Monday, 22 September 1986 Madam SPEAKER (Hon. Joan Child) took the chair at 2 p.m., and read prayers. Mr N.A. Brown —My question is directed to the Minister for Employment and Industrial Relations. I refer the Minister to the statement by the Prime Minister in the House last Thursday in which he said: . . . neither under the law of this country nor under the policy of this Government, is there the practice of compulsory unionism in this country. In view of that comment, I ask the Minister why, on 8 August, the Government lodged an application with the Australian Conciliation and Arbitration Commission to grant employment preference to employees in the Department of Housing and Construction who are members of several specified trade unions as against those who are not union members? Is it not plain that the Government's intention and the only practical effect of preference clauses is to maintain and enforce compulsory unionism in this country? Mr WILLIS —The incapacity of the Deputy Leader of the Opposition to understand basic industrial relations principles never ceases to amaze me. As the Prime Minister said in Question Time last week, we do not have a system of compulsory unionism in this country. There are no awards of the Federal Commission or, to my knowledge, of the State industrial tribunals which provide for compulsory union membership. We do not have a legal system which imposes unionism on unwilling members. In the Conciliation and Arbitration Act we also have, of course, specific provisions for conscientious objection to trade union membership. However, we do have a system in which there are awards which provide for preference to trade unionists. There is a distinct difference between preference to trade unionists and compulsory unionism. Opposition members-Ha, ha, ha! Mr WILLIS —The horse laughs from honourable members opposite illustrate, as do many other things they do and say, how little they know about industrial relations in this country or, for that matter, in any other country. There is a total difference between being forced to be a member of a trade union and preference being given to union members. A preference system, which is the policy of the Australian Labor Party, encourages people to join trade unions and it gives them some preference in the employment sphere. Indeed, that is appropriate because the whole industrial relations system is based on the fact that trade unions are there to represent employees. Indeed, any industrial relations system must be based on the fact that there are representative bodies for employees. It is also quite common in other countries for preference to apply to trade union members. There is no problem and no contradiction with what the Prime Minister said and the actions of the Government in seeking to introduce preference for trade unionists in some areas of government employment. There is no problem with that at all because there is just no contradiction. The fact that the honourable member who asked this question cannot understand the difference between compulsory unionism and preference for trade unionists demonstrates his total incapacity to be the spokesman on industrial relations for the Opposition. Ms Fatin proceeding to address a question to the Minister for Health- Madam SPEAKER —Order! The question is out of order. The matter is outside the Minister's responsibility. Mr HOWARD —I refer the Minister for Employment and Industrial Relations to weekend reports that the industrial relations arrangements of Sweden are under study in certain sections of the Australian labour movement. Is it a fact that Sweden has the highest taxes in the Western world and that taxation receipts there are a staggering 51 per cent of gross domestic product? Is it also a fact that Sweden has the biggest spending government in the Western world, with government spending at 64 per cent of gross domestic product? Is it also a fact that the marginal rate of personal tax in Sweden is 75 per cent? Is it also a fact that the latest Organisation for Economic Co-operation and Development survey of the Swedish economy criticised the centralised wage fixation processes of that country for undermining profitability and employment? In those circumstances, can the Minister assure the House that the Government will not seek to emulate Sweden as a model? Mr WILLIS —I did see some references in the newspapers to a study of the Swedish economy and industrial relations system. I welcome the fact that that study has been undertaken by the various members of the Australian Council of Trade Unions Executive. I cannot vouch for the alleged facts that have been put forward by the Leader of the Opposition. It is a fact that generally speaking taxes and government expenditure are much higher in Sweden than they are in this country or in many other countries. That has not stopped Sweden from having a very high rate of economic growth, nor has it stopped it from having a standard of living which is well in excess of the standard of living of this country. That does not necessarily mean that that is the approach one should therefore adopt to get a maximum standard of living. I simply note the fact that high levels of taxation and government expenditure do not necessarily-as the Opposition would have us believe-go along with very low levels of economic performance. Indeed, Sweden has been able to keep the unemployment level to around 3 per cent and to maintain a standard of living well in excess of that which prevails in this country. In the post-war period Sweden had much faster rates of economic growth than Australia. In studying any other country there are lessons to be learnt, but no one can look at another country and transplant what one sees in that country to his or her own country. Nevertheless, we can learn some lessons from it. The Swedish lesson most certainly is that there was a tremendous amount of co-operation between business, trade unions and government during the post-war period to the great benefit of the Swedish people. That co-operative system has prevailed in respect of not only industrial relations but also many other areas of activity and has so marked that country's performance. I believe that it indicates the benefits that can be obtained from a great degree of tripartism. People who wrote of the Swedish experience in the weekend papers also indicated that they saw the tripartite approach as one which we might follow more fully in this country. This Government has sought very much to develop a tripartite approach, to get away from confrontation and develop a co-operative system. It has established many councils for consultation in various industries and nationally to enable those discussions to take place. We can go much further down that track and we intend to do so. The discussion on Wednesday on work practices will certainly be a further step along that path. We hope that a tripartite approach to discussion on this important area will help to break down some of the unnecessary work practices which have prevailed in this country. So I have no problems at all with the statements that have been made about Sweden over the weekend. I welcome the fact that trade union members are looking at the experience of other countries and drawing the appropriate lessons. I believe that, in the basic area with which they are concerned, with a co-operative model with a greater emphasis on tripartism we can go further in this country and get the kinds of results which have been obtained in Sweden. Mr Charles having addressed a question to the Minister for Communications- Madam SPEAKER —Order! The honourable member's question is out of order. He is once again asking for opinions that are not within the responsibility of the relevant Minister. Mr N.A. Brown —In the absence of Government questions, I direct this question to the Prime Minister: Can the Prime Minister confirm that he has received a letter from the Business Council of Australia expressing concern at the intensification of superannuation claims and also demanding that the Government apply what is referred to as strong and immediate pressure to contain those claims? In view of the latest superannuation push by the Amalgamated Metal Workers Union, led by Mr Halfpenny, against Australian Consolidated Industries Ltd, does the Prime Minister now share the Business Council's concern about the increasing cost of pending superannuation claims? I ask the Prime Minister: What, if anything, will his Government do now to contain superannuation claims which show every sign of being reactivated at a time when the Government can least afford it? Mr HAWKE —I thank the Deputy Leader of the Liberal Party for his question. I would say this in response: Yes, I have received a communication from the Business Council of Australia which goes not only to that matter. I take this opportunity of thanking the Business Council for its generally very constructive approach to the whole question of industrial relations. It distinguishes itself from others, including the Opposition and the honourable gentleman who asked the question, in that it sees an enormous amount of merit in the processes of constructive consultation. It repudiates absolutely the processes of confrontation-the attempt to derive some mis- erable advantage from a particular issue that is going at the time. It says to us that, of course, it has concern. I understand its concern about the pressures in the superannuation field. I take this opportunity on that specific issue of saying, quite clearly, not only to the honourable gentleman but also to this House, that we believe that the processes of pressing superannuation claims should be conducted entirely within the framework laid down by the Full Bench of the Australian Conciliation and Arbitration Commission in the national wage case which dealt with the issue. This Government gives no aid, comfort or support to any attempt by any union, whatever union it is, to conduct processes outside that framework. One of the reasons why the Business Council of Australia takes such a positive approach in its discussions with this Government, and the reason it will play a constructive part in the meeting to be held the day after tomorrow on work practices, is that it recognises the enormous achievements under this Government's industrial relations policies. Let me remind the honourable gentleman opposite, so that perhaps at even this late stage the facts may permeate through his prejudices, that these facts are indisputable: Under the policy of this Government in the industrial relations area, for the first time in the history of this country, in a period of three years of economic growth, there has been an actual reduction in real wages. There has been a reduction of between 4 and 5 per cent in real wages in a period marked by an average of between 4 and 5 per cent growth in non-farm gross domestic product. That has never been done before. That is reflected in the fact that there has been a reduction in real unit labour costs of more than 7 per cent. That is what has been achieved under this Government. It has been reflected on the other side of the coin by a return to profitability levels of the late 1960s and 1970s against the miserable figure of 12.1 per cent profitability which was the achievement of the Government of which the honourable gentleman was a member in the year 1982-83. That is the achievement which at the same time has been marked by a lowering in the level of industrial disputation of about 53 per cent. Those are the facts. There has been a lower level of industrial disputation, a return to high levels of profitability, a reduction in real wages, and a reduction of over 7 per cent in real unit labour costs. Is it any wonder, in those circumstances, that not only the Business Council of Australia but most other relevant employer organisations say, `Congratulations to this Government for producing those results and a plague upon you who would seek to reintroduce the processes of confrontation in this country'? Mr CHARLES —My question is for the Minister for Communications. The Opposition spokesman on communications, the honourable member for Goldstein, said in this House last Thursday night: The next step for us is to take the Government head on in any legislation which it now proposes. He was referring to aggregation and