is only through the processes of co-operation that this nation will be able to overcome the deficit of the last few years and the neglect of Australian industry and to achieve an appropriate direction of the Australian economy, it is now. I believe that it is a very sorry state of affairs that there are people who are living so far in the past and who believe that it is appropriate to raise the strange ideological spectre of laissez-faireism as appropriate for Australia today. It is a sad reflection upon the limitations of those people. I suppose one might say that those people are captives of their own rhetoric. In many respects we are seeing a group of people who believe that it is important to set up again a conflict situation-perhaps the only situation they know, the only way in which they have made their fortunes-and blame the trade union movement which, of course, represents the Australian worker, for the ills of this society. They have very little sense of history and very little understanding that the regime under which this country's problems arose was a regime under which this country paid little attention to the international market-place. They have paid little attention to the need to maintain viable secondary and tertiary industries. It is these people who, in many respects, are the guilty ones. They believe that power and capital are synonymous and that, somehow or other, if one has the capital, one has the power over people. That is, indeed, a destructive way of thinking and a totally destructive way of looking at the development of society. They have given no credit to the trade union movement. Over the last three years members of the trade union movement have been the only people-I might say, with the exception of politicians-who have been prepared to take a real cut in their incomes for the nation's good. The farmers of this country have taken a very serious cut in their incomes. Mr McVeigh —I am glad you recognise that. Mr MILDREN —Of course I do. Mr McVeigh —Why did you put up the price of fuel on them? Mr MILDREN —I will leave that aside. Mr McVeigh —That is the knock-out blow; you cannot answer it. Mr MILDREN —I am just suggesting that the farmers have taken a cut in their incomes because of a decline in world markets. They know that as well as honourable members opposite do. The people who are really responsible for this are the people who are bleating on the other side of the House, because for 20 or 30 years they allowed this country to run down and not be internationally competitive. They cannot run away from that. That was disastrous. Mr McGauran —Specifics! Give us some figures. Mr MILDREN —If honourable members opposite want figures, given plenty of time I can give them the figures. Mr McGauran —They are all generalisations. Mr MILDREN —The honourable member knows that it is true. An honourable gentleman on the other side said that the honourable member interjecting is a man of great probity and veracity. I am afraid that that is something about which the honourable member will take a long time to convince me. Mr DEPUTY SPEAKER(Mr Ruddock) —Order! Would the honourable member please address his remarks through the Chair. Mr MILDREN —Of course, and I am terribly sorry that I have been waylaid. However, I make the point that it is the responsibility of those people who are now declaring that they want to return this country to the nineteenth century to realise that if there is to be any chance for the country to get back onto its feet, they are the ones who have to be responsible and who have to join with this Government and co-operate to ensure that this can be done. Mr TUCKEY(O'Connor)(12.28) —Australians are no longer interested in the rhetoric. Australians are no longer interested in the history of a $9.6 billion artificially created deficit projection that neither stood on the figures nor was the responsibility anyway of a past government. I have made that point frequently. Honourable members opposite mention the word inheritance so often in this place that one would think the Government was going to reintroduce probate. The deficit that the Hawke-Keating Government inherited was the $4 billion deficit that occurred in the last Fraser Budget, which it inherited in March 1983 and was obliged to administer until 30 June of that year. The next Budget and all the succeeding Budgets have been produced by the Hawke-Keating Government and have been theirs and theirs alone. Included in that expenditure, and that over-expenditure of $8,000m in its first year, was provision for Medicare. Is anybody in this chamber suggesting that Malcolm Fraser was going to reintroduce Medicare, which is costing close to $4,000m compared with a revenue income of $1.6 billion in the Budget that we are debating today? If there is anybody in the gallery or anywhere else who believes that if their grandmother, as much as they loved her, had left to them a forward commitment for debt and they would have accepted the inheritance, I would like to hear them say it. That is what the Prime Minister (Mr Hawke) and his Treasurer (Mr Keating) have tried to tell us for years-that someone else had dreamed up a commitment to a debt of $9.6 billion and they were so incompetent that they had to accept it. It was their decision. We know it was their decision, just as this Budget is their decision, and it was done deliberately to introduce the old Keynesian economic theory that one can kick start a modern economy by the process of massive government expenditure and debt. In simple terms, the realities of this Budget are that the Government has increased expenditure to $74,764m. That is up a mere $26,000m or 53 per cent on the last Fraser Budget. This Government has increased expenditure to 29.4 per cent of our gross domestic product. This Government has increased tax revenue from $44,344m in the last real inherited Budget to $71,261m, which is up $27,000m per annum in just over four years. Taxation revenue under this Government is now the highest ever level-25.5 per cent-as a percentage of gross domestic product. We had the spectacle of this economic genius, the Prime Minister, the other day trying to compare that level with the highest level under the Fraser Government of 24.6 per cent, and said the Government had to adjust the percentage for inflation. In other words, we are going to have percentages in real terms in the future. That is the economic genius that honourable members opposite call a leader. Let us look quickly at what the Government has done. It set out on a deliberate course of Keynesian economics. The Government has not yet learnt how to get off the merry-go-round and, of course, the financial community of the world has passed judgment on it. This is the first government and the first Treasurer ever to preside over a downgrading of our sovereign credit rating. How did the Treasurer react to that? He came in here singing `Moody Blues'-a smart-Alick. Every time we asked him any questions in this place relating to the hard economic facts of the day-there was evidence of it yesterday-he did not know the answers. He does not even know the percentages applicable under the fringe benefits tax statutory formula for the use of motor vehicles. He told us once that he was not a computer. That was the first time I had been able to agree with him for some time. The Government tried to reinvent the wheel with its economic policy, which is no different in this particular Budget, because it thought it could reintroduce Keynesian economics. History has proved that that will not work. The most recent history of Keynesian economics is the attempt of President Mitterrand. I will read what David Clark wrote about that experiment in the Australian Financial Review recently: After coming to power in June 1981-- Mr Hand —What has President Mitterrand got to do with it? Mr TUCKEY —I will give you the reason. The article continued: the Mitterrand Government tried a classic Keynesian demand stimulus. Wages were increased by a minimum of 10 per cent and elderly pensions by 20 per cent. I know that this Government did not do that; it hit the pensioners, but it put up the dole: Public investment was boosted to provide many more public sector jobs. This Government did that. The Government has increased public sector jobs by 15,000. Premier Cain increased his public sector by 25,000 jobs. The total increase under Labor governments in recent times is 45,000. Mr Hand —The most successful government in the Commonwealth. Mr TUCKEY —If the honourable member listens to this, he might just learn something. The article continued: The Mitterrand Government hoped that this package would raise profits and stimulate private sector investment. . . . . French consumers spent all right, but they purchased imported consumer goods-- Does that strike a chord with honourable members opposite? The article continued: which France either did not produce at all, like video recorders, or goods which were in limited production within France. The previous speaker bemoaned the decline of our manufacturing sector. Mr Simmons —You lot wiped it out. Mr TUCKEY —It does not matter how it happened. The pity of it is that the Treasurer decided that he could fix it. The article continued: The French Socialists discovered that they could order the populace to consume but not to produce. By the end of 1981-- just six months into his program, a program which the Government has followed so slavishly here-- France had an inflation rate of 14 per cent, a growing foreign and domestic debt, a falling franc and a spiralling import bill. Have honourable members opposite heard any of those things around Australia lately? Each and every one of those things has occurred for the same reason. The Government had a debt led recovery. The Government borrowed $24,000m against the security of our children in just four years, but it has not worked. Credit is running out, just at a time when, because of a fall in overseas commodity prices, the Government needs a bit of credit. The Government has created 600,000 jobs, it says. It can probably take credit for 150,000 of them, but if we gave it credit for the whole 600,000 it would have borrowed over $30,000 for each job. What happened? We find in this article that President Mitterrand, with his socialist policies, had to devalue his country's currency twice, by 6 per cent and 3.5 per cent. Despite an announcement that the French Government would try to keep the deficit at about 3 per cent of GDP and other efforts to talk up the economy-our Government has been doing that for the last three weeks-and to talk down speculation about the franc, another 8 per cent devaluation against the West German mark could not be avoided in March 1983. Surely honourable members here recognise the significance of March 1983. It is the very month and year in which the Hawke Government was elected. France had a massive disaster because of these policies, but the Government was too blind to see what it was doing and what it has done in successive Budgets. The Australian situation had nothing to do with what the Fraser Government did. This Government took the decisions; it decided to borrow the money, and it cannot blame anyone else. The Australian public is starting to wake up. It is fed up with this type of rhetoric: Win the argument at any cost; do not be confused by the facts. We had the Treasurer running around the other day telling business that it could afford the 3 per cent productivity case and the superannuation that goes with it because its profits have never been higher. The figure that he was using was one that was calculated prior to the removal of interest and taxation. Today we have the highest interest rates of any part of the world, bar the banana republics. That was not the case under Fraser. We had high interest rates then, but they were high around the world. The Japanese businessman today can get a prime rate of interest of 4.25 per cent; his American counterpart can get an interest rate of below 8 per cent; and his British counterpart can get one of around 10 or 11 per cent. Similar relative rates apply to householders, who are the people whom the Government says it is looking after. An amazing thing about this Budget is that this Government, the representative of the workers-I just heard someone say that-is putting up the price of beer every six months. It is the only entertainment that some workers have. I read the other day that the Minister for recreation, culture and everything else was saying how grateful he was that the various Ministers supported his culture program because one loves the opera and one loves the ballet. They are pretty good at going to them on subsidised tickets while the workers of Australia are made to pay the bill through the taxes on their fuel and their beer. This Government taxes, taxes, taxes the simple pleasures that people need. Excise is going up by $715m in this Budget because the Government is so hungry for revenue. It is prepared to tax the very people whom it came into this Parliament to represent, so that it can pass some subsidies on to others. The same thing applies to the fringe benefits tax. The Government makes such a fuss about this tax, which of course has received very little mention in this Budget. It is a tax that has entrenched the tax-free benefit for the fat cats who are allowed to put it into their costs and pass it down into the Treasurer's little brown paper bag, which will have the Vegemite sandwich in it. Kraft Foods Ltd has to pay the tax-it will pay it on its salesmen's vehicles-but it will not let its dividend income fall; it cannot afford to do so. This is the day of the corporate raider. If it lets its dividend income fall it will be taken over-maybe not Kraft Foods but I could put many others in that place. The Government will see 90 per cent of the fringe benefits tax passed on to consumers, but the Prime Minister denies it. It just shows his inability and his lack of knowledge of the workings of business. He has been involved in Bourke's store and ACTU-Solo. What a disaster they were. The reality of it is that it is the working people of Australia who will pay the fringe benefits tax. Salesmen are paying it already at $20 a week on the cars that they are obliged to use as demonstrators to earn their living. That is what the Government has done. Let me mention a couple of other taxes which the Government has imposed and which are plainly silly. It has put $100m of taxation on computer software. It is exhorting business to get technology and to get out there and compete with the rest of the world, yet it taxes the thing that business needs most in this modern world. I do not know how many honourable members opposite know the difference between computer hardware and software. The hardware is the machines and the software is the programs. Mr Simmons —Oh! Is that right? Mr TUCKEY —I am sorry, but honourable members on the Government side have a look on their faces that makes me feel obliged to explain it to them. The software is the repetitive item. Businesses have to keep buying it all the time. The Government will tax it; it will create a disincentive for people to invest in new programs which can improve the efficiency of their manufacturing processes and which can improve the efficiency of their accountancy processes. It is really smart stuff! The Government said that licensing is a tax avoidance measure. Of course it is not. Licensing is the process by which the invention is protected. It was not a tax rort. The Government is so paranoid about tax rorts that it does not look behind them for common sense. I am aware that I do not have any more time. If I had an hour I could go through the foolishness of this Budget, but it is not really necessary because the evidence is all around us. Our sovereign credit rating has been degraded, and we have to pay between 18 and 20 per cent for our money in this country when the rest of the world is paying for it at much, much lower levels. It is only the banana republics that have to pay this. Maybe the Treasurer was getting pretty close to the truth when he made his statement, but it is all his fault. Mr MILTON(La Trobe)(12.31) —In speaking to the Appropriation Bill (No. 1) 1986-87, which is presently before the House, I have some difficulty because with the present deregulatory state of the Australian economy the Government has put itself in a position in which influential overseas financial analysts can virtually dictate how we will run our economy. This means that, had the Government not planned for a substantial reduction in the Budget deficit, the overseas analysts would have cried doom and gloom about the Government's financial policies and our free floating dollar could have plunged to well below the $US0.60 mark. I have to say that I abhor the deregulatory state of our economy. I agree with the assessment by the Government of how we arrived at our present precarious situation, which included bad economic decisions by previous governments that were controlled by the Opposition parties in this House. Why must we persist with a floating dollar? Why not fix the dollar at its present level to avoid the manipulation by foreign currency speculators? My major concern about the Budget is that it will cause a further decline in the living standards of the two and a half to three million Australians who are living on or below the poverty line. When Opposition members in this chamber continue to talk about the need to cut wages they should appreciate that many workers are already receiving a wage which is close to or below the poverty line. Those Australians on social security benefits also are well below the poverty line. I seek leave of the House to incorporate in my speech two tables on poverty as at May 1986 which were prepared by the Melbourne University Institute of Applied Economic and Social Research. Leave granted. The documents read as follows- Table 1 POVERTY LINES: AUSTRALIA, MAY 1986(a,b) Types of Family Income Unit All costs including housing Costs other than housing $ $ Head in Workforce Couple... 195.90 143.20 Couple and 1 child... 235.40 178.00 Couple and 2 children... 275.00 212.90 Couple and 3 children... 314.50 247.70 Couple and 4 children... 354.10 282.10 Single adult... 146.40 98.50 Single parent and 1 child... 187.90 135.30 Single parent and 2 children... 227.50 170.10 Single parent and 3 children... 267.10 205.00 Single parent and 4 children... 306.60 239.80 Head not in Workforce Couple... 168.20 115.50 Couple and 1 child... 207.70 150.40 Couple and 2 children... 247.30 185.20 Couple and 3 children... 286.90 220.00 Couple and 4 children... 326.40 254.40 Single adult... 118.70 70.80 Single parent and 1 child... 160.20 107.60 Single parent and 2 children... 199.80 142.40 Single parent and 3 children... 239.40 177.30 Single parent and 4 children... 278.90 212.10 (a) Based on the preliminary estimate of seasonally adjusted household disposable income from all sources after taxes per head per week for June quarter 1986 of $203.30. (b) All figures refer to income after tax. Table 3 COMPARISON OF HENDERSON POVERTY LINES WITH THE INCOME OF ADULTS WHO RECEIVE MAXIMUM SOCIAL SECURITY PAYMENTS AND HAVE NO OTHER INCOME, MAY 1986 (Per Capita Household Disposable Income=$203.30 per week) Benefits (a) Family Allowance (b) Family Income Supplement (c) Rent assistance Unemployed (d) All other (d) Total income Unemployed (e) All other (e) Poverty line (f) Single Adult No children Unemployed... 95.40 0.0 0.0 10.00 - 105.40 - 118.70 All other categories... 102.10 0.0 0.0 - 15.0 - 117.10 118.70 1 child... 102.10 5.25 28.0 10.00 15.0 143.35 150.35 160.20 2 children... 102.10 12.75 44.0 10.00 15.0 168.85 173.85 199.80 3 children... 102.10 21.75 60.0 10.00 15.0 193.85 198.85 239.40 4 children... 102.10 30.75 76.0 10.00 15.0 218.85 223.85 278.90 Married couple No children... 170.30 0.0 0.0 10.00 15.0 180.30 185.30 168.20 1 child... 170.30 5.25 16.0 10.00 15.0 201.55 206.55 207.70 2 children... 170.30 12.75 32.0 10.00 15.0 225.05 230.05 247.30 3 children... 170.30 21.75 48.0 10.00 15.0 250.05 255.05 286.90 4 children... 170.30 30.75 64.0 10.00 15.0 275.05 280.05 326.40 Sources: (1) Information on benefits and allowances are gathered from leaflets published by the Department of Social Security. The leaflets provide general guides to the rates and the total amounts of benefits and allowances and describe the eligible beneficiaries as at May 1986; (2) The May 1986 Poverty Lines were calculated from Household disposable income, estimates of mid-quarter population and equivalence scales used by the IAESR. Mr MILTON —Table 1 shows, for example, that a couple with two children and with only one adult on a working income needs a net income of more than $275 per week to be above the poverty line. Table 3, for example, shows that a single, unemployed adult with two children receiving maximum social security payments and having no other income receives $168.85 per week, compared with the poverty level of $199.80. Table 3 does not take into account the value of fringe benefits to which many pensioners are entitled, such as health, welfare services, housing, transport, discounts on rates and education. However, I think honourable members on both sides of the House must agree that these figures are most salutary and indicate that the Government should be introducing urgent measures to overcome the poverty traps into which so many social security beneficiaries fall. I hope to say more about these matters in a later speech, and give examples relating to the circumstances of two or my constituents. As my time in the present debate is limited, I have to continue with more general comments about the negative effects which financial deregulation has imposed on our economy. Australian investment abroad was minimal until our foreign exchange markets were deregulated in 1983. As Kenneth Davidson of the Age newspaper has pointed out, private investment abroad increased from $2,200m in 1983-84 to $5,000m in 1984-85 and to a massive $6,900m in 1985-86. Incidentally, unlike some members on this side of the House, I consider Kenneth Davidson to have provided over the years a most thoughtful and incisive analysis of the economic issues facing Australia. He points out: Australia has no future unless it undertakes the massive investment in new industries necessary to replace the export revenue now lost as a result of a collapse in world demand for commodities. It seems ironic to me that at a time when the Government is urging Australians to buy Australian goods because of our terms of trade problems, stockbrokers are urging their clients to invest overseas. As a consequence of the advice of professional investment advisers, a high proportion of the capital outflow is caused by the overseas investments of life insurance offices and superannuation funds. This capital investment is needed badly in Australia but it is quite obvious that patriotism is not a hallmark of institutional and private investors. The Government has made it clear that its Budget strategy is reliant on private investment by the private sector to improve our terms of trade. The guide to the 1986-87 Budget documents states: The Government is helping to bring about the necessary changes through the Budget by spending less and borrowing less. With reduced government borrowing there are more funds available for investment by the private sector. The continuing huge capital outflow to overseas investments does not bode well for the underlying Budget expectations. The Budget deficit has been cut severely from $5.7 billion to $3.5 billion and the Government has achieved a reduction of $2 billion by making a cut of $3 billion in existing government programs and increasing revenue collection through taxation by $1.5 billion. Combined with the cuts in funding for the States, the cuts in government programs must lead eventually to a slowing of economic growth and a loss of jobs. As one who spoke strongly in favour of the prices and incomes accord, I am particularly disappointed that the cuts in government programs will fall most heavily on the poorer sections of the Australian community. Whilst the Government has always emphasised the wages side of the accord, to the extent that some Ministers have welcomed enthusiastically the large cuts in wages, my own emphasis has always been on the need for increases in the social wage, which was an equally important aspect of the accord. If wage cuts are adequately compensated by increases in the social wage, the benefits flow on to pensioners, the unemployed and low-income earners, and represent a redistribution of income in line with one of the basic principles of the political platform of the Australian Labor Party. Regretfully, the Government has not kept its side of the bargain with the union movement and the Budget has resulted in heavy cuts in the social wage areas of education, health, social security and welfare. It is difficult to see how the prices and incomes accord can survive in such circumstances. Of course, there are those who will ask: `What is your solution to the problem?'. As I have already indicated, and as I shall attempt to clarify in other contributions to the Budget debate which I hope to make later, I am not in favour of a contractionary Budget. I do not believe that we should have placed ourselves in such a vulnerable position vis-a-vis financial institutions. It is interesting to note that despite the heavy cuts in government spending and the reduction of the Budget deficit, some overseas economic analysis and some Opposition members are calling for even heavier cuts. It seems quite likely to me that the contraction in government spending will result in a serious economic downturn, particularly if private businesses and households cut back their spending and increase their savings. Such a downturn will result in more unemployment, less tax revenue for the Government and an increase in welfare payments. With no evidence that private business is prepared to take up the slack in the economy, it seems to me potentially disastrous to introduce cuts in government spending which could lead to a recession. I take the opportunity at this point to comment on two specific proposals in the Budget which, apart from my general comments about the effect of the social wage cuts on the three million Australians who are on or below the poverty line, have caused me concern. Honourable members will be aware already of my abhorrence of the Government's decision to sell uranium to France in clear contradiction of the Party's policy. My spontaneous reaction of disquiet expressed during the Budget Speech of the Treasurer (Mr Keating), which was shared by my friends and comrades, the honourable member for Hindmarsh (Mr Scott) and the honourable member for Hotham (Mr Kent), has since been vindicated by the hundreds of letters, telegrams, telephone messages and other messages of support from not only people in my electorate but also from others throughout Australia. Party members and supporters are disillusioned that party policy could be so blatantly overturned by a Labor government. Our South Pacific neighbour nations have expressed their dismay and disappointment that financial considerations have overcome our moral responsibilities. I appeal to the Government to reverse this decision. Such a reversal would not indicate weakness. On the contrary, it would show a recognition of the strength of the structures of the Australian Labor Party and the need to honour Federal Caucus obligations to our party members and supporters. The other matter to which I wish to refer is the decision to reduce the majority of industry assistance bounties by 20 per cent. This decision will prove to be a most blunt and negative means of reducing government expenditure, particularly for the textile, clothing and footwear industries. The Federal Government promised the industries that there would be no change to the protection package until 31 December 1988. The 20 per cent cut in bounties will have a serious effect on the future business policy of an important Australian company called Fibremakers Australia Pty Ltd, whose factory is situated close to the borders of the Federal electorates of La Trobe, Streeton, Casey and Aston. The majority of its 1,029 employees, whose livelihoods could be seriously affected by the reduced bounty decision, live in the four electorates concerned. Incidentally 179 employees live and work at Penrith. During a recent visit to the factory the honourable member for Aston (Mr Saunderson) and the honourable member for Streeton (Mr Lamb) and I held discussions with management and the employees, who were represented by their union shop stewards. We were advised of a letter which the management had written to the employees, which read as follows: The announcement on last Tuesday night of a 20 per cent cut back in bounties, applicable to the TCF industries, came as a complete shock to the Company and consequently the Company will need to reconsider its business policy, and immediately set out to recover the consequent $5.5 million in lost revenue. Whilst justifiable strong representations to the Government will be made on this irrational decision ahead of the pending decision on the IAC recommendations in October 1986 affecting the post-1988 protection package, we will be acting immediately to recover the lost bounty revenue by a further substantial price increase across our product range effective from the 25th August. Nevertheless, this is unlikely to recover the total losses without some potential loss of volume and market share in some market segments, depending on the relative intensity of competitive activity. The management also indicated in its letter that the reduced bounty would inevitably have an adverse effect on the $40m expansion and modification program that is currently under way. It is regrettable that the expansion program will be affected because it was welcome news when we Federal members learnt that the Australian company, JGL, had bought Fibremakers from the transnational corporative ICI and was embarking on the expansion program. The management had told us that whilst it has yet to assess the practical effects of the bounty cut, it is highly likely that the program will not be extended beyond the present stage 1 to stages 2 and 3. The curtailment of the expansion program would have a negative effect on the current drive to increase exports. Thus, the bounty cut has had the reverse effect of that intended by the Government, namely, to reduce government expenditure. As I do not wish to end my contribution to the debate on a negative note, I wish to make a positive plea to government. I am not calling for a change in the decision to cut the bounties, but I do ask that as the sudden decision was commercially unrealistic in respect of the forward commitment of sale prices, three optional payment methods be considered. First, the 20 per cent cut could be phased in over nine months, with 5 per cent on 19 August, 10 per cent on 1 October, 15 per cent on 1 January 1987 and the full 20 per cent on 1 March 1987. Secondly, the bounty could be paid on material contracted pre-19 August 1986 for future delivery at prices that are legally binding. Thirdly, the bounty could be paid on all finished goods produced after 20 May 1986 and before 19 August 1986, being stock held on that date and subsequently sold. Finally, the recent administrative decision to redefine the scope of bountiable items involving production staff cars and the polymer storage facility appears manifestly unfair and should be reconsidered. I hope that the Minister for Industry, Technology and Commerce (Senator Button) will give serious consideration to the issues that I have raised on the bounty decision. Mr DEPUTY SPEAKER(Mr Ruddock) —Order! It being 12.45 p.m., the debate is interrupted in accordance with sessional order 101 (a). The debate may be resumed at a later hour. The chair will be resumed at 2 p.m. Sitting suspended from 12.45 to 2 p.m. Mr SINCLAIR —Is the Minister for Immigration and Ethnic Affairs and Minister Assisting the Treasurer aware of the offer by the New Zealand Labour Minister for Finance, Mr Douglas, to resign because of Budget disclosures? As Minister assisting the Treasurer, did the Minister, as stated by Mr Allan Calleja on the Australian Broadcasting Corporation 7.30 Report on 29 August, leak to 5DN Adelaide on 12 August a decision on funding for the Institute of Multicultural Affairs as part of a deal for regular air time? If not on that occasion, did he intend as part of his negotiations with Mr Jeremy Cordeaux to enter into some type of deal related to such Budget disclosures? Why does the Minister have a lesser standard of propriety in such matters than his New Zealand Labour Colleague? Mr HURFORD —I have been waiting for the interjection `Scoop' because that, I understand, is my new nickname. I admired the late Senator `Scoop' Jackson from the United States. It is not a nickname I will worry about very much. Yes, I am aware of that offer by Mr Douglas. No, I did not disclose any Budget secret on 12 August. The fact is that I made the announcement on that day, with Cabinet backing, that the Australian Institute of Multicultural Affairs was terminated. It was not a Budget decision, it was a decision that was announced by me on 12 August. I have noticed that Mr Calleja has defamed me and I am considering the action I will take arising out of that. I will look at what else the right honourable member had to ask me in his long, voluminous question. If there is anything else that I think this House deserves to learn about I will make a supplementary answer. Mr CROSS —Has the Minister for Sport, Recreation and Tourism noted recent reports in Queensland newspapers that he believes that Queensland is the fastest growing State in Australia? Are these reports correct and, if not, was the Queensland National Party guilty of false advertising in its newspaper campaign last weekend? Mr JOHN BROWN —I did see those reports. I do not know whether to be flattered or not that Joh considers me to be such a fount of political and sociological wisdom that he wants to use me in his advertising campaign. I think it is fair that I put the remarks in context. Honourable members will understand that, upon our assent to the throne of government in Australia, this Government inherited Expo 1988, which was a contract entered into by the Queensland Government in conjunction with the previous Federal Government to stage an international exposition in Brisbane in 1988. It is a responsibility which we undertook honourably if reluctantly. I think the decision to have Expo in our bicentennial year was a mistake. Nevertheless, we have honourably approached our responsibility. I have spent a good deal of time in the last two years inducing countries around the world to take part in Brisbane Expo 1988, as has the Prime Minister. I have also spent a good deal of time trying to get the States to appear at Brisbane Expo. Most of them are fairly reluctant to have anything to do with the Queensland Government. To that end, last week a conference was held in Brisbane, attended by 100 delegates from countries around the world, some of which have agreed to come to the Brisbane Expo. Some are sitting on the fence about making a decision. The first speaker at the conference was Sir Joh Bjelke-Petersen, the Premier of Queensland, and they are welcome to him. To follow him at the lectern was a very embarrassing experience. One of the delegates asked me later: `Is that man senile?' The rambling incoherencies, the absolute piffle he spoke for 20 minutes, were an embarrassment to me as an Australian. I do not know how Queenslanders live with it. The House will remember that I was talking to 100 delegates from around the world who were thinking about coming to the Brisbane Expo. I confined my remarks to Australia's tourism effort and pointed out the incredible increase in tourism since this Government has been in power. I mentioned at the end of my remarks that we considered Brisbane Expo to be an extension of that effort, that there was an opportunity for Australia to show off to international visitors and to the international media the extraordinary lifestyle we have in Australia. I said that tourism was our fastest growing industry and that Queensland was the fastest growing State. Of course, I meant in tourism. Everybody at that conference knew exactly what I meant. I note that the Hon. Llew Edwards, the Chairman of the Expo Committee, apologised to the Prime Minister the next day for the absolute perversion of my remarks as construed by the Premier. The misuse of figures, quotations and advertising campaigns by the Nationals in Queensland is symptomatic of a decaying State. If the House wants a further example, another was given here yesterday by the Minister for Primary Industry when he spoke about the loan moneys that had been given to a National Party member. It is all part of the decay of Queensland. I think the Premier has come out of this with no respect at all, using an occasion when the Commonwealth was co-operating with the State to try to get it off the hook. Believe me, if the Commonwealth withdrew its support for Expo 1988 Queensland would be sitting on an economic problem of mammoth proportions. Although we have co-operated as well as we can to try to help them with this event, the Premier would seek to pervert those good intentions for his own short term political advantage. It is fairly representative of the evil state of the Queensland Premier's mind. As to Queensland being the fastest growing State in Australia, nothing could be further from the truth. The only area where it is showing any advantage at all in an economic sense is in tourism, and that is despite the Queensland Government. The Queensland Minister for Tourism is not only the least capable but the least co-operative of all Ministers in Australia. Anything that has happened in tourism in Queensland in the last three years is directly as a result of policies implemented by this Commonwealth Government. It has had nothing whatever to do with Queensland. The remainder of the Queensland economy is a disaster area. When the resources bubble burst, the Queensland Government had no idea how to cope with the changed economic environment. The Queensland Government is absolutely bewildered by the economic difficulties it faces. It has very little in the way of manufacturing industry. Coal, sugar and beef prices have retreated to ridiculous levels. It has nothing going for it except tourism. Anybody who suggests that the Queensland economy is in a good position or that Queensland is the fastest growing state in any area but tourism almost needs to be certified. After all, the average income in Queensland is 10 per cent below the average income for Australia. That is a fair measure of its economic capacity. Its living standards are the lowest in this land. A wave of bankruptcies is sweeping Queensland. There has been a 45 per cent increase in bankruptcies in the last year-the worst performance in Australia. It has an unemployment rate of 9.4 per cent-the worst in Australia. It has the second highest rate of industrial disputation. The Queensland Government is a dinosaur, a relic of days past when the State rode on a tide of resources. It is now sitting on a swamp of its own failure. The State needs new approaches and particularly it needs a new Premier. The State of Queensland, which has the capacity to be a great State, is ruled by a man who is not only in senile decay but is also absolutely evil and ready to pervert even the most honourable of intentions to suit his own advantage. I discount absolutely any imputation that I said that the Queensland economy was growing quickly or that Queensland was the fastest-growing State in Australia. It is a disgrace to the Australian political scene. Mr HOWARD —I refer the Prime Minister to his repeated and bogus claims about the so-called benefits of his Government's tax changes. Is it a fact that, even if the promised personal tax changes of the Government are fully implemented, the average tax rate for a person on average weekly earnings will have risen to 24.5 per cent next year from a level of 22.9 per cent when the Government took office in March 1983? Is it also true that, on the same basis, the marginal rate of tax for such a person will also have risen from 30 per cent to 40 per cent? Is this yet another reason why the level of taxation under the Hawke Government has reached an all-time Australian high? Mr HAWKE —I should preface my reply by putting into context the performance of the Leader of the Opposition when he had the responsibility as Treasurer. We do not have to rely upon his adversaries to make an assessment of his performance. As I have reminded the House on a previous occasion, I rely on what the honourable gentleman himself had to say. On 8 November 1983 he said: . . . when the former Government left office, taxation as a proportion of gross domestic product was higher than it was as a proportion of gross domestic product in 1975. That is a correct statement. It is there for all to see and I cannot dispute it. Let us understand that the performance of the Leader of the Opposition when he was Treasurer was to produce, after 7 1/2 years in office, a higher tax load than existed when he came into office. It is not surprising, because the characteristic of the previous Government in regard to taxation was not an effort to introduce a fair and equitable system, but a continuous process of ensuring that those most able to make a contribution to the revenue of this country were precluded from doing so or given the opportunity of not doing so because of the failure to impose the proper laws of this country. It is no wonder that the worst indictment ever made of a government in this country was made by a royal commissioner appointed by the previous Government. It appointed Commissioner Costigan, and in the report which was tabled in this House, commenting upon the achievements of the Government which had appointed him, he said that the fastest growth industry in Australia in the period since 1976 was the Australian tax avoidance industry. That was the assessment of the previous Government's own royal commissioner. Who are honourable members opposite now to deny the assessment of the royal commissioner whom they appointed? The tax avoidance industry was the fastest growth industry in Australia because of their virtually criminal ineptitude and negligence. As I said yesterday, the Leader of the Opposition walked out of office in March 1983 with his legacy to the people of Australia being a top marginal rate of 60c in the dollar, because he allowed billions of dollars to escape the taxation net and imposed a greater burden upon the ordinary, average, honest Australian taxpayer. Against that gross dereliction of duty, this Government, particularly under the leadership of the world's best Treasurer, has brought about a situation whereby, from 1 July next year, the top marginal rate will have been reduced from the Howard 60c in the dollar to 49c in the dollar. Associated with that will be the greatest taxation reform in the history of this country. The Leader of the Opposition has said that he wants tax to be a major issue in the political debate in this country between now and the next election. The Government joins with the Opposition. Indeed, we will make tax the major issue in the debate leading up to the next election. Opposition members will be judged by the fact that they are urging taxpayers in this country not to obey the law of the land. That means that they are saying that in opposition they continue the policy that they had in government; that is, to encourage those who have benefited from their criminal negligence to continue to do so. In government, they allowed those people the luxury of not applying the law to them; in Opposition, when we have a government that has brought in laws to impose a fair, reasonable and equitable taxation system, their contribution to the political debate is to urge those people who will have their perks and lurks taken away from them to disobey the law. The overwhelming majority of the Australian people will make the judgment that they should-that is, to condemn a political party which in office perverted this taxation system and which in opposition encourages disobedience of a law that would bring about a fair and equitable tax system. We welcome that debate, and we will win it overwhelmingly. Mr SIMMONS —Is the Minister for Employment and Industrial Relations aware of claims being made that implementing a compulsory work-for-the-dole scheme in Australia involves little or no additional cost? Could he inform the House as to the accuracy of these claims? Mr WILLIS —I am aware of claims made by the Opposition that a compulsory work-for-the-dole scheme could be introduced at little, if any additional cost. The Government rejects the notion of a compulsory scheme for a number of reasons, one of which is that it would certainly involve a very substantial increase in outlays. Although the Opposition claims that it is definitely committed to a compulsory scheme, it apparently has not worked out the details of any such scheme or how it would be administered. If it had, it would know that it would cost a lot of money. For the benefit of honourable members opposite, let me spell out the implications of a compulsory scheme, assuming that it would be introduced for all persons who are on unemployment benefit for more than three weeks and that they had to work for two days a week. In the year to February 1986, 790,000 persons had been unemployed for more than three weeks and they had an additional period on unemployment benefit of 30 1/2 weeks. If we round the figure up to 800,000 for the purpose of this calculation, in view of the forecast of a slight increase in unemployment this year over last year, we see that we will have to find 800,000 additional work opportunities for two days a week for an average period of 30 1/2 weeks in the voluntary sector. There must be enormous doubts as to whether we could find appropriate work in the voluntary sector of this society on such a massive scale. But even assuming that that was so, the additional costs, on our calculations, would be about $700m. The cost includes $488 as a contribution to the employment-related costs of generating those 800,000 positions, and those costs are related to the costs of materials and equipment used in undertaking work, supervision of that work, administration of the scheme and worker's compensation insurance. That $488m represents only a very modest Commonwealth contribution of $20 a week-- Mr N.A. Brown —Why did the Prime Minister advocate this scheme? Madam SPEAKER —Order! The Deputy Leader of the Opposition will cease interjecting. Mr N.A. Brown —The Prime Minister is advocating this. Madam SPEAKER —Order! The Deputy Leader of the Opposition will heed the Chair. Mr WILLIS —He is about as effective in here as he was on Channel 9. The $20 a week on which we base our estimate is very modest, as it compares with a figure of $30 to $40 under the current volunteer youth program and is less than the $25 a week which is paid under the voluntary scheme that exists in Canada. Another factor would be travel costs, which we have estimated would be $183m, assuming an average claim of $7.50 a week. Travel costs are paid under the