multi-channel services. Does the Government propose any such legislation, and what would be the effect if any such legislation were not passed? Mr DUFFY —I thank the honourable member for his question. I listened with great interest to the honourable member for Goldstein when he stated that the Opposition would oppose any legislation that would attempt to pave the way for the aggregation of regional television markets. Mr Peacock —Hear, hear! Mr DUFFY —It is all very well for the honourable member to say `Hear, hear', but it may come as a shock to all Opposition members to know that we do not necessarily require legislation to implement the Government's policy of aggregation. The honourable member for Goldstein appears not to understand-on the basis of the interjection, I suppose that the vast majority of Opposition members do not understand-that under the service based provisions of the Broadcasting Act the Minister for Communications has the power to determine and vary service areas. Anyone who has followed this matter will know that the redrawing of service areas is the most likely route to achieve aggregation. That brings me to the other point of the honourable member's question. The Government's policy of equalisation allows the introduction of new services by aggregation, or multi-channel services in approved markets. But in some areas of Australia, such as South Australia, Western Australia, the Northern Territory and some isolated markets within the eastern States, the Government will encourage a second commercial service via multi-channel services only, because clearly, throughout this whole matter, the Government has recognised that not all areas will be able to go to equalisation. The purpose of the proposed legislation to which the honourable member for Goldstein referred is to bring about those multi-channel services. Blocking that legislation would mean that multi-channel services will not be introduced. It is worth those opposite thinking for a little while about what the effect of their actions will be. Let me explain that to them. People living, for example, in Mount Isa, Broken Hill, Berri, Mount Gambier, Port Pirie, Albany, Bunbury, Kalgoorlie, Geraldton and Darwin will have no opportunity to receive new commercial services if the Opposition persists with the course mentioned in this House last Thursday night. It should be clearly understood by all the people living in the areas mentioned that if they do not get new commercial television services, it will be the fault of the Opposition parties in this House, with the help of the Australian Democrats in the Senate. It will not be the fault of this Government. Mr NEHL —My question is directed to the Minister for Health. Is the Minister aware that a women's health care pamphlet prepared by the Leichhardt Women's Community Health Centre and distributed through some schools to year 10 girls at compulsory health and welfare days recommends, among other things, the use of marihuana as a muscle relaxant, and the use of alcohol, straight or mixed, to enlarge the blood vessels in the pelvic area and give increased pain tolerance, and orgasm, by masturbation, intercourse or any other way that takes one's fancy, to reduce period pain? Is this appropriate advice to be given to young schoolgirls as part of a personal development course? Is this advice on alcohol and marihuana from a centre funded by the Minister's department consistent with the Government's $100m drug offensive? Will the Minister investigate this matter and stop funding attempts to push marihuana and alcohol to schoolgirls? Dr BLEWETT —I am not aware of the pamphlet referred to by the honourable member; nor, of course, am I responsible for the operation of community health centres. They are the responsibility of State government. But I will take up the issue with the State Government concerned. Mr O'NEIL —My question is directed to the Minister for Defence. In view of the good case South Australia has made for the contract for the new fleet of submarines-specifically its proposed `Green Fields' site on the Port River at Osborne-has the Government decided on the site where the new fleet for the Royal Australian Navy will be built? Can the Minister assure the House that the eventual site selection will be based on merit and will not be a political decision? Finally, if the decision has not yet been made, can the Minister tell the House when it will be made? Mr BEAZLEY —I can absolutely guarantee to the honourable gentleman that the decision on the site will be made on the basis of merit and not politics. We are very good at making decisions based on merit as opposed to concern about this or that political interest. I have noticed a great deal of reporting of the comments of a variety of State task forces on the subject of the submarine project. We very much welcome their attention to the project. As a result of their attention, an excellent relationship has been established between the companies which are doing the project definition studies and Australian industry. A real appreciation has developed between the companies and Australian companies which may find themselves involved in the submarine project. As a result, the designs of the various submarines are being modified to suit Australian industrial capabilities. The close integration which has occurred throughout the project definition phase will be a very substantial advantage when one of the tenderers is selected and we proceed to construct the submarines. The decision on the location of the site for the assembly of the submarines will be made early in the new year, when the overall designs are considered and when the two propositions that will be put forward to the Government later this year are considered. The types of considerations which will come into play in determining merit will be, of course, very substantially commercial and, to a degree, strategic. The commercial consideration, of course, will include a plethora of matters and will not necessarily relate only to the immediate costs of the site, but to the sorts of industries that would support it. It will relate, too, to questions of the industrial relations regime that will operate at the yard. A whole variety of factors will come into play. South Australia has put forward a very good bid in that regard. As I expressed in this place some time ago in the course of the South Australian elections, it will take a lot of catching. I still stand by that proposition. In conclusion, we have welcomed the considerable attention that this issue has received from the State governments of New South Wales, Victoria, Western Australia and South Australia. Indeed, the Tasmanians and Queenslanders have also been involved. It has all been to the good of the project. It has been very effective in demonstrating the capabilities of Australian industry to the two project definition study people. It amplifies the effectiveness of that type of selection process. As a result of that, we will arrive at both the right location for assembly and the right submarine. Mr DOWNER —I refer the Minister for Transport to his letter to me of 7 July 1986 in which he said that it would not be appropriate for him `to intervene on the question of Qantas providing travel assistance' and that `requests for special fares or travel assistance are matters for the airlines to assess on the basis of their commercial judgment'. Why did the Government apply this standard to a teacher wishing to attend a deaf children's conference in Chicago and yet allow public servants, including the Executive Director of the Trade Development Council, successfully to demand four free seats for the Australian Council of Trade Unions on a taxpayer-funded `study tour'? Mr PETER MORRIS —The reply that I gave to the honourable member was based upon the information that he provided at the time. I repeat for his benefit, and for the information of the House, that decisions of that nature are made by the airline exercising its commercial judgment. In respect of the other matter, I am not aware of the details. I shall be happy to make inquiries and provide the honourable member with the details in a proper form at a later date. Ms McHUGH —My question is directed to the Minister for Arts, Heritage and Environment and concerns the Australian film and television industry, which has attracted such favourable comment recently. I refer specifically to successes at the Cannes Film Festival and other recent successes in the industry including Crocodile Dundee which has enjoyed remarkable popularity and which was filmed in beautiful Kakadu National Park. Can the Minister explain why this success is occurring? Mr COHEN —Our success at Cannes has recently been repeated at the Montreal Film Festival, where 11 of our films were invited to participate. Crocodile Dundee was selected for the gala screening and received a tremendous response. On Wednesday night, I shall be showing, as previewing here, one of the films selected for the Cannes festival, entitled The Fringe Dwellers, and also Peel, the winner of the best short-film award at Cannes. I am sure that honourable members will be interested to know the details of the success of Crocodile Dundee. The gross box office earnings in Australia have already exceeded $27m, and that has broken every record in Australian cinema history. It has broken the record for all films and not just for a locally made product. Approximately six million Australians have seen the film. At Mount Isa, some 32,500 people have seen the film, and the population of Mount Isa is only 17,500. In a few days time-on 26 September-the movie will open in America, and I would not be surprised if its box office receipts there exceed $100m. It will add enormously to Australia's export earnings. One of the benefits that have already accrued is that for Australian release a record number of 93 colour prints were produced at Colourfilm at Sydney, and a further 500 prints have been produced for American release. An order for an additional 200 is expected for other international release. I think that this is an outstanding order as normally 60 is considered a good order. This is an opportunity to congratulate the producers of the film, Paul Hogan, John Cornell and Terry Jackman, on the job that they have done for Australia. I know that my colleague, the Minister for Sport, Recreation and Tourism, says that his tourism budget has been cut back slightly. At least he has Crocodile Dundee showing for the next three months in the United States, which means that he will not need any money. Well, he will not need as much as he would have done otherwise. The production of these films has been helped greatly by Division 10ba tax incentives, which have been maintained and strengthened. It is appropriate that the Opposition, which introduced these tax incentives, should state clearly what it proposes to do in future. Rumours are rife in the industry of the incentives being stopped if the Opposition gets into power. In the whole area of the arts the Opposition needs to put its position. It is allowing those in the arts commun- ity and the film industry to believe that under its new regime, if it ever came into power-God forbid-the benefits would be ended. Mr CONQUEST —My question is directed to the Treasurer. Will he either confirm or deny that taxpayers wishing to challenge decisions of the Australian Taxation Office will be required to lodge a $200 deposit as a filing fee to have the tax dispute considered formally? If confirmed, will the Treasurer tell us whether the fee will be refundable under any circumstances and whether interest is to be paid thereon when there is a lengthy dispute? Does the Treasurer agree that such a fee will be a barrier to many taxpayers who consider they have a legitimate basis on which to challenge a decision of the Australian Taxation Office? Mr KEATING —The taxpayer can still challenge an assessment of the Taxation Office but if he wishes to take the matter to appeal the $200 fee is payable. I would need to refresh my memory about the conditions of any repayment. Ms FATIN —My question is directed to the Minister for Health. What would be the effect on Medicare if the abolition of fringe benefits, capital gains and lump sum superannuation taxes were funded from it, as suggested by the Leader of the Opposition? Dr BLEWETT —I am aware of statements made over the weekend on this matter by the Leader of the Opposition. They can reveal only either an abysmal ignorance of health economics or a rather callous regard for the less well off in this society. Let me deal first of all with the rather shoddy economics. If these taxes he has suggested were abolished the cost to revenue would be $660m. If his proposal went through people could opt out of the levy, but if the same happened as in 1976, that is the upper segment of the population opted out, lost revenue would be $950m. Therefore the cost to revenue of the proposals put forward would be some $1,600m. Mr Porter —What do they take out in costs? Dr BLEWETT —Of course, as the interrupter points out, some of that money, approximately $1 billion, would be saved in medical benefit payments. The actual costs of the proposal are $600m, and they include nothing such as the tax rebate losses which have been talked about or the renewed subsidies to private hospitals. I repeat, the cost would be $600m. It is about time the Leader of the Opposition recognised that there are only two ways in the health Budget in which the sort of moneys he talks about can be saved: One is by doubling the levy to 2.5 per cent, as his Government did in 1976 when it introduced exactly the same scheme; and the second is by saving the money by removing the free medical provisions for pensioners and the disadvantaged. They are the only two ways in which those changes can be made. These people opposite are suggesting that the Government simply shift the balance of payment from the well off to those less well off in the community. As the absurdities of those proposals are revealed we would have exactly the same situation as we had under Fraser-a new health scheme every 18 months. Mr MacKELLAR —My question is directed to the Minister for Defence. Is it a fact that the officer shortage in the Royal Australian Navy is now so grave that the Department of Defence has been forced to offer special and unusual re-employment packages to retired Navy officers in order to fill senior and presently unoccupied positions? Mr BEAZLEY —The situation with regard to officers in all the Services is not as has been portrayed by the Opposition spokesman on defence or in a number of complaints that have been made in the Press over the last week or two. There are many factors in the officer shortage related both to the Navy and to the other Services, some of which I do believe relate to conditions. Since we have been in office we have gone through a process of substantially upgrading the access of the Services to community type arbitral processes, which they very much wanted and which they are taking advantage of. Through those processes we have substantially addressed some of the problems associated with the officers' level of income. We have also gone through the process, and are still going through the pro- cess, of improving service housing conditions. Despite the fact that this was a tough Budget for us, we were able to maintain expenditure on housing, for example, which is a problematic area, to the tune of some $66m. We are devising various ways, via remuneration packages, of approaching the problem. As far as I am aware, the particular process which the honourable member suggested has not been proceeded with. However, a variety of matters are being considered in regard to remuneration packages which may from time to time come across my desk and go to the remuneration Tribunal. Unlike the Opposition, in addressing this pro- cess systematically we are not simply regarding this problem as one associated only with remun- eration, although it has its remuneration component. There are many factors to be considered in the current rate of officer loss, not the least of which could reasonably be described as a Vietnam bulge proceeding through. In the 1960s there was heavy recruitment. Those officers recruited and maintained within the Services in the 1960s are now leaving them. Mr Tuckey —That is not the reason. Mr BEAZLEY —It is correct. That assessment is not just my assessment; that is the advice that came to me from the three Service chiefs, who are addressing that problem. There is also the factor of lifestyle. There is no doubt that the type of lifestyle which members of the Services have lived, with constant shifts and changes, is becoming problematic to a large number of people in the Services, particularly those who see the Services as a long term career, such as naval officers and the officers in the other two Services. That is a very difficult problem to address; it is a problem that will be with us for some time. It relates to the number of times people shift, the employment opportunities for families and the types of housing opportunities they would like as opposed to those that are readily provided. Over the next few years I think it will be very difficult to arrive at conclusions that are satisfactory to them. The possibilities of encouraging re-enlistment via processes of bonuses and the like are not decisions we have taken at this point. Those sorts of suggestions have been circulated, but I do not tend to favour them as the means of addressing the problem. I think it has to be addressed in a much more complex fashion. Mr LANGMORE —Has the attention of the Special Minister of State been drawn to a report in the Sunday Telegraph of yesterday that the Government has not taken up a personal offer from President Reagan to station two members of the United States Drug Enforcement Agency in Australia? Will he inform the House of the Government's position about that issue? Mr YOUNG —I thank the honourable member for Fraser for his question. I have seen the report. It comes on top of a question asked of me after Question Time last week by the honourable member for Gilmore regarding something he had heard or discussed with a member of the United States Embassy about an offer made by the United States President to send two members of the Drug Enforcement Agency to Australia. I was not aware of the offer. Normally the President would write not to my office but to someone else, but I would normally hear of it from the law enforcement area. I had not heard of the offer, and I said that I would get back to the honourable member, but before I could do that he took up the political option and put an article in the Sunday Press-that there had been an offer by President Reagan to Australia to supply us with two senior members of the United States Drug Enforcement Agency; they would help us overcome the drug war which we are losing in Australia; and that the honourable member was astounded that not a single move had been made by me to investigate the offer. I have investigated the offer, and I am advised that a lot of other people are astounded-because no one has heard of the offer. To date, there have been discussions in Washington between me and both Judge Webster of the Federal Bureau of Investigation and the Director of the Drug Enforcement Agency, between Judge Stewart and both agencies and between the Police Commissioner and both agencies. In 1985 there were discussions in Australia as to whether a United States drug enforcement agent should be in Australia. As I pointed out to the honourable member, the United States Embassy has a person designated to handle these matters at the Embassy in Canberra. We made it perfectly clear to the United States authorities some time ago that we would have no objection to a person being placed in Australia in the same way and in exactly the same capacity as our Australian Federal Police people are placed in Washington and Los Angeles. We would have to decide on where they were based, and whether it ought to be Sydney or Canberra is the subject of some debate. Of course the United States people in Australia would be in the same position as our people in Washington. They would not be operatives as they are in some other parts of the world. To all intents and purposes no one can pinpoint any offer made by President Reagan. I felt that it may have come in a major statement which the President was to make last week. As the House knows, the United States is again placing great emphasis on this massive problem with which it is confronted. Although some people are becoming a little cynical about the way it is doing it, I notice in the latest Time magazine the following passage: The rush by lawmakers and Government officials to pass antidrug legislation and prove their own purity by submitting to urinalysis has provoked the mirth of columnists and the sighs of weary legislators who have lived through earlier drug crises. New York Times Columnist William Safire writes mockingly of `drugocrats' waging `jar wars'. Shrugs Senator Daniel Patrick Moynihan: `we're all going to drug conferences and making the Secretary of State pee into a paper cup.' So not everybody adopts the same attitude about the way the United States is going about these things. I notice that even the President himself had his urine tested in August for evidence of drug abuse in order to prove how far the United States is prepared to go. We have not heard from the President about this offer. Mr Nehl —Do you want to give us a specimen? Mr YOUNG —I was going to suggest, since those opposite are all running dead at Question Time, that we get Madam Speaker to arrange it for them. They must be on a go slow drug. Mr Reith —Sit down and we will get the call. Mr YOUNG —The honourable member is not using Question Time so why does he not wait for a bit of information? The honourable member asked a question last week; he will not get the call for two years. Unless he can ask a question better than the one he asked last week, he should not get the call for two years. We thought the honourable member was here to get information. I do not know whether Bill Payne is in the Press gallery, but he writes articles for the Sunday Telegraph. He said that I admitted, in answer to a question the honourable member for Gilmore asked me last week, that the Federal Police are now operating a nine-to-five operation. That is not what I said. I said that the police determine themselves the resources they have-and they have been greatly enlarged by this Government; how they will use those resources; and what their priorities are. No major crime has not been investigated in the way the Australian Federal Police wanted to investigate it. Mr HOWARD —I refer the Treasurer to his admission last week that the authorities are now intervening to support the Australian dollar at a level of round 60c, which appears to countermand the following statement contained in the annual report of the Reserve Bank of Australia: The Bank has not sought to establish any particular exchange rate. Given the 17 per cent decline in Australia's reserves during the last four months, how long does the Government believe this direct intervention by the Reserve Bank can go on, or will the Government rely on higher interest rates to support the Australian dollar? Given the prospect of continued high interest rates, can the Treasurer confirm that the Government still expects 135,000 new dwelling commencements in the current financial year as foreshadowed by the Prime Minister in his 2 April housing statement, or will the level of commencements fall below the 135,000 he guaranteed, placing extra pressure on home owners and unemployment? Mr KEATING —The Leader of the Opposition seeks to misrepresent what I said last week. What I did last week was comment on market judgments. I was neither confirming nor denying those judgments. The House might find it useful for me to read the quote. I said: I think the market will probably assume therefore that there is probably a floor on the Australian dollar and . . . it is not an assumption I would disabuse them of. This of course reflects judgments about monetary policy, the attendant interest rates and the history of the bank's own market interventions . . . They are judgments that the market may well choose to make. I was commenting on what I believed to be the current judgment of the market; nothing more and nothing less. In relation to housing lending, deposit growth has still been running strongly in the three months to July. Lending from savings banks has been running at around $7.5 billion a year whereas the Government, on the basis of its