volunteer youth program introduced by the previous Government. We assume that that would continue under any such compulsory scheme. The amount of $35m for Commonwealth Employment Service staffing and administrative costs would of course be involved in matching unemployed persons to available placements, monitoring placements to ensure that the program guidelines are adhered to and other administrative tasks involving 1,000 extra CES staff. These are all conservative estimates and in practice would probably be considerably exceeded. The Opposition has claimed that these costs would be offset by weeding out dole cheats through the introduction of such a scheme. It should be recognised in that regard that in this Budget we have significantly tightened up the administration of unemployment benefits, as already announced by my colleague the Minister for Social Security. I remind the House that that involves special reviews being conducted in selected regions by teams of officers to identify and disqualify those wrongfully receiving unemployment benefits, that New Zealanders have been excluded from unemployment benefits for their first six months in Australia and in the following six months must prove an intention to reside in this country and that registration with the CES is to be mandatory for all unemployment beneficiaries-- Mr Sinclair —Why wasn't it before? Mr WILLIS —As it was, I tell the Leader of the National Party, until his Government removed that requirement in 1981. It was there until 1981 and his Government took it away. We are putting it back and making sure that people who do not maintain CES registration will have their benefit automatically cancelled. Also, people on unemployment benefit will be required to attend an office of the Department of Social Security in person each fortnight to lodge the forms necessary for the continuation of their benefit. That also was a requirement that existed until it was removed by the previous Government, which apparently allowed fraudulent practices to creep into the system to some degree. All of these measures will ensure that any cheating in the system is massively reduced. The Government's approach in tightening up the unemployment benefit administration and in introducing a greatly expanded voluntary community work program represents a far more cost effective, sensible and compassionate approach than does the ill-conceived approach of the Opposition. Mr Reith —Madam Speaker, I ask the Minister to table the document. Mr WILLIS —I will. Mr CONNOLLY —Will the Minister for Aboriginal Affairs confirm that when the Commonwealth purchases the Gimbat and Goodparla leases to create the proposed stage 3 of Kakadu National Park traditional owners will still be able to lodge claims under the existing Aboriginal Land Rights (Northern Territory) Act? Will he also confirm that traditional Aboriginal land owners could apply a veto on exploration and mining under the current Act and thus effectively prevent any new mining within stage 3 of the Kakadu National Park granted to them? Does the Minister propose to introduce amendments to the land rights Act to override the Aboriginal veto on mining? If not, how does the Government propose to open stage 3 of the Kakadu National Park to new mining as promised yesterday by the Prime Minister and the Minister for Resources and Energy? Mr HOLDING —The answer to the first aspect of the honourable gentleman's question is yes. Land at Gimbat and Goodparla, having been purchased by the Commonwealth, would be subject to Aboriginal land claim. Any such claim would be dealt with by a commissioner who would, under the Act, make recommendations as to any detriment which may follow. Detriment is always a matter of report where it occurs in respect of either an existing or a potential mining interest. It is not for me to endeavour to pre-empt either the recommendations of the commissioner or the way in which he would conduct those hearings. It is the intention of the Government to introduce amendments to the land rights Act. Those amendments have been widely circulated to a whole range of interest groups, including miners, the Northern Territory Government and the land councils. The response of those groups is currently being considered by me and relevant Caucus committees. It is unfortunate, however, that a response which we received from the Northern Territory Government, which indicated that it had some objections on the basis of duplication to what was being proposed, has been beaten up in the Northern Territory by the Chief Minister on the basis that what we are proposing is an alternative black State. Let me say this: This Government has spent some time conferring with all relevant interest groups, including the Northern Territory Government. If, because of the situation in the Northern Territory, the Chief Minister wants again to try to bring on an election by dividing the community in kicking a black head wherever he sees one, I certainly will review the whole position in respect of the Northern Territory Government, because the purpose of the amendments which have been so carefully considered has been to try to reduce some of the problem areas that have been exhibited in the operation of the Act. The Government has entered into all those discussions in good faith. We would be defeating our own purpose if we allowed the situation to arise where, for the most narrow, expedient and short sighted political reasons, these amendments were used by the Northern Territory Administration as an exercise in creating tension within its own community and conducting another election campaign on the basis of kicking a black head where it sees one. Mr LINDSAY —My question is directed to the Minister for Social Security. What would be the effect and cost to taxpayers of abolishing the pensions assets test as promised by the Opposition? Mr HOWE —I thank the honourable member for his question, I think all of us in the House were somewhat surprised, if not shocked, on the night the Leader of the Opposition made his alternative Budget speech. Mr Hawke —If you could call it that. Mr HOWE —Well, that is a bit overly-generous. He made his speech in response to the Government's Budget. On what I think was generally regarded as a pretty tough Budget, a very tight Budget, one in which the Government had to make a number of very difficult decisions, the Opposition Leader indicated that one area in which the coalition could make a decision and give an assurance. The only significant decision affecting expenditure that he indicated in his speech on the Budget was to remove the assets test and thus to restore social security pensions to some 34 millionaires and 524 people with assets ranging from half a million dollars to a million dollars over and above the worth of their family home. That suggests to me, and indeed I think it would suggest to the vast majority of Australians, where the Opposition's priorities are. The Opposition is unable, in the current circumstances, to nominate areas in which it would cut expenditure and is unable to say in any detail what it would do, except that it would protect 34 millionaires and 524 people with assets worth between half a million and a million dollars. That was the Opposition's only spending promise, and I think it is highly indicative. We recall that when the Opposition did occupy the Treasury benches it had all sorts of opportunities to take tough and difficult decisions and it was not prepared to take them. That is why, when we came to office, we faced such a massive problem of an overblown deficit. I think this particular decision is a clear indication that, when the Opposition talks tough and talks hard, when it indicates, as the honourable member for Menzies was prepared to indicate, that it will wipe off everyone who has been on unemployment benefit for over two years-- Mr N.A. Brown —That is nonsense. Who said that? Mr HOWE —And when other members indicate that they will knock young people off unemployment benefits-- Mr N.A. Brown —You liar; you absolute liar. You wouldn't know. Madam SPEAKER —Order! Mr HOWE —We know that if the Opposition selects that group of people it selects them because it thinks they are a push-over or those are areas in which they are going to be able to get away-- Mr N.A. Brown —He is telling lies. Madam SPEAKER —Order! The Deputy Leader of the Opposition will withdraw that comment. Mr N.A. Brown —Yes, all right, and I will fix it up in a personal explanation later. Madam SPEAKER —Order! The Deputy Leader of the Opposition will withdraw. Mr N.A. Brown —Yes, I did Madam Speaker-- Madam SPEAKER —You did not withdraw. Mr N.A. Brown —And I do again. Like my colleague, I have to do it several times-- Madam SPEAKER —Order! The Deputy Leader of the Opposition knows full well that the words are: `I withdraw'. Mr N.A. Brown —I withdraw, Madam Speaker. But he should tell the truth, too, while he is at it. Madam SPEAKER —Order! Mr HOWE —It is quite clear that, if one is to deliver in terms of deficits and tight spending, one must make decisions. One has to be able to make decisions. It is quite clear what kind of decisions would be made by the coalition parties. They would make the decisions that would effectively mean that wealthy people-indeed, millionaires-would be protected. They would make those decisions to protect those people. They would not be prepared to make decisions which would lead to greater fairness and greater equity in terms of the welfare system in Australia. I think that has been made very clear by the Opposition whenever it has made any statements in this area. Its approach to economics represents a kind of lunacy. It suggests that the burden of economic difficulties would have to be borne by low and middle income earners. That is what would happen if we were unfortunate enough to have a government led by the coalition. That approach should be contrasted with the approach that we have taken-that is, effectively, while recognising the difficulties, we take decisions which are fair. I want to pick up the point that was made by the Minister for Employment and Industrial Relations with respect to the removal in 1981 of the compulsory requirement for people to register for the unemployment benefit. That is certainly true but it goes a bit further than that. It is also true that in 1981 all selective reviews were effectively eliminated in terms of unemployment beneficiaries. The Government has made big decisions in regard to the assets test and also in the achieving of a disciplined approach to social security administration. It is hard to find a single decision made by the coalition parties when they were in government which had the effect of producing a system which had greater integrity and which was tighter than the one that was in place when they came into office in 1975. Mr N.A. Brown —This is an absolute disgrace. Mr Sinclair —You should call the Minister to order and wind him up. Mr HOWE —If one contrasts the decisions that we have been prepared to make this year-not only in the context of the Budget but also in the course of this year-with the record of honourable members opposite, one sees what frauds they really are. Madam SPEAKER —The Chair has no authority to wind the Minister up. Mr REITH —Is the Prime Minister aware that the conditions of payment of travel allowance to a Minister as listed by the Remuneration Tribunal require his home base to be his principal place of residence? Why has the Prime Minister permitted for the past two years the Treasurer to list a Sydney property-in which, by his own admission, he does not live-as his home base, so enabling the Treasurer to receive more than $30,000 in travel allowance for residing in Canberra, which is in reality his principal place of residence? As recent statistics issued by the Special Minister of State indicate that the Treasurer may have spent no more than 11 nights in his alleged home base of Sydney over the past year-unless he has claimed travel allowance for weekends he has spent in his Canberra home-will the Prime Minister now require the Treasurer to repay the money improperly obtained by him? Mr HAWKE —It is no wonder the Opposition received such a mauling in today's Press for its ineptitude during Question Time. This question was asked of the Treasurer yesterday and was more than adequately answered by him. The fact is that the Remuneration Tribunal determination concerning travel allowance allows Ministers to nominate their home base. The Treasurer's claims are in accordance with the determination and the relevant Cabinet decision. May I say that this Government regularly publishes figures in relation to Ministers' expenses, a course of action which contrasts dramatically with the previous Government's attitude to expenses. We publish the figures; the previous Government did not. Having regard to the performance of some Ministers of the previous Government, it is absolutely no wonder it did not publish them. I hope that, as the Opposition has raised this question twice, the Special Minister of State will have the opportunity, as he indicated yesterday, of throwing some light on the hypocrisy of honourable members opposite. They will see that the practices that they followed make the practices of my Ministers appear to be the practices of the paragons of virtue they are. What the Treasurer has done is totally in accordance with the determination of the Tribunal. Therefore, of course, it follows, in regard to the last part of the honourable member's question, that the answer is no. Mr DUNCAN —Is the Minister for Defence aware of the new policy of the United States Army strictly to limit smoking in military offices and buildings and to prohibit smoking altogether in vehicles and aircraft? Is the Minister aware that an estimated 16,000 Australians die from smoking related illnesses each year? Does he agree that smoking contributes to illness and to absenteeism in the general work force, not only on the part of smokers, but also on the part of non-smokers who inhale tobacco smoke? Does the Minister agree that the health, fitness and occupational readiness of Australian defence forces would be enhanced by controls on smoking by military personnel? What steps will the Minister take to reduce smoking by personnel of the defence forces? Mr BEAZLEY —I am not actually aware that any members of the defence forces smoke. I have not actually seen any of them smoke when I have been present, except perhaps on the odd occasion after dinner in the mess and a pipe on Sundays. So I am not sure of the extent of the problem to which the honourable gentleman referred. I know from the responses of my Cabinet colleagues to the events earlier in the week, when they had an opportunity to go out to sea, that most of them would take the view that service personnel who have to put up with being at sea for any lengthy period should be able to do anything they like. I doubt very much whether there would be much support among my Cabinet colleagues for banning smoking or any other relaxing activity in that atmosphere. I was not aware of the policies of the United States Army that the honourable member mentioned. He invited me to make a series of medical comments which are tendentious, to say the least, among people with far more expertise in that area than I. I would not presume to give him any direct answers. All I can say is this: The defence forces take very seriously the health of their members and behaviour which encourages better health. I doubt very much whether smoking by members of the defence forces occurs to a greater extent than in the general community. If anything, it would be less. In fact, I think there is a concern for fitness among members of the defence forces which makes them very low users of tobacco products. I doubt very much whether there is any substantial requirement on us to make any particular effort in this regard in relation to the defence forces. Mr GOODLUCK —Is the Prime Minister aware that the price of petrol has risen by an average of 13c a litre throughout Australia since he became Prime Minister? Is he further aware-these are the facts-that the pump price of petrol in Tasmania is nearly 64c a litre? Mr Charles —Change the Government. Mr GOODLUCK —Do not worry about the State Government. It is all attributed to the Hawke Government; that is the reason for it. What has happened to the assurance given in 1983 by the Prime Minister that the price of petrol would be reduced by 3c a litre and that he would put a freeze on the price of overseas crude? Mr HAWKE —I always welcome a question from my good friend the honourable member for Franklin and I thank him for this one. I have to share the view expressed by way of interjection behind me that if that is the price of petrol in Tasmania there ought to be a change of government. I understand that the price is 48c in Victoria. Let me go seriously to the issues involved in the question of the price of petrol. Madam Speaker, as you know, the Government is committed to the import parity pricing policy which was the policy of the previous Government. That policy has a clear and sensible foundation, and that is to ensure that domestic crude oil prices reflect international trends. That is the foundation of the policy and it is a sensible one. Looking at the current situation, world oil prices have continued to strengthen since the last IPP adjustment on 1 September. As to what the Government will do regarding the future price of petrol, we will make the announcement closer to the appropriate date of fixation. I make the very important point that the Government will continue to deal with adjustments to the IPP on a revenue-neutral basis, that is, to adjust the product excise rates to offset fully the revenue gained from higher prices which would otherwise accrue. If we look at comparative petrol prices, even with the Budget and the September IPP adjustment, Australian petrol prices are still amongst the lowest of those of any comparable industrialised country. We make no apologies for the actions and decisions of this Government. Essentially, they are based upon the principles of the IPP policy which were followed by the previous Government. To the extent that adjustments have been made necessary in recent times by the very seriously and wildly fluctuating price for oil, this Government has conducted its policy decision making on the basis of revenue neutrality. I think that policy is understood and respected by the Australian people. Mr BILNEY —Has the attention of the Minister for Health been drawn to an article by Dr Peter Yellowlees of the Flinders Medical Centre in the latest issue of the Medical Journal of Australia entitled `Thiamine deficiency in prevention of the Wernicke-Korsakoff syndrome'? In that article does Dr Yellowlees come to the conclusion that this syndrome is a major public health problem in Australia which requires immediate political intervention? Does the evidence show that thiamine deficiency in the diet, particularly of heavy drinkers, including alcoholics, is the cause of this major public health problem? Is the simple and cheap solution adding thiamine to the diet, including staples such as bread and beer? Would this prevent the present large number of admissions to psychiatric hospitals? Can the Minister say what action is being taken by the National Health and Medical Research Council to assess these claims and to put in train appropriate action? Dr BLEWETT —I am aware of the article by Dr Yellowlees and I am also aware of the concern in the community about the extent of the Wernicke-Korsakoff syndrome in our society. It is a disease which is usually associated with an excess intake of alcohol. To answer the second part of the question, there is evidence from overseas that the addition of thiamine to bread and flour reduces nutrition-related alcoholic diseases. However, it is not clear that that would be of great benefit in this country because our bread and cereals naturally have a higher level of thiamine than those of comparable countries. No data is available on the benefits of adding thiamine to alcoholic drinks, although some studies have suggested that there might be a cost benefit to government in doing that. In relation to the first part of the question, the National Health and Medical Research Council has this issue on board. It has commissioned two major studies-one on the prevalence of the disease in Australia and the second on thiamine absorption and alcohol beverages. In addition, my Department's national dietary survey is examining the Australian adult's intake of thiamine. An NHMRC expert committee will consider the results of all these surveys and will aim to develop a public strategy to deal with this disease. I can assure the honourable member for Kingston that in the consideration of those strategies the proposals by Dr Yellowlees will be taken on board. Mr YOUNG(Port Adelaide-Special Minister of State) —For the information of honourable members, I present the Government's response to the report by the Joint Select Committee on Electoral Reform on determining the entitlement of Federal Territories and new States to representation in the Commonwealth Parliament. Motion (by Mr Howe) proposed: That the House take note of the paper. Debate (on motion by Mr N.A. Brown) adjourned. Mr HURFORD(Adelaide-Minister for Immigration and Ethnic Affairs and Minister Assisting the Treasurer) —For the information of honourable members, I present statements of expenditure from the Advance to the Minister for Finance for April, May, June, July and August 1986. Mr HURFORD(Adelaide-Minister for Immigration and Ethnic Affairs and Minister Assisting the Treasurer) —For the information of honourable members, I present the following paper: Advance to the Minister for Finance-Statement of Heads of Expenditure, and the amounts charged thereto pursuant to section 36A of the Audit Act 1901 for the year ended 30 June 1986. Mr HOWE(Batman-Minister for Social Security) —For the information of honourable members, I present the text of a statement by the Minister for Community Services (Senator Grimes) on disability services. Mr HOWE(Batman-Minister for Social Security) —For the information of honourable members, I present the text of a statement by the Minister for Community Services (Senator Grimes) on the care of aged people. Mr BARRY JONES(Lalor-Minister for Science) —I table the Government's response to the recommendations of the Royal Commission into British Nuclear Tests in Australia. It is the substance of a ministerial statement by the Minister for Resources and Energy, Senator Gareth Evans, QC. Mr HOWARD(Bennelong-Leader of the Opposition) —Madam Speaker, I wish to make a personal explanation. Madam SPEAKER —Does the honourable member claim to have been misrepresented? Mr HOWARD —Yes, I do, and by no less a personage than the Prime Minister (Mr Hawke). Yesterday the Prime Minister claimed-he repeated it today-that I had urged people to break the law. I want to make it clear on my part and on behalf of the Opposition that it will never be my policy or the policy of the Opposition to urge any citizens in this country ever to break the law of this country. Mr N.A. Brown(Menzies) —Madam Speaker, I wish to make a personal explanation. Madam SPEAKER —Does the honourable member claim to have been misrepresented? Mr N.A. Brown —Yes, Madam Speaker. Madam SPEAKER —The honourable member may proceed. Mr N.A. Brown —During Question Time the Minister for Social Security (Mr Howe) said that I had advocated that recipients of unemployment benefits who had received them for two years or more should, to use his expression, be wiped off the slate; that is, that they should be denied unemployment benefits. I have never made any such statement whatsoever. What I have said on a number of occasions-if the Minister had his wits about him he would take notice of what people say on these subjects-is that the unemployment benefit may not be an appropriate form of social security payment for the long term unemployed and that there may well be a case for some different and possibly even some better form of social security for the long term unemployed. I have said, certainly, that the unemployment benefit is not appropriate for people on an open-ended basis, but I have also said that there should be some other and possibly even better form of social security for them. 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 assembled. The humble petition of the undersigned citizens of Australia respectfully showeth: That we strenuously object to the proposal that many post office agencies are to be closed. They provide a network of offices with postal and agency services to residential areas and small communities. They serve a community need and we would be seriously inconvenienced if forced to travel further to purchase postal items or collect parcels. It would be an unnecessary expense particularly for pensioners without their own transport. We maintain that the purpose of Post Offices should be to serve the public for the variety of services they offer. They are a community centre particularly in country areas and if necessary they should be subsidised to retain them. Your petitioners therefore humbly pray that the House should take all possible steps to prevent the closure of post office agencies and that the network should be extended, with the Agency services they offer expanded. And your petitioners, as in duty bound, will ever pray. by Mr Adermann,Mr Beale,Mr Beazley,Mr Blanchard,Mr Blunt,Mr Braithwaite,Mr Brumby,Mr Carlton,Mr Charles,Mr Cobb,Mr Cohen,Mr Dobie,Mr Everingham,Mr Fife,Mr Peter Fisher,Mr Steele Hall,Mr Hicks,Mr Jenkins,Mr McGauran,Mr McVeigh,Mr Martin,Mr Millar,Mr Nehl,Mr Price,Mr Ian Robinson,Mr Scott,Mr Spender,Mr Tuckey and Mr Uren. To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. We, the undersigned, plead that Parliament will legislate, or act in accordance with the present legislation to replace the current members of the Film Censorship Board who have admitted to Senator Harradine on 12th December, 1984 as reported in the Senate Select Committee on Video Material, (see attached extracts), that they are not applying either the blasphemy or obscenity tests as required under the provisions of the Customs (Cinematograph Films) Regulations, and that these persons be replaced by persons who will apply these and the other related test in accordance with the said Regulations. Your petitioners humbly pray that you will give this matter your earnest attention. And your petitioners, as in duty bound, will ever pray. by Mr Steele Hall,Mr Jenkins,Mr McGauran,Mr McVeigh and Mr Tuckey. 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 Brumby,Mr Langmore and Mr Scott. To the Honourable the Speaker and Members of the House of Representatives assembled. The petition of certain citizens of Australia respectfully showeth: That taxpayers with dependent children have been gravely disadvantaged by a serious decline in the level of recognition provided in the taxation system for the costs of maintaining a family, in particular: The failure to index family allowances which has resulted in an erosion of more than 50% in their real value since May 1976; the abolition of family allowances for dependents who have turned 18, even those still at school; the abolition of concessional tax rebates for education and other expenses. That this erosion in horizontal tax equity has placed an intolerable financial burden on many large families, particularly those on middle incomes who fail to qualify for means-tested benefits such as TEAS but whose living standards are now well below average due to heavy expenses on necessities such as education, housing, food and clothing. Your petitioners humbly pray that: family allowances be restored to the 1976 value (in real terms), and indexed according to the CPI; the dependent spouse rebate be retained; the Federal Government take urgent measures to restore equitable provisions in the taxation system through the introduction of family income splitting. And your petitioners, as in duty bound, will ever pray. by Mr Beale and Mr McGauran. To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The petition of the undersigned shows: Graduated family allowances are of important assistance to families with more than one child. All family allowances, whether for one, two, three, or more children, have not kept pace with inflation. There are suggestions that all family allowances should be paid at the one flat rate. This would severely disadvantage families with more than one child. There are also suggestions that the dependent spouse rebate be reduced or removed. This would represent another blow to the family unit. Your petitioners therefore pray that the House of Representatives, in Parliament assembled, should: Ask the Federal Government to increase the value of existing family allowance payments, and reject any moves to change the payments to a flat rate or to tamper with the spouse rebate. And your petitioners, as in duty bound, will ever pray. by Mr McGauran. To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The petition of the undersigned residents of Australia respectfully showeth: That the humble petitioners have grave concern about recent changes in the Extradition (Foreign States) Act of 1966 which deny basic rights which have been a cornerstone of the English and Australian law for over seven hundred years. We are speaking of the right to be presumed innocent until proven guilty and the right of an individual to defend himself against his accusers. This concern has come to light during recent extradition proceedings against Messrs Hempel and Etheredge in Western Australia. We are concerned that because judicial protection of these basic rights has been excluded from the Act, refugees, migrants, Australian overseas travellers, and visitors are at risk when they have been to (or come from) countries where the norms and practices of human rights and civil liberties are below traditionally accepted Australian standards. We the undersigned petitioners, therefore urge the Government to re-examine the Extradition (Foreign States) Act (as amendment in 1985), and amend the current Act so that the rights of the accused are once again judicially protected in Australia. In addition, we urge the Government to refrain from entering into any further extradition treaties or proceedings under the current Act until the process of re-examination and amendment of the Act has occurred. And your petitioners, as in duty bound, will ever pray. by Mr Campbell and Mr Drummond. 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: 1. We are completely satisfied with the design of the existing Australian national flag. 2. We are aware it properly reflects the immutable characteristics of Australia, namely: The Union Jack-itself the creation of 3 Christian crosses-represents the nation's historical origin, and the source of its language and law. The Southern Cross on an azure blue background signifying its place in space. The large star depicting the advent of Federation in 1901. 3. We know the flag has been a source of inspiration to generations of Australians in peace and war. 4. We recall that millions of native-born Australians and newcomers to these shores from other parts of the world have become united under its proud symbolism. 5. We are certain that any change to the flag will produce division in the Australian community. Your petitioners therefore pray that your Honourable House will: Propose and pass a motion that ``the existing Australian national flag remains sacrosanct from change''. And your petitioners, as in duty bound, will ever pray. by Mr Blunt. To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. We the undersigned as an ex-service person protest strongly at the reported intention of the Commonwealth Government to make drastic reductions in repatriation benefits in the forthcoming 1986 Budget. And we pray that the Government not make any changes in repatriation benefits. 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 showeth: That Labor's capital gains tax, fringe benefits tax, tax on lump sum superannuation and assets test are an unwarranted burden on the people of Australia, have contributed to the national economic crisis and the anomalies in the legislation are causing confusion and anger amongst all sections of the Australian community. Your petitioners therefore humbly pray that the House of Representatives in Parliament assembled should immediately seek the repeal of Labor's Assets Test, Labor's Capital Gains Tax, Labor's Fringe Benefit Tax and Labor's tax on lump sum superannuation. And your petitioners, as in duty bound, will ever pray. by Mr Dobie. To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The petition of the undersigned shows that the Hawke Government should: 1. Pass on the full benefit of lower international oil prices 2. Not increase or extend fuel taxes; and 3. 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 Hawker. To the Honourable the Speaker and Members of the House of Representatives assembled in Parliament. The petition of the undersigned citizens of Australia showeth: That many Australian wage and salary earners and self-employed persons do not enjoy secure retirement incomes provided by superannuation; and That the Government issued in December 1985 Guidelines for the implementation of the proposed productivity decision by the Conciliation and Arbitration Commission and draft Operational Standards for Superannuation schemes. Your petitioners therefore humbly pray that the Government: 1. Guarantees to every employee the right and freedom to select the superannuation scheme of his/her choice. 2. Protects the individual exercising that freedom of choice from any coercion, influence or other pressure which may be applied by any employer, association or trade union. 3. Will recognise only those schemes which provide genuine superannuation and reject those schemes which do not provide for: preservation of benefits to retirement vesting of employer contributions on a reason- able sliding scale equal employer and employee Trusteeship control to ensure security of investments. by Mr Steele Hall. To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The humble petition of the undersigned citizens of Australia respectfully showeth: 1. That we the undersigned are totally opposed to the closure of the Wollongong area office of the Department of Immigration and Ethnic Affairs. 2. That the impact of the closure of the office in Wollongong will be particularly felt by the non-English speaking migrants and community at large from Shoalhaven to Hellensburg and as far as Wingecarribee and Wollondilly. Your petitioners therefore urge the House of Representatives and the Government of the Commonwealth to ensure that the area office of the Department of Immigration and Ethnic Affairs in Wollongong be kept operational and fully staffed. by Mr Hollis. To the Honourable the Speaker and the Members of the House of Representatives in Parliament assembled. The petition of certain citizens of Australia respectfully shows that: The lack of a Medicare Office in Lalor/Thomastown is seriously inconveniencing the residents of the Shire of Whittlesea. Your petitioners therefore request that a Medicare office be established in Lalor/Thomastown as soon as possible. And your petitioners as in duty bound will ever pray. by Mr Jenkins. To the Honourable the Speaker and Members of the House of Representatives assembled in Parliament. The petition of certain citizens of Australia draws the attention of the House to the fact that the lack of a Medicare Office in Wyong is seriously inconveniencing the residents of Wyong Shire. Your petitioners therefore request that the Medicare Office is established in Wyong as soon as possible. by Mr Lee. To 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: 1. Use its influence with the United States Government to encourage it to join the moratorium on nuclear testing begun by the Soviet Union on 6 August 1985. 2. Use its influence in all forums to encourage other nuclear nations to join the Nuclear Test Moratorium. 3. 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 McArthur. To the Honourable the Speaker and Members of the House or Representatives in Parliament assembled. This petition of concerned Australian citizens respectfully points out: That deterioration of the total global environment is continuing at an increasing rate; that important environmental resources vital to human livelihood such as trees, soil and water are decreasing at an alarming rate; that there is a need for educating all people to assume a greater responsibility for the conservation, sustainable use and maintenance of vital resources; that dynamic and active initiatives are needed to conserve and renew the total environment; and that protecting, conserving and repairing the Earth can unite all people and nations in co-operative action for survival. Your petitioners therefore humbly pray that the Australian Government will: propose to the United Nations General Assembly at its 41st Session in September 1986 that 1988 be proclaimed the ``First International Earth Repair Year''. And your petitioners as in duty bound will ever pray. by Mr McVeigh. 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 per cent of Average Weekly Earnings; 2. That the lag time between the announcement of the Consumer Price Index figures and the subsequent adjustment of pensions would be reduced to one month, and 3. That the disproportionate tax burden borne by low income earners would be lifted, None of these promises has been honoured to date. Your petitioners are extremely angry at the failure of the Government to live up to its commitments and as in duty bound will ever pray that these serious omissions will be given the attention they deserve. by Mr Nehl. To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The humble petition of the undersigned citizens of Australia respectfully showeth that: The Hawke Government's Fringe Benefits Tax is a vicious, punitive tax that unjustly affects employers, will have a major impact on small business and farm profitability, and will result in increased unemployment. Your Petitioners humbly pray that the House of Representatives, in Parliament assembled, urge the Parliament to repeal the legislation establishing the Fringe Benefits Tax. And your petitioners as in duty bound will ever pray. by Mr Nehl. To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The humble petition of the undersigned citizens of Australia respectfully shows that: (a) the film ``Hail Mary'' (i.e. ``Je Vous salue Marie'') has been registered by the Film Censorship Board for public exhibition with a Restricted Classification; and is due to be screened in the forthcoming Sydney Film Festival; (b) The film is a blasphemous and pornographic attack on Jesus Christ, the Blessed Virgin Mary, Saint Joseph and the Archangel Gabriel, as such is is extremely offensive to the undersigned. (c) The film therefore breaches regulation 13 (1) of the Customs (Cinematograph Films) Regulations. Your petitioners therefore request that the House of Representatives call upon the Attorney-General, as the Minister responsible, to prevent the exhibition of the film in Australia. And your petitioners as in duty bound will ever pray. by Mr Nehl. To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The humble petition of the undersigned citizens of Australia respectfully showeth that: The Hawke Labor government's productivity-superannuation accord with the ACTU and its support of the superannuation claims of the trade union movement will create an imbalance in industrial power and distort the future development of the Australian economy. Your petitioners humbly pray that the House of Representatives, in Parliament assembled, urge the Government to reject the superannuation claim of the trade union movement, and allow superannuation to develop without trade union domination. And your petitioners as in duty bound will ever pray. by Mr Nehl. To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The humble petition of the undersigned citizens of Cowper Electorate respectfully showeth that: The Hawke Labor government's productivity-superannuation accord with the ACTU and its support of the superannuation claims of the trade union movement will create an imbalance in industrial power and distort the future development of the Australian economy. Your petitioners humbly pray that the House of Representatives, in Parliament assembled, urge the Government to reject the superannuation claim of the trade union movement, and allow superannuation to develop without trade union domination. And your petitioners as in duty bound will ever pray. by Mr Nehl. To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The humble Petition of certain electors of Australia respectfully sheweth: That the Bill of Rights Bill, the Human Rights and Equal Opportunity Commission Bill, the Human Rights and Equal Opportunity Commission Amendment Bill and the Human Rights and Equal Opportunity Commission (Transitional Provisions and Consequential Amendments) Bill, if passed by the Parliament, will undermine human and civil rights in Australia; will attack the institution of the family in our country, and will destroy States Rights and the federal nature of our Commonwealth. Your Petitioners humbly pray that the Parliament rejects these Bills; abolishes the Human Rights and Equal Opportunity Commission and moves to withdraw ratification of the International Covenant on Civil and Political Rights. And your petitioners as in duty bound will ever pray. by Mr Nehl. To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The humble Petition of certain electors of the Division of Cowper respectfully showeth: That the Bill of Rights Bill, the Human Rights and Equal Opportunity Commission Bill, the Human Rights and Equal Opportunity Commission Amendment Bill and the Human Rights and Equal Opportunity Commission (Transitional Provisions and Consequential Amendments) Bill, if passed by the Parliament, will undermine human and civil rights in Australia; will attack the institution of the family in our country, and will destroy States Rights and the federal nature of our Commonwealth. Your Petitioners humbly pray that the Parliament rejects these Bills; abolishes the Human Rights and Equal Opportunity Commission and moves to withdraw ratification of the International Covenant on Civil and Political Rights. And your petitioners as in duty bound will ever pray. by Mr Nehl. To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The Petition of concerned people respectfully showeth their desire to have the koala declared an endangered species and given the proper protection of the Commonwealth. Your petitioners therefore humbly pray that your Honourable House declare that the koala may not be exported from this country and that urgent re-vegetation of their habitats be carried out. Your petitioners also humbly pray that Commonwealth Government funds will be made available for research into the disease Chlamydia Psittaci which is killing the koala. And your petitioners as in duty bound will ever pray. by Mr Price. 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 Harp and Hooded seals protected. Your petitioners therefore humbly pray that your Honourable House will propose Harp and Hooded seals to be listed on Appendix 1 of the Washington Convention (CITES). And your petitioners, as in duty bound, will ever pray. by Mr Price. To the Honourable the Speaker and members of the House of Representatives in Parliament assembled. The petition of certain citizens of Australia respectfully showeth: That the Australian flag symbolises the continuity between Australia's past, its present and the future; That the presence of the Union Jack on the flag represents not a subservience to Britain, but a reminder of our inheritance of the fruits of hundreds of years of struggle for individual liberty against the forces of tyranny and oppression; Nonetheless recognises the rights of Australians should they wish as a people to change the design of their flag. Your petitioners humbly pray that no change be made to the Australian flag except with the consent of the people in a referendum. And your petitioners, as in duty bound, will ever pray. by Mr Ruddock. To the Speaker and members of the House of Representatives in Parliament assembled. The petition of the undersigned residents of Australia respectfully showeth: We the undersigned residents of Australia totally reject any move to cut funding to Australia-wide English as a Second Language programs in schools. We request that the Australian Government restore funding to the 1985 level in the 1986-87 Budget. And your petitioners, as in duty bound, will ever pray. by Mr Ruddock. To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The humble petition of the undersigned citizens of Richmond electorate respectfully showeth that: 1. We the undersigned are totally opposed to the introduction of a $2 fee on prescription drugs for pensioners; 2. The impact of such a fee will be particularly felt by the chronically ill elderly who will be faced with a $2 burden with the purchase of each Pharmaceutical Benefit Scheme drug; Your petitioners humbly pray that the House of Representatives, in Parliament assembled, urge the Government to ensure that prescription drugs continue to be provided to the pensioner population without the $2 fee on each prescription. And your petitioners as in duty bound will every pray. by Mr Blunt. To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The humble petition of the undersigned citizens of Richmond electorate respectfully showeth that: The Hawke Labor Government's Bill of Rights seeks to make changes in the constitutional balance in Australian by intruding into the affairs of individuals and of State and Local Governments. Your petitioners humbly pray that the House of Representatives, in Parliament assembled, urge the Government to repeal the Bill of Rights legislation and not restrict the individual freedoms of Australians and its present justice system, nor in any underhand way centralise power in our three tier system of Government. And your petitioners, as in duty bound, will ever pray. by Mr Blunt. To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The humble petition of the undersigned citizens of Richmond electorate respectfully showeth 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 House of Representatives, in Parliament assembled, urge the Government to honour its commitment and that of previous Governments to ex-servicemen and women by: Ensuring no additional cut-backs will be made to the portfolio of Veterans' Affairs. Reviewing the previous cut-backs in such areas as the travel allowances, dental scheme and repatriation pharmaceutical benefits scheme. Proceed with abolishing more stringent conditions applying to the granting of the TPI pension. And your petitioners, as in duty bound, will ever pray. by Mr Blunt. To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The humble petition of the undersigned citizens of Richmond electorate respectfully showeth that: There is an urgent need to up-grade and extend the facilities at the Northern Rivers College of Advanced Education. Your petitioners humbly pray that the House of Representatives, in Parliament assembled, urge the Government to provide the necessary capital funding for the Northern Rivers CAE to ensure North Coast students have access to a tertiary institution capable of providing them with the skills they will need to meet the challenges of the future. And your petitioners, as in duty bound, will ever pray. by Mr Blunt. To the Honourable the Speaker and Members of the House of Representatives assembled. The humble petition of the undersigned citizens of New South Wales respectfully showeth: (1) That in the past, because of their remoteness, citizens in rural areas have not been able to receive SBS (Multicultural) television through conventional means. (2) That recently those citizens have been able to receive the SBS television service from the AUSSAT satellite by means of receive-only earth stations. (3) Now express concern that by Government decision this service is to be terminated. Your petitioners therefore urge that SBS television continue to be made available to citizens in rural areas of Australia by means of the AUSSAT 1 satellite and receive-only earth stations. And your petitioners, as in duty bound, will ever pray. by Mr Hicks. To the Honourable the Speaker and Members of the House of Representatives of the Commonwealth in Parliament assembled. The humble petition of the undersigned citizens of New South Wales respectfully showeth: That they strongly support the establishment of the Western Sydney State University as recommended in the Parry Report and call upon the House to establish the Western Sydney State University in conjunction with the New South Wales Government. And your petitioners, as in duty bound, will ever pray. by Mr Price. Petitions received. Madam SPEAKER —I have received a letter from the honourable member for O'Connor (Mr Tuckey) proposing that a definite matter of public importance be submitted to the House for discussion, namely: The Government's failure to adequately explain the operation of its new taxing measures, including the Fringe Benefits Tax, and the resulting confusion and disincentive for business-big and small. 