arrangements with the banks, has talked in terms of a figure of $6 billion. I have no indications to date that the deposit growth, which was running very strongly up until July, has tapered off since July; so I have no basis for altering the assumption of 135,000 starts across the year. Mr GORMAN —Can the Minister for Sport, Recreation and Tourism advise the House of the results that Australia achieved at the International Disabled Games, the short name of which is FESPIC, which were recently held in Java? Mr JOHN BROWN —The honourable member for Greenway, in very similar terms to the honourable member for Wide Bay, has always exhibited a very deep interest in the participation of the disabled in sport in Australia. At the recent FESPIC Games, where Australia was represented by amputee, wheelchair and blind athletes, I am happy to tell the House that Australia won 104 gold medals, 44 silver medals and 28 bronze medals, which made us the top nation in the world in disabled sport, as we have been at every recent disabled games from the Disabled Olympics down. I think every member of the House, including the Leader of the Opposition, should be very proud of the achievements of Australia's disabled athletes. But strangely enough, I came back on the early plane from Adelaide to farewell our athletes to this FESPIC Games on behalf of the Government, and thereby on behalf of the Australian public, and while sitting in the airport waiting to meet the athletes I noticed a little quote in the Sydney Morning Herald, which said: `Howard questions need for sports funding'. The article went on to say that others might see this as a heresy but that he did not. Therefore, I presume that we are entitled to look back at the record of this particular group of people who were in government for 30-odd of the last 37 years. If we do that, we realise how little they did for sport. I inform the House that this Government will contribute $1m to disabled sport this year-to the elite disabled athletes right down to those people who have been stuck away on verandahs for years and who have had no place in sport in Australia. The record of honourable members opposite for funding disabled sport was just nothing, nil. When they talk about reducing funds for sport they might note that funds for sport contributed by this Government are 0.006 per cent of Budget outlays, which is just 600 per cent more than they ever gave for sport. I presume that we can look at their record and think that that is what we will go back to. Therefore, I wonder whether we should believe that the Surf Life Saving Association, which this year is to get $1m from this Government to continue its work, should go back to the $100,000 they used to give it, or that the Royal Life Saving Society, which is charged with teaching Australian kids how to swim, can look forward to going back to $100,000 instead of the $350,000 it will get this year. The same thing can be repeated in respect of a dozen other organisations. I suppose our Olympic athletes will go back to running chook raffles, like they used to do during the term of office of the previous Government, so that they can attend Olympic games, whereas under this Government they received $1.4m. I know that honourable members opposite believe that is too much. It happens to be 10c per head of population every four years-2 1/2c a year-but honourable members opposite think it is too much. If honourable members opposite want to start winding the clock back on sports funding, they should do so at their own peril because in the next 18 months I will be out telling all of those sporting organisations that we fund-100 organisations representing six million Australians-that, if by some unfortunate set of events those opposite happen to be in government again, they can look forward to what they got previously, which was nothing, and that they can look forward to the funding that existed before Mr Hawke became the Prime Minister. The previous Government did not support sport and Australia then had the highest level of heart disease in the world because Australians were not participating in sport. Australians are now participating. I am very happy to tell the House that participation in sport in the last three years has been 200 per cent higher at the grass roots level than it ever was under the previous Government. If honourable members opposite want to carry on with some proposition such as `Howard questions need for sport funding', they can carry on. There is enormous support for us in the sporting community of Australia, and I will spend the next 18 months telling it that poor old Rambo over there, who purports to be the shadow Minister for Sport, Recreation and Tourism-if we can believe the ramblings of John Stone, the alter ego of the Leader of the Opposition, that my Department of Sport, Recreation and Tourism is laughable-will not have a department at all if he ever gets into government. Under this Government, funding for sport will continue at its current high level, particularly for the disabled athletes who performed so brilliantly in Java. Mr SCHOLES(Corio-Minister for Territories) —I present, for the information of honourable members, the annual report of the Australian Capital Territory Bush Fire Council for 1984-85. 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 Blanchard,Mr Blunt,Mr Braithwaite,Mr Robert Brown,Mr Ian Cameron,Mr Chynoweth,Mr Cowan,Mr Drummond,Mr Hand,Mr Hollis,Mr Hurford,Mr Kent,Mr Keogh,Mr Lee,Mr Miles,Mr Porter,Mr Rocher,Mr Snow,Mr Tickner,Mr Tuckey and Mr Webster. 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; by Mr Chynoweth,Mr Hawker,Mr Hurford and Mr Kent. 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 larger 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 Miles. The Honourable the Speaker and Members of the House of Representatives in Parliament assembled. We, the undersigned plead that the Parliament implement pro-family policies. In particular we appeal for: 1. the retention of the present graduated assessment system for payment of the Family Allowance; 2. indexation of the Family Allowance in order to keep pace with inflation; 3. an increase of 3.7% in the Family Allowance benefit to return it to 11.5% of the Average Award Wage (making it similar in value to the 11.5% of the Basic Wage when Child Endowment was first introduced by the Chifley Government in 1941). 4. retention of the Dependent Spouse Rebate and the amount of the Dependent Spouse Rebate adjusted so that it is equal in value to the tax-free threshold allowed when calculating taxable income. Your petitioners therefore humbly pray that you will give this matter earnest consideration and your petitioners, as in duty bound, will ever pray. by Mr Drummond and Mr Rocher. To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The Petition of the undersigned respectfully showeth: That families have been gravely disadvantaged by a serious decline in the level of their net disposable income through: failure to index family allowances-resulting in a 50% loss in their real value since 1976 abolition of family allowances for dependants who have turned 18-even those still at school failure to increase the spouse rebate since 1982 discriminatory taxation system-which penalises single income families. Recognising the cost benefit to taxpayers when the intact family unit itself delivers essential care to the extended family. Your Petitioners most humbly pray that the Government take immediate action to: Restore the lost value of family allowances and to index them to cover future price rises Introduce optional income-splitting for taxation purposes Retain the spouse rebate. by Mr Maher. To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The petition of the undersigned respectfully showeth: We most strongly oppose the process of Food Irradiation by radioactive Cobalt 60 or any other radioactive substance. We oppose the introduction of regulations that will facilitate the food irradiation process by State Governments. We express our deep concern at this attempt to extend the use of radioactive substances and exposure of workers to radiation. We call on the Government to immediately ban the importation of radioactive Cobalt 60 or other radioactive substances and to immediately disallow the regulations that permit the irradiation of food here in Australia. by Mr Kent,Mr Saunderson and Mr Scott. 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 Mssrs. 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 amended 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 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 petition of the undersigned citizens of Australia respectfully showeth that: The fringe benefits tax will cause hardship to business throughout Australia, especially in the already severely depressed rural sector and in the motor vehicle industry. The fringe benefits tax will be a disincentive to employment and worse, will result in additional unemployment. The economy of this country would best be served by policies that lightened the tax burden, not increased it, that encouraged enterprise, not stifled it and stimulated growth, development and jobs, not prevented it. Your petitioners therefore humbly pray that the House will repeal this Legislation and your petitioners, as in duty bound, will ever pray. by Mr Rocher. To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. We, the undersigned, are deeply concerned at the impact of the new Fringe Benefits Tax on the following grounds: 1. its severe and damaging effect on business confidence, investment and incentive, especially in the rural, mining and small business sectors 2. its capacity to seriously worsen unemployment through the additional costs it imposes 3. its extremely negative impact on the competitiveness of export industries at a time when the nation desperately needs to improve its trading performance 4. in that it may compel many honest and decent citizens to defy the Tax in order to preserve their livelihoods, their businesses and the jobs of their employees, thus causing hardship, the breakdown of respect for the law and discord within the community. We therefore most earnestly petition you to repeal the Fringe Benefits Tax Legislation forthwith. Your petitioners, as in duty bound, will ever pray. by Mr Sharp. To the Speaker and Honourable 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. by Mr Ruddock and Mr Tickner. To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The petition of the undersigned citizens of Australia respectfully showeth the legislation to tax fringe benefits is iniquitous, inequitable and unfair. Your petitioners humbly pray that you do not proceed with the legislation. by Mr Beale. To the Honourable the Speaker and Members of the House of Representatives of the Parliament of Australia 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 consideration, 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 undersigned citizens of Australia do humbly petition: That the proposed sale by the Brisbane City Council of property at 196 Lutwyche Road, Windsor, Brisbane, to Australia Post for use as a transport depot would: (a) increase industrial traffic congestion in the general area (b) occupy existing scarce open space area in a relatively high density residential area (c) increase noise for residents adjacent to the site (d) increase traffic congestion and noise for residents in streets used by vehicles from the proposed transport depot (e) increase traffic flow along Rosemount Terrace which is a relatively narrow street and currently ill-equipped to cope with increased traffic (f) increase the traffic hazards at either end of Rosemount Terrace as both ends already constitute potential traffic dangers, particularly the corner of Newmarket Road and Rosemount Terrace (g) increase traffic congestion at the Newmarket Road/Lutwyche Road `T' junction (h) lead to development of the site which could obstruct the easterly view of residents in Rosemount Terrace (i) worsen the visual pollution of the Lutwyche Road corridor, the main arterial route from the northern suburbs of Brisbane to the city centre. Your petitioners do therefore humbly pray that the Parliament use its powers to prevent Australia Post from proceeding with negotiations to acquire property at 196 Lutwyche Road, Windsor, Brisbane. by Mr Cross. 