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 TUCKEY(O'Connor)(2.57) —If ever we needed evidence of the complete disarray of the Government, we got it today from the Minister for Sport, Recreation and Tourism (Mr John Brown) when he was responding to a question on a matter that he should have well and truly decided was dead. I think his is just another case of someone who is going bananas. The other evidence is the desperate efforts of the Treasurer (Mr Keating) and other Ministers to dress their draconian fringe benefits tax in new clothes. We are well aware of the Government's constant dissembling of the facts as to its economic performance, and it is up to the public to judge that. The matter before us today is more serious. In the Government's attempts to present the fringe benefits tax as a mild and administratively simple tax, the Treasurer is misleading taxpayers into making incorrect returns and suffering future financial penalties. That is not good enough. It is fair enough that the Government tries to defend the disaster it has brought upon Australia, but it is certainly not fair enough to tell people things which are not true or accurate and which mislead them and turn them into tax evaders. Let me give honourable members some examples of this. Not long ago an article in my newspaper which circulates in Geraldton, the Geraldton Guardian, under the headline `Keating in bid to clarify tax', stated: Mr Keating said examples of mis-information about the changes- He was talking about the fringe benefits tax- was a claim that farmers would be liable for tax on the food and lodging given to their children, if the children worked on the farm. `That claim is just rubbish' he said. The `Fringe Benefits Tax Guide'-the pink book that is now hated by Australian business universally-states on page 23 under the heading `Housing Fringe Benefits-Types of Accommodation': A taxable housing fringe benefit arises when an employee (including members of the employee's family)- it says this in English; I understand that one has to fill out the forms in English- is given by an employer the right to use a unit of accommodation as his or her usual place of residence. The Treasurer has a few problems about the words `usual place of residence'. The quotation continues: This includes the right to share occupation with others. A unit of accommodation includes a house, flat, or apartment; accommodation in a hotel, motel, guest house, bunkhouse or other living quarters in a ship or other vessel or floating structure, or a caravan or mobile home. Honourable members should remember that this includes the right to share accommodation with others, including members of an employee's family. How could the Treasurer get that one wrong? What about the people of Geraldton who believe what they read in the Geraldton Guardian and make that mistake? The House of Representatives Hansard of 5 June 1986 reports Minister John Brown as saying, in answer to a dorothy dix question on whether the hospitality industry would be adversely affected by the fringe benefits tax: It has never intended that the fringe benefits tax for employees would be calculated at the full commercial tariff of the hotel or motel concerned . . . I can assure the House that in this case the rent would be calculated at a figure which recognises the special circumstances surrounding the particular remote hotel or motel, discounted by 40 per cent, minus the board that would be paid. It was suggested that the Nullarbor Motel, with 20 employees, would be up for $104,000. He said that was 800 per cent wrong, that it would be around $13,000 and not $104,000. I remind the Minister that that is a differential of $91,000. When the Minister advises people he must stop and think whether or not he has done them a good turn if they happen to get it wrong. He went on to say: In the case of people living full time in a hotel or motel, or who have their meals in a restaurant where they work permanently, the value of the meal will be determined at $2 for an adult and $1 for a child. But on page 24 of the FBT tax guide-that wonderful pink or purple document-under `Housing Fringe Benefits-hotel and motel accommodation', it says: . . . broadly, goods or services- Clearly, hotels are services- supplied by an employer whose business it is to provide similar or identical goods or services to the public-the taxable value is reduced to 75 per cent of the market value, less the employee's rent etc. That will be the case, for example, if a hotel employee is provided with residential accommodation in the employer's hotel similar to that provided to paying guests. I have been in the hotel industry a long time and honourable members can take my word for it that the accommodation is similar. Employees frequently just occupy an ordinary room; and they will be taxed at the market value. But the point I make is that there is now a bloke out in the Nullarbor Plain who has the option of declaring a tax responsibility on an amount of $13,000 or on an amount of $104,000. What happens if he gets it wrong? The Government will call him a tax evader. He will be the person who suffers and not the Government, which is trying to paint its fringe benefits tax as something it is not. Yesterday, in answer to another dorothy dix question on the FBT and log books, the Treasurer said: . . . for business purposes . . . Log books do not have to be filled in if owners of vehicles wish to use the statutory rule which has been provided by the Government. I do not have a copy of the precise rule with me- He could not even remember his own tax laws- but it means that the write-off is around 40 per cent for 5,000 kilometres- That is a downright untruth. There is no evidence of that. He continued: of vehicle usage, and for usage up to 25,000 kilometres it is about 75 per cent to 80 per cent. In other words, if a motorist wishes not to bother about the log book, he does not have to. He can fall back on the statutory rule if he so chooses. If, however, the owner of a business or a self-employed person wishes to claim 80 to 90 per cent, or something of that order- Suggesting that it is only the top 10 or 20 per cent- and substantiate to the kilometre the differentiation between private and business use, then the log books, quite properly and sensibly, are available for that purpose. All they need to do is to enter in the log book each day the private mileage and the balance is automatically designated as business mileage. It is not an onerous obligation. The notion that a person must fill in details of every trip that has been put about by the Coalition is, of course, nonsense. Yet pages 8 and 9 of the Australian Taxation Office's Income Tax and Car Expenses booklet say `as per attached'. I have my hands on it, so can tell honourable members what it says. It says: There are different methods you can use to prove your claim for car expenses. Where you do more than 5,000 business kilometres a year you can claim: Actual business expenses. Receipts are defined as: This method requires you to keep: receipts, invoices or similar documents for all car expenses; a detailed log book-- Mr N.A. Brown —Requires! Mr TUCKEY —Yes. It continues: A summary of kilometres travelled. If you fail to use a log book one can have 12 per cent of the cost of the price of the car-12 per cent is his statutory rule-which is about $1,000 a year deductions for running a car, or one can have a third of the actual expenses. Of course, that again means full substantiation. So where does the Treasurer get all of this drivel I have just read out? Where does he substantiate that? He made it up because he is getting worried about his fringe benefits tax. But the point is that people will have heard him on the radio yesterday. Some of the newspapers actually published the rubbish he spoke. What happens to those people if they get it wrong? According to this Treasurer they are tax evaders. Those rules apply just for substantiation because the Treasurer is mixed up because he has no knowledge of the laws he brings in here. He will give us all the rhetoric in the world but he cannot answer any substantial questions. He just tells us that he is not a computer. As I said this morning, we agree with that comment. It is the other side of the question on which he was getting a bit mixed up, and that is the fringe benefits tax requirement for employees using vehicles. That is different too. That requirement states that if one uses a vehicle for less than 15,000 kilometres, one will be taxed on 24 per cent of the value of the vehicle; from 15,000 kilometres to 25,000 kilometres one will be taxed on 18 per cent of the value of the vehicle; from 25,000 to 40,000 kilometres one will be taxed on 10 per cent of the vehicle and for more than 40,000 kilometres one will be taxed on 6 per cent of the value of the vehicle. That is another statutory rule and it still has no relationship to the figures that the Treasurer threw around in here yesterday when he was trying to paint up his words. He even put out another Press release in response to the criticisms of the Opposition yesterday. He said that one can just make the odd entry in the log book but, of course, that is not what the legislation tells us. The legislation is very specific in what it tells us. I became the owner of a log book printed by the firm Gillingham Printers Pty Ltd is South Australia. Written very clearly on that log book is `Approved by the Commissioner of Taxation Canberra'. I rang that firm to assure myself that it did get approval. The people there told me that they did. This is what the log book tells me I have to record for each journey: I have to record the date of the journey, the odometer reading, start and finish, the purpose of the journey and, contrary to what the Treasurer said yesterday, business kilometres travelled. I also have to record the name of the driver, the date of entry, which I presume is different from the date of journey, the name of the person making the entry, presuming that is different from the name of the driver, and I have to sign it. The Commissioner wants nine separate entries. That is what he has told the printers of log books and that is what we will have to fill in. Let us take that another step. The Treasurer suggested we could have one entry for the day. If one leaves home by car and travels to work, they are private kilometres travelled. If one gets to work and the boss says, or you have notice from your secretary, that you have to go off and see someone, they are business kilometres travelled. If one returns to the office, one might do a couple more business trips. Then comes lunch. They are private kilometres travelled. After lunch, one starts business again, and then one goes home. If the Treasurer can work out how one gets all that into one entry, I would like to know. What I am really on about is that the other thing the Treasurer has done is to change substantially the tax laws of Australia in terms of self-assessment. Mr Sinclair —His interest is pretty significant too. Mr Howard —And they said tax was going to be the big issue. Mr TUCKEY —We are here to discuss taxation but honourable members opposite do not want to hear about it. They are too busy telling fibs. All they are interested in is winning the argument. They do not want to be confused by the facts. The reality is that in changing over to self-assessment, a draconian change has been made because they have removed some words out of section 170 (3). The section has been changed so that it now reads: Where a taxpayer has made to the Commissioner a full and true disclosure of all the material facts necessary for his assessment, and an assessment is made after that disclosure, no amendment of the assessment increasing the liability of the taxpayer in any particular shall be made . . . after the expiration of 3 years from the date upon which the tax became due and payable under that assessment. Some interesting words were taken out: except to correct an error in calculation or a mistake of fact . . . One can now be reassessed for any reason within three years, including the reason that one failed to make full and true disclosure. What about the people who have heard the Treasurer, Senator Walsh and the Minister for Sport, Recreation and Tourism lately? If that poor little motel operator believes the Treasurer and understates his taxation by $90,000 a year, it might be three years-in fact, it might be seven years-before he finds out, by which time he has a tax bill of $560,000 which he obviously cannot afford. Of course, he has not put his prices up to compensate for this burden. That is the message that the Treasurer and the Minister for Sport, Recreation and Tourism passed out yesterday. When people previously sent in their return No. 1, they had the opportunity to have the Commissioner assess it and write back: `Look pal, you have got it wrong' but under self-assessment the Commissioner will believe them for the time being. They can receive a visit from a field auditor for anything up to seven years. The field auditor has carte blanche for three years on one ground but in fact I believe the Commissioner has every reason to argue that, if one has interpreted the laws and the rules of this very complex tax incorrectly, there has been a failure to make a full and true disclosure. So the Commissioner has seven years on him. Those people who listen to the Government listen to it misleading them, and misleading them dramatically, saying things that are absolutely contrary to what the laws say and absolutely contrary to what the pink book and the other books that have come from the Commissioner of Taxation say. The Government is trying to hose it down, but what is it doing? It is telling people to evade the tax, which is the very thing that it is accusing the Opposition of doing. The Government is saying that we are doing it; it is doing it by painting the tax as being something that it is not. The Treasurer even went to the trouble of putting out an extra release yesterday. He is wrong. The Act is quite clear. It is section 136 (1) of the Act which refers to relevant car documents and which requires all those things that I read out a moment ago. Just on this occasion we will put up with honourable members on the Government side telling us all these stupid stories about the economy and about how the Government has it `dead right'. We know the operative word is `dead'. We will put up with that; we do not mind that, but, for goodness sake, leave the people of Australia alone. Honourable members opposite should not tell them untruths; they should not come in here and try to defend themselves from a political disaster and put over stories about the working of this tax to make it seem more moderate and to bluff people into becoming tax evaders under self-assessment. That is what they are doing, and they are doing it in other areas, too. That is a disaster and a disgrace. If the honourable member for Isaacs (Mr Charles) gets up and defends that attitude, I will make sure that his constituents know that he is prepared to mislead them, too. That is what we are complaining about. We are not complaining about the tax at the moment; we are complaining that the Government is misleading people in regard to its implementation. Mr DEPUTY SPEAKER(Mr Millar) —Order! The honourable member's time has expired. Mr CHARLES(Isaacs)(3.12) —I issue an invitation to the honourable member for O'Connor (Mr Tuckey) to come by my electorate any time he wants. I am sure if he did so my majority would increase dramatically. The Prime Minister (Mr Hawke) and the Treasurer (Mr Keating) have continually pointed out in this House that we welcome debate on taxation because we believe firmly, because it is a fact, that in the run up to the next election people will see quite clearly the facts of taxation and what this Government has done in contrast to what the previous Government, to which the honourable member belonged, did and in contrast to the proposals that the Opposition has put forward or is contemplating in relation to either taxation or eradicating proposals that this Government has already put forward. In that instance, the Government welcomes the motion that has been put before the House, because it does not argue against the fringe benefit tax; it merely discusses whether we have explained it well enough. Talking about misinformation, if the tax has not been explained to people well enough it is mostly because of the misinformation that has been deliberately put forward by Opposition members who for many, many months have been running around the country completely misleading people about the facts-about what this tax is all about and about what it will do. It is a shameful indictment of this Parliament that honourable members on the other side have not been able to go forward and inform people of the facts, whether they are good or bad. The facts stand up. We have seen honourable members on the Opposition side of the House, including the honourable member for O'Connor, going around Australia and deliberately misleading people about what the changes to the taxation system are all about-the fringe benefits tax is one element. Indeed it is ironical to look back at a few of the quotes from the present Leader of the Opposition (Mr Howard). If one looks at what he has said in the past, one will see that he agrees with the fringe benefits tax. In 1980, when the Leader of the Opposition was the Treasurer of this country, he said: Fairness demands that employees who are paid solely in cash-and most Australians are-should not be asked to pay more tax and thus effectively subsidise those whose income is obtained partly in cash and partly in the form of valuable benefits of other kinds. That was a quote from the Leader of the Opposition when he was Treasurer of this country. Further, on 30 July 1986, on the Carleton-Walsh Report, the Leader of the Opposition said: I said when I made the announcement about the fringe benefits tax that what we were going to do was get rid of Mr Hawke's fringe benefits tax and the abuses in that area-and there were some, are some, and would be some in the future-would be dealt with in another fashion. That is what the Leader of the Opposition said. In effect he said: `We will get rid of Hawke's tax and introduce Howard's tax'. Members of the Opposition come in here and say that they do not agree with the fringe benefits tax; however their leader does not agree with them. Every week when we come into this House the Opposition is going to do away with some taxes, but then decides that it wants to keep them, and the next week it changes its mind again. What has happened about the entertainment tax? Is the Opposition keeping it this week or not? I believe the figure for a full year is $330m. There were squeals about the entertainment tax-restaurants on every corner were going to close-but not now. There was a lull in proceedings at some restaurants for a few months, I agree, but now they are as full as they ever were. The vast majority are back to making profits now that things are back on an even keel. The Australian people are not subsidising free lunches to the tune of $330m a year, as they were before under the Government to which Opposition members belonged. It is interesting to look at the car tax. I have had a number of representations on this and have thought it quite ludicrous to believe that real estate agents, travelling salesmen or people whose work, shall we say, between 9 o'clock and 5 o'clock is totally business orientated on the road or whatever travel they do is for business must fill in numerous entries in their log books. I have said that to believe that is obviously quite stupid; there must be a simple answer to that. Of course, there is. The Government has pronounced it and the Australian Taxation Office has given a ruling that if a real estate agent, for example, drives to work at 9 o'clock and does a dozen trips in a day, all of which are for business, he has one entry for the day. As the Treasurer said yesterday, a number of people who are claiming 90 to 95 per cent for business trips could do it the simple way by merely deducting from the overall figure the small proportion of private use, which is probably to and from work. That is the simple method and it is the method that has been introduced. It has been ruled on not only by the Government but also by the Taxation Office. Let us look at a few other taxation measures. As I said in this House in my speech on the Budget, it was interesting to note that the Deputy Leader of the National Party, the honourable member for Gwydir (Mr Hunt), spoke about fuel taxes in his speech on the Budget. In 1980-81, the fuel tax was 8.9 per cent of total receipts; today it is 1.8 per cent. As has been pointed out in this House before, the Opposition when it was in government was the one that received the easy money. Nearly 9 per cent of total receipts came from the petrol tax. It is 1.8 per cent now. That shows that, no matter which party is in government, obviously there are budgetary problems if suddenly we lose easy money. The Government has overcome that; the deficit has come down to $3.5 billion. We have introduced a range of other taxes to compensate for the massive tax cuts, the largest tax cuts that this country has seen, which will be introduced in December and next July. We will be putting $1.5 billion into the system in December and another $4.5 billion into the system on 1 July next year, which is in the legislation which was introduced in this House. We shall see the top tax rate come down from 60c in the dollar to 49c and 40c. It is worth repeating that the Opposition had the stewardship of this country for 31 out of 34 years-not merely for a couple of years. When you left office the top rate was still 60c in the dollar. Mr DEPUTY SPEAKER(Mr Millar) —Order! The honourable gentleman might address the Chair. Mr CHARLES —Mr Deputy Speaker, it is still 60c in the dollar, and this Government will bring it down. The two top rates will be 49c and 40c. Mr Price —The 60c rate was the John Howard one. Mr CHARLES —That is right. The John Howard rate was 60c in the dollar. The honourable member for O'Connor talked about small business but, apart from the car tax, he did not say how taxation was affecting it greatly. Company tax as a percentage of total Budget receipts varied between 10.8 per cent and 13.4 per cent between 1976-77 and 1983-84, which was the period of the Fraser Government. It then plummeted at the start of the Hawke Government's term of office to 9.1 per cent, and it has increased this year to 9.9 per cent. It is still below the percentage under the Fraser Government although it is rising. It is improving because of the profitability that has been introduced into the system under the present Government. Business profits are back to the levels of the 1960s, which accounts for the rise in company tax receipts. However, they have still not reached the level that applied under the Fraser Government. Indeed, the following statement is made on page 360 of the Budget in respect of PAYE taxpayers: Collections from other non-PAYE individuals as a proportion of total receipts fell in the 1970s, reflecting the relative weakness in primary producer incomes and increased recourse to tax avoidance. As the Prime Minister said today, tax avoidance was the largest growth industry in this country during the present Opposition's reign in the 1970s and early 1980s under the Fraser Government. The Budget Papers tell us that there was `increased recourse to tax avoidance.' Let us consider some of the promises that the Leader of the Opposition has given on behalf of the coalition parties. The Opposition says that it is going to institute income splitting, which will cost $2.7 billion. It says that it will have a flatter tax system, not a flat one. The Opposition's spokesman on Treasury matters, the honourable member for Mackellar has said that he does not agree with a flat tax system because-and at least he was honest-everyone earning less than $26,000 a year would be paying more tax. Under a flat tax system with a threshold of $5,000, we would need a tax rate of 33c in the dollar if we were to achieve the present result. At least the Opposition spokesman on Treasury matters addressed himself to that. As I have said, the Opposition wants a flatter tax system, whatever that means, and not a flat tax system. Under a flatter tax system the top rate would be taken down to 40c, although some in the Liberal Party, including Andrew Hay, want a rate of 30c. That would cost $1.6 billion. The abolition of the fringe benefits tax would cost $325m. As I have said, the Leader of the Opposition still agrees with some form of fringe benefit tax. Apparently he would abolish capital gains tax. That would cost $5m. Abolition of tax on lump sum superannuation payments would cost $80m. When the honourable gentleman last spoke he argued for the reinstitution of entertainment expenses, and that would cost $310m. The reinstitution of negative gearing would cost $50m while the full flow-on of world oil price reductions would cost $400m. The abolition of sales tax on oils and lubricants would cost $66m. The abolition of tax on new oil would cost $165m. The provision of child care rebates would cost $108m. The restoration of income equalisation deposits and `in-out' tax averaging would cost $23m. The abolition of wine tax would cost $107m. All in, the cost would be $5.9 billion. Apart from the assets test and a few other goodies such as Medicare-allowing the healthy to opt out and leaving the old and the sick to carry the can-the books will be balanced at a figure of $3.5 billion. All up, the cost will be $11 billion. We have not heard one word from the Opposition about where it will find that sum. That amount is in excess of two education budgets. From where will the money be found? If it is to be taken with one hand, it will have to be put back into the system with the other. That is fairly basic economics. Unless expenditure is cut to that extent- Mr Andrew —We will do that. Mr CHARLES —The honourable member for Wakefield says that the Opposition will cut expenditure by that much. That means that the entire education and defence budgets will be cut out. That would be the consequence of the sums that the Opposition is talking about. It is talking about $11 billion. Opposition members talk in the chamber about cars and fringe benefits tax and about misleading the public. They are the ones who have misled the public. Mr Tuckey —No, the Government did. Mr CHARLES —You are the ones who have misled the public. You are the ones who have run around the country trying to confuse people. You are the ones who have done all that. Mr DEPUTY SPEAKER —Order! The honourable gentleman would serve himself well if he observed the Standing Orders. He must refer to the honourable members opposite by the seats that they represent. The honourable gentleman must address his remarks through the Chair. Mr CHARLES —Yes, Mr Deputy Speaker. It is the Opposition that has confused the public. It has deliberately misled the Australian public in describing what the taxation changes that the Government has introduced are all about. The Government has introduced fairness to the system. When all the changes have been made, the people will see the fairness of the system, which was never seen when the coalition government was in office. We have heard a lot of nonsense and drivel from the Opposition this afternoon, but it has failed to address itself to taxation. The Government welcomes the debate on tax. We shall pursue the issue and win it because the people of Australia will see through the Opposition's nonsense. Instead, they will look at the facts as presented by the Government, which will be a clear indication that the taxation system that is finally introduced by the Government will be one of fairness. Mr DEPUTY SPEAKER(Mr Millar) —Order! The honourable gentleman's time has expired. Mr COWAN(Lyne)(3.27) —I am pleased to support the matter of public importance that was introduced by the honourable member for O'Connor (Mr Tuckey). The honourable member for Isaacs (Mr Charles)-this will be my only comment on his speech-failed to answer the assertions made by the honourable member for O'Connor in respect of at least three extremely relevant matters that he wanted answered. One of those matters concerned a businessman who operates on the Nullarbor Plains. Do not tell me that that man is to be penalised by the Government after waiting for seven years because he has not received a correct answer from the Minister concerned. The Government is a replica of the Whitlam Administration. It is living day by day. It has invoked policies, especially on taxation, without doing its homework. It has introduced these policies because of the pressure from the Australian Council of Trade Unions and from certain parts of the Labor Party, which have said that the Government must transfer money from the pocket of one person to that of another within Australia. That is the Labor Party's old tax cry. Measures have been adopted that are not sustainable. The Government knows that they will not be accepted by the ordinary Australian, especially businessmen and farmers, large and small, who do not want the extra costs, worry, and concern that were outlined by the honourable member for O'Connor. Our minds must go back to the Tax Summit and to option C which the Treasurer (Mr Keating) suggested to the people of Australia at the time. That option may have been acceptable. It may have been adopted by the Summit. However, as everyone will recall, the Prime Minister (Mr Hawke) met the ACTU in the middle of the night and decided that another tax formula would have to be adopted for the people of Australia. I shall continue to repeat that we have in office a high taxing government. The Labor States of Australia are taxing to the utmost those to whom they should be giving relief and providing incentives to employ others so as to increase their trading turnover. I often wonder how this Government-and this has been borne out in the recent Budget-will continue to keep its social security commitments. Mr Price —Support the people. Mr COWAN —Yes, support to the people. The Government has already put off its commitments to the age pensioners and perhaps it will again put off its commitments to them in a mini-Budget early in 1987 because the economy cannot sustain those commitments. Let us look at what the impositions are. Not only do we have a fringe benefits tax we also have a number of new tax impositions such as the capital gains tax and the superannuation tax. The Government did away with negative gearing. Only last night in my speech on the Budget I explained the problems these taxes are creating for the very people the Government claims to be supporting. It should not blame the state of the economy on the fact that we do not have overseas markets for our products. The Minister for Trade (Mr Dawkins) is at present overseas participating in multilateral talks, trying to convince the parties that agriculture should come under the General Agreement on Tariffs and Trade. Agriculture may not come into the GATT while this Government is not facing up to its economic responsibilities in Australia. We have a Prime Minister who in 1983 said to the people of Australia: `We will reduce the price of petrol by 3c a litre'. As the honourable member for Franklin (Mr Goodluck) said today, the Government has increased the price of petrol by 13c a litre since it came to office. It has increased the tax on petrol from 5.8c to over 24c a litre, in addition to the imposition of fringe benefits and other taxes. These are taxes the Government has created and imposed upon the producers of Australia, whether they be in small business, industry, manufacturing, motor vehicles and components, or whether they are working on the farm. The Government is guilty and the people of this nation are the judge and jury who will decide in 1988, or whenever the election is held, whether the Government will be returned. Mr Deputy Speaker, if you had watched television this morning you would know that, as one of our leading writers and commentators said, it is common knowledge that our Prime Minister (Mr Hawke) has lost his touch. The Minister for Foreign Affairs (Mr Hayden) is in the chamber. I will bet that many honourable members opposite would rather see him leading Australia today than the man they have. It is interesting that this afternoon in another place a question was asked of the Minister for Finance (Senator Walsh) relating to the arbitrary limit of $150 for fringe benefit tax liability for a farm employee and the repercussions of non-compliance. The Minister for Finance failed to answer the direct question but made a vicious attack on the National Farmers Federation, the body under which all primary producers are united. He said that the NFF is the problem because Elders and the bigger farmers are involved. Mr Hayden —They are red raggers and anti-American. Mr COWAN —They are not red raggers. That is an untruth. The Minister for Foreign Affairs accuses National Farmers Federation members of being red raggers. That is what he said and every Australian ought to know what he has said about them. It is a darned disgrace to Australia for a member of the Cabinet to accuse members of the National Farmers Federation, Elders and other companies of being red raggers. These people were the pioneers of this country. They established themselves and cleared our countryside, and as a result we have the standard of living that we enjoy today. It is shameful that the Minister should attack the farmers in the way he does. On the land there is a close relationship between the employer and the employee. It is something that many of us on this side understand because we are farmers and we come from the land. That relationship is very close indeed. A farmer likes his employee to live on the farm and he engages him and gives him certain concessions. He might not have to do that, but because he has the facilities he provides them. I know that milk and honey and meat and other things such as accommodation and power are provided to the employee on the farm. He gets the benefit of these concessions. About 30,000 farmers came to Canberra and stood outside Parliament House-- Mr Ian Cameron —Fifty thousand. Mr COWAN —Fifty thousand. They coaxed the Prime Minister to come out. He came out and he said: `I will look at the fringe benefits tax and we will give you certain concessions'. Mr Howard —He never did a thing. Mr COWAN —As the Leader of the Opposition says, the only concession I know of is that meat will be assessed on its value at the sale yards. The Prime Minister did not respond as promised; just as he did not respond after having promised to reduce petrol prices by 3c. On Friday diesel fuel will go up by 5.8c a litre. Mr Martin —It is not enough. Mr COWAN —There you are; the honourable member for Macarthur says that it is not enough. Is it any wonder that the Minister for Foreign Affairs gets up, because he is so embarrassed by this, and declares that the NFF members are red raggers. The truth of the matter is that the fringe benefits tax will cost the rural producers between $10m and $15m. Not only will there be a cost to the farmer, his wife and the employee, but they will also have the worry of filling out the log books, attending to the administration, and so on. They will incur an extra accountancy fee. These things have to be paid for. The farmer is not a person who reads every line in the Taxation Act. I think it is section 26c of the Act which states that the Government may tax the employee. It has the right now to tax the employee-- Mr DEPUTY SPEAKER(Mr Millar) —Order! The honourable member's time has expired. Mr PRICE(Chifley)(3.37) —The Opposition totally lacks credibility in raising this issue. I remind the House of the credibility of the Leader of the Opposition (Mr Howard), the former Treasurer. His Government ran the most disgraceful campaign in 1977 and suggested to the people of Australia that it would give them a fistful of dollars. It ran the campaign under the tag that Liberals give and Labor takes. I remind the honourable member for Moreton (Mr Donald Cameron) that in 1978 the present Leader of the Opposition took away those tax concessions. The Opposition has a miserable record of performance in government. I quote an article from the Age concerning the taxation White Paper, made available to me by the Parliamentary Library. It states: `The opportunism and cowardice of successive governments have produced a hideously complex tax structure that is riddled with loopholes and inequities. The extent of the drift to unfairness can be seen in a few statistics cited in the paper's opening chapter. The marginal rate of income tax that is paid on every additional dollar for a taxpayer on average earnings has soared from 19 per cent to 46 per cent in 30 years'. The proportion of gross income paid out in income tax, has risen from 10 per cent to 25 per cent. Nearly 40 per cent of all full time employees now face a marginal tax rate of 46c compared to about one per cent in 1955. The effect has been not only to discourage the honest from making greater effort but also to produce a multitude of cheats and tricksters. In spite of the tougher policies adopted in recent years, tax avoidance and evasion have reached epidemic proportions. As the previous Government speaker, the honourable member for Isaacs (Mr Charles) pointed out in an excellent speech, for 31 of the last 34 years the Opposition has occupied the treasury bench. What has been the role of the Opposition during this whole series of painful taxation reforms that this Government has had the guts to tackle? Have Opposition members sat on the sidelines and said, `This is such an important issue to all the people of Australia that we feel that we must support the process'? Of course they have not. At each and every opportunity they have sought to misinform or alarm the people of Australia. Indeed, the lead speaker for the Opposition today would win yet again the Michael Hodgman award for deceit, dishonesty and dishonour-- Mr DEPUTY SPEAKER(Mr Millar) —Order! The honourable member is out of line insofar as he referred to the honourable member in a manner inconsistent with the Standing Orders. He also expressed it in terms that might invite a withdrawal. Mr PRICE —I withdraw unreservedly, but I draw to the House's attention the fact that it has been a consistent ploy of the Opposition to misinform people. The text of the matter is very significant to the debate. It reads: The Government's failure to adequately explain the operation of its new taxing measures, including the Fringe Benefits Tax, and the resulting confusion and disincentive for business-big and small. Mr Charles —They agree with it. Mr PRICE —That is the point I raise. Are honourable members opposite disagreeing with the tax? Are they saying that they are violently opposed to the tax? Have they said in this debate that, if elected, they will withdraw the tax? My colleague has already quoted some words used by the then Treasurer, now the Leader of the Opposition (Mr Howard), in 1980. Let me also quote some comments that he made in the Carleton-Walsh Report. This sheds some interesting light on whether or not the Opposition would withdraw the fringe benefits tax. On 30 July 1986 the Leader of the Opposition said: I said when I made the announcement about fringe benefits tax that we were going to get rid of Mr Hawke's fringe benefits tax. That is, the abuses in the area-and there were some and are some and would be some in the future-would be dealt with in another fashion. In other words, that bit of rhetoric means that those opposite will be happy to withdraw the Hawke fringe benefits tax. What they are not spelling out, although clearly it is their intention to do it, is that they will introduce the Howard fringe benefits tax. Mr Lee —And hit the workers. Mr PRICE —And hit the workers, as the honourable member for Dobell has said. That is where their dishonesty and deceit comes in. They are not prepared to be frank with the people of Australia. I want to run through their appalling credibility problem on taxation measures. Their shopping list of taxation reforms-the things that they claim they will do-will cost $5.9 billion. Where will they get the money from? The abolition of the wines tax will cost $107m; the restoration of income equalisation deposits and in-and-out tax averaging, $23m; the provision of child care rebates, $108m; the abolition of tax on new oil, $185m; the abolition of sales tax on oils and lubricants, $66m; the full flow-on of world price reductions, $400m; the reinstitution of negative gearing, $50m; the reinstitution of entertainment expenses, $310m; the abolition of tax on lump sum superannuation, $30m; the capital gains tax, $5m; the fringe benefits tax, $325m; a flatter tax system, $1.6 billion; and the institution of incomes splitting, $2.7 billion. Honourable members opposite have outlandish spending commitments, and here we can see that they have outlandish taxation commitments. Where will they get the money from? Our taxation proposals, of which the fringe benefits tax is an important part, will cost us $1.5 billion at December. From 1 July, they will cost this Government-we have laid the groundwork so that we can implement the system and we will deliver it-$4.5 billion. Where will the Opposition find this $5.9 billion? No wonder it does not have any credibility in relation to the fringe benefits tax. I want to outline the position in regard to fringe benefits. Let us take the highest-paid 11 per cent of wage and salary earners-not the ordinary people of the electorate of the honourable member for Lyne (Mr Cowan) or the preceding speaker's electorate or my electorate. These measures will not hurt them. Indeed, they are currently paying for it, as the honourable member for Bennelong (Mr Howard) said in 1980. Of the highest paid 11 per cent, one in six receives a private transport fringe benefit. One in seven receives an entertainment allowance. One-quarter have private telephone costs paid for or subsidised by their employers. One in 12 enjoys employer-provided or subsidised housing. One in 12 has his medical and/or hospital costs paid for or subsidised by his employer. I am not talking about the poor in the community or about those on average weekly earnings; I am talking about the highest-paid people in our community. One in 13 has his holidays paid for or subsidised by his employer. One in 20 has his club fees paid as a fringe benefit. One in 26 receives a share in the employer's firm as an employment benefit. We can see from this that the Opposition is really asking that the vast majority of Australians who do not have access to these fringe benefits should assume in their tax burden the responsibility for giving these fringe benefits to the wealthiest-the top 11 per cent-in our community. As more and more people come to understand the fringe benefits taxation legislation, it is no wonder that they can understand the equity and justice behind our proposals. That is why we will get support every time we mount a public platform in support of the fringe benefits tax. I wish to make a couple of quick points about this business of the log book. There is no legal requirement under the fringe benefits tax or the substantiation provisions for anyone to keep a log book. Taxpayers may do so, but in most cases they will find a satisfactory tax result by adopting the concessionary formula-- Mr DEPUTY SPEAKER(Mr Millar) —Order! The honourable member's time has expired. The discussion is concluded. Mr RUDDOCK(Dundas) —On behalf of the Joint Committee of Public Accounts, I present the 250th report of the Committee, relating to the Review of the Discontinuance of the Efficiency Audit of Australia Post-Administration of Counter Services, and I seek leave of the House to make a short statement in connection with the report. Leave granted. Mr RUDDOCK —The Chairman of the Committee will be delivering a statement in similar terms in the Senate. I make this statement on his behalf. Report 250 details the findings of the Committee's Review of the Discontinuance of the Efficiency Audit of Australia Post-Administration of Counter Services. The efficiency audit of Australia Post's administration of its counter services began in June 1980 and was discontinued by the then Auditor-General, Mr K. Brigden, in October 1984. It was one of the earliest and longest efficiency audits conducted by the Australian Audit Office. Subsequent to the discontinuance, an informal draft report of the efficiency audit was disclosed to the media without authorisation. This resulted in allegations about the motives of the Auditor-General regarding his decision to discontinue the audit. On 20 June 1985 the Committee announced that it would review the circumstances surrounding the discontinuance of that audit. On 30 June 1980, after a feasibility study, the Auditor-General notified the Australian Postal Commission that an efficiency audit into the provision of services to the public through post offices would be undertaken. It was anticipated that field work would commence in July 1980 and that a report would be tabled in Parliament in mid-1981. The initial audit team comprised five staff. Australia Post was advised in May 1981 that