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, of the Parliament of Australia assembled. We, the undersigned, plead that Parliament becomes aware that the Public has no legal right to influence the setting of Standards for Television Programming, that we deplore the new Standards which came into force on 1st February, and that we call on Parliament to amend the Broadcasting and Television Act 1942, section 16 (2), so that the Australian Broadcasting Tribunal, when determining Television Standards, and screening hours, shall consult with the Australian people: Because at present the Tribunal is compelled by law to consult only with television stations on these matters, Because the new standards are a result of such consultation, and have already been implemented without public discussion, Because the new Standards are ambiguous, and without definition, Because the new Standards are composed of modifying terms which circumvent the proscriptions, Because the media is only motivated by aspirations of pecuniary superiority, Because, in contrast, the public is only motivated by their wish to exercise pastoral care over the nurturing home environment of their children, Because we believe that the standards wrongly ascribe extreme importance to ``the story line'' of a film screened, Because we believe that the Standards wrongly ascribe total unimportance to the effects of viewing, especially violent films, on the young, the impressionable, the immature, the unstable, or the socially disadvantaged, Because we refuse to accept the media-imposed assessment of community standards, And because we wish to impart our demand to be consulted, our demand to have legal status in decision-making, and the right to counsel those whose decisions so deeply affect our homes. by Mr Drummond. To the Speaker and Members of the House of Representatives in Parliament assembled. The humble petition of the undersigned electors of Australia respectfully showeth: That the Government should cancel the Fringe Benefits Tax they intend to impose on businesses throughout Australia because: 1. The tax discriminates against charitable organisations, sports clubs, private schools and religious organisations: 2. The tax will mean employees around Australia will suffer reductions in their remuneration packages: 3. The Bill places another impossible burden of paperwork on small business: 4. The Bill is absurd in its application to Government employees, who now constitute 32% of the workforce. And your petitioners as in duty bound will ever pray. by Mr Drummond. To the Honourable the Speaker and the Members of the House of Representative in Parliament assembled. The humble petition of the undersigned citizens respectfully showeth that your petitioners are gravely concerned at the failure of the government to honour its election promises to pensioners. In particular those promises relate to the following commitments: 1. That within three years of its election to office, a Hawke Labor Government would raise the level of the standard pension to 25% of Average Weekly Earnings; 2. That the lag time between the announcement of the Consumer Price Index figures and the subsequent adjustment of pensions would be reduced to one month, and 3. That the disproportionate tax burden borne by low income earners would be lifted. None of these promises has been honoured to date. Your petitioners are extremely angry at the failure of the Government to live up to its commitments and as in duty bound will ever pray that these serious omissions will be given the attention they deserve. by Mr Hand. 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 in Parliament assembled. The humble petition of the undersigned citizens of Australia respectfully showeth: That in the light of the Labor Government's failure to act to correct the many anomalies in the Assets Test on pensions brought to its notice, the Labor Government's legislation should be repealed before it has an unduly unfair impact on pensioners. Your Petitioners therefore humbly pray that the House of Representatives in Parliament assembled should immediately seek the repeal of the Labor Government's iniquitous and unfair Assets Test. And your petitioners, as in duty bound, will every pray. by Mr Hawker. To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The humble petition of the undersigned citizens of Australia showeth that whereas: 1. They are completely satisfied with the design of the existing Australian National Flag. 2. They are aware it properly reflects the immutable characteristics of Australia, namely: (a) The Union Jack, itself the creation of three Christian Crosses, represents the Nation's historical origin and the source of its language and law; (b) The Southern Cross on an azure blue background signifying its geographical location on this planet Earth; (c) The large star depicting the advent of Federation in 1901. 3. They know the Flag has been a source of inspiration to generations of Australians in peace and war. 4. They recall that millions of native-born Australians and newcomers to these shores from other parts of the world have become united under its proud symbolism. 5. They are certain that any change to the Flag will produce division in the Australian community. Your petitioners therefore pray that your honourable House will propose and pass a motion that ``the existing Australian National Flag be changed only with the approval of the Nation as expressed in a Referendum''. And your petitioners as in duty bound will ever pray. by Mr Hawker. To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The petition of certain citizens of Australia respectfully showeth: That the Australian flag symbolises the continuity between Australia's past, its present and the future; That the presence of the Union Jack on the flag represents not a subservience to Britain, but a reminder of our inheritance of the fruits of hundreds of years of struggle for individual liberty against the forces of tyranny and oppression; Nonetheless recognises the rights of Australians should they wish as a people to change the design of their flag. Your petitioners humbly pray that no change be made to the Australian flag except with the consent of the people in a referendum. And your petitioners, as in duty bound, will ever pray. by Mr Ruddock. To the Honourable the Speaker and members of the House of Representatives in Parliament assembled. The humble petition of the undersigned citizens of Australia respectfully showeth: 1. That we the undersigned are totally opposed to the closure of the Wollongong area office of the Department of Immigration and Ethic 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 Helensburgh and as far as Wingecarribee and Wollondilly. Your petitions 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 is kept operational and fully staffed. by Mr Hollis. To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled: The petition of certain citizens of Australia respectfully show 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 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 negotiations 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 Ban Treaty. by Mr Jenkins. To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. And, to the Australian Government. This petition of concerned Australian citizens respectfully points out that a comprehensive ban on all nuclear weapon tests in all environments for all time would be a vital first step towards: Inhibiting the addition of more and more sophisticated and destabilizing nuclear weapons to the world's arsenals; Arresting the extension of the arms race to outer space; Upholding the provisions of existing treaties and agreements. Your petitioners humbly pray that: 1. The Australian Government-(a) take new initiatives to encourage all member states of the United Nations-especially the governments of nuclear weapon states-to conclude at an early stage a treaty banning all nuclear weapon tests in all environments for all time; (b) call on all nuclear weapon states to declare an immediate moratorium on all nuclear weapon tests pending conclusion of a CTB. 2. All federal members of Parliament and senators make strong representations to the Australian Government to act towards these goals. And your petitioners, as is duty bound, will ever pray. by Mr Tickner. To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The humble petition of citizens of Australia shows: That the people of New Zealand and the New Zealand Government have given an example to the world in their efforts to achieve a nuclear free South Pacific, and such decision being endorsed by the people at a general election. Your petitioners therefore pray that the Australian Government support the principled stand taken by the New Zealand Government and urges it to condemn any efforts by the U.S. Government to impose economic or other sanctions on New Zealand in retaliation for their stand on nuclear vessels. We further urge the Australian Government to urgently implement its policy to promote the development of zones of peace and nuclear free zones in the Indian and Pacific Oceans. by Mr Kent. To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The humble petition of the undersigned citizens respectfully showeth that your petitioners wish that all medicines prescribed by a registered Medical Practitioner be made available free of charge by the Government to all pensioners for the following reasons: 1. The enormous cost of some drugs, including pain relieving ones, not at present on the ``free list''. 2. That certain drugs essential for permanently disabled, such as epileptics are at present being charged for and therefore present a great financial burden to the pensioner. Your petitioners therefore pray that your honourable House will consider our wishes. And your petitioners, as in duty bound, will ever pray. by Mr Kent. To the Honourable, the Speaker and Members of the House of Representatives in Parliament assembled. The petition of the undersigned citizens of Australia of Albanian background respectfully showeth: we most strongly oppose the use of the `Special Broadcasting Service' and the taxpayers funds for nationalist political purposes. we are deeply concerned that the existing Albanian program on radio 3EA Melbourne is not meeting the needs of the community. It is being used against its' interests, as well as the interests of the broader Australian society. we respectfully believe that such use of public facilities undermines Australian principles of multi-culturalism and has a damaging effect on community relations. Your petitioners therefore, strongly urge the Government to take immediate action to ensure that the present announcers of the Albanian program are removed and replaced with community representatives. by Mr Kent. To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. This petition of the undersigned citizens of Australia respectfully showeth that we strongly oppose the introduction of the `Australian Card' or any other form of National Identification Numbering System. We believe that the introduction of a National Identification Numbering System is not only totally unnecessary but is a severe threat to our civil liberties and privacy. We condemn the Government's action on this matter, particularly as no reasonable nor responsible justifications for the proposal have been forthcoming from the Government. We humbly pray that the House of Representatives, in Parliament assembled, should reject any proposal for a National Identification Numbering System. by Mr Kent. To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The humble petition of the undersigned citizens of Australia showeth that the 1986 Census deprived housewives of the right to record their occupation and instead forced them to give the negative response: `No, did not have a job'. That the 1986 Census could have been used, at no extra cost to taxpayers, to give a genuine `Fair Go' to all women to record their views on the government's National Agenda for Women. That coinciding with the 1986 Census, the Office of the Status of Women is conducting a costly, selective survey titled: `A Fair Go For Women'. This survey requires no identification of respondents, making the results of the survey highly suspect since it is known that various groups and individuals have obtained