further field work would be undertaken, that further information was required and that Mr D. Berthelsen would be the Audit Officer's project leader from June 1981. The staff on the audit was shortly after reduced to two and then to only one person. From mid-1981 until late 1983, further field work was undertaken and considerable delays were experienced in the writing of the draft report. Several different drafts were submitted to the Committee, which indicated that there had been differing views on the report content. This informal draft report was a precursor to any formal draft to been seen by the Auditor-General. Under the provisions of the Audit Act 1901, the Auditor-General is required to issue a formal draft report to the audited organisation and to take the views of that organisation into account in his final report. In May 1984 an incomplete informal draft report was sent officially to Australia Post. A non-specific response from Australia Post in July 1984 resulted in senior officers of the Efficiency Audit Division becoming increasingly concerned that, while this audit was the only audit outstanding from those commenced by the Efficiency Audit Division, considerable effort would be required to bring it to finality. These concerns were expressed to the Auditor-General in August 1984. The two basic problems brought to the Auditor-General's attention were: That the Australia Post efficiency audit had been running for some 4.5 years; and that for over two years there was only one officer, Mr Berthelsen, conducting the audit and reporting direct to the division head. The Auditor-General discussed in late September 1984 the completion of the report with Mr Berthelsen and was given assurances that the audit report would be finished within four weeks. A month was allowed for completion. At the end of the month Mr Berthelsen requested a further six weeks to complete the report. In late October 1984 the then Auditor-General, Mr Brigden, decided to discontinue the audit. The Committee was presented with a list of some 19 occasions when completion dates for the report had been given by Mr Berthelsen. On 7 February 1985 the Auditor-General advised Australia Post that further work necessary to carry out the audit on Australia Post would not be undertaken. The Committee concluded that the decision taken by the Auditor-General to discontinue the efficiency audit was justified. However, the debate on whether the audit should have been continued was not put aside. The issues were raised again by Mr Berthelsen with the new Auditor-General, Mr J. Monaghan, on 8 March 1985. In May 1985 the Auditor-General formally responded to Mr Berthelsen. The Auditor-General noted that the Australia Post efficiency audit suffered the consequences of a serious management failure. He found that the audit groundwork was not sufficient for the previous Auditor-General to judge that the draft audit conclusions could be sustained against Australia Post's likely rebuttals. The Auditor-General advised Mr Berthelsen that he would not be reviewing Mr Brigden's decision further. However, the debate continued, including claim and counter claim as to the worth of continuing the audit to its final conclusion of reporting in detail to the Parliament. This occurred both within the Audit Office and later before the Parliamentary Public Accounts Committee. As part of the Committee's review, advice was sought from the Attorney-General's Department, the Committee's legal adviser, the Auditor-General, and Mr K. Brigden, the former Auditor-General, as to the basis of the Auditor-General's legal power to discontinue an efficiency audit. These advisings are documented in the Committee's report. On this matter the Committee concluded: Firstly, the former Auditor-General, Mr K. Brigden, had the discretion to discontinue the efficiency audit of Australia Post's administration of counter services under section 48e (1) of the Audit Act 1901; secondly, the former Auditor-General, Mr K. Brigden, failed to present a report on the efficiency audit of Australia Post under section 48f (1); thirdly, the Auditor-General, Mr J. Monaghan, complied in part with section 48g (1), when he reported the discontinuance of this efficiency audit in the Annual Report of the Auditor-General 1984-85; and, fourthly, the Auditor-General should comply with section 48f and 48g of the Audit Act 1901 as is relevant to the efficiency audit of Australia Post's administration of counter services. The Committee also examined the management of the efficiency audit of Australia Post in the Efficiency Audit Division. The first head of that Division, Mr J. Jones, told the Committee that he decided to delegate responsibility to others to manage projects and, as Division head, to develop methodology, select topics and maintain quality control. Mr Jones stated that this `option, had its risks, because when people are allowed to learn by doing they make mistakes'. Mr Jones accepted responsibility for the fact that-he conceded it was so-the management of the Australia Post audit was deficient. Mr Jones claimed that he had difficulties working with the former Auditor-General, Mr Brigden. Mr Brigden was aware that relationships generally were not harmonious between that Division and the rest of the Audit Office. He also said that, throughout the Division's existence, problems with the major audits undertaken remained the same. Audit scope was not defined and maintained with precision and audits were not managed firmly or documented properly. Mr Brigden told the Committee that considerable pressure was brought to bear upon the Division head with a view to having all 16 of the audits originally undertaken by the Division completed by the end of 1983, but these efforts were by no means successful. Only seven had been completed-since 1978-when the head of the Efficiency Audit Division proceeded on leave early in 1984. In an endeavour to expedite the completion of the remaining audits, major changes were made to long standing administrative and reporting arrangements within the Audit Office. In May 1985 the Auditor-General, Mr J. Monaghan, decided that all major project audits directed to efficiency and operational effectiveness issues would be formally designated as efficiency audits. The aim was to achieve an average turnaround of approximately nine months from designation to tabling. He expected that, on this basis, some 20 to 30 efficiency audits per year would be conducted. The Audit Office has introduced revised management practices to ensure that management objectives, including improved reporting objectives for efficiency audits, are achieved. There is some evidence that the aims of both Auditors-General-Mr K. Brigden and Mr J. Monaghan-to make efficiency auditing much more timely have been achieved. Overall, the Committee found: The efficiency audit of Australia Post was not well managed, resulting in a lack of concise and timely reporting; There were serious communication problems regarding the efficiency audit of Australia Post within the Efficiency Audit Division; between the Auditor-General (Mr Brigden) and the Efficiency Audit Division; and between the Efficiency Audit Division and the rest of the Audit Office; and The scope of the efficiency audit of Australia Post was not well defined and maintained; The Committee concluded: The management of the efficiency audit of Australia Post-administration of counter services, was deficient; The ultimate responsibility from 1981 to 1984 for the management of the Efficiency Audit Division and of the efficiency audit of Australia Post was the Auditor-General's; The management of the efficiency audit of Australia Post was not in keeping with the Australian Audit Office's goals, that is, that the Australian Audit Office should be exemplary as regards accountability for its functions and the efficiency, economy and effectiveness of its operations; The Australia Post audit was not only the longest but also the costliest efficiency audit. The Committee anticipates that the Auditor-General will provide the total cost of the efficiency audit of the administration of Australia Post's counter services in his next annual report. The issue of stamp security was also raised before the Committee. Amongst other matters, it was alleged that the Auditor-General may have misled the Minister for Communications (Mr Duffy) on the issue of postage stamp thefts. The Committee concluded: stamp security within Australia Post was not related to the decision to discontinue the efficiency audit of Australia Post-Administration of Counter Services; and further detailed investigation of the security of stamps and other negotiable paper by the Auditor-General is warranted. I would like to express the Committee's appreciation to the Auditor-General and his staff, the former Auditor-General and the staff of Australia Post for their co-operation provided throughout the review. The Committee thanks its legal adviser, the Hon. Mr Justice Paul Toose, and members of its own Secretariat for the support given during this very difficult inquiry. I commend this report to honourable members. Bill presented by Dr Blewett, and read a first time. Dr BLEWETT(Bonython-Minister for Health)(4.00) —I move: That the Bill be now read a second time. The Bill before the House makes a number of important changes to areas within the Health portfolio. Most of these changes have already been announced by the Government as part of the Budget and are, in the main, measures which will provide substantial reductions in government expenditure. Honourable members are aware of the difficult economic circumstances which necessitated a rigorous scrutiny of all areas of government expenditure. Clearly, the Health portfolio had to play its part, but the Government has been concerned to ensure that any changes should be made in the fairest possible way. The amendments in this Bill are part of an overall package of measures within the health area which achieves the Government's Budget objective of restraint with equity. In relation to Medicare, the Bill will increase the maximum gap payment between the Medicare rebate and the schedule of fees from $10 to $20 from 1 November. Complementary changes not requiring legislative amendments are the deferral of schedule fee increases until 1 November and the 25 per cent reduction in schedule fees for 18 pathology tests, which has applied since 1 August. These changes, together with the increase in the Medicare levy to 1.25 per cent, have enabled the Government to preserve its commitment to a universal health insurance scheme based on the principles of equity, simplicity and cost efficiency. Importantly, by adopting this particular strategy, the Government has been able to maintain the Medicare rebate at 85 per cent of the schedule fee, thereby ensuring the continuation of bulk billing which overwhelmingly works to the benefit of pensioners and the disadvantaged. Since 1 July this year nearly 52 per cent of all medical services under Medicare have been direct billed and the vast majority of these were for services provided to pensioners and the disadvantaged. In addition, the maintenance of an income related levy ensures that the burden of paying for health care is spread across the whole community on the basis of ability to pay rather than simply on the sick. Other major amendments included in this Bill are the establishment of a new pharmaceutical benefits scheme which will provide assistance to those with chronic illnesses and other high volume users of prescription drugs. The isolated patients travel and accommodation assistance scheme is to be abolished from 1 January 1987, although the Commonwealth will continue to fund replacement arrangements administered by the States. Commonwealth controls over the approval and categorisation of private hospitals are to be removed. This latter change accompanies the announcement in the Budget that Commonwealth subsidies to private hospitals will cease from 1 October 1986. I turn now to a more detailed explanation of the major features of this Bill. Clause 5 of the Bill provides for an increase in the maximum patient contribution between the Medicare benefit rebate and the schedule of fees from $10 to $20 to take effect from 1 November 1986. This is the first increase in this gap since it was introduced in 1978. The increase takes into account the effects of inflation over the past eight years. However, the change will only affect those Medicare services costing more than $67. Therefore the increase will not affect the vast majority of items involving consultations, which are by far the most common type of services. While the maximum gap payment will increase, the Government will continue to maintain safeguards for people faced with substantial out of pocket expenses for medical services. The $150 maximum annual total gap between benefits and schedule fees will be maintained, which means that once the ceiling of $150 has been reached, Medicare benefits are payable at 100 per cent of schedule fee levels. Private patients in hospitals will continue to have gap payments for medical services covered by their private hospital insurance organisations. In addition, as I have already noted, the Government has retained the 85 per cent rebate level which will enable practitioners to continue to direct bill for pensioners and the chronically ill. Clause 7 of the Bill repeals provisions in the Health Insurance Act dealing with the approval and categorisation of private hospitals. These amendments will deregulate controls over private hospitals. An associated measure, also announced by the Treasurer (Mr Keating) in his Budget Speech, is the removal of government subsidies to private hospitals from 1 October 1986. As a result of this measure, private health insurers will incur additional benefit liability but it is not expected to impact significantly on contribution rates. The exact increases in contribution rates will vary from fund to fund and State to State but, as most funds have accumulated significant levels of reserves, increases should be moderate. Deregulation of private hospitals is part of the Government's overall strategy of streamlining government and assisting the private sector by removing overlapping and unnecessary layers of bureaucracy. Deregulation also fulfils the undertaking given by the Government to the Australian Medical Association in April 1985, as part of the settlement package for the New South Wales doctors' dispute. The Government has long held the view that the regulation of private hospitals is more appropriately a State responsibility. Only the States have the detailed knowledge required for the rational planning and provisioning of both public and private hospital services. On the other hand, the appropriate role for the Commonwealth is to develop national health policy objectives-not the detailed administration of controls that the States should be administering. The devolution to the States of Commonwealth controls over the approval and categorisation of private hospital accommodation was an integral part of the original Medicare proposals and is a logical corollary to withdrawal of the subsidy. These controls, while required to prevent unnecessary Commonwealth expenditure, in practice, simply duplicated State controls. The associated abolition of the present government subsidy will not mean a loss of revenue for private hospitals because basic table fund benefits will be increased by the amount of the subsidy. Indeed, hospitals will save in administrative costs by removal of the Commonwealth from the claims and payment process. At the request of the private hospital industry the current system of paying hospital fund benefits according to the categorisation of private hospitals will be continued as an administrative arrangement for an interim period pending introduction of revised patient classification arrangements from March 1987. As from 1 October 1986, I will declare a new basic hospital table which will ensure that each private hospital receives benefits for insured patients at least equivalent to the sum of the fund benefits and Commonwealth bed day subsidy that were applicable to patients of that hospital on 30 September 1986. In addition, the Bill provides for the continuation of applications and cases before the Administrative Appeals Tribunal commenced before 1 October, if this is the wish of the applicants. As a transitional arrangement, the Commonwealth will consider assisting certain private charitable, religious and community hospitals which historically have cared for needy uninsured patients and whose viability has been reliant on that subsidy. The assistance will be in the form of specific purpose lump sum grants to eligible hospitals for the remainder of this financial year. Longer term considerations for these hospitals will be discussed between the Commonwealth and the States. To be eligible, hospitals will have to demonstrate that they have a history of caring for uninsured patients and that a grant to maintain financial viability is necessary to enable continuation of existing services. While dealing with the amendments that the Bill makes to the Health Insurance Act, I refer honourable members to two minor but important changes. Sub-clause 4 (3), which amends the definition of prescribed `dental patients', will enable the Minister, by determination, to extend Medicare cover of the cleft lip and palate scheme, to include children with other facial deformities, as was originally intended by the scheme. Clause 9 of the Bill amends the secrecy provisions of the Health Insurance Act to further limit the permissible disclosure of information under the exceptions to this provision. In its seventy-ninth report, the Senate Standing Committee on Regulations and Ordinances raised some concerns about certain possible disclosures of information, and this amendment is designed to meet the Committee's concerns. Part III of the Bill contains amendments to the National Health Act 1953. The amendment made by clause 15 is included to enable the Government to proceed with its proposal to introduce a new program designed to reduce the incidence of hepatitis B among new-born babies most at risk of contracting the disease. This is achieved by including in section 9B of the Act a capacity to expand by regulation the list of diseases for which vaccines may be provided. This approach has the advantage of enabling a quick response to future needs. I now turn to clause 16 of the Bill, which repeals the provisions of the Act establishing the isolated patients travel and accommodation assistance scheme-IPTAAS. As previously announced, this repeal is intended to take effect from 1 January 1987, although the Bill preserves the rights of patients who have commenced journeys to seek medical treatment before that date. As in the case of private hospital deregulation, the abolition of IPTAAS represents a rational streamlining of an inappropriate Commonwealth activity and therefore should be welcomed by all honourable members. Indeed, as many of the criticisms of the current IPTAAS arrangements have come from members opposite. I would be very surprised if the abolition of the scheme in favour of funding to the States does not receive bipartisan support. I recall that in the second reading debate on the introduction of IPTAAS some years ago I expressed concern about the monstrously bureau- cratic arrangements associated with the administration of the scheme. Unfortunately that concern has proven to be fully justified. Since I became Minister for Health I have received numerous representations which, whilst supporting the basic principles and objectives of the scheme have nevertheless criticised many of its aspects. The criticisms have come from a wide range of sources, including State Ministers for health, Federal and State members, the Commonwealth Ombudsman, groups representing specific classes of patients, groups representing rural patients, social workers associations, and individual patients. The scheme has also been criticised by the Administrative Appeals Tribunal. The States and Territories are, of course, responsible for the planning and provision of health services and for the actual provision of specific patient transport services such as land and air ambulances and inter-hospital transfers. In superimposing IPTAAS the Commonwealth inappropriately stepped into an area of State and Territory responsibility and effectively distanced the States from valuable planning information on the effectiveness and distribution of their own services. Moreover, the Commonwealth is poorly placed to administer any scheme of this nature, having no suitable delivery and processing mechanism outside the capital cities and at best only a second-hand knowledge of available services. On the other hand, State hospital and welfare delivery networks are well established and some already provide cash advances to the needy in anticipation of IPTAAS benefits. Accordingly, the States and Territories are well placed to develop and administer more flexible and effective measures for those in need. In deciding to abolish IPTAAS, the Government was particularly conscious that, despite its faults, the program has provided a tremendous amount of much needed support to patients in rural and isolated areas and that the needs of those people must be protected. Accordingly, the Commonwealth will continue to provide substantial funding for patient transport assistance. Funds for the States and the Northern Territory will be provided through special revenue assistance grants. On a full year basis this funding represents a 26 per cent increase over IPTAAS benefits paid in 1985-86 and the funds will be distributed among the States and Territories in proportion to the actual distribution of IPTAAS benefits in that year. This generous increase in funding will be more than sufficient for the States and Territories to provide effective patient transport arrangements or to provide a greater frequency and range of specialist services to people in remote areas. It will also enable them to meet any demands that might arise for interstate transport, including from capital city residents, for highly specialised services such as liver and heart transplants, magnetic resonance imaging and lithotripsy. I emphasise, however, that the new arrangements are a matter for each State and Territory to determine, having regard to its own distribution of specialist services and the specific needs of its rural population. On 1 September last year, benefits were introduced to the basic hospital insurance table for day surgery and for the cost of surgically implanted prostheses in public and private hospitals. Sub-clause 14 (1) of the Bill extends these benefits to apply to prostheses supplied in approved free-standing day surgery facilities. There are now five such facilities in Australia. I believe that the continued development of new surgical and anaesthetic techniques will enable many more surgical procedures to be safely completed without the need for an overnight stay, greatly reducing hospital costs and disruption to patients. I take this opportunity to endorse the work of the pioneers of day surgery in established hospitals and new specialised facilities and hope that the health insurance industry will recognise the potential savings by offering greater cover on their supplementary tables to further encourage this development. The next major changes made by the Bill concern pharmaceutical benefits. Clause 21 of the Bill provides for an increase in the maximum general and concessional patient contributions for pharmaceutical benefits. These changes will be effective from 1 November 1986. General patients will pay a variable amount up to a maximum of $10 per prescription for the supply of a pharmaceutical benefit. Whilst the maximum a patient will pay is $10, the Government estimates the average patient contribution will be about $7.30. The concessional patient contribution will increase from $2.00 to $2.50. This will be the first increase in the contribution since its introduction on 1 January 1983 and is broadly in line with movements in prices and incomes since then. As in the past, pensioners holding a pensioner health benefits card and their dependants, and sickness beneficiaries holding a health benefits card and their dependants, will not be charged for pharmaceutical benefits. In those few cases where a special patient contribution applies, patients will continue to pay that special patient contribution as well as the standard charge, if applicable. This also applies to pensioners. From 1 November 1986 pharmaceutical benefits for war widows and their dependants will not be available through the Department of Veterans' Affairs. Instead, pharmaceutical benefits will be available to these persons free of charge through the pensioner pharmaceutical benefits scheme. This change will result in improved efficiency of administration. A major feature of the amendments is to incorporate a safety net which will apply to the supply of pharmaceutical benefits to general and concessional patients. The amendments provide that, from 1 November 1986, no individual or family, including concessional beneficiaries, will have to pay for more than 25 pharmaceutical benefits scheme prescription items in any calendar year. In the first instance the `safety net' will run for 14 months, from 1 November 1986 to 31 December 1987. After that, the scheme will apply for each calender year. After 1 November 1986, individuals or families will be able to obtain a prescription record form from their pharmacist. This is provided for in clause 19. The pharmacist will enter on the form a record of each prescription supplied. After 25 entries, the pharmacist will issue the individual or family with a pharmaceutical benefits entitlement card which will allow them to receive free pharmaceutical benefits for the remainder of the entitlement period. It is not anticipated that the administrative workload on individual pharmacists will be significant and agreement has been reached with the Pharmacy Guild of Australia on payments to pharmacists for issuing pharmaceutical benefits entitlement cards. I point out to honourable members that this scheme has been developed with the full co-operation of the Pharmacy Guild of Australia. Indeed, the Guild's assistance has made the task that much easier and I would like to place on record my appreciation of the valuable contribution made by the Guild in the development of this new pharmaceutical benefits scheme. In addition, my Department and the Guild will continue to monitor the impact of the new scheme upon the community to maximise its effectiveness and ensure that there are no abuses of the new arrangements. Clearly, the Government had to rein in costs during a time of economic restraint, but in doing so we have been able to increase protection for high volume users of pharmaceutical benefits scheme drugs. I believe this is a long overdue reform and one which should have the support of both sides of the House. I also remind honourable members that, as part of the Government's changes to assist those with chronic illnesses, arrangements have been made to pay an annual grant to the Australian Diabetes Foundation to provide diabetics with essential supplies, including insulin syringes and needles. This is an important element of our chronic protection plan and one which has been welcomed by the diabetes organisations. Part IV of the Bill contains amendments to the Therapeutic Goods Act 1966. That Act was amended in 1981 to introduce a batch release system for biological therapeutic goods, such as vaccines, so as to enable the quality of products to be assessed before release to the public. Clauses 41 and 42 of the Bill insert new sections 23da and 23ea into the Therapeutic Goods Act. These are machinery amendments intended to correct legal inadequacies in the earlier provisions. Under the new provisions the Secretary to my Department will be empowered to obtain specific information from a manufacturer and to have official tests performed on samples before a specific batch can be released for use. The amendments will ensure that the batch release system provides an effective mechanism for preventing the marketing of unsafe or ineffective biological products. Clause 44 of the Bill inserts into the Therapeutic Goods Act a new regulation-making power to provide, amongst other things, for the inspection of manufacturing companies operations and procedures which will ensure the Australian public is supplied with therapeutic goods that meet quality, safety and efficacy requirements. The Bill also contains a number of minor drafting amendments. Financial Impact Statement The increase in maximum patient contribution payable for Medicare services from $10 to $20 will result in savings of $18m in 1986-87-with introduction from 1 November 1986-and $29m in a full year. The increase in patient contributions for pharmaceutical benefits, together with the introduction of the safety net measures, is expected to reduce government pharmaceutical benefits scheme expenditure by approximately $56.6m in 1986-87 and approximately $67m in 1987-88. The abolition of the isolated patients travel and accommodation assistance scheme and the provision of alternative funding to the States and Territories will result in a total Commonwealth expenditure of $24.2m for patient transport assistance in 1986-87. The sum of $13.3m will be provided for the remaining life of IPTAAS and takes into account the backlog of claims and the lag in submitting claims after the abolition. The sum of $10.9m will be provided to the States and Territories for the first six months of 1987. The full-year equivalent of $21.8m will be indexed in future years. No expenditure arises under this Bill from the change to allow regulations under section 9B of the National Health Act. However, the cost of providing for a new program of hepatitis B immunisation for at-risk babies is estimated at $2.8m in a full year. The deregulation of private hospitals is expected to result in savings of $0.25m in 1986-87 and $0.5m in a full year. These savings should be considered in association with the abolition of the private hospital subsidy which will save $90m in 1986-87 and $143m in a full year. Business Impact Statement The repeal of legislative controls over private hospitals is a substantial deregulation initiative and is in keeping with the Government's resolve to reduce regulatory controls over private industry. Care has been taken in the development of the new pharmaceutical benefits scheme to minimise the administrative input by pharmacists and to adequately compensate them where additional work is unavoidable. Pharmacists will be required to enter prescription details on the prescription record form, issue pharmaceutical benefits entitlement cards and to satisfy themselves that individuals have an entitlement to the benefits being claimed. The new arrangements will also provide the opportunity for pharmacists to develop a closer and more professional relationship with individual patients with the obvious potential for increased business activity. They will also be relieved of the administrative work load associated with making claims on the Commonwealth for the 40 million prescriptions which will no longer attract a government subsidy. Their cash flow will improve significantly as they will receive immediate payment for these prescriptions rather than waiting for reimbursement from the Commonwealth. The amendments to the Thera- peutic Goods Act will not affect the normal manufacture of satisfactory batches of biological products. Every effort will be made to avoid any delays by performing the necessary tests at the same time as they are being performed by the manufacturer. I commend the Bill to the House. I present the explanatory memorandum to the Bill. Debate (on motion by Mr Porter) adjourned. Bill presented by Mr Barry Jones, and read a first time. Mr BARRY JONES(Lalor-Minister for Science and Minister Assisting the Minister for Industry, Technology and Commerce)(4.24) —I move: That the Bill be now read a second time. This Bill proposes a number of amendments to the Customs and Excise Acts. The principal amendment is at clause 9 of the Bill and proposes to give effect to the Government's decision to introduce revised excise duty rebate arrangements on exports and domestic free market sales of Bass Strait crude oil. These new procedures, which I will detail shortly, are being introduced to allow more timely settlement of rebate claims and thus increase the attractiveness of free market sales to the Bass Strait producers. The Bill contains a number of other amendments of a technical or administrative nature and I will provide brief details of the more important of these in a few moments. The new mechanism for the payment of rebates of excise duty on exports and free market sales of Bass Strait crude oil is part of the Government's initiatives announced in July this year to stimulate domestic production and encourage exports of crude oil produced from Bass Strait. Since the beginning of 1986 the unsettled international oil market has had a significant and adverse impact on the Australian oil and energy industries. With the downward trend in world oil prices, Bass Strait crude oil production and Australian crude oil exports sourced from these production areas have dropped dramatically. The Government, concerned with the revenue and balance of payments effects of reduced oil production reflected in low domestic free market sales and the gradual cessation of export shipments, announced in July a package of measures to stimulate domestic production and encourage crude oil exports. One of the measures introduced on 1 July 1986 was to reduce the effective top rate of crude oil excise on free market sales of old oil by a sliding scale ranging from 65 per cent at $12.50 or less per barrel to 87 per cent at $35.00 or more per barrel. By the end of July however, Australian crude oil prices had fallen to their lowest level since 1979 and this naturally had serious ramifications for the cash flow and financial viability of the Australian oil industry. In order to further encourage the resumption of free market sales, the Government also decided that from 1 August 1986 the top marginal excise duty rate for old oil would be reduced from 87 per cent to 80 per cent subject to certain review provisions. I should mention that excise duty rebates have been paid on exports of crude oil since 1984. These rebates have been implemented by excise regulations made approximately every six months. To provide the necessary market stimulus it is now necessary to introduce a mechanism for the payment of the export rebates and rebates on domestic free market sales on a monthly basis. The Government believes that the most suitable and expedient method to achieve this is to have the Minister for Resources and Energy determine by notification in the Commonwealth of Australia Gazette the rebates of excise duty payable on exports and domestic free market sales of Bass Strait crude oil. This should ensure that a monthly settlement of excise duty rebates can be accommodated, thereby increasing the attractiveness of these sales and exports to the Bass Strait producers. The provisions of clause 9 of the Bill provide that similar to regulations the proposed Gazette notices are to be subject to tabling and disallowance by the Parliament in the usual way. This mechanism is proposed in order to preserve the Parliament's important scrutiny over this administrative tool. As evidence of the timeliness and efficacy of the Government's policy initiatives aimed at increasing production and crude oil exports, there were only 10 export shipments in the first half of 1986 and Bass Strait productions averaged only 320,000 barrels a day in the second quarter of 1986. By contrast, since 1 August 1986 nine export sales have been completed, valued at about $106m. More significant, however, is that Bass Strait production levels are currently running at 480,000 barrels per day and the Bass Strait producers are confident of achieving export sales averaging 70,000 barrels per day in the current financial year. I turn now to the important amendments of a technical or administrative nature contained in the Bill. Clauses 4 and 12 effect minor amendments to the provisions in the Customs and Excise Acts respectively, relating to the obligations on ship and aircraft owners to provide information relating to ship's or aircraft's stores, including drugs, which are on board on arrival in Australia, or are taken on board while in Australia. The proposed amendments update the administrative requirements for the provision of this type of information, to facilitate and accommodate the use of modern media to transmit this data. Clause 5 effects a technical amendment to section 151 of the Customs Act, to transfer from the Minister to the Comptroller-General of customs the power to treat goods as the manufacture of a forum island country, for the purposes of determining duty under the Customs Tariff Act. This transfer of power is consistent with the general transfer of administrative functions from the Minister to the Comptroller-General in customs legislation, as implemented by the two Customs Administration (Transitional Provisions and Consequential Amendments) Acts of 1985 and 1986. The transfer of powers vested the day to day administration of the customs in the Comptroller-General, and the proposed amendment in clause 5 continues that theme. The other technical and drafting amendments are explained in the explanatory memorandum to this Bill. Financial Impact Statement The provisions of this Bill have no direct financial implications. I commend the Bill to the House and present the explanatory memorandum to the Bill. Debate (on motion by Mr Lloyd) adjourned. Bill presented by Mr Barry Jones, and read a first time. Mr BARRY JONES(Lalor-Minister for Science and Minister Assisting the Minister for Industry, Technology and Commerce)(4.32) —I move: That the Bill be now read a second time. This Bill concerns the future directions of one of Australia's most important resources-and I am not now talking of iron ore, coal, bauxite or uranium, but of the intellectual resources within the Commonwealth Scientific and Industrial Research Organisation. Just how much depends on CSIRO's performance over the next few years is, I believe, not widely enough understood in the community, because Australians still tend to define resources in purely material terms, and rarely relate it to intellect and human capacity. This attitude contrasts markedly with attitudes in countries such as Switzerland, Holland, Belgium, Sweden and Israel, to mention countries with populations smaller than our own, where human skills are invariably recognised as being of paramount importance. Australia has no option but to develop similar attitudes if it is to survive economically for the remainder of this century. Australian business management, in particular, will have to change direction radically, and devote a far greater degree of attention to human skills than it has in the past. This will inevitably mean making use of CSIRO, because CSIRO is the single greatest reservoir of the technological skills and knowledge this nation possesses. In most other Western nations, government-funded research and development is paralleled by a strong private research and development capacity, but the Australian private sector, outside agriculture and mining, has for decades all but ignored the need for research and development, with the result that government has been left to shoulder the task of fostering scientific talent and expertise. In examining the future of CSIRO, the Government was conscious that it would be setting the directions and structure for the Organisation for some years to come. Furthermore, CSIRO's role in performing longer-term, strategic research means that it is necessary to consider Australia's future, to ask where we as a nation are headed, when setting the context for decisions on CSIRO's future. There has been a profound change in perception over the last year or so of Australia's place in the world. In 1984-85 there was a prevailing euphoria about the state of Australia's economy. After all, it was reasoned, if we had the world's strongest economy and the world's highest growth rate, then structural improvements in the economy hardly seemed necessary. I was deeply conscious that my concern about the inadequacy of Australia's scientific and technological base was not popular in 1983 and 1984. Underlying the Government's decision on future directions for CSIRO was a belief that Australia must develop as a nation that makes much greater use of its intellectual resources. If we are to arrest the relative decline in Australia's standard of living, Australia must become a more intellectually active scientific and technological culture. However, simple adoption of technology from overseas at a greater rate, or more effectively, will not create the required environment in Australia for acceptance and development of new technologies. A strong local capability in research and development, directed to the opportunities of the future, not the past, is essential. This will be the fundamental role of the restructured CSIRO resulting from the Amendment Bill before the House today. To provide context for the future directions which the Government has identified for CSIRO, I would like to look briefly at our past. By 1900 Australia was a world leader in technology and its per capita income was the highest in the world, followed by Argentina. Our prosperity was based on our agricultural output and our natural resource endowment. Technological developments, spurred by the need to be competitive, were responsible for our pre-eminence in the world economy of the time. However, we have not used our initial success as a springboard to industrial growth. Instead, we have relied on our efficient agricultural and mining industries while our manufacturing and other industries remained poorly developed. Mr Kerin —Menzies, McEwen and Anthony. Mr BARRY JONES —Exactly. Agriculture and mining, employing just 7 per cent of our labour force, account for more than 80 per cent of our export earnings, if we include the value of secondary processing. This is not a sign of strength, as the fastest-growing sector in world trade has been in high value-added, brain based goods for about 15 years. Theoretically, that 80 per cent plus figure could increase to 100 per cent as some farming and mining groups have urged. If it did, this would be a catastrophe, putting us at the mercy of declining world commodity prices, providing a disincentive to restructuring and updating our economic and technological base. Our urban society would be a mere appendage to the rural and mining base. Australia produces large volumes of raw materials, high bulk, low-added-value goods, at a time when alternative suppliers are coming on stream, and where traditional markets are either becoming self-sufficient or are adopting trade policies which are adverse to us. In the fastest growing areas of world trade-low bulk, high-value-added, brain based or brand-name goods-we are very small producers, having left our run extremely late. In technology-based goods, of the 24 Organisation for Economic Co-operation and Development nations, Australia ranked twenty third in 1984 in the imbalance between the value of imports and exports. Only Iceland had worse figures. There are serious, long term and-in my view-irreversible problems in agriculture, complicated locally by drought, but also by our national preoccupation with the short term, and failure to grasp long term trends. The most productive year in the history of world agriculture was 1985, with outputs 12 per cent higher than ever before. A green revolution has swept Asia in the past 15 years. China is now largely self-sufficient in grain. India now has a grain surplus of 35 million tonnes, locked away in silos. Indonesia, for the first time in many years, is now a grain exporter. Britain, still a major farming nation, has had unusually good harvests. The minerals situation is similar. The overheated minerals boom that began in the 1960s and continued through the early 1980s was based on heroic assumptions of a continuing world-wide growth in demand for base metals we could produce in large volume and with steadily rising prices. These assumptions have not been fulfilled. Other sources of supply-notably Brazil-are now selling at a lower cost, while the technological revolution has brought an era of parsimony in the use of natural resources. The latest preoccupation of Australian politics and the media-the emergence of the so-called New Right-is a relatively insignificant part of a much greater problem. In passing, I must comment that a leading member of the New Right, as late as 1979, was positively advocating a reduction in Australia's manufacturing capability and exports in order that our dollar would not be upvalued too much by the large forecast increase in mineral exports and capital inflow to the minerals industry. The strategies of most other western nations during the 1950s and 1960s were quite different from our own. The companies of Japan, Europe and the United States of America, attracted by the economic growth prospects of most economies, spread out across the world, opening up new markets with new products and processes. This competition spurred heavy research and development investment, innovation, product and overseas market development, yielding handsome returns and an economic resilience which allowed them to survive the economic recession of the 1980s better than most. The major factor in the rise of resource-poor nations has been the proportion of export earnings directly attributable to intellectual input: Invention, research and development, product innovation, design, patents, royalties and copyright. More than 60 per cent of the annual export earnings of Japan, France, Sweden, the Netherlands and Italy depend on brain based industries, while Australia's figure is probably less than 5 per cent. The skill based earnings of our industrial contemporaries will grow. Ours will contract unless we make a fundamental change in direction. The most important political issue we face is how to bring Australia up to date, how to come to grips with the social and political significance of the technological revolution that has swept the Western world in the past 25 years. Australia missed the bus on being an active participant in that revolution, and is now paying the price for its low level of intellectual vitality and for remaining in the mental world of the 1960s. We still have to learn the lesson that the world does not owe us a living. It is dangerous for us to conclude that all other nations are out of step and they must learn to march with us. What Australia must do is also what CSIRO must do. CSIRO has made enormous contributions towards the success of our agriculture and minerals industries. I believe CSIRO's most important role over the coming years will be to work with those industries in which research and development plays a central role. In particular, CSIRO will play a major role in contributing to the Government's program of restructuring and revitalising high-technology manufacturing, and in supporting the emerging information and space technology industries. The