bulk supplies of the brochure, while the majority of women are not aware that their views are being sought by the Government. Your petitioners humbly pray that the House of Representatives, in Parliament assembled, will restore to the Census a category for Housewives, and that the `Fair Go For Women' survey will be recognised as a costly exercise of dubious value in determining the real views of Australian women, as this should be done through the Census, or a Referendum held in conjunction with the next Federal Election to minimise costs, and to give all women a genuine `Fair Go'. And your petitioners as in duty bound will ever pray. by Mr Miles. To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled, Parliament House, Canberra, A.C.T. 2600. We your Petitioners, humbly showeth: That the Wildlife Species, in this case-The Kangaroo, have a right to exist and flourish independently of Human needs. For this reason alone we should not regard the Kangaroo as a Human resource nor contemplate commercial exploitation simply because more offsprings are born each generation that can hope to survive. Permissible cropping rates are unknown and the means of enforcing controls or Protective Legislation is completely ineffective and inadequate due to the Widespread nature of the Industry. All Australian's have a responsibility to our already declining Wildlife. We your Petitioners therefore humbly pray that you will: (1) Ban the exports of products made from Kangaroos. (2) Take action to see that State Governments prohibit the commercial killing of Kangaroos. by Mr Tickner. To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. We, the undersigned citizens of the Commonwealth, do humbly pray that the Commonwealth Government: Take the action necessary to create an Australian republic on or before 1st January 1988. And your petitioners, as in duty bound, will ever pray. by Mr Tickner. To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The Petition of the undersigned showeth that: Approximately 100,000 Australians live on the verge of homelessness, dependent on Government resources to survive, or sleep out or in refuges. Over 700,000 households, or in excess of 2 million Australians are living below the proverty line after paying their rent or mortgage costs. In addition, there are thousands of households with special needs, such as the disabled, who are not well catered for in the private sector but who nevertheless require suitable housing. Waiting lists for public housing have almost doubled in the past five years to 146,000 by June 1985. The list is expected to grow to some 250,000 by 1990. Your petitioners therefore humbly pray that the Australian Government as a highest priority undertake a campaign to bring the issue of poverty and, in particular, housing-related poverty, to the attention of the Australian public, and increase expenditure on public housing through the Commonwealth and State Housing Agreement, by at least 15% annually in real terms. To further increase rent relief payments for those on low incomes in the private rental market, and to use its influence with State and Territory Governments to encourage them to increase their expenditures on public housing. And your petitioners as in duty bound will ever pray. by Mr Tickner. To the Honourable the Speaker and Members of the House of Representatives of the Commonwealth in Parliament assembled. The humble petition of the undersigned citizens of Australia respectfully showeth: That they oppose the construction of any additional nuclear reactor at the Australian Atomic Energy establishment at Lucas Heights in N.S.W., or any site within Australia. Your petitioners therefore pray that the Government of Australia will not construct an additional nuclear reactor at Lucas Heights or within Australia. And your petitioners as in duty bound will ever pray. by Mr Tickner. To the Honourable the Speaker and Members of the House of Representatives of the Commonwealth in Parliament assembled. The humble petition of the undersigned citizens of Australia respectfully showeth: That in the wake of the Chernobyl Reactor disaster, no nuclear reactor can be considered entirely safe. Your petitioners therefore pray that the Government close down the Lucas Heights reactors immediately and permanently, and that no new nuclear reactors be built within Australia. And your petitioners as in duty bound will ever pray. by Mr Tickner. To the Honourable the Speaker and Members of the House of Representatives of the Commonwealth in Parliament assembled. The humble petition of the undersigned citizens of New South Wales respectfully showeth: That they oppose the construction of any additional nuclear reactor at the Australian Atomic Energy Establishment at Lucas Heights in New South Wales. And your petitioners as in duty bound will ever pray. by Mr Tickner. To the Honourable the Speaker and Members of the House of Representatives of the Commonwealth in Parliament assembled. The humble petition of the undersigned citizens of Australia respectfully showeth: That in the wake of the Chernobyl Reactor disaster, no nuclear reactor can be considered entirely safe. Your petitioners therefore pray that the Government close down the Lucas Heights reactors immediately and permanently, and that no new nuclear reactors be built within Australia. And your petitioners as in duty bound will ever pray. by Mr Tickner. To the Honourable the Speaker and Members of the House of Representatives of the Commonwealth in Parliament assembled. The humble petition of the undersigned citizens of Richmond electorate respectfully showeth that: The Hawke Labor Government's Bill of Rights seeks to make changes in the constitutional balance in Australia by intruding into the affairs of individuals and of State and Local Governments. Your petitioners humbly pray that the House of Representatives, in Parliament assembled, urge the Government to repeal the Bill of rights legislation and not restrict the individual freedoms of Australians and its present justice system, nor in any underhand way centralise power in our three tier system of Government. And your petitioners as in duty bound will ever pray. by Mr Blunt. To the Honourable, the Speaker and Members of the House of Representatives in Parliament assembled. The humble petition of the undersigned citizens of Maranoa electorate respectfully showeth that: The current Government's Bill of Rights seeks to make changes in the constitutional balance in Australia by intruding into the affairs of individuals and of State and local Governments. Your petitioners humbly pray that the House of Representatives, in Parliament assembled, urge the Government to repeal the Bill of Rights legislation and not restrict the individual freedoms of Australians and its present justice system, nor in any underhand way centralise power in our three tier system of Government. And your petitioners as in duty bound will ever pray. by Mr Ian Cameron. To the Right Honourable the Speaker and Members of the House of Representatives of the Commonwealth in Parliament assembled. The humble petition of the undersigned citizens of New South Wales respectfully showeth: That they strongly support the establishment of the Western Sydney State University as recommended in the Parry Report and call upon the House to establish the Western Sydney State University in conjunction with the New South Wales Government. And your petitioners as in duty bound will ever pray. by Mr Grace and Mr Price. To the Honourable, the Speaker and Members of the House of Representatives in Parliament assembled. The Petition of Warwick Education Centre, electors of the Division of Rankin, shows that the Federal recurrent funding has been withdrawn. Your petitioners therefore pray that the funding be restored to its present level. We, the undersigned, protest strongly against the Federal Government's failure to continue the Warwick Education Centre's recurrent funding in 1987. Consequently, we call upon the Government to restore funding so that the aforementioned Centre can continue to provide the services that it has done in the past. by Mr Beddall. 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 $2.00 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 $2.00 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 $2.00 fee on each prescription. 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 in Parliament. The Petition of certain residents of the State of Western Australia draws to the attention to the House that the Government has increased wholesale sales tax another 10% under the 1986-87 Budget, resulting in a 20% Sales Tax on wine. This tax was introduced at a time of a record trade imbalance between our wine imports and exports and will further exacerbate that problem. Your petitioners therefore ask that the Government cancels the 20% Sales Tax before it causes a further contraction in our wine industry, with consequential loss of exports, and employment in the wine and tourism and retailing industries which are currently operating in Western Australia. by Mr Drummond. To the honourable the speaker and members of the House of Representatives in Parliament assembled. The Petition of certain citizens of Victoria respectfully showeth: That all legitimate business expenses incurred in earning or producing assessable income should be allowable deductions. That the proposed Capital Gains Tax is an unwarranted burden on the rural sector, which will severely affect its long-term viability. That the delay by the Government in introducing the legislation into Parliament is causing confusion and hindering farmers in the organisation of their affairs. Your petitioners humbly pray that the Government introduces the Capital Gains Tax legislation without delay and that the Australian Democrats join with the Opposition to defeat the proposed legislation. by Mr Hawker. Petitions received. Madam SPEAKER —I have received a letter from the Deputy Leader of the Opposition (Mr N.A. Brown) proposing that a definite matter of public importance be submitted to the House for discussion, namely: The Government's belated and inadequate response to the need to remove restrictive work practices. I call upon those members who approve of the proposed discussion to rise in their places. More than the number of members required by the Standing Orders having risen in their places- Mr N.A. Brown(Menzies)(2.57) —Last week's death-bed conversion of the Prime Minister (Mr Hawke) to the cause of removing restrictive work practices must be viewed with an enormous amount of cynicism. We say that because we now have a Prime Minister who is trying to present himself as some form of born-again reformer on the issue of removing work practices which are restrictive. How uncomfortably, we must say at the outset, that must lie in the mouth of a Prime Minister who has probably spent the past 25 years of this life embarked upon a course of expanding trade union power that has enabled restrictive work practices to be imposed on our economy. But, like most of his attempts at reform, we are seeing from this Prime Minister a response that is completely inadequate; it is too little and it comes to late. The Prime Minister is prepared to fiddle around at the edges of work practices and call yet another conference to talk about them, but he is not prepared to tackle the root cause of the whole scandal, and that is the rigidity and the inflexibility of our industrial relations system. Against the reform of that antiquated structure, the Prime Minister and his Government have firmly set their faces. Let me start by looking not at what the Opposition says about our present industrial relations system but at what is said about it by one of the many international observers that have recently come to judge it. It is important that we remember that the following comment was made by an independent observer. On Australia's day of shame-that is what 10 September was-Moody's Investor Services Inc. took away our AAA rating. One of the reasons it gave for reaching the conclusion that it should reduce us from our AAA rating was put by Moody's in the following words: Industrial and labor market rigidities are further expected to hamper the country's ongoing efforts to shift economic resources into areas with high foreign exchange earning capacity. That is what Moody's has