scientific work of CSIRO will, of course, continue to benefit the resource based primary industries, particularly by adding value to products before they leave our shores, and by tailoring them to meet specific overseas market needs. The present level of private sector industrial research and development in Australia must be increased. This is the most critical factor in achieving a more internationally competitive and skill-based industrial capability in Australia. CSIRO will have an important supportive role in achieving this goal. Over the past few years, CSIRO has substantially improved its interactions with manufacturing industry. The trend started in 1980, with the establishment of the new Division of Manufacturing Technology. The number of professional staff engaged in manufacturing-oriented research has grown by nearly 100 since 1981, an increase of some 15 per cent. Research in manufacturing new accounts for 27 per cent of professional staff. Growth in the manufacturing effort is a trend I expect to continue, and work for the information industries is also growing rapidly. CSIRO's international standing as a research establishment is beyond dispute. It is certainly higher than its national standing, at least in some sectors. Ironically, the Bell Laboratories, world leaders in communications technology, have a higher opinion of CSIRO's research capacity than the local competitor, AWA, has. CSIRO has collaborated with industry in the development of many products which are being exported, or are about to be. These range from the high-speed vision processor, a major advance in the field of robotic vision, to the extremely strong ceramic called `partially stabilised zirconia', which has a wide range of potential applications. The Government is looking to CSIRO to play a role in assisting industry to a much greater export orientation, as well as to continue support for our more traditional industries. This is vital to Australia's future prosperity. It is precisely because the Government places great store by CSIRO and has great expectations of it that we are introducing this new legislation aimed at carrying the Organisation into the next decade in the best possible shape. In May 1985 the Government requested the Australian Science and Technology Council to conduct a total review of public investment in research and development. ASTEC published its report `Future Directions for CSIRO' in November, and the Minister for Science announced in June that the Government had accepted the broad thrust of the ASTEC recommendations. This legislation is based in part on those recommendations, and provides for CSIRO to be maintained as a single entity, in order to achieve maximum efficiency and flexibility in responding to changing national research priorities. The Government considers that CSIRO's primary role should continue to be applications-oriented research in support of major industry sectors and selected areas of community interest, with a commitment to the effective transfer of its results to users. To help CSIRO place more emphasis on the application of its research, the organisation is being encouraged to take on more short term problem solving projects, to be paid for largely by the individual companies concerned. An important objective of this is to gain a better knowledge of industries' needs, and to foster mutual respect and confidence. It is not intended that CSIRO substitute for industry performing its own research and development, but rather that it back up and stimulate industry to do more for itself. The major emphasis for CSIRO with its own funds will remain, where it should, on contributing to future industrial development by longer term `strategic' research. The Government will give clear guidance to CSIRO about Government policies and priorities. As Minister, I will issue guidelines to CSIRO from time to time setting out policies and priorities which the Government wishes CSIRO to follow. In addition, CSIRO will continue to prepare three-to-five-year strategic plans, which will be submitted to me, and annual operating plans. I will retain a statutory power of direction. Changing the top structure will be an important element in building closer links between CSIRO and industry and the community. The legislation clearly separates the top-level policy body-the Board-from management functions. The former Executive will be replaced by a board having a part time non-executive chairman and six to eight part time members appointed for their personal abilities, not as representatives of sectional interests. The Chief Executive will be the only full time member of the Board. The Board will be responsible for setting the broad policy directions within the general policy context established by the Government. The Board members, including the Chief Executive, will be appointed by the Governor-General in Council for a maximum period of five years, but will be eligible for reappointment. The Chief Executive, who will be the most senior member of the organisation, will have responsibility for the management of the activities of CSIRO within the directions established by the Board. The Government has decided that CSIRO should be able to retain its earnings from outside sources without this leading to a decrease in appropriation. Although future levels of funding will continue to be determined in the annual Budget context, this decision should provide a major incentive to CSIRO to strengthen its links with industry, and the application orientation of its research. Although the Advisory Council and State and Territory committees have provided valuable advice and direction to the Executive, it is clear that the structure has not been ideal. The Government has therefore decided to repeal that section of the Science and Industry Research Act which establishes these bodies, and to empower the incoming Board to set up non-statutory channels of advice from industry and the community. Representations from the outlying States of Queensland, Western Australia, South Australia and Tasmania have all expressed concern at this provision, but the special needs of these areas outside the Sydney-Melbourne axis are recognised and I am confident that the proposed non-statutory channels of advice will give appropriate and effective State representation. The Government is also proposing to establish a House of Representatives standing committee on science and technology, which I believe will be a major step in improving CSIRO's interaction with and responsiveness to Parliament. The present CSIRO Consultative Council, which comprises staff and management representatives, will be retained to provide an effective forum for the representation of staff views within the management structure. The ASTEC report on CSIRO raised a number of other important issues concerning use of resources, conditions of service for research staff, funding and financial arrangements. ASTEC's recommendations on these matters will be subject to consideration, in the first instance, by the incoming Board, and subsequently by me in consultation with other Ministers as appropriate. The Bill also provides that the Chief Executive should administer the Science and Industry Endowment Fund, a fund used to support scientific endeavours which do not have access to mainstream funding. The changes to CSIRO embodied in the new legislation are complementary to other initiatives introduced by the Government aimed at transforming the research and development climate in Australia. These initiatives include the grants for industry research and development scheme, the 150 per cent taxation concession, the National Industry Extension Service and revised offsets arrangements. The legislation also incorporates and formalises a number of changes that were under way within CSIRO at the time of the ASTEC review, particularly the five-year strategy for development aimed at improving the focus, management and use of the Organisation's research. I am very optimistic about CSIRO's future. This legislation will give impetus to the positive changes that have already taken place within the organisation, and will also reflect the Government's desire to enhance CSIRO's responsiveness to community needs. I commend the Bill to the House and I present the explanatory memorandum to the Bill. Debate (on motion by Mr Lloyd) adjourned. (Budget Debate) Debate resumed. Dr WATSON(Forde)(4.51) —I rise to speak to the Appropriation Bill (No. 1) 1986-87. In many ways it gives me pleasure to speak after the Minister for Science (Mr Barry Jones) who has just made a second reading speech on the Science and Industry Research Legislation Amendment Bill. The Minister identified in his speech a number of the problems that I intend to address. However, I must admit that I am a little disappointed that the Minister is a member of a government which, in my opinion, has not addressed these issues significantly enough and has missed an opportunity for which Australians will pay for quite some time. It has been said by a number of Ministers that the Budget is a tough one and that it was brought down at a critical time in our economic life. We heard that even today from the Minister for Health (Dr Blewett) and the Minister for Social Security (Mr Howe). First, I want to address the current issues facing the Government, which seem to be the major items that it addressed in its Budget. Secondly, I wish, like the Minister for Science did a moment ago, to address some of the historical problems that Australia has faced and is continuing to face. Thirdly, I would like to address a couple of the key issues which I believe should have been addressed more fully in the Budget. Finally, I would like to consider exactly how the Budget responded to the historical problems and the key issues which had been missed. The current issues facing the Government have probably been illustrated by a number of the headlines that have appeared in newspapers over the past six to eight months. One of the issues was undoubtedly the fluctuation in our exchange rate. In many ways it is ironic that the Treasurer (Mr Keating) has been hoisted with his own petard. Following the Campbell Committee of Inquiry into the Australian Financial System and the movement already set out by the current Leader of the Opposition (Mr Howard), it was the Treasurer who took Australia to a deregulated financial market and a deregulated exchange rate. When the Government assumed office in March 1983, Australia had a trade weighted index of 81.7. On the Monday immediately after the 1984 election the exchange rate was still, on a trade weighted index basis, in the 80s. In fact, it had increased slightly to 83.1 Yet by the end of 1985 we had recorded an historical low, when the index was down to 59.2. By the end of the year it was still hovering around the 60 mark and the Australian dollar in terms of the United States dollar was trading at 68c. In 1986 we saw quite wild fluctuations and a continued fall of the Australian dollar. By the end of July 1986-certainly just before the finishing touches to the Budget were being made by the Government-we had a new trade weighted index low and a new historical relationship between the Australian and United States dollars. It is undoubtedly true that the Government was concerned, as the Treasurer has admitted on a number of occasions, about the current account balances. We are one of the few major Organisation for Economic Co-operation and Development countries with a deficit. Australia has the highest deficit, as a percentage of our gross domestic product, of any of the OECD countries. In fact, we have a current account deficit which is nearly twice that of the United States of America on a percentage basis. In absolute terms, I believe that it is the second highest deficit of any OECD country. The third problem facing the Government and the Australian community is the increase in Australia's gross foreign debt. It is true that at some time in August it was about $86 billion, which represents a little over $5,000 per head, or something like $22,000 per family in Australia. This must be paid for by Australians. Not all of this is government debt-some is private debt. But whether it be government or private debt the only way to repay it is through overseas export earnings. In essence, it can be repaid only in that way. This repayment involves a high percentage of our export earnings. In fact, an amount equal to about 34 per cent or 35 per cent of our exports every year is needed to pay the interest and capital on our debt. About 15 per cent of our export earnings is required to pay the interest alone on our foreign debt. The Government is faced undoubtedly with an increasing overseas debt commitment and the Budget was meant to address that issue. The fourth issue facing the Australian community-it is one of particular concern to consumers and businessmen alike-is the current inflation rate in Australia compared with the inflation rates of our overseas competitors. The latest edition of the Economist in the Parliamentary Library dated 6 September 1986 demonstrates that Australia has a major problem with its inflation rate. For example, wholesale prices are a precursor to future changes in retail or consumer prices. In the past three months Australia's wholesale prices have increased by an average of 6.6 per cent. Virtually every other country with which the Economist compares Australia has had negative wholesale price rises. In other words, wholesale prices in other countries have been falling. Consumer prices were still falling in Japan and West Germany in July. Japan's consumer prices have fallen by about 0.3 per cent in the past three months and there has been a minor rise of only 0.1 per cent over the past 12 months. West Germany had a fall of 0.2 per cent. Belgium wholesalers have cut their prices in the year to the end of July by 7.2 per cent. In the last three months the Belgans have cut their prices by 5.7 per cent. There are similar movements in Canada, France, West Germany, Holland, Italy and Japan. Indeed, Japan saw a massive fall of 13 per cent in wholesale prices in the past three months. There was a slight increase in Sweden. Wholesale prices showed a negative movement in Spain, Switzerland and the United States. Only the United Kingdom has experienced a significant increase such as our own. Inflation is a problem; it is one that is increasing for Australia. That was the position facing the Government. The Treasurer has argued that Australia has had an historical problem. A moment ago the Minister for Science indicated the extent of the problem in terms of our relative export position in the world, which has fallen from a fairly high ranking 30 years ago to a relatively low one in terms of OECD countries. We rank about twenty-second or twenty-third in the list of major exporters. It is undoubtedly true that one of Australia's problems over the last 30 years has been that we have tended to concentrate on agriculture and minerals to the exclusion of manufacturing. When we compare Australia with the rest of the world we see that in 1953-54 something like 87 per cent of our exports were in minerals, fuels and agricultural products. Even in 1983-84 that figure was somewhere around 74 or 75 per cent. Whereas in 1953-54 the rest of the world had something like 70 per cent of exports in agriculture and minerals, currently it has less than 40 per cent. Nearly 60 per cent of the world's exports are in the manufacturing area. Whereas only some 20 per cent of Australia's exports are in that area, the Minister for Science was right in identifying it as a major problem. The Treasurer, of course, has tried to indicate that the major issue facing Australia recently, because of our concentration on agriculture and minerals, has been the terms of trade. The Treasurer in his Budget Speech said: Many Australians have wondered why the economy was doing so well in 1985 and yet, apparently, doing so poorly in 1986. The answer lies in the dramatic collapse of world commodity prices since late last year. The Treasurer ought to read some of the things put out by the Economic Planning Advisory Council, of which he is a member. In EPAC's statement No. 8, made earlier this year, on page 3 he will see a chart which sets out our terms of trade index, not just over the last year but since 1950. The terms of trade have been going against Australia since 1951. Our terms of trade fell more dramatically in the early 1950s and throughout the 1960s and 1970s than has been the case over the past year. Except for the mineral boom in the mid-1960s and the energy boom in the 1970s, during the last Whitlam Government, the terms of trade have gone consistently and dramatically against Australia for a long period. Yet under the Menzies Liberal Government we had continued expansion in our trade and a continued increase in our standard of living. If Australia's terms of trade had gone against the Whitlam Government in the way they did against the last coalition government, Australia would have been in a far worse position at the end of the Whitlam Government than it was. Most Australians look back on that period and think that Australia was in pretty bad shape. We were lucky because Australia was a net beneficiary of the high oil prices during that period. The terms of trade going against Australia is nothing new. Australia has had to face this for some time. It was no good for the Treasurer to wake up one morning and say: `Heck, we have a banana republic. The terms of trade have gone against us'. They were going that way before he became Treasurer and before the last Whitlam Government; they have been going that way since 1951, when we had a wool boom during the Korean war. Mr Downer —There was an election that year. Dr WATSON —We had an election year and we beat them. The critical issues facing Australia have also been identified in some of the Government's own publications. I can refer to no better source than EPAC's statement No. 10 on page 5, where we see details of business investment in Australia. Business investment in Australia peaked in 1971, just before the last Labor Government. It fell dramatically during the Whitlam Government, and for good reason. Australian business did not trust a Labor government. Investment did not start to rise again until the end of the last Liberal Government, and it fell dramatically again once the Labor Government took over in early 1983. The Budget forecast a further fall of one per cent in business investment in Australia in 1986-87, and we have seen business investment falling on a quarterly basis since June 1985. This Government knows the major problem. We cannot have a continual increase in the standard of living, we cannot have an increasing rate of employment over a long time, unless we re-invest in ourselves. The Minister for Science recognises that. He recognises that it is important to reinvest not only in plant and equipment but also in ourselves as individuals. I will address that issue briefly. One of the problems facing Australia is that after-tax returns have fallen dramatically. One would have hoped to find in this Budget some stimulus for investment in plant and equipment and for investment in ourselves. One would have hoped that this Government would have addressed the issue of how to get Australians to re-invest in our country. We did not find that. We saw in this Budget exactly the opposite. We saw an increase in government charges through excise duties which will reduce after-tax returns for businesses. We saw increases in personal and company taxes. We saw a reduction in subsidies to business, which will increase their cost of production. We saw increases in outlays of a substantial nature in virtually every area except the subsidy area, which will increase the cost to business. This Government had the opportunity to bring down a Budget which would set the picture for Australia for the next decade but it blew it. The Government did exactly the opposite to what it should have done, and it will pay for that at the next election. Mr ROBERT BROWN(Charlton)(5.07) —Mr Deputy Speaker- Mr John Brown —A good member, and a good name. Mr ROBERT BROWN —That is a very perceptive interjection. The Budget the Parliament is in the process of considering now represents unquestionably the most important legislation that comes before the Parliament at any time. It probably represents the most important document which would come before any authority or institution in Australia at any time. I was interested to hear Mr Deputy Speaker confirm that apparently an amendment has been moved to the Budget by the Opposition. That is particularly interesting because presumably it indicates some desire by the Opposition to put into place one of its alternative budgets. Perhaps it will be one of those Budgets for which the Opposition was responsible during those seven disastrous years between 1976 and March 1983, when they were finally thrown from office. Before I deal with particular aspects of the Budget, and incidentally do one of those things that I rejoice in having the opportunity to do, that is to refer to the record of the coalition when it was in government, I will try to put to rest one of the claims made by members of the Opposition and by their conservative henchmen around Australia about the national debt. It is true that in June this year Australia's net foreign debt stood at $65 billion. It is true that that foreign debt had increased from something in excess of a relatively low amount of $9 billion at the end of June 1981. But one of the things that is never referred to by the Opposition is the fact that of that foreign debt only 35 per cent is public debt. Of the total debt of $65 billion, less than $14 billion represents Commonwealth debt. What we need to keep in mind is that one of the fundamental reasons for the increase in the aggregate value of that foreign debt is the very significant borrowings from overseas by the private sector in Australia-not by the public sector at all. One of the greatest things that has happened in the Australian economy in recent years is the very significant devaluation of the Australian dollar, which has restored the competitive edge to Australian manufacturing and made it possible for Australia to stand erect as a commercial participant in a commercial world. Yet that devaluation itself has been responsible for about 20 per cent of the total component of that aggregate foreign debt. Let us hear no more nonsense about it from Opposition spokesmen and their conservative henchmen. Let me say one thing before I leave that matter. The alternatives are simple. Either we allow the inflow of capital or funds from overseas in the form of debt capital, which we will have the opportunity to repay in the future, or it will come in as equity capital, which means that foreign interests will progressively buy up more and more of the Australian economy, as they did when the coalition was in government. The prospect then is that, in the disposal of all those assets of the Australian people, there will be few opportunities in the future for them to be brought back into the ownership and control of the Australian people. They are the sorts of choices that we can make. Whenever those circumstances are misrepresented, quite deliberately, by members of the Opposition, we will need to continue to refute them and to continue to clarify them, and we will do precisely that. We should not lose sight of the fact that this Government has been in office for only 3 1/2 years. Nor should we lose sight of the economic circumstances that the Hawke Government inherited. One of the fundamental reasons why, in March 1983, hundreds of thousands of people turned their loyalty, support and allegiance to the Australian Labor Party was the devastation of the Australian economy which had been wrought by those who purport to be economic managers. They tore the economy apart, and their insane policy of maintaining an overvalued Australian dollar as their sole anti-inflationary weapon was responsible for devastating Australian manufacturing. That was one of the fundamental reasons why, when the Australian dollar was devalued with the floating of the dollar, Australian exporters were unable to respond. Australian import competitors were unable to respond or to take advantage of it because they had been devastated by the previous Government. Industry after industry and firm after firm were smashed against the wall as a result of that Government's economic policies-- Mr John Brown —It is happening in Queensland now. Mr ROBERT BROWN —Exactly, because the Hon. Sir Johannes Bjelke-Petersen is still applying on a State level what those economic vandals put into place on a national level. All those people who talk about the great achievements that have been made in the Queensland economy under the National Party Government should examine the facts. The performance of the Queensland economy is one of the worst, if not the worst, performances of the Australian States. People say: `The Premier might be a bit senile and he might be losing his marbles, but has he not been able to bring about development?'. He did nothing of the kind. He came in the wake of private development because of the resource-rich nature of that State. Whenever the Queensland Government has deliberately intervened, it has brought about the same type of economic vandalism that was brought about by those people opposite. (Quorum formed) Mr DEPUTY SPEAKER(Mr Ruddock) —Order! Before the honourable member resumes his speech, I draw attention to the fact that the honourable member for Hindmarsh left the chamber during the ringing of the bells. It is inappropriate for honourable members to do that. Mr Scott —Mr Deputy Speaker, I made it quite clear when I came in that I had gone to pick up a copy of Hansard. I had not left the chamber. Mr DEPUTY SPEAKER —For the information of honourable members, the alcove is not regarded as part of the chamber. Mr ROBERT BROWN —I appreciate immensely the fact that a quorum was called by the Opposition Deputy Whip because it has provided me with a very intelligent-looking audience. Previously, intelligent people were listening in the gallery and I had those who were present on the Opposition side, and now I have an intelligent audience on this side. I thank the honourable member for calling that quorum. I was saying that we should not lose sight of the fact that it was only three and a half years ago that we inherited a devastated national economy which we were responsible for pulling back together. I said, too, that the Opposition had deliberately maintained an overvalued Australian dollar as its chief anti-inflationary weapon, which had the effect of devastating Australian secondary industry. The members of the Government certainly have not forgotten those circumstances, and the memory of the Australian people is much longer than members of the Opposition give them credit for. The Australian people remember absolutely that during the previous Government's last 12 months unemployment in Australia increased by a quarter of a million, or by 750 people every day for 12 months. Not only that, but for the first time in 30 years honourable members opposite had brought about a situation in which economic growth was actually negative. There are a number of extremely important aspects of this Budget, many of which will be resolved only with the passing of time. I make very brief reference to them. The first is the growth forecast. It is important that we achieve the growth that has been forecast, otherwise there could be a detrimental effect on the comparatively high level of employment which this Government has been able to bring about. We indicated before the March 1983 election that we would be attempting, within our first three years, to create 500,000 new jobs. Mr Chynoweth —How many did we get? Mr ROBERT BROWN —We created 630,000 new jobs in three years. We achieved that 500,000 target with five months to go. Honourable members will remember the way in which the Opposition responded when we gave that undertaking, that firm commitment, that promise to the Australian people. Opposition members laughed at us because their experience in their last year in government was to create additional unemployment of 250,000-a quarter of a million-people. Not only that; we know that during the Opposition's seven years in government the number of people living in comparative poverty in Australia increased to 3 million-one person in every five-including 800,000 children. What a record. Mr O'Neil —Shameful. Mr ROBERT BROWN —What a shameful record. I thank the honourable member for Grey for that perceptive interjection. These are the people who, presumably, will shortly be going around the Australian traps appealing to the Australian people once again to show them some loyalty, some support, some allegiance, and they will be rejected again, as they were before. The Australian people know that as a result of the very sound, constructive, coherent and effective economic policies that this Government put into place, we reversed that state of free-fall that the Australian economy was in prior to March 1983. In our first three years we achieved an increase in the level of growth, from negative growth to a 5 per cent real growth level. Everyone has been complaining about the deficit on the current account. One of the fundamental reasons for that is because of buoyancy-this tremendous surge in growth-in the Australian economy, domestic demand increased to such an extent that we were dragging in imports. Our trading partners-Japan, the United States of America, countries around the Pacific rim and countries in the EEC-did not achieve a rate of economic growth equal to ours, with the result that they were not buying our exports. But this dramatic growth that took place within Australia meant that we were buying goods from them. That is one of the fundamental reasons for the deficit on the current account. That is one of the fundamental reasons why, in this Budget and in the Government's general economic strategy, we have to gear back on the rate of economic growth in Australia. The Opposition, when in government, was flat out trying to lift it and we are trying to gear it back. I have reservations and concerns about that, but that is the interpretation which the Government has placed on our domestic economic circumstances, and that is the approach which the Government is making. I want to make a comment, too, about the references that have been made to the necessity for the burden of this hardship to be spread equitably over the Australian community. There are two particular things which indicate that, in fact, whether we like it or not, there has been a reduction in the real standard of living of the Australian people. This is not as a result of anything which this Government has done, and this point has been made before. If we were able to secure today the same prices for our exports as we were achieving at the end of 1984, our exports would be earning, on an annual basis, $6 billion more-$6,000m more. If, as a result of that, we had been able to reduce the current account deficit from $14 billion to $8 billion, that would still have left a deficit of some concern but it would have been of almost minimal concern compared with the deficit we have at the present time. That means that the products that Australian workers, Australian factories, Australian farms and Australian mines have been selling overseas have had ripped off them, by that collapse of world prices, $6,000m on an annual basis. So the capacity of Australia as a nation to earn has been reduced by $6,000m. Let us see what this means in terms of each Australian household. There are about five million households in Australia. If we divide that five million into $6 billion the answer comes out something in excess of $1,000. That means that, on average, every household in Australia has had a reduction in its real income, as a result of that collapse of world prices, over which we have no control, of something in excess of $20 a week. But when the Government says, in all sincerity and honesty, that there is a burden which must be spread equitably, and it puts into place a Budget which is designed to do that, we hear the sort of nonsense we have been hearing from members of the Opposition. No wonder we become a little impatient with them. I do not mind people adopting a political position-of course, we are going to continue to do that-but I would prefer if it could be adopted with a marginal degree of honesty and integrity. Of course they are two things that are lost to members of the Opposition. Integrity and honesty have never been part of their political armoury. Misrepresentation and attempts to make people afraid, attempts to confuse people-- Mr Blanchard —Scaremongering. Mr ROBERT BROWN —I thank the honourable member for Moore, who reminds me that another part of the Opposition's armoury is scaremongering. I could go on, but the amount of time available to me has been significantly affected. Let me say that one of the leading economic commentators, before the Budget, said this: . . . the market should be happy with a projected Budget deficit of around $4 billion. It was $3.5 billion. That same person said: The market . . . will want to see the lower deficit achieved by axing rather than taxing. The axing provided $2.5 billion and the taxing provided $1.5 billion. He said: From the market's point of view, the forecast for GDP will need to be below 3 per cent to be credible . . . It was 2.5 per cent. He continued: . . . the market will be looking for an average CPI inflation rate for the year of about 8 per cent. It was 8 per cent. So, on all those measures, the Government has been remarkably successful. The DEPUTY SPEAKER(Mr Ruddock) —Order! The honourable member's time has expired. Mr ADERMANN(Fairfax)(5.27) —It is almost a pleasure to follow the honourable member for Charlton (Mr Robert Brown), because he is a pleasant, likeable fellow. He was vainly going along the path of trying to dig up ghosts from the past and valiantly, and very theatrically, trying to defend a Budget which is entirely indefensible. But if nothing else it was a very pleasant interlude in an otherwise dreary day. On the admission of the Government and the Treasurer (Mr Keating), Australia is facing extremely acute economic difficulties, and one would have hoped that this Budget would have been directed to remedying many of those ills. That it has failed to do so, and the necessity for the presentation of a supplementary mini-Budget to implement cuts in expenditure which were not made in the Budget, is now patently obvious. It is perceived by even a cursory analysis that the Government has resiled from addressing expenditure cuts which are necessary and, in its coming up with the hypothetical figure of a deficit of $3.5 billion, we have been subjected to a gigantic subterfuge. This was, of course, comprehended, if not by the honourable member for Charlton by economic analysts, by overseas and Australian money markets and by such important and critical judges as Moody's Investor Services Inc. The whole thrust of the exercise was a succession of additional taxation imposts and a deferral of promised expenditures and expenditure foregone. Let me deal with those two matters. The Government has complained that recovery is inhibited because business will not make the investment deemed desirable by the Government. Business cannot and will not make this investment until the prevailing mood of uncertainty, depression and lack of confidence can be dispelled. It cannot and will not increase investment unless it can see some prospect of stability and profitability. On top of disastrous and indefensible taxes, such as the fringe benefits tax and the capital gains tax, which are crippling small business, the increased load of indirect taxation-and the bureaucratic regulation which goes with it-imposed under this Budget will be a mammoth disincentive to already struggling business to adopt any investment decisions. Every new and increased cost, every new and increased taxation impost which is loaded on to the small business sector puts any hope of recovery further away and makes the degree of inevitable recession confronting us even more intense. I have never, in 14 years in this Parliament, detected throughout our nation such a feeling of despondency as I detect today. I have never heard so much talk of recession as is now abroad. This Budget is certainly the catalyst in such a scenario. Was it a tough Budget? It was tough on pensioners, the unwilling beneficiaries of measures such as the assets test. It is a tragedy that their pension increase was substantially delayed. The deferral of their increase means that our most disadvantaged and needy group of Australians, faced with an intolerable and rising inflation rate and with no capacity to increase their meagre income, have been betrayed by a government which gave them assurances of sympathy. The Budget was tough on Australian business and taxpayers, who have been waiting since September last year for promised income tax cuts. They are now told that they will have to wait even longer for those cuts. The supposed tax cuts have been negated by major increases in virtually every other area of taxation. The Budget was tough on war widows and repatriation beneficiaries who have already been persistently attacked by earlier government measures. It was tough on small business which, after all, must provide the employment and increased production which the Government professes to espouse. But it was not tough in the areas in which it should have been tough. The Australian Council of Trade Unions knows that the discounting of wage increases to encompass a depreciated dollar, increased excises and indirect taxes will not happen. It knows that it can press for productivity increases, shorter hours and over-award remuneration with impunity. It cares little that businesses will go into bankruptcy and unemployment will escalate. The Budget was not tough on government expenditure and wastage. Without a mini-Budget to remedy this situation, we are up the creek without a paddle. Indeed, if the Government could find a way to plot a course which is directly opposite to what Australia needs to achieve recovery, it has done so in this Budget. It is no wonder that Moody's has downgraded our credit rating and the world's economists condemn our performance. Forecast expenditures in the Budget reveal that, after social welfare and payments to the States and local authorities, our next highest head of expenditure is interest on public debt-an unbelievable and unacceptable figure of over 10 per cent of our national expenditure. Worse still, I believe that this figure is understated. The projections on which this Budget are predicated are unattainable. The growth in gross domestic product is overstated. Inflation growth is understated. Projected interest rates are understated. So the deficit of $3.5 billion, even with all of the manipulations to which I have already adverted, will end up being considerably higher-just as last year's projected deficit blew out by a net figure of well over $800m. So our indebtedness will increase beyond the Budget projections. However, it is not merely the absolute amount of our national debt which most concerns me. It is not just how much we are borrowing, but what we are borrowing for, that concerns me. If we are borrowing for capital investment so that industry can expand, and we can see that borrowing leading to increased production, income and wealth, that is possibly an investment which is not entirely to be condemned. It can provide profits, increase jobs and raise our standard of living. Of course, it still requires wise management and control. However, more and more, this Government is borrowing merely to pay the housekeeping bills-for consumption. We are borrowing to pay our pensioners and public servants, to prop up a standard of living which we cannot afford, and that is the road to disaster. Mr Ian Robinson —A tragedy. Mr ADERMANN —It is a tragedy. That will not achieve one scintilla of production, one job, or one step along the road to recovery. Indeed, it will inhibit production, destroy jobs and produce recession. Simply and plainly, we cannot proceed along this path of folly. We cannot increase our borrowing to pour more and more into totally non-productive consumption areas, as we are now doing. The world thinks we are mad. We are living beyond our means. We are paying Australians more not to work than to work. With holiday loadings, penalty rates, flexitime and reduced hours, a mass of paid holidays, and the consequent compounding costs of workers' compensation, fringe benefits and a host of other on-costs, we have departed from all reason and common sense. If one mentions to this Government measures such as the removal of the holiday loading, the peculiar penalty imposts on the tourist industry, a return to a 40-hour working week, the requirement of some community service in return for unemployment benefit, it goes into a frenzy of vitriolic abuse. It cheerfully supports the blackmail by unions of business after business, industry after industry, for so-called productivity-superannuation handouts. I thought that productivity increases were somehow linked to increased efficiency and productivity. But in Australia today, even when we have negative GDP growth, unions unashamedly call for increases due to productivity. No wonder the world thinks we are mad. No wonder our credit rating has gone down and the world's economists put us way down the list of responsible economic managers. No wonder we hear talk of recession. No wonder there is such despondency abroad in business and in the community. Over 14 years I have discerned a trend in this country. A philosophy has developed which dismays me. Let me say at the outset that I love art and I value greatly our environment. I have actively participated in and encouraged sport. I have always encouraged groups who work to redress injustices and improve the lot of the disadvantaged and the handicapped. Mr Simmons —You should be in the Labor Party. Mr ADERMANN —Wait for it. I love to see within the community endeavours to improve and beautify our surroundings. Therefore, what I now say is not aimed at any particular endeavour or sector. I refer to an attitude which pervades almost every section of our daily life. I have seen governments of all persuasions-this Budget reinforces what I say-pandering and bowing to vocal militant pressure groups. I have seen a departure from the healthy philosophy of people working in the community to raise funds and promote the sorts of things about which I have spoken. More and more, special interest groups demand that the Government-that is, the taxpayer-promotes and pays for their particular requests. Less and less do we go out and raise funds, sweat a little, sacrifice a little, to make our nation a better place. We look for grants. We look for increased funding and the like. We seek recognition and fame, not because of our hard work and endeavour, but as the leaders of groups who have coerced government into picking up the tab. As a result we have lost the compassion and concern that we should have. The old community spirit and involvement is gone. We cry `give me', rather than go out and spend ourselves in order to achieve and attain. In this Budget, as in Budgets for many years, the taxpayers of Australia are increasingly being required to fund the desires of militant pressure groups. We are becoming lazier and lazier. There does not seem to be any sensible, rational priority about it. Those who shout loudest, parade most often and carry the most placards, seem to receive the largest handouts. This Budget and its predecessors fail miserably to deal with this matter, which should be of real concern. The Budget reinforces and accelerates a trend which must be regarded as undesirable. Many boards and bodies have sprung up, adept at asking for, receiving and spending increasing amounts of funds. How much money which is designed to achieve an aim is being dissipated and wasted? If citizens care, if they really believe in a cause, if they have a vision, let them put their hearts, minds and energy into that cause. If we care enough, we surely should not merely demand that governments do for us what we should be doing for ourselves. If I want to achieve a goal or acquire an asset, I work for it. If I want it greatly, I work harder for it. Governments have discouraged that community spirit. We get less for our money and, as a consequence, an inferior result. This Budget ought to encourage community pride and call on us to do something for the nation because we are Australians and because we care. It fails. Our boards, bodies and handouts proliferate and appetites become more insatiable. This Budget should have given direction into the future; instead it produced palliatives and band-aids. It should have provided encouragement and incentives; instead it stifled enterprise. It should have given sure and certain evaluations and responsible accounting; instead its projections are suspect and its conclusions are unreliable. It should have rallied our national spirit; instead it has plunged us more deeply into despair and despondency. It should have encouraged us to work to make our nation a better, richer place; instead it rewarded the strident demands of those who cry `Give me', and it frustrated and disappointed those who would work and sacrifice to make their vision a reality. Therefore, this Budget fails miserably on every objective test we can apply to it. Mr SIMMONS(Calare)(5.41) —Once again this evening we have heard the usual National Party rhetoric that we have grown accustomed to over many years. It is a typical line where National Party members in particular urge us to cut government expenditure, with the exception of this, that and the other. Once more the honourable member for Fairfax (Mr Adermann), in common with most of his colleagues, particularly those from the National Party, repeats this line. As I said, we have come to expect in this House the usual line of the National Party about socialising one's losses and capitalising one's profits. The honourable member for Fairfax talked about the so-called impost of fringe benefit taxation, capital gains taxation and other taxation measures that were announced by the Treasurer (Mr Keating) on the night of 19 August. The total figure to be collected by those measures amounts to about $1.5 billion. However, what the honourable member for Fairfax did not care to state was that that $1.5 billion was revenue neutral. In other words, with the taxation reductions that will take place in two stages, commencing on 1 December 1986 and 1 July 1987, not $1.5 billion but three times that amount-$4.5 billion-will be returned to Australian taxpayers by way of taxation reductions. For every dollar collected by the Government in taxation at this time $3 will eventually be returned over this financial year. As the Treasurer has indicated on many occasions, this is the most significant taxation reform this country has seen in many years. We are scrubbing those lurks and perks. We should not be calling it a fringe benefit tax; we should be calling it the abolition of the lurks and perks, the sorts of measures that honourable members on the other side of the House have been protecting for years. I find it absolutely incredible that once more we hear condemnation of the fringe benefits tax, the capital gains tax and other measures but we never hear about the positives. How many Opposition speakers have pointed to the imputation system that will commence from 1 July this year whereby we will end the process under which companies are taxed at the company tax rate and individuals who have received dividends are again taxed? Surely that reform is long overdue and it is part of the overall tax package, a package that was announced in legislation on the night of 19 August. Mr John Brown —You won't hear them complaining about that. Mr SIMMONS —As the Minister for Sport, Recreation and Tourism said, it is interesting that we do not hear many comments about that from the Opposition. All we get is the incessant claim about the fringe benefits tax, the capital gains tax, this, that, and the other tax. What the Opposition is doing-it is a legitimate political tactic-is pointing out some of the negatives, and in any taxation system there will always be negatives. Government members are here to make sure that the positives of the package are also put forward. The other interesting point about the debate on the Appropriation Bill (No. 1) 1986-87 that causes me to laugh from time to time is that honourable members opposite seem to forget that since 1949, with the exception of about six years, the conservatives-the Liberal Party and the National Party and its predecessor, the Country Party-occupied the treasury bench for well over 30 years. If they were so concerned about issues such as the 17 1/2 per cent holiday leave loadings, penalty rates, wage flexibility, this, that and the other, for heaven's sake why did they not do something about them when they were in government? I guess everyone has the luxury when in opposition of being able to bleat about some of these points without having the responsibility of doing anything positive about them. Opposition members have glossed over some of the wage flexibility that has existed in this country over the last three years or so. People seem to forget that we have had a great deal of wage flexibility because we are the only government in recent times that has had a wages policy. The significant difference in fiscal policy separating the Opposition from the Government is the fact that the Government can reach an accommodation with the trade union movement in this country to do something about a genuine wages policy that is agreed on with the trade unions. The 17 1/2 per cent holiday leave loading about which we have heard again this evening-the old chestnut-contributes about 1 1/2 per cent of total labour costs. Yet in the past 12 months, under the processes of the accord, this Government has achieved wage flexibility by way of a 2 per cent wage discount in respect of the consumer price index. That amount is significantly greater than would have been achieved had the 17 1/2 per cent leave loading been abolished. We seem to forget that we now have, as a result of the policies that have been pursued under our Government for the last 3 1/2 years, a wages outcome that puts wages back to a relative position against profits within the community. Profits are at an all-time high. In the context of these debates we forget some of the positive achievements that have been part of the accord during the past three years. (Quorum formed) I am very much indebted to the honourable member for Wakefield (Mr Andrew) for allowing my parliamentary colleagues to hear the comments I was about to make on some of the positive outcomes of the accord during the last three years. I was about to say, before I was interrupted by the honourable member for Wakefield- Mr Hand —Have a look at the number of Liberals in here-there are hardly any at all. Mr SIMMONS —As my colleague the honourable member for Melbourne points out one can almost count the number of Liberals in here at present on one hand and have four fingers left. They are not interested in hearing about some of the positive achievements- Mr DEPUTY SPEAKER(Mr Ruddock) —Order! I would not pick up the comments of the honourable member for Melbourne, as they were quite disorderly. Mr SIMMONS —Thank you, Mr Deputy Speaker, but they were a valuable observation. Under this Government the rate of economic growth in Australia has been the fastest of any of the Organisation for Economic Co-operation and Development countries. The last three years has been the most consistent period of sustained and high level growth since the early 1970s. Australia has experienced the fastest employment growth in the world and is the only OECD country projected to have a further fall in unemployment. The quality of Australia's employment growth also stands out amongst the OECD countries. More than two-thirds of our job growth is in full time employment. Almost 90 per cent of jobs now derive from the private sector and 57 per cent of the new jobs have gone to women. The rate of inflation prior to the devaluation has been more than halved. Whilst it is currently high compared to some of the OECD countries, it has to be seen in the context of high economic and employment growth, as my good friend and colleague the honourable member for Charlton (Mr Robert Brown) pointed out in his valuable contribution a few minutes ago. Inflation is not the measure of competitiveness. The devaluation and the level of unit labour costs are very critical factors. Profitability as a proportion of gross domestic product has been raised significantly from about 11 per cent to 15 1/2 per cent. Industrial disputation, the concern of the Opposition, is at its lowest level for 18 years-despite the comments we hear from the Opposition all the time. My friend the honourable member for Charlton in his contribution pointed to the fact that many of the measures the Government has been forced to take as a result of external factors have been brought about by the collapse of world commodity prices. It is illuminating to point out exactly how severe that collapse has been. In the case of coal, between 1981-82 and the fiscal year just ended the collapse was 28 per cent. In the same time scale the collapse in wheat prices was 27 per cent. In the case of iron-ore, it was 26 per cent and significantly, in the case of sugar, between 1978-81 and 1985-86 the decline was more than 68 per cent. So we are not just talking about insignificant declines in our commodity prices. We are talking about devastating declines which, as the honourable member for Charlton pointed out, have meant that our trade has suffered to the extent of $6 billion. Significantly, this Government has responsibly responded with a Budget that takes into account the external factors that have been forced upon us. What did the Leader of the Opposition (Mr Howard) have to say in his response-a most pitiful response-to the Budget a few days later? But it is not a matter of what I think, or what my colleagues think, of what the Leader of the Opposition thinks. It is significant to point out that the Sydney Morning Herald, that free-thinking newspaper, on 22 August, the day after the Budget, made the following commitments: While criticising the Government for not making deeper and more permanent spending cuts in this week's Budget, he again failed to say which government programs he would cut. His failure will undermine the credibility of his promise to hold government spending at zero real growth for three years, and therefore his promise to cut taxes. That is what the Sydney Morning Herald thought of the Budget comments by the Leader of the Opposition. No one really takes the comments of the Leader of the Opposition very seriously at all because we know that the reality is that talk is cheap when one is in opposition. We have delivered the goods in very difficult economic circumstances-circumstances that have been forced upon Australia through no fault of our own. The Sydney Morning Herald went on to point out: The crucial question is whether Mr Howard would do better. If he will not say now what he would like to cut because he knows it would be politically too damaging, would he, as Prime Minister-- Heaven forbid!- be prepared to actually make the cuts? His record as Treasurer and his silence as Opposition Leader will leave the public in doubt. I thought that was a very significant analysis of the Opposition Leader's contribution. Very conservative elements within the Australian media have looked at what the Opposition Leader had to say and have dismissed his comments as indeed they should be dismissed. We are in very difficult economic circumstances because we as a nation have for too long relied upon a very narrow economic base. For many years we have had the attitude that if we experienced some sort of external problem all we had to do was to plant a few more crops or dig a few more holes. Unfortunately, the chickens have come home to roost on that proposition. We can no longer do that. The green revolution is a great thing so far as humanitarian ideals are concerned but it has been a trade disaster for a country such as Australia. What we have to do is to use the new-found competitive position we now have as the result of a floating exchange rate to counteract the sorts of policies that were part of the Fraser-Howard Administration for many years in the 1970s and the early 1980s. Manufacturing industry was wiped out because of an over-valued exchange rate. There are signs in Australia now that that position is being turned around, but at an enormous cost, because most of that industry was just cast aside during those difficult years. I believe that this Budget sets the parameters under which that sort of situation can be reversed. It is not going to happen during this fiscal year; it is a process that will occur over a number of years. But the 1986-87 Budget is a very important start in that process. Mr DOWNER(Mayo)(5.58) —Anybody listening to this debate-today not being a radio day, very few people have that dubious privilege, although I am glad to see that some members of the Australian Labor Party are present-will appreciate that Australia at this time in its history is crying out for leadership and for a sense of direction. It is crying out for a government that would be clearly committed to making Australia the great country it should be, a government which would build our nation's prosperity, thereby enhancing choices and self-fulfilment for ordinary Australians, and a government which would enhance the freedom of Australians by breaking down the power of big government, big unions and even big business and putting power back into the hands of ordinary people. Finally, Australia is crying out for a government which would enhance domestic social stability and build the external security of our nation. It is a great tragedy for Australia that at this time it is receiving none of that leadership from the Government. By the yardsticks I have outlined, the Hawke Labor Government has been nothing short of a complete and utter failure. The Budget we are debating today is one of its instruments of failure. Australians should not really have been surprised by the failure of a Hawke government. They should have expected it. In an historical editorial on 21 August 1980, at the end of the decade of the Prime Minister (Mr Hawke) as the head of the Australian Council of Trade Unions, the Australian Financial Review said: The very first thing that needs to be said about Mr Hawke's decade at the head of the ACTU is that it has been a decade of barren failure. His period as Prime Minister has also been a barren failure. One of the reasons for that failure is that the Government has absolutely no sense of direction. All it is doing is scurrying around in circles trying to please special interest groups. On the first day it tries to please the unions. On the second day it tries to please the Left of its own Party. On the third day, it tries to please the opinion polls. On the fourth day, it provides funds and tries to please the peace groups. On the fifth day, it tries to appease some welfare lobbies and, on the sixth, it tries to please big business. By the seventh day, when the Government inevitably rests, all it does is rest in the knowledge that it has pleased absolutely no one; it has given the nation no leadership; and it has given the nation no sense of direction. In a desperate endeavour to please all these various groups, the Government has, of course, spent money. It has tried to buy the support of the electorate. As every honourable member of this House now knows, the Hawke Government's record on spending is nothing short of appalling. The tragedy of this Budget is that, despite the economic crisis the Government has created, to which it now admits, and despite the cries of the Prime Minister and the Treasurer (Mr Keating) for restraint and belt tightening and their recognition that Labor has overspent-and mightily-this Budget does not reduce spending at all. It should have but, in any case, let us look at the totality of the Government's record on spending. Since this Government came to power in March 1983-a sad time, as it has turned out, for the nation-Commonwealth spending has increased by a massive 16.7 per cent. That figure does not mean very much to people; but, when one puts it into numbers, spending has increased by $25,972m. That is how much public expenditure has been increased by this Government. Forty-four per cent of Australia's national income is now consumed by governments-which, of course, includes State governments as well. Total State, Federal and local government spending last financial year was 10 per cent more than the total value of all companies listed on all Australian stock exchanges-a figure that I find quite staggering-and total taxes and charges were 85 times greater than the profits of Broken Hill Proprietary Co. Ltd. Obviously this spending spree has had an immense impact on the economy. It has given Australia the highest interest rates in the industrialised world. It has given Australia an inflation rate double the average of our trading partners. It has given Australia the greatest tax burden that it has ever had in its history; and it has given Australia a $100 billion foreign debt-up from just $18 billion in 1981-and a balance of payments deficit the like of which we have never seen before. We are now into the fourth quarter of a recession created by this Government. When we bear all those factors in mind, it is no wonder that Australia has lost its AAA rating. The assessment of Moody's Investor Services, which led to the loss of that AAA rating, as honourable members well know, was very perceptive. I quote from its assessment because I think it is important that honourable members understand it. Moody's is reported as having said: Recent measures by the Government to reduce public spending- and, of course, the report is referring there to the Budget- are likely to be insufficient to put a brake on the build-up in debt requirements. Moody's said that its rating decision also reflects several internal factors, including inflation rates running at twice the OECD average and unemployment pressures. Industrial and labour market rigidities are further expected to hamper the country's efforts to shift economic resources into areas with high foreign exchange earning capacity. That is the assessment, not of the Opposition, of the Liberal Party of Australia or even of the Australian community: That is the assessment of Moody's, which has now taken away Australia's AAA rating. Australians should not be surprised for one moment that we have lost our AAA rating because, when one looks at the history of this Government and at some of the remarks that have been made by members of the Australian Labor Party, one can see that that was almost one of its death wishes. It is interesting to observe that on 11 February 1983, during the then election campaign, the Australian Financial Review reported: Labor will rely on a naive 19th Century faith in funny money and public works. I do not think anybody could deny that, in that assessment, the Australian Financial Review was absolutely right. Let us look at where this naive belief in funny money and public works came from. It came from Labor's 1983 policy platform. If only people would now turn back to that policy platform, they would realise that we were always doomed to end up where we are today if we elected, as the nation did, a Labor Government. In that policy platform, the Labor Party said that it wanted to increase the portion of capital inflow on the basis on loan capital, rather than equity capital. It went on to say that Labor would initiate a program of public borrowing overseas and would resort to increased borrowings to fund the deficit. That is why we have an immense balance of payments problem and an immense foreign debt problem. That is why we have lost our AAA rating. As I said, we should not be surprised that we have lost our AAA rating because one only has to go back to the July 1982 Labor Party conference to see what the then Deputy Premier of New South Wales-a senior member of the Labor Party-had to say. We must remember what he said because he had great prescience: Friends, if and when we get a Labor Government- he did in the end- if we adopt some of the policies . . . that are in our Platform international capitalism will take away our AAA rating anyhow, and if we are in a position where we have got to worry and please internationalism to retain our AAA rating then we do not deserve to be in Government. The then Labor Deputy Premier of New South Wales, by the standards of the Labor Party, was right to say that. He was prescient. He showed great perspicacity because what he predicted in fact happened. It is clear now that the Hawke Labor Government realises the disasters that pursuing the policies that it has pursued for over three years has reaped upon Australians. All the way through it has ignored the warnings that have been given to it. It sneered and denigrated the Opposition with puerile political points. It sneered and denigrated editorials in newspapers. It sneered at and denigrated the international financial community. Attack is all it has been about against those who have disagreed with it. Yet by ignoring those warnings, it has ended up making the very mistakes that were predicted, and that has caused great harm not just to the economy, in terms of statistics, but to ordinary Australians. In the Budget Papers last year, the Treasury said that it was expected that there would be a marked deterioration in the terms of trade. Yet, in the last Budget, the Government increased public expenditure by $6,000m, while all along it had been advised by its own department that a marked deterioration in the terms of trade was to be expected. But the Treasurer blindly turned his back on that advice. He obviously rejected the advice of his own Department. On 20 May he went around pretending all was well and he said things such as that what we have is an entirely healthy economy. The tragedy of this Government is that, in spite of the collapse of the Australian economy, which I hope I have made clear, the Government has still ignored the exigencies of the times. It has ignored the need to change direction in this Budget. The Government has argued that it has brought down a $3.5 billion deficit. Practically every respected financial commentator in Australia has agreed with the Leader of the Opposition (Mr Howard) that that figure is entirely phoney and that in fact the Government is not really achieving financial restraint in the way it should. That view has been taken not only by respected financial commentators but also by members of the Government. No less a distinguished person than the person who I believe will be No. 3 on the Labor Party Senate ticket in Victoria, Senator Button, the Minister for Industry, Technology and Commerce, has admitted that this Budget is inadequate, because he has said that there must be further spending cuts. The Treasurer, too, with a little gobbledegook, has admitted, in effect, that the Government will be looking for a mini-Budget sometime early next year. I think I am right in saying that Senator Walsh is another person who has added to that particular view. In other words, the Government has admitted that its own policies and its own Budget are completely inadequate. Let us just look at how the Government achieved this phoney $3.5 billion deficit. It has increased taxes, taking the productive resources out of the economy, by $1,400m in this Budget. With a sleight of hand and creative accounting, as it is often called, it has added some $2,600m to government revenue through the Reserve Bank of Australia selling the nation's reserves, through the Reserve Bank's profits. It has also deferred, not cut, spending worth about $1,000m by postponing the payment of tax cuts and the indexation of various social security measures. In other words, this is a government which, with a sleight of hand, is trying to show that it is economically responsible but which, in fact, is still encompassed with a philosophy of squandermania which is bringing this country to its knees. As a member of the Waste Watch Committee I can say proudly that we have done a great deal to expose the squandermania of the Labor Government. We have exposed the fact that the Government has increased spending on the United Nations Educational, Scientific and Cultural Organisation by 125 per cent. We all know who is the Ambassador to UNESCO. Mr Hurford —What about your own electoral office? Mr DOWNER —The Government has wasted $3m on peace grants to all sorts of groups which, according to the Prime Minister, are backed by the Soviet Union. It spent $100,000 on junkets for environment Ministers to, of all places, Norfolk Island. Why would they want to have a meeting there? I must admit that I am a little surprised to hear the honourable member for Adelaide (Mr Hurford) interjecting, because I was hoping we would not get on to commercial radio. Grants to unions have been paid in immense proportions. Let us concentrate on Adelaide. There the United Trades and Labour Council has received $323,000 from the Labor Government so far. The Movement Against Uranium Mining, rather ironically I would have thought, has received grants of $84,000 from the Government. The Movement for the Ordination of Women within the Anglican Church has received a grant from the Government, the first time in Australian history that a government has become involved in the internal doctrinal debates of one of our great churches. Unrelated, if I may say so, to the Anglican Church, the Gay Actors Ensemble has received $6,700 worth of taxpayers' money by way of a grant. These are only small figures, of course, but they are an illustration of the way in which this Government spends money on all sorts of vested interest groups which, when the time comes, it is hoped by the Government, will deliver votes for it. I warn the Government, though, that the political impact of wasting taxpayers' money can, in fact, be very severe. In the early 1920s the then British Government was accused of being extremely wasteful, and by all accounts it was. So wasteful was that Government that a new political party was formed, called the Anti-Waste League. Surprisingly, although it stood on only one plank, and that plank was to reduce government spending, it had two members of parliament elected in by-elections in 1921. It is a warning to the Government, because the political price of wasting other people's money is a very high one. Australians have had enough of the big spending policies of this Government. There are really two fundamental consequences, quite apart from the economic consequences that I have described, of this squandermania which is so much part of socialism and Labor governments. The first is inevitably high taxation. When a government spends other people's money it raises money through taxpayers and, in effect, redistributes wealth from the productive sectors of the economy. That is, of course, all part of the Labor Party policy. It wants to reduce incentives-it is not interested in productivity-and it denies the whole philosophy of encouraging achievement, which should be so much part of what Australia is about, and I know it would be about with a Liberal government. Let me take one industry that is important to my electorate, the wine industry. I would have thought the honourable member for Adelaide would be interested in the wine industry as well. Wine production is one of the few things nowadays that Australia is doing really well. It is producing high quality wines. What does the Government do? It does not assist the industry; it doubles the tax on the industry. Really, that has to be just about the most absurd decision that any government has taken-to double the tax on one of the few industries that we have which is productive. As a result of that, the Government will be forced into taking further action to bail out those people in the wine industry who are suffering. The Government will now have to set up an economic study to assess the impact of the doubling of the wine tax on the industry so that it can predict what the consequences really will be. It did not do an economic study on the impact of the fringe benefits tax on the car industry, and look what happened to that. It was proud that it did not do such a study. It must do such a study on the wine industry so that at least the Government has some direction about what is going to happen to that industry. It could very well be forced into a position of providing more structural assistance to the wine industry, which is only another form of additional government expenditure, which is something that I do not want to encourage, but that additional assistance could run up a bill of in the vicinity of $20m if expected trends in the industry eventuate. The Government, in any case, will have to do a great deal more to encourage all exports, including exports from the wine industry. I was recently in the city of Bristol in the west of England, where there was a wine fair. I hasten to add that I paid for my trip to Bristol and back. It was one of the major wine fairs of western Europe. The presence of the Australian wine industry at the Bristol wine fair could be described-I do not exaggerate-only as absolutely pathetic. Much more will have to be done to help that industry. Some of those problems could have been avoided if honourable members on the other side of the House were not so mad on taxation. It has done the same thing to the dairy industry, which is struggling. The Government introduced a tax on flavoured milk. It has done the same thing to the citrus industry, which is struggling against dumped imports from Brazil, by imposing a 10 per cent tax. High tax in this country is destroying enterprise, incentive and our capacity as a nation to get ahead and compete with the rest of the world. Big spending, let me also add, is not compassionate. The objective of a lot of this big spending is to help those in need, but a government will never be able to provide the assistance that families, friends and neighbours can provide to people. Yet all people in Australia turn to the Government now for assistance because they think that is the only source of help. If we could get government off people's backs, if we could get away from that mendicant mentality in this country, if we could reduce the size of government, we could return to traditional care, community care and compassion, which does so much to help those who are disadvantaged. In conclusion, let me reiterate that the Hawke Government is a failure. It has failed in the same way as the Prime Minister failed when he was President of the Australian Council of Trade Unions-a complete and utter failure. Australia needs new directions, new vision and new hope for the future, and it will get it from the Howard Liberal government which will be elected at the next election. Debate (on motion by Mr Grace) adjourned. Bill presented by Mr Hurford, and read a first time. Mr HURFORD(Adelaide-Minister for Immigration and Ethnic Affairs and Minister Assisting the Treasurer)(6.19) —I move: That the Bill be now read a second time. This Bill will amend the income tax law to give effect to several of the taxation measures announced in the 1986-87 Budget. In that regard, it will vary in some respects the trading stock valuation arrangements relevant to horse breeders, restore the income tax exemption of the pay of Defence Force reservists and provide income tax deductions for certain gifts. Other amendments contained in the Bill will authorise deductions in respect of cash bids for off-shore petroleum exploration permits, provide a more generous basis for the offsetting of profit on the disposal of animals under the brucellosis and tuberculosis eradication campaign and effect changes to the withholding tax on interest on overseas borrowings. In addition, the Bill will amend the income tax law to provide for the calculation of 1986-87 provisional tax. It will also give the force of law in Australia to a taxation agreement with Austria and a further protocol to the existing taxation agreement with the Netherlands. Finally, some minor amendments of the income tax and other taxation laws are being effected. I will now outline in more detail the significant measures contained in the Bill. Trading Stock Valuation of Horses The Bill will give effect to two 1986-87 Budget measures relating to the valuation of horses for income tax trading stock purposes. Under the trading stock provisions of the law, live stock on hand at the end of a year may be valued, at the taxpayer's option, at cost price or market selling value or at such other value as circumstances may justify. A taxpayer may bring natural increase in live stock to account at a cost price not less than prescribed amounts-$1 per head for sheep, $5 per head for cattle and horses and $4 per head for pigs-but substantially less than actual cost. This allows tax to be deferred until the disposal of the natural increase. The economic and rural policy statement of 15 April 1986 announced changes to the trading stock valuation arrangements for animal stud breeders generally. However, reflecting the fact that the tax deferral advantages are generally much greater for horse breeders than for breeders of other animals, it was announced in the 1986-87 Budget that changes would be restricted to horse breeders and would apply only in respect of service fees. Accordingly, the Bill will amend the law so that for trading stock purposes the cost price of a horse acquired by natural increase is not less than any service fee-whether for physical or artificial service-that is incurred after 19 August 1986 in acquiring the horse. This is expected to result in a gain to revenue of $7 million in 1988-89, with negligible gains in subsequent years. The second of the 1986-87 Budget amendments under this heading relates to the special valuation option available to horse breeders in respect of sires and brood-mares. Horse breeders may elect to write down the cost of sires and brood-mares at rates of 50 per cent and 33 1/2 per cent respectively on a diminishing value basis or to write down the cost of mares over a minimum period of three years. In relation to horses acquired after 19 August 1986, the Bill will limit this special option to horses that are aged three years or more. This amendment, which should have no revenue consequences, will ensure that, as intended, the concessional basis of valuation is available only in respect of breeding stock. Pay of Defence Force Reserve This Bill will give effect to the Budget announcement to reinstate full taxation exemption of the pay and allowances of members of the Defence Force reserves and emergency reserves for service, other than continuous full-time service, on or after 1 January 1987. Full tax exemption will also be reinstated in respect of any gratuity paid to members of the emergency reserves by reason of a calling out for continuous service on or after 1 January 1987. These changes are estimated to cost $5m in 1986-87 and $12m in a full year. There will be an offsetting reduction to outlays of $8m in a full year associated with the discontinuance of the special reserve allowance. Gifts Another 1986-87 Budget measure to which the Bill gives effect will allow deductions for gifts of the value of $2 or more made after 19 August 1986 to the Australian Academy of Technological Sciences and to the Australian College of Occupational Medicine. The estimated cost of revenue of this measure is nil for 1986-87 and less than $60,000 in a full year. Cash Bidding Payments The Bill will implement the proposal announced on 15 January 1986 to allow income tax deductions in respect of payments made to the Commonwealth under the cash bidding system introduced last year for the award of off-shore petroleum exploration permits in highly prospective areas. This will ensure that Australian companies are not placed at a competitive disadvantage compared with foreign based companies entitled to income tax deductions for the payments in their home countries. In cases where exploration leads to the development and production of petroleum, cash bids will be able to be written off on a straight line basis over the lesser of 10 years and the life of the producing field. Write-off will commence in the income year in which a production licence is first acquired in respect of the relevant permit area. In the event that the original cash bidder disposes of an interest in the permit area before the grant of a production licence, the original bidder may transfer to the purchaser an entitlement to deductions. If no production licence is granted, or if the permit expires or is wholly surrendered, the amount of the cash bid will qualify as an eligible capital loss for capital gains tax purposes. The cost to revenue of this proposal is estimated at $1m in the 1988-89 year, increasing to $1.5m in each subsequent year. I take this opportunity to make known the Government's intention to extend income tax deductibility, on the basis just outlined, to cash bids paid under the Commonwealth cash bidding work program system introduced in 1967. Deductibility will also be extended to cash bids paid under systems in force in the States and the Northern Territory that are comparable to the Commonwealth systems. In this regard, honourable members would be aware that, in a joint statement yesterday, the Minister for Resources and Energy (Senator Gareth Evans) and the Victorian Minister for Industry, Technology and Resources announced the release of a petroleum exploration area straddling Commonwealth and Victorian jurisdictions. The proposed extension of deductibility will ensure that cash bids paid in respect of that area qualify for income tax deductions. The further necessary amendments will be introduced into the Parliament as soon as practicable and, like those contained in this Bill, will apply from 15 January 1986. Profits from Death or Destruction of Live Stock Amendments of the income tax law proposed by the Bill will vary the operation of an existing option available in respect of profits resulting from proceeds on the death or destruction of live stock because of bovine brucellosis or tuberculosis. The proposal was announced in the economic and rural policy statement of 15 April 1986 and the variation will apply in respect of the death or destruction of live stock after 30 June 1986. Under the existing law, the average profit per head on live stock that die or are destroyed because of certain diseases may be offset against the cost per head of replacement animals acquired during the year of death or destruction or during the next five years. The Government recognises that the replacement of animals lost because of bovine brucellosis or tuberculosis may take longer than five years and that a lost herd may be replaced by fewer, but more expensive, animals. The Bill will therefore broaden the basis on which relevant profits may be offset against the cost of replacement animals. It will extend the period of offset by five years. It will also provide for profits to be offset on a herd basis rather than on a per head basis-that is, the whole of the profits may be offset progressively against the total cost of replacement animals. The amendments are not expected to have any significant effect on revenue. INTEREST WITHHOLDING TAX EXEMPTIONS The exemption from interest withholding tax for interest payments on overseas borrowings by a State, or by a Commonwealth or State authority where the loan funds are not used in direct competition with the private sector, is to be withdrawn in relation to borrowings contracted for after 1 July 1986 in accordance with the Government decision announced on that day. On 28 July 1986, the Treasurer (Mr Keating) indicated that it was Government policy that public authorities should face a similar environment in respect of borrowings as do private sector borrowers. Consistent with this policy, the Bill proposes that the States and State and Commonwealth authorities be exempted from withholding tax for interest payments on public or other widely spread issues of securities overseas in the same way as a resident company raising money for use in an Australian business. The withdrawal of the interest withholding tax exemption for the States and authorities is to apply to borrowings contracted for after 1 July 1986 but will not affect interest payments made on or before the date on which the Bill receives royal assent. Pending enactment, the States and authorities may continue to apply for exemption for overseas borrowings in relation to interest payments up to the date of royal assent. Thereafter they will be able to obtain exemption to the extent permitted by the amended provisions relating to public or other widely spread issues of securities overseas. The Bill also proposes removal of the generally applicable conditions for that exemption that the loan be raised in a foreign currency and that interest be payable in a foreign currency. Advocates of these changes have argued that the existing requirements impose unnecessary additional costs and impede the ability of Australian borrowers to raise off-shore funds in Australian currency and so reduce their foreign exchange exposure. These amendments will apply to interest payments made after the Bill receives the royal assent. A recent court decision has shown that roll-overs or extensions of loans contracted for some years ago remain able to benefit from the previous `Australian entity' interest withholding tax exemption. This is an unintended result as the exemption was withdrawn to have general effect from June 1983. Accordingly, the Bill proposes to preclude the exemption of interest paid on borrowings resulting from relevant loan roll-overs and loan extensions effected after 1 July 1986 or from the post-1 July 1986 drawing down of funds under a pre-existing loan facility where the borrower was not, before 2 July 1986, contractually bound to use that facility. Corresponding provisions are proposed in relation to the withdrawal of the exemption for overseas borrowings by the States and by public authorities. Similarly, another provision of the law which until June 1983 provided exemption in relation to overseas borrowings by the Australian Industry Development Corporation is to be amended to make clear that loan roll-overs and loan extensions do not preserve the former exemption. Those measures will also apply in relation to interest payments made after the date of enactment of the Bill. Anti-avoidance provisions will prevent the re-arrangement of interest payments to bring them into the period, prior to enactment, in which the relevant exemptions remain available. Provisional tax for 1986-87 As provisional tax is part of the pay as you earn system and is designed to collect tax on non-salary or wage income within the year in which the income is derived, it is generally accepted that the amount of provisional tax charged should approximate as closely as practicable the amount of tax actually imposed for the year. Incomes to which provisional tax applies are expected to increase in 1986-87 but, due to the proposed reductions in personal income tax rates from 1 December 1986, effective rates of tax for 1986-87 will be lower than for last year. As in the past, it is proposed that the basis that would otherwise apply in the calculation of provisional tax be varied for the current year to take account of these two factors. Accordingly, this Bill provides for 1986-87 provisional tax to be calculated on the basis of 1985-86 taxable income increased by 11 per cent and by applying the lower rates of tax for 1986-87. Also reflected in the provisional tax calculation will be the proposed increased rate of 1.145 per cent at which the Medicare levy is to be imposed for 1986-87. The increased low income thresholds to apply for levy purposes in 1986-87 will be taken into account. Generally, rebates and credits will be allowed in the provisional tax calculation at the levels allowed in 1985-86 assessments. For Christmas Island residents, however, the rebate allowed in their 1985-86 assessments will be reduced by one-third in line with the arrangements for phasing in personal income tax on the Island. Taxpayers who consider that their taxable income for 1986-87 will increase by less than 11 per cent, or who consider that their rebates will be at a higher level, will continue to have the right to `self-assess' and have the provisional tax for 1986-87 recalculated on the basis of their own estimates. The Austrian Comprehensive Tax Agreement I now turn to provisions of the Bill that will provide legislative authority for the entry into force of a comprehensive double taxation agreement dealing with all forms of income flowing between Australia and Austria. The agreement was signed on 8 July 1986, at which time details were announced and copies of the agreement were made publicly available. It accords with the other comprehensive taxation agreements concluded by Australia in recent years. The Bill will insert the text of the agreement into the Income Tax (International Agreements) Act 1953 as a schedule to that Act. The agreement will not enter into force until all necessary constitutional processes are completed both by Australia and Austria. The agreement is not expected to have any significant effect on the revenue. Second Netherlands Protocol The Bill will provide legislative authority for the entry into force of a second protocol amending the existing comprehensive taxation agreement and protocol between Australia and the Netherlands. The second protocol will enable the Netherlands to close an avenue for avoidance of its tax being exploited by Netherlands investors deriving interest from debt claims secured by mortgage over real property in Australia. At present, Netherlands tax does not generally apply to such interest, which is treated under the agreement as income from real property. The protocol will treat the income in the same way as other interest is treated under the agreement. This will allow the Netherlands to tax such interest from Australia in full, subject to the allowance of a credit for Australian tax paid on the interest, instead of the interest being generally free of Netherlands tax and subject only to Australian withholding tax of 10 per cent. The tax treatment in Australia of interest flowing from Australia to the Netherlands will be unchanged. The gross amount of such interest will continue to be liable to Australian interest withholding tax of 10 per cent. Mortgage interest derived by Australian residents from the Netherlands is presently exempt from tax in Australia if it is subject to Netherlands tax. Under the protocol, such interest will be taxable in Australia, with a credit for the Netherlands tax, which is limited to a maximum of 10 per cent of the gross interest. The protocol will generally have effect in Australia for years of income commencing on or after 1 July 1986 and, in the Netherlands, for taxable years and periods beginning on or after 1 January 1986. Transitional entry into force arrangements will ensure that the protocol will not apply to interest paid under contractual obligations entered into before 30 June 1986, when the protocol was formally signed, until Australian years of income commencing on or after 1 July 1988 and Netherlands taxable years and periods beginning on or after 1 January 1988. Appropriate anti-avoidance measures will safeguard the operation of the transitional arrangements. The protocol will enter into force after the procedures necessary to give it the force of law in both countries are completed. MINOR AMENDMENTS The Bill will amend the income tax law to add the Secretary to the Department of Science as an authority to approve bodies as approved research institutes for income tax purposes. It will also amend various taxation laws to reverse an unintentional alteration to the burden of proof provisions by the Taxation Boards of Review (Transfer of Jurisdiction) Act 1986. An explanatory memorandum which comprehensively explains the measures contained in this Bill, and in another Bill that I will introduce shortly, is being circulated for the information of honourable members. In commending the Bill to the House I present the explanatory memorandum to this Bill. I repeat that it is also an explanatory memorandum for the next Bill. Debate (on motion by Mr Carlton) adjourned. Bill presented by Mr Hurford, and read a first time. Mr HURFORD(Adelaide-Minister for Immigration and Ethnic Affairs and Minister Assisting the Treasurer)(6.36) —I move: That the Bill be now read a second time. This Bill will give effect to the 1986-87 Budget proposal to increase the general rates of bank account debits tax. For cheque accounts kept with banks outside the Australian Capital Territory, including Jervis Bay, the highest rate of bank account debits tax will be increased from $1.50 to $2, with other rates being increased by up to one half. The increased rates will apply to debits made on or after 1 December 1986. In view of the proposal announced in the Budget to introduce a financial institutions duty in the Australian Capital Territory from 1 July 1987, the rates of bank account debits tax presently applying in the Australian Capital Territory will remain unchanged. Increasing the general rates of bank account debits tax is expected to raise additional revenue of $45m in 1986-87 and $90m in a full year. The explanatory memorandum that has been circulated already to honourable members also explains the provisions of this Bill. I commend the Bill to the House. Debate (on motion by Mr Carlton) adjourned. Bill presented by Mr Hurford, and read a first time. Mr HURFORD(Adelaide-Minister for Immigration and Ethnic Affairs and Minister Assisting the Treasurer)(6.40) —I move: That the Bill be now read a second time. Pensions payable to, or in relation to, former Commonwealth Government employees and Defence Force personnel under the Superannuation Acts 1922 and 1976, the Defence Forces Retirement Benefits Act 1948, the Defence Force Retirement and Death Benefits Act 1973 and the Papua New Guinea (Staffing Assistance) (Superannuation) Regulations are increased in July each year in accordance with the increase in the weighted average of the consumer price index for the six State capital cities to the previous 