said, and amongst all the welter of comment that has been made arising out of that matter, it is well to remember that Moody's emphasised the rigidities and inflexibility in our present industrial relations system. So there it is, as plain as anyone could wish. Australia's economic success and the way the world is judging Australia are now both being held back by our rigid industrial relations system-a system that is one reason, although of course not the only reason, for our worsening economic performance, our flagging trade, our high interest rates, our rising inflation, our falling dollar and our mounting debt. One result of this rigid system, which has now been condemned by so many international observers and which the Australian community is coming to realise is one of the features of our country which is holding back our development, is the creeping paralysis of restrictive work practices-practices that add so much to our costs and practices that hold back so much of our potential productivity growth. If anyone has any doubt about this problem, let me rely not upon what we in the Opposition say but upon the comments of one who has had a second look and has thought again about the way in which this country is going. I refer to Mr Charlie Fitzgibbon-a man with a history of involvement in the trade union and labour movement going back over many years. He said: . . . improving the ability of our industries to compete against intensifying competition both at home and abroad requires reform in the area of restrictive work practices . . . It is more than possible that I have contributed on a number of occasions to either their introduction or at least their continuance. At least he has more honesty about him than the present Prime Minister. He went on to say: However much I may have erred in past years, I long ago recognised that most of such practices do not assist industry to provide optimum results for its workforce and therefore they are useless- I repeat the word `useless'- impediments to progress. That is what Mr Charlie Fitzgibbon has said. Let there be no doubt that this is a major problem facing this country. Restrictive work practices are widespread throughout our industries. For example, the Metal Trades Industry Association has conducted a survey and has found that, believe it or not, 80 per cent of employees have been and are engaged in a wide number of restrictive work practices that add so much to costs and keep our productivity down. Examples of them are legion. There is gross overmanning, especially in sea-going and transport industries, in stevedoring and on the waterfront. Some unions insist that work not be done during normal hours so that overtime must be paid for. Demarcation disputes have been made an art form, with unions using their muscle to force employers to engage several people to do one job. The list goes on. Companies are bludgeoned into employing shop stewards on a full time basis under threat of strikes. In one case that came to my notice, a separate shop steward had to be employed to supervise only four employees in his trade. Extravagant allowances have been forced through our centralised system for almost any spurious reason that seems to fit the mood. To take an extreme example, but one from the real world, on one building site in Sydney the workers apparently were distracted by the smell of Chinese cooking and they applied for and successfully got a dim sim allowance. Those are the absurd lengths to which this work practices scandal has gone. Absenteeism is a national disgrace. The unions impose bans on outside contractors to force employers to keep larger work forces than they need. Operators and process workers are prevented from making even the simplest repairs to the machinery on which they themselves work. Stop work meetings are held for spurious reasons. New technology is frequently banned with all the zeal of the Luddites. Awards are riddled with clauses on non-productive time-time that is not worked but is, of course, paid for. Penalty rates and loadings are an international joke. If on occasion a supervisor in an industry uses a simple tool to perform a simple task, there can be a mass walk-out. In addition to all of that, we have the most restrictive and pernicious work practice of all-compulsory unionism, which this Government supports. While I am at it, may I say what an absurd explanation we had today of the very point that the Opposition is making. Here is the Government applying for preference clauses, enforcing preference clauses, using preference clauses to ensure that people who are members of a certain union get a job over, above and against those who are not members of that union and who do not get a job. It is the utmost hypocrisy for the Minister for Employment and Industrial Relations (Mr Willis) and the Prime Minister to say: `Of course, there are preference clauses in this country, but there is no closed shop and no compulsory unionism'. It is absolutely absurd, for the simple reason that if one is a member of the union one gets the job and if one is not a member of the union one does not get the job. If that is not compulsory unionism, I do not know what is. What the Opposition says about that most pernicious work practice is that we will repeal the power of the Conciliation and Arbitration Commission to grant preference clauses in awards. The problem, then, is extensive. But what a contrast there has been between the Government's response and the Opposition's response. What has the Government done? It has made three equally absurd and equally inadequate responses. The first response was the most hysterical outburst by the Prime Minister against the good faith of those who wanted nothing more than to reform our industrial relations system. They have been abused as being lunatics and troglodytes. The Prime Minister stood by and allowed one of his Ministers, without any reprimand, to describe them as traitors. Let me make it clear that we do not need any lectures about extremism from members of the Labor Party. If they want to root out extremism, they should start by looking at their own Party and do something about one of their Senate candidates who was, until a couple of years ago, a member of the most extreme movement in Australia, namely, the Communist Party of Australia. If they want to start criticising people for extremism, they should, as with charity, begin at home and dump Mr Halfpenny completely from their Senate ticket. The second response that the Government adopted, of course, was the time honoured Hawke method of calling a mini-summit. We say that it is all very well to talk about these issues. Of course, it is good to talk about them. But our criticism of the Government is related to the fact that it has open to it avenues to bring about reform of restrictive trade practices and work practices. Of course, it can do something about management practices as well. But if there is a problem about restrictive work practices, as there clearly is, it is in the hands of the Government to do something positive about it. It is not enough for it to say: `We will have a summit and then we will withdraw', to use its words. `We will walk away from it and leave the unions and the peak employer councils to solve the problem themselves'. That is an abrogation of government responsibility. It is within the power of the Government to change our industrial relations laws, to enable employers and employees to get together to work out their own incentive based arrangements, to work out conditions of employment for themselves and, for the first time, to have a say about what their work is worth, what they should be paid and what work conditions should exist in their place of employment. It is the responsibility of the Government to do something positive to bring about a more flexible wage fixing system in this country. That was its second response-to have a mini-summit and then walk away from it, instead of changing the industrial relations law, as it should, to allow more flexibility and more work based incentive arrangements between employers and employees. If the Government did that, it would get rid of restrictive work practices. The Government's third response, of course, is the most absurd and ludicrous of all. Apparently we are now to look towards the Swedish corporate state for our inspiration. It should come as no surprise, I suppose, to anyone that the Labor Party and its hand maidens in the trade union movement now see the light on the hill as coming from Sweden. After all, is not that the country which has all of the things which the Labor Party is trying to force on Australia? It has the highest taxes in the industrialised world. Taxation in that country represents more than 50 per cent of gross domestic product. It has the highest corporate taxes, which have destroyed individual initiative in that country. It is a country which has extraordinary controls and regulations. Above all, just to show how ignorant one of the economic Ministers of this Government is, I point out that it is not a country which has a long record of substantial economic growth. If the Minister is going to make these wild assertions he should back them up. We do not need Sweden as a model. We need our own model of less taxation and less government spending. We want our own model of less intervention, less regulation and far more incentive. Above all, in this country we need an industrial relations model with less regulation and less trade union power, which the Labor Party can never bring about because it is wedded to the trade union movement and paid by it. We need more incentives for individual employers and their employees to make their own bargains, which will bring about increased productivity at the work place at the enterprise level. We do not need any foreign flirting with the Swedish experiment. As I have said, we need our own model. We know what the country needs and it is up to the Government to provide it if it can, but we say that the Australian people will recognise sooner or later that this Government cannot provide it and will turn to the Opposition. The worst feature of all is that the Government has within its own hands the power to change our system to get more productivity from our industry. However, against that reform, which is so needed, the Government has set its face. It should be condemned for its lack of activity and its half-hearted response to the need to reform work practices. Like so many other things in this country, we need a new industrial relations system that will restore incentive once again, and above all we need a new government. Mr WILLIS(Gellibrand-Minister for Employment and Industrial Relations)(3.12) —Anyone listening to the debate would assume from the speech of the Deputy Leader of the Opposition (Mr N.A. Brown) that restrictive work practices came into being only when the Government came to office. That is an absolute nonsense. As every Opposition member knows and as everybody outside the House knows, restrictive work practices have been built up within the system over many years. When we came into office in March 1983, this country was in very bad economic shape. Some of the reasons for that were fairly recent events but some of them went back decades. They went back to the policies that had been pursued by government in the post-war period. In 1983, Australia was basically what Liberal-National Party coalition governments had made it. Australia had been governed for 30 of the 33 years since the end of the 1940s by Liberal-National/Country Party governments. They had built up an economy which was grossly inefficient by world standards and which gave us low levels of productivity. It was an economy which was falling far below its potential and it relied on the lucky country syndrome-the fact that we were able to find minerals and that we had a very efficient rural industry. Previous governments had given us a manufacturing industry base which was grossly inefficient, highly protected and unable to be internationally competitive. That was our legacy when we came into office in March 1983. We have set about redressing the Australian economy on many fronts, and that has meant meeting the need to produce a rapid growth in employment, which we were certainly able to do in our first three years in government. That