31 March. On 3 July 1986 these pensions were increased on the basis of the 9.2 per cent increase in the consumer price index to 31 March 1986. The extraordinary circumstances of the economy require all members of the community to share the cost of reducing Government expenditure. Accordingly, as announced in the Budget Speech, the 2 per cent wage discount recently applied to wages is to be extended to government superannuation benefits payable to, or in relation to, former Commonwealth Government employees and Defence Force personnel. This Bill amends the Defence Force Retirement and Death Benefits Act 1973, the Defence Forces Retirement Benefits Act 1948, the Superannuation Acts 1922 and 1976 and the Papua New Guinea (Staffing Assistance) (Superannuation) Regulations to provide for the levels of pensions payable under that legislation to be decreased with effect from 10 October 1986 to the levels that would have applied if the increase in July 1986 had been based on an increase of 7.2 per cent in the consumer price index rather than an increase of 9.2 per cent. It is expected that, as a result of the proposed amendments, Government outlays on the relevant pensions during 1986-87 will reduce by approximately $12.6m and during 1987-88 by approximately $17.3m. In commending the Bill to the House, I present an explanatory memorandum relating to the Bill. Debate (on motion by Mr Tim Fischer) adjourned. (Budget Debate) Debate resumed. Mr GRACE(Fowler)(6.42) —It gives me great pleasure to support the Government's Budget, unlike Opposition members, who come in here and grandstand that they have the policies to resurrect our economy and put it back on the rails. The fact is that they have no policies at all-or perhaps they have a couple hidden around this House somewhere, which for sure would be organised by the New Right. Nevertheless, the Australian public will realise which party has firm policies and which party is prepared to make the tough decisions that need to be taken at this point. I remind honourable members that the Government remains firmly committed to an economic strategy in which traditional tools of macroeconomic policy are supported by and co-ordinated with a consensus-based incomes policy. It is nothing like the Opposition with its confrontationist attitude to almost everything. If some of the Opposition's so-called policies were to be introduced, it would really destroy the very fabric of our society which this Government has worked so hard to mend after the dismal failure of the previous Government. I believe that this Budget is one of the toughest brought down by the Treasurer (Mr Keating) and I congratulate him on his firm stance and his even-handedness, but we must remember that it was brought down in some of the hardest times that this nation has ever faced. The Government has proved that it is prepared to take the necessary steps to alleviate those problems. Of course, those conditions would not have been easily discernible when the last Budget was delivered. Let us look at some of the problems that lie ahead. First, it is common knowledge that the trade war being waged between the United States of America and the European Economic Community is having an effect on our economy. For instance, it is well known that we have had $6 billion cut from our national income. This needs to be corrected. The Government, the unions and the business community are not responsible for this, but the Government needs to take the necessary action to address the problems faced by this country. The Government has seen the need to reduce the Federal deficit-a legacy left to us by the previous bumbling Treasurer, the present Leader of the Opposition (Mr Howard). This year the deficit has been reduced to about $3.5 billion-a reduction of about $2,233m. But I would remind the House that, had that action not been taken, the deficit would have blown out to $7.5 billion. The deficit blew out to about $9.6 billion in 1982-83, when no action was taken by the present Leader of the Opposition because of his weakness and ineptitude to comprehend the situation. This year, outlays are estimated to be about $74,764m. This represents an increase in nominal terms of about 6.9 per cent. Increases in real terms are expected to show no change in 1986-87 compared with increases of 2.5 per cent in 1985-86 and 6 per cent in 1984-85. Budget outlays, as a proportion of gross domestic product, are expected to fall to 29.4 per cent this year and Budget receipts are expected to rise by 11 per cent, but this is slower than in the two preceding years. Appropriation Bill (No. 1) Appropriation Bill (No. 1) Appropriation Bill (No. 1) Appropriation Bill (No. 1) Appropriation Bill (No. 1) Appropriation Bill (No. 1) Appropriation Bill (No. 1) Appropriation Bill (No. 1) Appropriation Bill (No. 1) Appropriation Bill (No. 1) Appropriation Bill (No. 1) Appropriation Bill (No. 1) Appropriation Bill (No. 1) Appropriation Bill (No. 1) Appropriation Bill (No. 1) Appropriation Bill (No. 1) Appropriation Bill (No. 1) Appropriation Bill (No. 1) Appropriation Bill (No. 1) Appropriation Bill (No. 1) Appropriation Bill (No. 1) Appropriation Bill (No. 1) Appropriation Bill (No. 1) Appropriation Bill (No. 1) Appropriation Bill (No. 1) Appropriation Bill (No. 1) Appropriation Bill (No. 1) Appropriation Bill (No. 1) Appropriation Bill (No. 1) Let me now turn to some other aspects of the Budget that I feel are relevant. First, over the years child maintenance has been allowed to go unchecked. Over time it has grown to such an extent that it takes a great chunk out of our social security budget. This had to be changed, and I am pleased that the Government has taken the initiative to place the onus back on parents and make them more accountable for their responsibility to their children. The Government will legislate to set up an office within the Australian Taxation Office to ensure that payments are made. Welfare cheats will not be too pleased to see further anti-fraud measures introduced. I remind honourable members of some of the anti-fraud measures already introduced and of how effectively they have worked. For example, direct crediting to banks of benefits and pensions has reduced fraud by 72 per cent. There has been a rise in the number of prosecutions for fraud involving $30,000 or more-86 per cent, to be precise. A further commitment that the Government has undertaken is the introduction of the identification card. I feel sure that this will go a long way to stopping social security fraud, and it will also make sure that all Australians pay their share of tax. Those who oppose the card must have something to hide when it comes to paying their taxes. I am also glad that the Government has decided to place a photograph on the card. The pensioner community will also have to make a very small sacrifice to help the country; and it is a small sacrifice compared with other sections of the community. Pension increases will be delayed for 42 days. I do not think that is too much to ask of the pensioners. The cost of the increases to the pensioners is $300m and the deferral will save the Government $129m. The increases in other areas for allowances are commendable, to say the least, and the tightening of the administration of benefits is long overdue. Another area of great concern to this Government is community services. It pleases me to see that expenditure is to be increased by 11 per cent to $1,867m, with $26m being earmarked for new projects. The streamlining and bringing together of all existing family support programs is an excellent idea and the Federal-State cost-sharing arrangement is to be continued. The home and community care programs will receive a significant boost of $94m to cater for people outside institutionalised settings. Education is another area where the Government can be proud. The introduction of an administration fee of $250 per annum is an excellent idea. (Quorum formed) Before the quorum was called I was talking about the introduction of the $250 administration fee and I stated that it was an excellent idea. I say to those dithering on the periphery and calling those charges tertiary education fees that, if they do not understand that, they have a long way to go towards understanding the debate. The streamlining of educational allowances and bringing them under the one umbrella will help more than 233,000 students, and I might add that those receiving the new Austudy allowance will be reimbursed for the administration fee. This means an estimated 114,000 students will not pay any form of administration fee at all. The Government's ongoing commitment to tertiary education funding is evident in the 2.5 per cent increase in real terms to $67.8m. Some of the significant increases that this Government has achieved are exceptional compared with the record of the previous Government. Under the Fraser Government funding fell by 0.6 per cent in real terms. Technical and further education institutions have also benefited from the Budget. The total outlays for TAFE have increased by 2.5 per cent to $314.6m. As my allocated time draws to an end I would like to make a few general points. It amuses me to listen to the Leader of the Opposition (Mr Howard) and to the Deputy Leader of the Opposition, the honourable member for Menzies (Mr N.A. Brown), talking about their alternative Budget plans. They want to cut this and cut that and freeze all spending increases for three years. That may be all right for the dries on the other side of the House, but what drastic effect will it have on the community and what drastic effect will it have on the economy in general? Fortunately, we will never have to find that out, because the people will realise, as the New Right rises to prominence, that its policies are a recipe for disaster. Charles Copeman and his cohorts in the H. R. Nicholls Society are pressing for some unbelievable demands. Under this Government we have achieved a remarkably good record on the industrial relations scene. On assuming office in 1983 and introducing the prices and incomes accord, we were able to produce strong economic growth of almost 5 per cent in the first three years. I invite honourable members to compare that with the 2 per cent rate in the life of the Fraser Government. We have had the fastest rate of job growth in the Western world, with 650,000 new jobs. Industrial disputes are at half the level they were under the Fraser Government. There has been a fall of 7 per cent in real unit labour costs. No other country has achieved this. These are some of the results that the Fraser Government could only dream about and something that the Leader of the Opposition is now dreaming about. If the Andrew Hays, the Charles Copemans, the Hugh Morgans, the John Stones-a lovely name-and the Paul Houlihans-he ought to be ashamed of himself, having an Irish name-get their way and are able to introduce some of their outlandish policy recommendations, this country will indeed be in big trouble. The dismal front that the Leader of the Opposition is trying to put on, that he is not influenced by these extremists, of course is laughable. I believe Dr Gerard Henderson, staff member of the Leader of the Opposition, is also a member of the H. R. Nicholls Society. Then, of course, there is that prolific leaker of documents who needs to have people neutralised, David Trebeck, who is also a member of the Society. But, of course, John Howard has nothing to do with the H. R. Nicholls Society! Well, he could have fooled me. Mr DEPUTY SPEAKER(Mr Leo McLeay) -Order! The honourable member will refer to members by their title. Mr GRACE —I refer to the Leader of the Opposition. My last statement is a warning for the people of Australia to beware, for if the H. R. Nicholls Society is influencing this country's political agenda, and I believe it is, there will be more than class warfare in Australia. I commend the Budget to the House. Mr RUDDOCK(Dundas)(6.56) —I am pleased to have this opportunity to contribute to the Budget debate this year. Unlike the honourable member for Fowler (Mr Grace), who spoke before me, the honourable member for Charlton (Mr Robert Brown), who spoke earlier in the day, the honourable member for Ballarat (Mr Mildren) and the honourable member for Lilley (Mrs Darling), whose speeches I heard in particular, my comments will not be set in the past, endeavouring to obscure this Government's record by trying to draw comparisons with governments of three or four years ago. I would like to set the scene simply by recording a description of Australia's economy at this point in time: The economic and financial background to monetary policy in Australia underwent substantial, sometimes dramatic, changes during 1985-86. The year began with strong growth in economic activity and buoyancy in sentiment. This situation was largely reversed as the year progressed . . . At the outset of the year economic prospects were delicately poised. The economy was growing strongly, but inflation was double that in the major economies abroad and there was a rapidly growing external imbalance on current account . . . The outlook nevertheless remains dominated by the need to restore external balance. The period of adjustment appears to be longer and more difficult than previously thought. In particular, the need to further restrain public spending and borrowing, and the rate of increase of labour costs is likely to persist for some time yet . . . The task ahead remains formidable. They are not my words; they are words that I picked out of the overview on the Australian economy by the Reserve Bank of Australia in its June 1986 report to members of this Parliament and to the Australian public generally. It set the scene for the way in which this Budget for this Government should have been drafted. I believe the Australian people were ready for the Government to make the decisions that were necessary in Australia's interests. There were high expectations that this would be a tough Budget. I think all of the conditioning that had gone on before from the comments of the Treasurer (Mr Keating), whether they were deliberate or otherwise, that Australia had the prospect of being a banana republic had brought home to the Australian people the urgency of the situation and the need for our present problems to be addressed, and addressed in a realistic fashion. Community expectations had changed, and changed significantly. In my 13 years in the Parliament I have never seen the Australian public as well prepared for a difficult Budget as they were for this one. Overwhelmingly there has been a change of attitude and expectations. That change of expectations was such that the Australian public was prepared for, and expected, a tough approach in relation to government expenditure. Yet the expected hard decisions were not taken. The Budget was largely a wimp and the Australian people believe that. The fact of the matter is that, while there was some exaltation when the public first heard that there was in prospect a $3.5 billion deficit-a figure that it was generally prepared to believe, from the conditioning that had gone on before, was a reasonably good outcome-when people looked behind the figures and assessed the Budget in an objective way that deficit figure did not stand to scrutiny. That needs to be understood. In the context of a Budget of one of the Treasurers of a Government which I supported in the past, this Budget was seen by the Australian public and commentators to be rubbery. The figures are clearly rubbery. The downturn in various tax collections is to be expected, having regard to the extent to which our economy is in recession. Mark you my words, Mr Deputy Speaker; this economy is in recession at this time, having experienced negative growth in the last three quarters. Clearly, tax collections cannot be expected to be maintained at the level of performance that the Government has predicted. More importantly, the downturn in economic indicators makes it clear to me that expenditures on the social welfare side will be very much greater than the amount for which the Government has budgeted. We have already seen that the Government's projections in relation to unemployment in the first two months of this budgetary year have been in excess of the Budget predictions. The Budget predicted an 8 per cent level of unemployment. Already, for two months, we have seen a level of 8.3 per cent. It is unreasonable, when the economy is in recession, to expect that growth in employment will be such as to ensure that the Government's projections are realised. Obviously, the only result will be that outlays will be much more considerable than the amount for which the Government has budgeted. At a time when tax collections are significantly down and the Government's outlays, particularly in the important welfare areas-which are totally beyond government control-are up, the deficit achievement that has been predicted certainly cannot be realised. That, of course, is one of the reasons that this Budget has been so harshly judged by commentators. There is a concern about the level of international debt that Australia has been incurring of late. The fact is that in June 1983 we had a public sector debt of $3.2 billion and a private sector debt of $19.8 billion-a total debt figure of $23 billion. At December 1984, public sector debt was $19.1 billion and private sector debt was $37.6 billion-a total net debt of $56.7 billion. It is quite clear that that debt is increasing at an alarming rate. The honourable member for Charlton, notwithstanding his claims that the private sector debt was larger and therefore should be regarded as a more significant factor, has totally misread the situation. The fact is that, in the space of two and a half years, public sector debt has increased by a total of 600 per cent. Over the same period, on the figures I have cited, the private sector debt has increased by merely 100 per cent. I am not saying that it is not a significant figure; of course it is. But the total increase in public sector debt has been of such an order that we have a real and significant problem in the making. The Government's Economic Planning Advisory Council, in a Council paper of October 1985 headed `Australia's Foreign and Public Sector Debt', commented: If the country were to continue to borrow in an overall sense to finance consumption spending, disruptive adjustment would eventually become unavoidable-regardless of whether foreign debt was comprised mainly of public or private sector debt. The honourable member for Charlton ought to bear those comments in mind. It is clearly a problem of enormous proportions. If the Government does not get that level of debt in hand promptly, other disruptive adjustments will eventually become unavoidable. I think that EPAC, when it talks in those terms, means that if the Government is not prepared to take firm steps in relation to the level of debt, receivers will have to be appointed. The International Monetary Fund-one of those international organisations that look at these questions-will be called upon to take our economy and the necessary adjustment in hand. In relation to the question of debt, I direct the attention of honourable members to an article prepared for the Westpac Banking Corporation's economic discussion papers by Professor J. O. N. Perkins, who made some observations about the steps that were needed to reduce the level of debt. He stated: The only wise policy is to take steps to reduce the extent of the rise in the country's external indebtedness, by making . . . efforts to improve the current account by the non-inflationary means of slowing down inflation in Australia. These are the steps that he says are so essential: This involves not only finding ways to keep down the rate of increase in labour costs, but also to hold down both government receipts and more importantly- the more inflationary forms of government outlay . . . Those are the steps that an independent observer of government policy believes ought to be taken. Honourable members on this side of the House who have participated in this debate have given very clear warnings to the Government about the sorts of steps that ought to have been taken in the Budget-steps to get government expenditure far more in control than this Government has been able to do, and to be able to do so by taking the hard steps that the Australian public was prepared for and was ready to see put in place. One of the great disappointments in relation to so many of the steps that were taken in relation to this Budget was the extent to which the Government merely fiddled at the edges and made temporary decisions that will not have any long term impact on future government budgetary outlays. For instance, one of the points that must be clearly made is that the changes to the payment of pensions involved a one-off decision and will have no long term impact on budgetary outlays in future years. These are the sorts of factors that need to be taken into account. I think the Government should give greater attention to the constructive comments from the Opposition as to the areas in which expenditure cuts can be made. Without spelling out a full and alternative Budget, members of the coalition Waste Watch Committee have given a clear indication of numerous areas of funding that could be constructively attacked great hardship to the Australian people. When one looks at some of the organisations that are being funded by this Government, clearly there is very considerable scope for a reduction of expenditure. The Leader of the Opposition (Mr Howard) made it very clear in his contribution that one did not have to increase expenditure in particular areas to appease particular pressure groups at this time. Realistic steps can be taken in many areas simply to maintain and not increase the present level of expenditure. I refer to particular programs that were undertaken by the Government in the Budget. Of course, there are particular organisations that could, quite constructively, be abolished or simply terminated at this time, with a view also to reducing government outlays. I am afraid that the Government has shown itself unwilling to address those areas of expenditure. Its own blinkers and shackles have ensured that the way in which Budget cutting has been undertaken is extremely ineffectual and most disappointing. Having regard to the change of attitude on the part of the Australian public, I am disappointed that, in the national interest, the decisions that were necessary were not taken in this Budget. Mr CAMPBELL(Kalgoorlie)(7.09) —In rising to support the Budget I think that, in the economic circumstances, it was a very commendable document and sets Australia on the right road. Although there were some cuts, I think that additional cuts could have been made. I am on record as saying that, had I been in charge, the Special Broadcasting Service would have been wiped out completely. I think it serves no purpose. I think that one of the great myths perpetrated by both major political parties in this country is what I call the myth of multiculturalism. It is nonsense; it is also divisive and potentially dangerous to the community. I think ethnic people in Australia have real problems. Quite a lot of them live in my electorate and they come to me and say: `If you are 40 and unemployed it is tough. If you are 40, ethnic and unemployed it is very tough'. They are very concerned about employment. Most ethnic people come to this country expecting a new life, willing to embrace our ways and our culture. They are quite happy to do that. In my opinion the SBS was always a sop to the middle class. I want to pass a few remarks on what is commonly called the New Right. I do not intend to waste much time on it; it is hardly worthy of it. The so-called New Right is the very old Right-the same people with the same worn out ideas and the same rhetoric that have failed this country in the past. Let me refer to a few of the gentlemen involved. John Leard in his retirement, or perhaps dotage, took out full page advertisements in the Australian to tell us what was wrong with the country. Yet when that same gentleman was head of ANI Corporation Ltd he was one of the people who benefited from this country's entrenched system of protection. Obviously, that was bequeathed to us from the Black Jack McEwen era. John Leard was very happy to take advantage of that, and ANI Perkins endeavours in the field of exports were abysmal. Why should they worry when they had a totally protected Australian market? These people have attacked the 17 1/2 per cent leave loading. We are now told that this is the cause of all our woes. Why suddenly, out of the blue, this should be so is very hard to say. These people resort to lying and the Opposition pushes their lies in this Parliament. Madam SPEAKER —Order! The honourable member will not use the word `lies'. Mr CAMPBELL —I will defer to your better judgment, Madam Speaker, but collectively there would be no opposition to that. However, I am prepared to rephrase what I said. The Opposition pushes these people's incredible mistruths in this Parliament, and I think its lack of honesty will become apparent. The truth is that most countries equivalent to Australia have that sort of facility in their wage structure. Some countries have even higher facilities. In Europe the so-called thirteenth month is a very common practice. Taking a few of the Organisation for Economic Co-operation and Development countries, Belgium has the equivalent of a 90 per cent loading; Denmark, 30 per cent; France, 30 per cent; Greece, 50 per cent; the Netherlands, 30 per cent; Norway, 32 per cent; Portugal, 100 per cent; Sweden, 25 per cent; and Finland, 50 per cent. In Sweden, Finland and Switzerland other measures also increase their wage bill. Clearly the 17 1/2 per cent leave loading is not the problem. We often cite the United States of America, which does not have that facility but does pay an hourly rate considerably higher than that of Australia. I have recently looked at a study done in my electorate which pitched the wage rates of people at the North West Cape facility against those of equivalent people in Florida in the United States. It showed there was a minimum $3.50 difference in favour of the United States. One can buy a lot of 17 1/2 per cent holiday loadings with $3.50 an hour. Quite clearly, the leave loading was never a problem. The so-called New Right has taken industrial action, used industrial lawlessness in my electorate, which has been very heavily hit. There was a nine-week strike at Kambalda which was brought about by the nineteenth century industrial relations practices used by Western Mining Corporation Ltd. Sir Arvi Parbo has taken steps to redress that matter and I am very pleased to see that he at least, of the Western Mining Board, has distanced himself from the antics of the New Right. Mr Copeman's Peko-Wallsend Ltd in Robe River incited enormous industrial trouble and then had the audacity, the gall, to concede that his motives were political. Here is a man who for his own political ideology was prepared not only to wreck the lives of a lot of innocent ordinary workers and their families but also to prejudice the welfare of his shareholders. With some glee one of the company's people told me that the shares had actually risen since the Robe River dispute. The truth is that the shares rose on the strength of the company's gold interests, not because of the industrial relations policy in Robe River. It is interesting to see some of the tired, old failures. Debate interrupted. Madam SPEAKER —Order! It being 7.15 p.m., I propose the question: That the House do now adjourn. Mr EVERINGHAM(Northern Territory)(7.15) —The Government and particularly the Minister for Finance (Senator Walsh) object to the financial commitment that is necessary to sustain my electorate, the Northern Territory, as part of the Commonwealth. They conveniently overlook the role of the Commonwealth in bringing about that situation. Yesterday's rejection of the opportunity to raise more revenue for the Commonwealth and to strengthen the Australian and Territory economies is economic lunacy. Yesterday we saw the casual closing off to exploration and mining of 12,700 square kilometres-an area the size of Wales-of some of the world's richest mineralised land in Kakadu. In general the anti-mining lobby has, with some success, painted the entire Kakadu National Park area, both declared and prospective, as a lush wonderland where exotic species of bird and animal life abound beside brimming billabongs. Any intrusion by the dreaded miners, or even by a properly organised tourist industry, would despoil the billabongs, kill the crocodiles, and drive away the birds forever. This is not the reality. For a start, the vast size of the Kakadu parklands is not generally realised. Stages 1 and 2 of the park total up to 12,700 square kilometres. Stage 3 of the park, the Gimbat and Goodparla pastoral leases, will bring the park to around 20,000 square kilometres in total. Section 36 (c) of the Australian Labor Party platform, as approved by the Thirty-seventh National Conference in Hobart this year, reads as follows: . . . opposing mining or any other activity in national parks which adversely affects the prime function of the park, ie nature conservation. The Minister for Arts, Heritage and Environment (Mr Cohen) said during the Conference that mineral exploration ought to be permitted under strict guidelines. Since the Labor Party and its Environment Minister agree with the principle of exploration and mining in parks as long as strict guidelines apply, let us look at whether mining has, or will, adversely affect the prime function of Kakadu. Earlier I spoke of the vast area of the declared park-12,700 square kilometres. We hear a lot about the wetlands and the stunning beauty of the escarpment, and rightly so. However, at the height of the monsoon season these wetlands cover a maximum of 2,200 square kilometres of Kakadu-about 16 per cent-and that includes the extensive mud flats on the coastal fringe and the miles of mangrove swamps surrounding the river estuaries. The escarpment country covers a maximum 1,800 square kilometres of the park proper. So we are talking about up to 30 per cent of Kakadu National Park with the escarpment covering only about 12 per cent. Page 81 of the original Kakadu plan of management, prepared by the Australian National Parks and Wildlife Service and signed by Professor J. D. Ovington, states: The escarpment and its outliers provide the most dramatic scenery in the park, as well as being the area of richest Aboriginal value and the most diverse habitat for the terrestrial fauna. Waterfalls and plunge pools are also concentrated in this topographic division. So the overlord of Kakadu is limiting the majority of the wonders of the area to a relatively small portion of this huge land mass. Let us now hear from another professor on 70 per cent of the park area which is not wetlands, waterways or a river system. Professor Harry Messel of Sydney University has surveyed crocodile populations and studied the river systems in Kakadu. Giving evidence to the Senate Standing Committee on National Resources in Sydney in May this year, Professor Messel stated: Do not get carried away with all the nonsense you read down here about what a wonderful place it is up there. By `up there' he was referring to Kakadu National Park. He continued: At most of the places there is nothing to see except bloody mud banks, mangroves and a few buffaloes staggering about. When you get into the upstream section, up in the hills and rocky places, the scenery is very spectacular, but for the hundred odd kilometres downstream to the mouth (of the river) there is very little to see, the crocodiles are the most interesting things. Keeping in mind that the Whitlam Labor Government halted exploration in Kakadu and hoodwinked mining companies in 1972 and 1973, one can only guess at the wealth this bankrupt nation is forgoing to allow Labor ideologues to experience that familiar warm inner glow. The Northern Territory Chamber of Mines conservatively estimates that there is $40 billion worth of minerals in stage 2 alone, and even the ANPWS accepts $36 billion as a realistic figure. It is not just uranium that will be left in the park. It is also gold, zinc, silver and platinum. Earlier this week gold was bringing $600 an ounce on the world market and platinum was priced at $1,000 an ounce. That makes it a very expensive exercise for Australia, when the danger to the environment in Kakadu National Park now is mostly from feral animals and noxious weeds. Mr CAMPBELL(Kalgoorlie)(7.20) —I rise tonight to talk about some of the bright spots in our economy, which I am afraid are very much neglected by the media. There are people in Australia who are showing initiative, who are developing techniques and products that we can sell overseas. They are doing so with great success. In the electorate of my good friend and colleague the honourable member for Kingston (Mr Bilney) Solar Optical Australia Pty Ltd is a good example. This company, highly innovative and very technologically oriented, was very competitive in world terms before the devaluation. Since the devaluation the company is killing its competition, and I say more power to its elbow. In Perth there is Underwater Systems Australia Ltd, which markets and has acquired for Australia the world's greatest collection of remote underwater technology. This company took up a study commissioned by Senator Button's Department. It also commissioned its own studies, which have vindicated the Government's original vision. The studies indicate that in the United States of America alone there will be a market for Australia worth $550m a year in four years. This is a tremendous achievement. It makes some of the things that make headlines in this country pale into insignificance. We have seen page after page on the problems of Kakadu National Park and a lot of nonsense about uranium mining in Kakadu. Why would anyone want to mine uranium in Kakadu? Uranium is so plentiful elsewhere in Australia. Uranium will eventually be mined in Kakadu, of course. It will be mined in Kakadu when we drill for oil on the Great Barrier Reef. That will be when the middle class runs out of oil. It will be years down the track, but it will happen. USAL has unique products which have a market niched not only in military but also in the leisure market. It is saddening-in fact, it is sickening-to see the sort of support this company gets when our own Royal Australian Navy buys an inferior American product in preference to the Australian product. It is a travesty of justice and an absolutely reprehensible act, and I am still waiting for an explanation. USAL has a market in Australia alone which has been identified by people such as Nelson Wheeler and Arthur Anderson as being worth $20m a year. We believe that that figure will be rapidly exceeded. Other companies are striving manfully to make headway, companies such as Farmers Tractors of Merredin in the electorate of O'Connor. This company makes arguably the best four-wheel drive tractor in the world and is about to put on the market a utility vehicle which will prove to be superior to the Unimog and substantially cheaper. It should open up for Australian markets in other parts of the world. Again, the United States of America could be a prime target for this company. This company, like many small Australian companies, has cash flow problems. It is expensive to develop these new products and the company has had the experience of going out of its way to develop new products which clients wanted, only to have those clients walk away because they could buy something overseas a little cheaper. I am very glad to say that it is poetic justice that this company, after working very closely with Co-operative Bulk Handling Ltd in Western Australia, had Co-operative Bulk Handling opt to buy a Japanese product which was slightly cheaper at the time and certainly not as well constructed but which, since the devaluation of the dollar, has become much more expensive. These are the bright spots in our economy-these and many more. In my opinion it is a terrible shame that the Press does not pay a little attention to the good news instead of being the harbingers of doom that it is. Mr McGAURAN(Gippsland)(7.25) —One of the qualities a member of parliament needs more than anything else at this time of widespread cynicism and distrust displayed towards members of parliament is integrity. Whatever the differences of view between me, my colleagues and the honourable member for Kalgoorlie (Mr Campbell), we respect him for his integrity. That is a quality sadly lacking in the majority of Government members, so much so that, following the honourable member's realistic assessment of the Kakadu National Park issue, the honourable member for La Trobe (Mr Milton) was moved to say `We have trouble with some of our members' and the honourable member for Throsby (Mr Hollis) said: `This bloke is more at home on your side than ours'. These people cannot be loyal to each other in any sense, such is the divergence of ideology in the Government. In recent days the Prime Minister (Mr Hawke) has suffered taunts and ridicule that we in the Opposition could not possibly have dreamed up. It is interesting to note that this abuse is directed at the Prime Minister by people who formerly believed in him, who formerly had some belief in his integrity. The only surprise to us is why it took them so long to wake up to the fact that the Prime Minister is totally lacking in integrity. One needs only to refer to a number of his commitments or promises made over the years. (Quorum formed) Let all Government members know that the quorum was called by the honourable member for Kalgoorlie in response to the malicious comments made about him by the honourable member for Throsby and the honourable member for La Trobe. During the speech by the honourable member for Kalgoorlie these two honourable members ridiculed him and more or less said that he had no place in the Australian Labor Party. That is how the Labor Party treats its own. Is there no integrity, no loyalty in this Party? Are its members so lacking in honesty and decency that they ridicule their own as their own are speaking? Let me quote for all Government members the words of the honourable member for La Trobe: `We have trouble with some of our members'. The honourable member for Throsby said: `This bloke is more at home on your side than ours'. That is an indication of the harmony and unity of the Government. It is so racked and distorted by internal factions and so unable to agree to a common point of view that the Australian public is missing out. Madam SPEAKER —Order! The honourable member's time has expired. Mr MILTON(La Trobe)(7.30) —It was my intention to make some comments about the contributions of the honourable member for the Northern Territory (Mr Everingham) and the honourable member for Kalgoorlie (Mr Campbell), but after the lunatic ravings of the honourable member for Gippsland (Mr McGauran), I think it is not appropriate for me to make any further comments. Therefore, I will proceed with my speech. I want to talk tonight about nuclear waste, something about which the honourable member for Gippsland has no knowledge whatsoever. We should implement a total ban on the processing of nuclear materials until such time as the people of all countries can be assured that a safe method for the disposal of nuclear waste has been found and the present huge and accumulating amounts of nuclear waste have been disposed of. One person who does know a good deal about this sort of thing is the honourable member for Hindmarsh (Mr Scott). At present, no known safe method of disposal exists, as I have reminded this House on a number of occasions during the past six years. The problem of nuclear waste accumulation has now become severe. In 1984 it was estimated that in the United States of America alone there was 2.3 million cubic metres of low level radioactive waste, 77.6 million gallons of highly radioactive liquid waste, 331,000 cubic metres of transuranic waste, 175 million tonnes of radioactive uranium mine tailings and 6,700 tonnes of spare nuclear fuel. By the early 21st century, taking into account the nuclear waste from all countries using nuclear fuel, it is estimated that the accumulated high level of radioactive waste alone will equal about 25 per cent of the natural radioactivity of the oceans. These figures are hard to translate into facts which the public can grasp, but suffice it to say that even the vast amounts of water contained in our oceans cannot tolerate the absorption of such large quantities of nuclear waste without causing grave danger to the human race in the lifetime of many children living today. It is argued by apologists for the nuclear industry-many of whom, of course, sit on the Opposition benches-that the dumping of other wastes in the ocean, such as sewage, is also harmful. This is true, but the highly toxic nature of radioactive substances, which can last for many hundreds of years, and the ability of marine life to absorb and concentrate radioactive material as part of the food chain mean that it is far more dangerous to human life than the disposal of sewage sludge. Apart from the high potential target from the dumping of radioactive wastes from the known causes, the present knowledge of the biology of the deep seas is very limited. Much more knowledge is required of the fauna which inhabit the deep seas to establish whether radioactivity would pass into the food chain through ingestion by deep sea fauna. We have now experienced more than 40 years of the nuclear age and significant amounts of radioactive waste have entered the environment. Apart from the more spectacular and serious accidents at the Three Mile Island nuclear reactor in the United States of America and the Chernobyl nuclear reactor in the Union of Soviet Socialist Republics there have been many hundreds of minor accidents involving the land, air and sea environments. With the continuing development or major national nuclear energy programs, using both conventional and broader reactors, there will be a large increase in nuclear wastes requiring storage or disposal. The irresponsibility of the leading nuclear power generating countries such as France, Japan, the United Kingdom, as well as the USSR and the USA is beyond measure when one considers that there is no known safe method of nuclear waste disposal. I point out to the House that there are three principal means by which radioactive waste will reach the Pacific Ocean: First, by the underground testing of nuclear weapons by the French in atolls such as Mururoa; secondly, by the introduction of low level radioactive waste from nuclear reactor operations and the research use of radio isotopes; and, thirdly, by the proposed sub-seabed disposal of high level waste. The last method of sub-seabed disposal of high level waste is not permissible under the existing international treaty. In the time which I have available I will not dwell on high level radiation release as it is not permitted, but suffice it to say that the extremely high danger of such wastes to all life forms is so great that it would have been highly irresponsible if the International Atomic Energy Agency had not recommended the outlawing of such waste. Madam SPEAKER —Order! The honourable member's time has expired. Mr MILES(Braddon)(7.35) —One of the most, if not the most, damaging and dangerous features of the Australian political scene that has occurred in the last three years has been the change in standards by which we judge whether something is good or bad. A most recent example to illustrate that point was the way in which the Government, the media, commentators and the Australian community generally welcomed a monthly trade deficit of $1.2 billion. There was a time when Australians would have been horrified by such a result. But not now, because this Government, under the leadership of the Prime Minister (Mr Hawke) has fiddled, fudged and shifted ground so often on economic and social matters that the standard signposts by which we should measure our success or failure have been lost in the quicksand of political expediency. They have created their own myths and are now lost in a fog of broken promises, U-turns and abandoned principles. Why should the Australian people trust the Hawke Government when even members of the rank and file of the Australian Labor Party have been stood up and played for suckers and naive hangers-on? That is what the leadership of this Government has done to its own party members in the last few weeks. There is hardly any major policy area that has escaped a U-turn by the Government. I wish to go through a few areas to illustrate the point that I am making. First, there is the area affecting young Australians. In August 1985 the Prime Minister claimed that 10,000 traineeships would be made available in the coming year. But by September this year only 2,025 young people had been put to work in the scheme and only 58 of these had been placed in the private sector. So much for this Government's promises. Then, to add to the planning difficulties of young people desiring a tertiary education, the Government gave all the outward signs that it would not introduce tertiary fees. In the Budget just handed down fees were introduced. I turn to the area of health. In 1984, during his policy speech, the Prime Minister said: And now I give this undertaking-that for the term of our next government, the Medicare levy will not be increased. Yet, within two years we have had a 25 per cent increase in that levy. That means that many families who pay, say, $400 for the Medicare levy will pay another $100 this year. People are not only appalled by the Prime Minister's forked-tongue approach to the truth in relation to health cover, but they are also outraged. They are outraged because not only has the Prime Minister misled the Australian community, but as H. W. Bolles said in a letter to the editor of the Australian today: The Government is now despicably and spitefully withdrawing day bed subsidy to private hospitals. Nearly every statement that this Government makes is proving to be a false dawn and a forlorn hope as it gropes in the dark to clutch at straws. There is no better example of this than the economic solutions peddled by the Prime Minister and the Treasurer (Mr Keating) over the last year. Remember the J-curve? It was first going to appear in late 1985 and certainly no later than March or April 1986. It has been, and still is, a mythical, forlorn theory that is now regarded in many circles as the jaded Keating curve. In February this year the Prime Minister said: As far as the Government is concerned, we assert that the economic fundamentals of policy-making are right. In March the Treasurer said: The economy has been doing very, very well. In May he said: 1986 will be a year in which the economy can deal with the imbalance on our external account. Yet, within five days, he was saying: If this Government cannot get the internal economic adjustment . . . then Australia is basically done for. We'll just end up being a third rate economy . . . The Australian people are deeply concerned about the double-talk of the Prime Minister and the Keating U-turns. They have been led up so many garden paths that have led to dead ends that they have lost any faith or any confidence that they ever had in this Government. This Government stands condemned because of its affront to the principles of decency, honesty and trust that Australian people have come to expect of their democratically elected governments. Mr TICKNER(Hughes)(7.40) —Madam Speaker, the matter that I raise in the House tonight concerns human rights in the Union of Soviet Socialist Republics. In doing so, I will be taking great pains to avoid any reference to any of the matters that were raised as an official part of the recent Australian Parliamentary Delegation to the Soviet Union and Poland because I think you would agree that those matters are properly dealt with in the report that will be furnished to the Parliament. However, while in the Soviet Union, together with the honourable member for Capricornia (Mr Wright), Senator McIntosh and Senator Sanders, I was privileged to meet members of an independent peace group in the Soviet Union which is known as the group to establish trust between the Soviet Union and the United States. Memories of the meeting that we had with that group will live with me all my life. I would like to recount briefly that meeting to the House and also report the fate of four of the founding members of that group. I pre-empt what I am about to say by indicating that those four members have now been allowed to leave the Soviet Union. The meeting that we were able to have with the trust group in Moscow had about it an air of mystery and intrigue. As anyone who has travelled to the Soviet Union will know, there are major concerns about lack of respect for human rights and we were aware that the trust group was not favourably looked on by the Soviet Union. We had, however, been encouraged to meet with this group by a number of Western peace activists. It was emphasised to us by them and also by Amnesty International the hope that these people relied very much upon contact with the West and also on as much publicity as possible being given to the work that they did. We went to the apartment where a number of the members of the trust group had gathered. We really did not know what to expect because when the average person hears about an independent peace group in the Soviet Union I think it is fair to say that one does not really know whether it is a creature of the Soviet Government or whether it is a group that is funded or promoted by the Central Intelligence Agency. It is very hard, I think, to understand just what an independent group would be like. We met with the members of the group, and they were truly an inspiration. They were very independent, very courageous and forthright in their actions. They had contacts with a whole range of Western peace groups and also with the Labour Party in the United Kingdom. Among the courageous actions in which they participated was a public protest, such as it was-a very meek and mild protest-about the Chernobyl nuclear accident. I think it was probably the only protest of a public form in the Soviet Union about that very tragic accident. As a result of that public protest, which involved the wearing of T-shirts and drawing attention to a call for a moratorium on the construction of future nuclear reactors until there is a proper inquiry, they suffered an effective loss of their employment and subsequently, on another occasion, were imprisoned. They displayed, as I have indicated, tremendous courage in raising their concerns. I am delighted to report that they have now been allowed to leave the Soviet Union, but they express continuing concerns about the issue of human rights in the Soviet Union. I emphasise how important it is to Western democracies that people in the Soviet Union are allowed to have freedom of speech and that groups are permitted to criticise the Soviet Government and to operate independently to express their own public views in support of stronger action by the Soviet Government for world peace. Having said those things, let me also place on the record that, if we are going to have a serious debate about human rights questions and about issues of nuclear disarmament in the House of Representatives, we have to have an honest debate. I do not think that it is constructive simply to slam everything that the Soviet Union does without also giving support to the constructive initiatives-and there have been some, such as the call for a nuclear testing moratorium-promoted by the Soviet Union. I raise these matters tonight not in an attempt to be partisan, but to highlight what I think are very important issues of human rights and world peace. Dr WATSON(Forde)(7.45) —I would like to refresh my colleagues' memories and refer to some of the comments made by the Prime Minister (Mr Hawke) before the Federal election held in 1984. The Prime Minister was careful to say, as quoted in the Hobart Mercury on 9 November 1984: These things are going to continue . . . interest rates coming down and a fully operational housing industry. Two weeks later the Prime Minister was quoted in the Daily Telegraph as saying: I have been very careful not to make any claims about which I cannot be absolutely certain. The Prime Minister is fond at election time of referring to claims about which he can be absolutely certain. For example, during the South Australian elections he heaped scorn upon the Opposition for suggesting that there was a case for greater flexibility in housing interest rates. He declared: I have told Mr Bannon again, not that he had any doubt, that my Government will not lift the ceiling on home mortgage rates. In early 1986, the Prime Minister is reported in the Canberra Times as saying: I can't give any assurances other than in regard to housing interest rates where we made it clear we are not going to be lifting that ceiling. The Prime Minister received support from the Minister for Housing and Construction (Mr West) and the Treasurer (Mr Keating) in Parliament. In November 1985, the Minister for Housing and Construction, a member of the deft Left, or should I say the deaf Left, stated: There will be no deregulation of savings banks' interest rates, nor do we have any intention of increasing the rate of thirteen and a half percent. Then on 19 March the Minister echoed the Prime Minister's assurance. He stated: The Government remains committed to the ceiling on housing interest rates. The Treasurer got into the act on 20 March, and stated: I will not be bringing a submission to Cabinet recommending a change in the ceiling. But barely two weeks later when the Government removed the ceiling for new loans the Treasurer remarked: We never made a specific commitment about the future lending rate. That is an interesting comment because the news media and the average Australian seemed to think otherwise. On 3 April, on the Midday Show with Ray Martin, Laurie Oakes stated: It is a backflip of Olympic Gold Medal standard. The Opposition is referring to it as a U-turn but it is more of a wheely. On 3 April in the Australian Financial Review, Greg Hywood stated: It was one of the more remarkable political backflips of recent times. Michelle Grattan stated in the Age: It was the old story of the disposable promise. In the Courier-Mail, Wallace Brown stated: It is clear that Mr Hawke's credibility will, or at least should, suffer. Finally, Niki Savva in the Melbourne Sun on 5 April stated: Next time Mr Hawke gives a cast iron guarantee he shouldn't be surprised or hurt if he is questioned about his sincerity or asked how long the warranty will last. Madam Speaker, I can assure you that the interest rate issue is affecting the vast majority of Australians. Only a couple of weeks ago, I was speaking to a young lady in my electorate whose husband had lost his job because the company he had worked for had gone into liquidation. A contributing factor was the high interest rates that the company had to pay for its loans. But that couple, with their two young children, did not fall back on the Australian taxpayer. The husband immediately went out and found another job. In doing so, their income fell from about $1,400 a month after tax to about $1,100 per month-a crucial blow to a man and wife with two young daughters. But on top of that their house payments have soared from $436 to $573 a month. That family, just one of many, is struggling for survival in an economy which is being wrecked by this Government. When the coalition left office, interest rates were 12 1/2 per cent for savings banks, 14 1/2 per cent for building societies and 14 1/2 per cent for trading banks. Today only the building societies have a 14 1/2 per cent rate. The rate of savings banks has jumped to 15 1/2 per cent and the rate for trading banks is over 18 per cent. There is the specific comment in the latest issue of the Economist that Australian banks have raised their prime lending rates by one percentage point to 19 per cent, which implies a real interest rate of 10 per cent, the highest of any country with which the Economist makes a comparison. Today's reality contrasts cruelly with the electioneering deception of the Prime Minister. At the next election the Prime Minister and his Government will receive the rewards that that deception so richly deserves. Mr HOLLIS(Throsby)(7.50) —It is always interesting to listen to Opposition members, especially in the adjournment debate. They come into the chamber and talk about how wonderfully the country was being run under the previous coalition Government. If it was being run so wonderfully, I wonder why the coalition parties have been rejected by the people of Australia in recent years, and not once but twice. Mr Chynoweth —And a third time coming up. Mr HOLLIS —As the honourable member says, a third one is coming up. However, I am not here to talk about that subject this evening. Next month, the Indian Prime Minister will visit Australia, and this will provide an opportunity for our two countries to get to know more about each other. There is, sadly, a need for that to happen. We have always had good relations with India, but I feel that not enough has been done on both sides to enable the relationship to reach its full potential. I hope that the visit of the Indian Prime Minister will provide a stimulus of which we shall take advantage so that the two countries can get to know more about each other. It was recently my privilege to visit India. Most Australians, when they think of India, imagine it to be a country of poverty, yet I guess that it will come as a surprise to many honourable members that India is the seventh most industrialised country in the world. I just wonder how many Australians realise that. I am surprised by the number of Australian business people who fly over India on their way to and from Europe without stopping there for a period. European markets, through the European Community and other organisations, are, in the main, closed to us, and we should be doing much more to develop a growth in trade with India. The potential is almost unlimited. We must get to know more about the Indians, however, before we can trade with them. I suggest that some of the business people who fly across India on their way to and from Europe should take the time, or make the effort, to stop in India for a week or so to explore some of the business possibilities in that country. One way in which that could be done is by developing more trade through joint ventures with India. It is a country with a huge domestic market and it is ideally placed to trade with the African and Asian nations. The Indian market has been ignored by us and by our business people for far too long and we cannot continue to do so. Indeed, we ignore it at our peril. In May 1985, there was a business mission to Australia from the Madras Chamber of Commerce and Industry. The object of the mission was to explore the possibilities of increased trade, technical collaboration and joint ventures. It was felt that with Madras being well placed geographically in relation to Australia, active business relations could be developed between Australia and India through the southern ports, which are within a week's sailing time of the west coast of Australia. I met the leader of the mission, Mr Kumar, and other members of the mission, and the high hopes that they had of the mission have in many aspects been fulfilled. I should like to see more business missions coming from India and more missions going to India from Australia. Something else that I should like to see developed is closer cultural ties with India and more of them. Through culture we can get to know and understand more about each other. I believe that when the Indian Prime Minister visits Australia next month there will be a cultural exchange signed between the two countries, which is something that I would welcome very much. I look forward to the Indian Prime Minister's visit with great enthusiasm because I think that it will be one way of increasing knowledge between two great countries. Mr ROCHER(Curtin)(7.55) —Taxation is the creature of government expenditure, even though some honourable members opposite would have us believe that the reverse is true. The Hawke Government gives a classic example of how the perceived need to spend becomes all consuming; that is all consuming until the need arises to raise taxes to offset its undisciplined approach to expenditure. Then, of course, all the promises of reduced taxes become meaningless things of the past. Words of honour are sacrificed at the altar of expediency and deceit prevails. Although there are many examples of broken promises during the already too long term of this Government, the following is among one of the most outstanding. It belongs to the then Leader of the Opposition, the present Prime Minister (Mr Hawke), in his policy speech on 16 February 1983, when he said: . . . let me make one point so that even our opponents can understand it; and let me make it beyond . . . their powers of misrepresentation and distortion. There will be no new capital gains tax. With capital gains taxes well and truly with us, so it is that another solemn, unequivocal promise has been broken. The tax is here and only a change of government will secure a return to tax sanity. The basic problem with a universal capital gains tax is that it fails to draw any distinction between productive investment and speculative investment. Under previous tax arrangements considerable speculative investment was already subject to tax at marginal rates; for example, short term share, property and futures investments. The basic opposition to this capital gains tax remains that not only will risk taking be discouraged through its attack on productive long term investment, making it a prospective tax, but also this capital gains tax threatens to devalue existing assets such as farms and small businesses and is thus a retrospective tax. Moreover, in designing the capital gains tax to apply to real gains on realisation of assets acquired from 20 September 1985, the tax introduces two additional distortions into the tax system. They are a disincentive to dispose of assets which are now subject to the capital gains tax and an incentive to invest in the family home at the expense of investment in other productive, long term assets. Investments being channelled into the private home might very well run into problems, as my friend the honourable member for Flinders (Mr Reith) will explain to the public in a few days. While the disincentive to dispose of assets will operate in many areas of the economy, both those distortions can be expected to show up, particularly in the housing market. The family home becomes the new property tax haven, with owner-occupiers raising the equity in their properties through renovation or trading up to more expensive homes. At the same time, residential rents can be expected to rise significantly to the level where additional rental income offsets the capital gains tax. Owner-occupiers will replace the smaller investor and the number of rental properties, particularly new developments, is likely to decline, in combination with the effects of the negative gearing legislation also passed by this Government. The Australian Labor Party Government does not understand the very strong psychological effect that a capital gains tax has on entrepreneurs and business. This tax will hinder the growth of new investment in this country which is essential for the development of our economy and the consequent growth in employment. Our economy is not yet at the same stage as the economies of the United States of America, the United Kingdom, Japan or West Germany, as some would have us believe. The Treasurer (Mr Keating) has quite properly described Australia as a capital scarce nation. We need to encourage capital formation in Australia, not discourage it by imposing a new tax on capital, as has been done. House adjourned at 8 p.m. The following papers were deemed to have been presented on 17 September 1986: Defence Act-Determination-1986-No. 56-Travelling Allowance and other allowances. Health Insurance Act-Statements (2) of particulars of Ministerial determinations made pursuant to section 106aa, dated 8 September 1986. National Parks and Wildlife Conservation Act-Plans of Management, together with representations and comments of the Director on the representations pursuant to section 11, in respect of- Christmas Island National Park. Kakadu National Park. Uluru (Ayers Rock-Mount Olga) National Park. The following answers to questions were circulated: (Question No. 1838) Dr Klugman asked the Minister for Communications, upon notice, on 16 September 1985: (1) What is the estimated saving in costs to the ABC of a single day's strike by employees in (a) NSW and (b) all of Australia. (2) What amount did the ABC save in each of the last five financial years as a result of strikes by employees. Mr Duffy —The answer to the honourable member's question, based on information provided by the Australian Broadcasting Corporation-ABC-is: (1) (a) The estimated saving in costs to the ABC of a single day's srike, based upon the number of members of relevant industrial organisations in NSW (ABC staff in the ACT and the Northern Territory are members of the NSW Branch of the ABC Staff Union) would be in the order of $116,000. (b) Based upon the number of relevant union members in all States, the ACT and the Northern Territory, the estimated savings would be $263,000. (2) 1985-86-$123,300; 1984-85-$ 46,000; 1983-84-$ 8,250; 1982-83-$ 2,900; 1981-82-$ 1,100. (Question No. 2431) Mr Sharp asked the Minister for Territories, upon notice, on 15 November 1985: (1) What are the Government's plans for (a) the future of Bowen Island and (b) the people who lease part of Bowen Island. (2) If the Government proposes to take over all of Bowen Island, (a) what amount of compensation will the people who presently lease part of the island receive, (b) when will the lessees be required to leave the Island and (c) what period will be allowed for them to evacuate their belongings. (3) What provision has his Department allowed in its budget for any compensation for the lessees of Bowen Island. (4) What is the estimated cost of (a) establishing his Department's plan for the island and (b) running the island according to the plan on an annual basis. (5) If estimated costs are not available, what is the reason. (6) Have any individual members of his Department expressed an interest in obtaining access to the island after the lessees have left. (7) Has his Department ever expressed dissatisfaction or had reason to express dissatisfaction over the lessees' occupancy of Bowen Island; if so, (a) were the lessees informed and (b) were his Department's wishes met. (8) What was the condition of Bowen Island (a) when the current lessees first gained access and (b) in November 1985 in terms of (i) vegetation, (ii) penguin colony population, (iii) bird population, (iv) feral animals and (v) condition of buildings and other facilities. (9) When did his Department last carry out a detailed study of Bowen Island. (10) Is a ranger or caretaker service provided on the island, if not, who performs these functions. (11) Is a ranger or caretaker to be appointed by his department when the lessees have left; if so, will the ranger or caretaker be based on the island. (12) If a ranger is not to be based on the island, how will it be supervised. (13) What protection from tuna fishermen will be given to the Fairy Penguin colony on Bowen Island. (14) For how many days in 1984-85 was the boat operated by the ranger of the Jervis Bay nature reserve in service. Mr Scholes —The answer to the honourable member's question is as follows: (1) (a) Bowen Island will be managed as a public nature reserve in accordance with the published Draft Jervis Bay Nature Reserve Development and Management Plan and the Bowen Island Management Action Plan. Public access will be encouraged but under Departmental supervision. (b) The lease on the formerly leased part of the island expired on 31 December 1985 and has not been renewed. The former lessee has been asked to vacate the island. (2) (a) The sum of $90,000 was offered in compensation on 7 January 1986. (b) and (c) The former lessee was notified in July 1985 of the requirement to vacate the island on expiry of the lease on 31 December 1985. A formal notice to give up possession before 21 February 1986 was issued on 5 February 1986. This has not been complied with and action to recover possession has begun in the A.C.T Magistrates Court. (3) This matter was covered in my Department's appearance before Senate Estimates Committee F on 28 April 1986. (4) (a) $181,000 over the 3 year period 1986-87 to 1988-89. (b) $64,000 in 1986-87. (5) Not applicable. (6) No. (7) Yes. (a) The former lessee was informed in writing and orally of specific issues of concern; (b) Some matters were corrected to the Department's satisfaction; others were not. (8) (a) A detailed record of the condition of the island in 1953 is not available. (b) (i) The island is heavily vegetated with a mixture of native and introduced plant species. Plant growth increased markedly in some areas following a rabbit eradication program by Departmental officers in 1979-81. (ii) Following the successful rabbit eradication program in 1979-81 the penguin colony occupied additional territory previously rendered unsuitable by rabbits and was estimated to comprise 1,500 breeding pairs by November 1982. No firm estimate of the present population is available. (iii) Detailed information about other bird species is not available. (iv) Departmental officers are optimistic that rabbits have now been eradicated from the island. Introduced rats remain the most serious feral animal pest. There are pheasants on the island. (v) Some of the buildings are in an advanced state of deterioration; others are in better condition. The jetty is in need of repairs. (9) Detailed scientific studies of Bowen Island were progressively initiated in the early 1970's. Since then a resource data base has been established, detailing the distribution of vegetation communities, wildlife habitat and prehistoric sites. Additional wildlife surveys are planned. Monitoring of specific biological indicators is an ongoing activity. (10) Ranger services are provided by Departmental rangers stationed at Jervis Bay. Successive caretakers employed by the former lessee have lived on the island, but have not been authorised or expected to perform Departmental functions. (11) A Departmental ranger will be stationed on the island once vacant possession is available. (12) Not applicable. (13) The Department has no evidence to suggest that tuna fishermen pose a threat to the penguins on Bowen Island. The presence of a ranger will provide protection for the penguins. (14) The boat operated by the Jervis Bay rangers was used on 54 days during 1984/85. The cost of answering this question is estimated at $250. (Question No. 3009) Mr Tickner asked the Minister representing the Minister for Industry, Technology and Commerce, upon notice, on 29 November 1985: What action has he taken to encourage distributors of foreign films to manufacture exhibition prints in Australia. Mr Barry Jones —The Minister for Industry, Technology and Commerce has supplied the following answer to the honourable member's question: In September 1983, following discussions between officers of my Department and the major distributors of imported theatrical release motion pictures, the distributors agreed to a trial period in which they would process here an annual minimum of 600,000 metres of release prints for Australian exhibition. This represented about six per cent of imported film distributed at the time. In the event, distributors have, in each of the years to September 1984 and 1985, processed almost twice the agreed minimum level. I am very pleased that for both years the distributors have been able to substantially exceed their minimum commitment, even in spite of the downturn they experienced in the last year or so. However, the aggregate level of local processing of imported films is still only a small proportion of the total film imported. My Department is investigating opportunities for the expansion of film printing in Australia, where the Australian product is competitive with overseas-sourced films. Further discussions will be initiated with the film distributors in the near future, with a view to exploiting these opportunities to achieve an increased level of local film printing. I believe the film distributors will recognise that increased levels of local printing are commercially feasible, and that the benefits this will provide to the local film industry are also in their long term interests. (Question No. 3273) Mr Jacobi asked the Minister for Arts, Heritage and Environment, upon notice, on 20 February 1986: (1) How many accidents involving toxic chemicals have occurred in Australia in each of the last 5 years. (2) How many (a) deaths and (b) injuries have resulted from accidents. (3) How many of the accidents arose from violations of the law. (4) If statistics relating to accidents involving toxic chemicals are not available, what steps will he take to ensure their availability in the future. (5) What measures has the Government taken for the control of toxic substances. Mr Cohen —The answer to the honourable member's question is as follows: (1) to (4) The need for information, on a national basis, relating to accidents involving toxic chemicals has been of concern to various Commonwealth, State and Territory authorities for some time. There are no comprehensive statistics covering all kinds of accidents nor those which arise from violations of the law. The Standing Committee of the Australian Environment Council has this matter under consideration. The Australian Bureau of Statistics and the National Occupational Health and Safety Commission (NOHSC) are reviewing current statistics on occupational health and safety with a view to rationalising the data collected by the States and the Northern Territory. The Commission has recently released a discussion paper on the range and type of statistics which should be gathered. A proposal is currently under consideration by a committee of the Australian Transport Advisory Council on a national system of reporting incidents occurring in the transport of dangerous goods. The Department of Health operates a national poisons case reporting scheme which is voluntary and includes reports from hospitals and State Poisons Information Centres. Not all poisonings are reported and those that are cover accidental or intentional poisoning by all types of chemicals including therapeutic drugs and household chemicals. Cases reported to the Scheme over the last five years were as follows: 1982-47061; 1983-69799; 1984-71600 (rounded estimate); 1985-72158. Deaths by poisonings reported were as follows: 1982-2; 1983-21; 1984-1; 1985-8. The Australian Bureau of Statistics publishes data relating to deaths by the following types of accidents (amongst others): accidental poisoning by drugs, medicaments and biologicals. accidental poisoning by other solid and liquid substances, gases and vapours. accidents caused by hot substances or objects, caustic or corrosive materials and steam. Because of the size of this statistical report, it has been provided separately to the honourable member. State and Territory authorities have primary responsibility for regulating the manufacture, storage, transport and use of toxic chemicals and for the prevention of accidents involving such substances. (5) The Government has taken steps in a number of areas to bring about better management of chemicals by its own initiatives and in co-operation with State Governments. The establishment of the National Occupational Health and Safety Commission in 1984 initiated greater co-ordination of efforts to make Australian workplaces safe and healthy. Its activities relate to safety in the handling of chemicals, amongst many other issues. The Government has announced its intention to introduce as quickly as possible a national chemicals notification and assessment scheme. The scheme will provide for evaluation of all new chemicals being introduced in Australia for potential health and environmental hazards and for similar evaluation of chemicals previously introduced which may present hazards. (Question No. 3356) Mr Donald Cameron asked the Minister for Science, upon notice, on 13 March 1986: Further to the answer to questions Nos 3216 to 3243, what: (a) was the stated purpose of each overseas trip made by employees of the Minister's Department and of all statutory authorities that report to the Minister in 1984-85, (b) was the classification or job description of each officer making each trip, (c) was the duration of each trip, (d) were the countries visited during each trip, and (e) was the estimated cost of each trip, with the airfare component identified separately. Mr Barry Jones —I have provided an answer to the honourable member's question. [The information which has been collated for the honourable member is too lengthy to be published in Hansard. Copies are available at the House of Representatives Table Office.] (Question No. 3771) Mr Downer asked the Minister for Health, upon notice, on 14 April 1986: What (a) were the amounts paid to and (b) projects undertaken by Mr Phillip Adams and Mr Rod Cameron, their associated companies or principals of those companies, for work on behalf of the Minister's Department or authorities under the Minister's control in (i) 1983-84, (ii) 1984-85 and (iii) 1985-86 to the date of answering this question. Dr Blewett —The answer to the honourable member's question is as follows: A similar question was asked of me by Mr Blunt (Question No. 2066) on 9 October 1985. My detailed response is listed in Hansard 11 March 1986, page 1123. Subsequent to Mr Blunt's Question, my Department has made four additional payments totalling $1,028,646 to Monahan Dayman Adams (of which Phillip Adams is a Principal) to meet media costs associated with National Campaign Against Drug Abuse. (Question No. 3788) Mr Ewen Cameron asked the Attorney-General, upon notice, on 15 April 1986: (1) Will he investigate whether clause 26 of the Housing Industry Association Agreement HIAV 11 (Victoria) revised edition November 1985 breaches the intent of sections 52 and 53 of the Trade Practices Act concerning unfair practices. (2) Will he also investigate section 55 of the uniform Commercial Arbitration Act 1984 of Victoria and NSW which purports to revoke the previous compulsion to arbitrate known as the ``Scott v Avery'' clause in earlier arbitration Acts. (3) Will he investigate whether clause 26 of the Agreement HIAV 11 which was published considerably later than the date of commencement of the Commercial Arbitration Act 1984 (a) is intimidatory, in view of the fact that no mention is made of disputes being resolved at court, (b) makes arbitration mandatory and (c) makes the award final. (4) Is it a fact that in the published philosophy of the Trade Practices Commission it is stated that it is important that consumers are not misled and that false claims may not only mislead consumers but provide to those who make them an unfair advantage. (5) Has Agreement HIAV 11 been approved by the Trade Practices Commission; if not, will he suggest a modification of clause 26 of the HIAV Agreement. (6) Will he investigate whether any ACT building contracts constitute unfair practices. (7) Will he prepare for introduction a Contract Review Act to prohibit unconscionable contractual conduct thereby not relying upon the uncertainties contained in clause 21 of the Trade Practices Amendment Bill 1985. Mr Lionel Bowen —The answer to the honourable member's question is as follows: (1) to (3) The Trade Practices Commission, which is responsible for administering and enforcing the Trade Practices Act 1974, is currently making enquiries to determine whether Clause 26 of the Housing Industry Association Building Agreement (HIAV 11) could be misleading consumers as to their statutory rights. Further, the Office of Consumer Affairs is represented on a technical committee set up under the auspices of the Standards Association of Australia following a request from the Standing Committee of Consumer Affairs Ministers. This committee is preparing standard conditions for domestic home building contracts and contracts for additions and alterations to existing homes. The committee includes representatives from the consumer movement, consumer affairs authorities, the building industry and the home finance industry. It is expected that the inclusion of Scott v Avery clauses in home building contracts, and their relationship with section 55 of the Commercial Arbitration Act 1984 (Victoria), will be amongst the matters which receive close attention by the Committee. (4) The consumer protection provisions of the Trade Practices Act administered by the Commission are designed to encourage fair and honest business practices, protecting both consumers and ethical traders alike. (5) The agreement HIAV 11 has not been authorised by the Trade Practices Commission. I would not wish to pre-empt the work of the technical committee of the Standards Association of Australia developing a standard home building contract by suggesting a modification of clause 26. As noted above, I expect that the inclusion of Scott v Avery clauses in home building contracts will be one of the matters examined by the committee. (6) As noted above, the Office of Consumer Affairs is represented on a Standards Association of Australia technical committee which is preparing standard conditions for domestic home building contracts. When this work is completed, it is hoped that the standard contract will be adopted and widely used throughout Australia, including the A.C.T. In the meantime, however, if the honourable member has information about particular contracts which may breach the Trade Practices Act, I would be pleased to receive it and refer it to the Trade Practices Commission for investigation. (7) Section 52a of the Trade Practices Act 1974 prohibits a corporation engaging in unconscionable conduct, in connection with the supply or possible supply of goods or services ordinarily acquired for personal, domestic or household use. This section, which came into force on 1 June 1986, is intended to prevent a corporation taking unfair and unconscionable advantage of its superior bargaining position. While the operation of the new section will be kept under review to ensure that it is having its intended effect, I do not see a need at this stage for any change in the provision. (Question No. 3818) Mr Duncan asked the Minister representing the Minister for Community Services, upon notice, on 30 April 1986: Is it a fact that some project officers have suggested to child care centres that they could charge $80 as a maximum fee plus the $5 permissible gap fee and then add a surcharge for parents with a combined family income of more than $700 per week for child care; if so, does this encourage provision of child care for high income earners at the expense of low income earners. Mr Howe —The Minister for Community Services has provided the following answer to the honourable member's question: Project officers have advised child care centres that under the arrangements introduced from 1 April 1986 fee relief subsidies provided by the Government are based on the centre's maximum fee, up to a limit of $80 per week. If a centre's maximum fee is between $80 and $85 per week, all users are required to pay a gap fee equivalent to that portion of the fee above $80 per week. If a centre's break-even fee is above $85 per week, the Government is providing transitional assistance during the period 1 April 1986 to 31 March 1987 for that portion of the fee above $85 per week. In some cases, the child care centre adds a surcharge for costs such as over-award wages or salaries or employment conditions. Conditions which are in excess of awards will not be approved by my Department for fee relief purposes or for transitional assistance. The Government remains committed to the maintenance of affordable child care for low to moderate income families by continuing to provide fee relief, while at the same time ensuring that the child care needs of users across the entire income scale are met. However, centres have a responsibility to contain their costs so that child care remains affordable. From 1 July 1986 the fee relief ceiling was increased to $90 a week for those services with a new annual fee due for approval on or after that date. (Question No. 3872) Mr Everingham asked the Minister for Foreign Affairs, upon notice, on 2 May 1986: (1) Has his attention been drawn to a requirement of the Malaysian Government that all applicants for passports, renewals of passports and registrations of births must have the applicant's signature witnessed by a Malaysian Consular official. (2) Has his attention also been drawn to the fact that this requirement causes much difficulty and hardship to Malaysian citizens and their families who are resident on Christmas Island, which is several thousand kilometres from the nearest Consulate. (3) Will he discuss with the Malaysian Government arrangements whereby the Administrator of Christmas Island can be given the necessary certification as an authorised person to witness the signatures for applications for these official Malaysian documents. Mr Hayden —The answer to the honourable member's question is as follows: (1) No. (2) I am aware that there are some 2,000 Malaysian citizens on Christmas Island whose presence could generate consular work. I accept that their distance from Malaysian consular offices in mainland Australia could cause delays in the carrying out of consular functions on their behalf. (3) The type and extent of consular services provided by the Malaysian Government for its citizens on Christmas Island is a matter entirely for that Government. The suggestion made by the honourable member has, however, been informally passed to the Malaysian authorities in Kuala Lumpur. (Question No. 3985) Mr Lloyd asked the Minister representing the Minister for Industry, Technology and Commerce, upon notice, on 8 May 1986: What (a) Federal and (b) State laws or regulations require country of origin of foreign fresh fruit sold in Australia to be indicated to intending consumers. Mr Barry Jones —The Minister for Industry, Technology and Commerce has provided the following answer to the honourable member's question: (a) The Commerce (Trade Description) Act 1905 and the Commerce (Imports) Regulations made under that Act, prohibits the importation of a range of goods including fresh fruit unless the goods, or in certain circumstances their packaging, are marked to show the country in which those goods are made or produced. (b) I am unable to provide advice on specific State laws and regulations. I am advised, however, that the Minister for Health has completed negotiations with his State and Territory counterparts on a co-operative agreement to adopt uniform standards applicable to food and beverages in Australia. This draft agreement has been circulated to Premiers with a view to early implementation. This agreement will mean the application of a single uniform standard throughout Australia and will include the requirement for the labelling of imported foods to include a statement of the name of the country in which the food was made or produced. The enforcement of these requirements will continue to be a State responsibility consistent with present practice. The honourable member may care to take up his specific queries with the relevant State departments. (Question No. 4340) Mr Jull asked the Minister for Aviation, upon notice, on 19 August 1986: (1) Are approaches being made by the Government for reciprocal or additional rights for Qantas to US airports following the decisions of Continental Airlines to increase the number of flights to Australia from the USA, and to provide one stop services from Australia to New York. (2) Has any such approach been made requesting rights to ports additional to San Francisco and Los Angeles; if so, which ports does Qantas intend to serve. Mr Peter Morris —The answer to the honourable member's question is as follows: (1) and (2) Last February I announced that Australia would be seeking talks with the United States in order to negotiate better balanced air service arrangements. I explained that the concept of fair and equal opportunity between the airlines of both sides had become distorted over the years and it was time to correct the situation. One area of serious imbalance in our arrangements with the United States is that of the respective route entitlements of the two sides. These heavily favour the United States at present. Two rounds of talks have already been held with the United States authorities, in May and August, and further talks are planned. To date discussions have focused mainly on the question of capacity on the route. The question of route entitlements will be pursued in greater depth at a later stage in the negotiations. (Question No. 4412) Mr Coleman asked the Minister for Foreign Affairs, upon notice, on 20 August: (1) Who are the members of the Victorian, Tasmanian and ACT International Year of Peace Consultative Groups. (2) On what basis were they selected. Mr Hayden —The answer to the honourable member's question is as follows: (1) The membership of the Victorian International Year of Peace (IYP) Committee is as follows: Professor Max Charlesworth (Chairman) School of Humanities, Deakin University The Hon Gordon Bryant The Rev Wesley Campbell Division of Peace and Justice, Uniting Church Mr Peter Christoff PND Mr Paul Di Masi Victorian Secondary Teachers' Association, Peace and Disarmament Committee Ms Christine Johnstone Secretary, Australian Nuclear Free Zone Secretariat in Victoria Mr Stanley Johnstone Department of Criminology, University of Melbourne; Victorian President, UN Association of Australia Ms Katy Kyne Council of Adult Education, Peace Studies Program Mr Philip Lamb Australian Red Cross Society Mr Laurie Lewis Senior Curriculum Officer, Victorian Education Dept., Peace Education Task Force Mr Brian Loughnane Member and former Branch President, Liberal Party and Subscriber, Catholic Commission for Justice and Peace Ms Wendy Lowenstein Arts Action for Peace Dr Tilman Ruff Medical Association for the Prevention of War Dr Belinda Probert Senior Lecturer in Sociology Monash University; peace activist; member of the Watkins Australia Film Foundation Mr Frank Ness Senior Foreign Affairs Representative, Melbourne Dr Greg Lyons Premier's Department Ms Sarah Stephen Victorian Ministry of Industry Technology and Resources Mr Max O'Halloran RSL Dr Ray Maddocks Executive Officer of the Committee: Victorian Education Department The membership of the Tasmanian IYP Committee is as follows: Mr Paul Potter (Chairman) Department of Foreign Affairs Mr Ron Malm Department of Premier and Cabinet Ms Carol Warner performing arts Rev Paul Kruse Church groups Ms Hassanah Wilkinson Co-ordinator, Tasmanian peace groups Mr Jack Lomax Local peace groups Mr Ted Bolton business and industry Ms Di Stow trade unions Mr Peter Blackwell environmental groups Dr Dougald McLean professional peace groups Ms Leonie Smith international and ethnic groups Mr Reg Lightfoot community service clubs Mr Shaun Dobson RSL Ms Phoebe Hinton media The membership of the ACT IYP Committee is as follows: Mr Jim Dunn (Co-Chairperson), Human Rights Council of the ACT Mrs Nancy Shelley (Co-Chairperson), Australian Council of Churches-Commission on International Affairs Mr Stephen Bartos ACT President, ALP Mr Doug Carpenter Trades and Labour Council of the ACT Ms Carol Coram Citizen's Advocacy and the Baha'i Community Ms Carol Dowling Land Rights Now Brig. Alf Garland (Rt) ACT President of the RSL Lt Col David Horner History Department, University College, Australian Defence Force Academy Mr Peter Maher President UNAA (ACT) and Canberra Program for Peace Ms Barbara Meyer Grannies Against the Bomb/Quakers Mr Gordon McAllister Christians for Peace Ms Sue Moore Student and member Schools Against the Bomb Ms Michelle Morris Confederation of ACT Industry Ms Moira Rowland Scientists Against Nuclear Arms Mr Bill Royce Liberal party, ACT Ms Sue Sobey Women's International League for Peace and Freedom Mrs Jean Thomson President, National Council of Women (ACT Branch) Mr Sid Walker Canberra Environment Centre Mr Peter Woods Community Relations Branch, Department of Territories 2. The members of the IYP Committees in each State and Territory were selected on the basis of the need for such Committees to be broadly representative of the community and the need to involve community groups which had shown a concern for peace, security and disarmament issues. (Question No. 4450) Mr Mildren asked the Special Minister of State, upon notice, on 21 August 1986: (1) What initiatives have been undertaken by the Australian Electoral Commission to encourage young Australians to enter their names on the electoral roll over the last 2 years. (2) What has been the cost of these initiatives. (3) What further initiatives are proposed and what is their projected cost. Mr Young —The answer to the honourable member's question is as follows: (1) Young Australians have been a specific target audience in the Australian Electoral Commission's enrolment activities since June 1984. Activities have included school visits by Divisional staff, a leaflet and two posters directed at age 17 provisional enrolment, and displays at careers exhibitions, shopping centres and shows. Young Australians also formed part of the target audience for enrolment advertising at the December 1984 Federal election. (2) It is not possible to provide cost details of all activities for young Australians as these are part of on-going programs for the wider community. However, the following activities can be separately costed: Item $ Brochure: `It's Your Australia: Have a Say' (374,000)... 17,800 Posters (10,000)... 2,010 Resources Kit for Divisional Staff (200 kits)... 1,248 (3) The Commission will continue, as part of its overall enrolment activities, to encourage young Australians to enrol. In addition, its national election curriculum projects for high schools will contain a component on enrolment and voting as do the on-going educational projects undertaken by the Commission.