has not been merely a short term focus. We have been emphasising from the outset the need to make all the productive forces of our nation more productive than they have been in the past, and we have tackled the issue on various fronts. It is grossly untrue to say, as the Deputy Leader of the Opposition said many times during his speech, that this Government has responded only latterly and inadequately. Since we came into office, we have been on various fronts attacking the need to achieve greater productivity so that we can realise something like our real potential. In the process of doing that we have in various areas addressed the issue of restrictive work practices. I guess that the first such area was in relation to the steel plan. In our very early days we established a plan for the steel industry, an industry which was in dire difficulties when we came into office. Indeed its very future was being questioned. We set about establishing a plan for that industry which would ensure its future viability and make it much more productive and efficient, and we were able to do that. The target which was set to be achieved over a number of years in respect of output per man was achieved in about a year and a half; that is, we achieved an output of about 250 tonnes per man year. That target was set in the very early stages to be achieved over several years, and it was a very gratifying result. It was accompanied by a very substantial reduction in industrial disputation and has meant that that industry has become far more efficient than it was under the previous Government. That was just the first of a number of such plans which have been adopted. Latterly we have adopted the heavy engineering industry plan which again specifically went to the question of the need to improve work practices. Part of the agreed plan is that the parties will discuss and eliminate unnecessary work practices. The unions were very co-operative in relation to that clause in the agreement. Let me now refer to the car industry which, under the previous Government, was allowed to become grossly inefficient, massively protected and hopelessly organised. We have set about establishing a plan for that industry to make it much more competitive and productive. We established the Automotive Industry Consultative Council-a tripartite body-which has discussed various ways of making the industry more efficient. Various steps have been taken to achieve that, including the introduction of the `just in time' principle, which eliminates the costly need for substantial warehousing and enables industry to get by with products being delivered just as they are needed for production purposes. That has been a great saver to the industry and it has also required various changes in work practices to enable that system to be introduced. The unions went along with that as a perceived part of the need to make the industry more efficient and to ensure that there were jobs for their members. In those various industry plans specific attention has been given to the need to increase productivity and to eliminate restrictive work practices. In none of those industries was any of this kind of activity undertaken by the previous Government, nor can I think of any other industry in which it was undertaken. That Government sat there decade after decade, allowing all these things to occur and allowing Australians to be massively inefficient, allowing industry to be built up under massive protection which encouraged all those inefficient practices, and it did nothing about it. Then, when it got into opposition, it tried to prove how righteous it was by saying that this Government ought to be doing more about restrictive work practices when we have done infinitely more in our three years in government than it did in 30 years in government. In respect of our own area of employment, where we have a particular obligation to set an example, we have undertaken a very substantial examination of various work practices in the Public Service and in other areas of government employment. The Prime Minister (Mr Hawke) will make a speech in this House later this week which will give the details of that examination. He will demonstrate that we are very concerned to ensure that we have a much more efficient Public Service in this country and that we eliminate the various inefficiencies which were allowed to foster under the previous Government. We are, right in our own area of employment, making a very profound effort to improve the efficiency of the Public Service as well as various other areas of government employment such as factories and so on. I believe the Opposition is utterly hypocritical in saying that the Government should be doing more to eliminate restrictive work practices when it sat there for decades when in government doing nothing and allowed it all to happen. Now when it is in opposition it complains about the Government, which is doing far more than it did and which is taking substantial steps, and says we are doing nothing. The reference by the Leader of the Opposition (Mr Howard) to Moody's Investor Services Inc. was indeed interesting. He indicated that Moody's had said that one of the factors in its considerations in downgrading Australia's credit rating was the industrial and labour market rigidities. Of course this was anything but the major factor involved in its decision-making, as it made clear that a major factor involved, indeed the fundamental factor, was that we had an enormous balance of payments problem, which again can be said to be something which goes back to the neglect of the previous Government. We have a system of virtually Third World-type exports because the previous Government was quite happy in the post-war period to allow this country to rely almost totally on rural products and later on minerals, which required very little in the way of productive effort or reliance on the skills of our work force. The previous Government allowed us to develop that pattern of exports, which meant that we were utterly dependent on commodity prices. When those commodity prices fell, as they have in the last year and a half, of course this nation was pushed into diabolical trouble because of a massive decline in terms of trade. If we had had a government which, through the post-war period, had developed strong manufacturing industries, internationally competitive manufacturing industries, had addressed work practices, addressed protection, addressed the structure of industry, and which had developed an efficient manufacturing industry, we would not have had the balance of payments problem we now have because a much lesser proportion of our exports would have been taken up by commodities and a much higher proportion, as is the case with most other developed countries, would have come from manufactured goods and services. However, we do not have their situation because the previous Government totally neglected to develop an efficient manufacturing industry and internationally competitive services. It has taken this Government to try to introduce the policies which will make those industries more efficient, to introduce the underlying macroeconomic situation which will create the international competitiveness, which it has done in relation to its wages policies, which have been eminently successful compared with anything which operated under the previous Government. This Government has introduced specific industry policies designed to make industries more efficient. The Deputy Leader of the Opposition also referred in support of his case to Mr Charlie Fitzgibbon, who was, for many years, Secretary of the Waterside Workers Federation of Australia and a leading figure in the Australian Council of Trade Unions. He is a very respected figure in the trade union movement. Indeed, he was so respected that when we came to office and saw the need for a very substantial revision of our industrial relations system, we established a committee of review of which he was a member. Mr Fitzgibbon was a member of the Hancock Committee of Review into Australian Industrial Relations Law and Systems. Mr Fitzgibbon, as a member of the Hancock Committee, has made clear what he believes needs to be done to reform the industrial relations structure in this country. The report to which he was a signatory is the basis of wide-ranging changes to our industrial relations system which will be introduced by this Government by the end of this year. Those wide-ranging changes to our industrial relations structure will be very important changes indeed, but they will not be of the kind that the Opposition would want because we do not live in the fairyland in which the Opposition lives. People such as Mr Fitzgibbon are not going around this country saying: `We need to scrap or totally emasculate the arbitration system-in the way the Opposition would'. Mr N.A. Brown —Nor have we. We have not said that. What nonsense. Mr WILLIS —The honourable member said that he would emasculate it. Mr N.A. Brown —What rot. Mr WILLIS —The honourable member implied that he would emasculate it most severely. He said that he would take actions which would destroy it. If that is not what emasculation means, perhaps the Deputy Leader of the Opposition ought to study his dictionary. Mr DEPUTY SPEAKER(Mr Leo McLeay) —Order! The Deputy Leader of the Opposition was heard in silence. He should hear the Minister in silence. Mr Donald Cameron —There are no Labor people here to make a noise. Mr DEPUTY SPEAKER —Order! I warn the honourable member for Moreton. He was asked to remain silent earlier. I now warn him. Mr WILLIS —As I was saying, we will introduce wide-ranging changes to the industrial relations system. Those changes will be profound and important, and they will enable this country to have a more efficient industrial relations system in the future, one which will build on the enormous record which this Government has already achieved in industrial relations. This Government has presided over a period in which there has been a dramatic reduction in the level of industrial disputation, a dramatic reduction from what the previous Government could achieve in decades in office when it puddled around with an inefficient economy, totally unable to produce a relatively respectable level of industrial disputation. It took this Government's election to office to bring about a dramatic reduction in industrial disputation. We are certainly not complacent about that reduction; we are seeking to improve on that record. Our record is particularly impressive given the fact that it was put together in a period of very strong economic growth-a time which would, if one looks at the years of Liberal governments, normally see high levels of industrial disputation. In fact, we produced the opposite. Also, as the Prime Minister said in Question Time today, with the reduction in industrial disputation we have had a reduction in real wages of about 5 per cent during three years of strong economic growth. That never looked like being achieved under previous governments, when strong periods of economic growth always meant rising real wages. We do not have to say in any way that we are ashamed of our industrial relations policy. Our industrial relations policy of the past three years has been highly successful by the standards not only of the previous Government but of any government in the Western world, particularly if one looks at our wages outcome and the context in which that was achieved. We reject this matter of public importance. It is absurd to say that the Government's approach is belated and inadequate. The conference to be held on Wednesday in Melbourne will be a substantial step towards enabling us to eliminate restrictive work practices in this country. It is being welcomed by all parties-by the Business Council of Australia, the Confederation of Australian Industry and the Australian Council of Trade Unions. The conference will not be just some pointless talkfest; rather, it is recognised by all parties to be a very important step towards our taking further measures to eliminate restrictive work practices in this country. Mr DEPUTY SPEAKER(Mr Leo McLeay) —Order! The honourable member's time has expired. Mr MILES(Braddon)(3.26) —The record that this Hawke Government is building is littered with indecision, U-turns and broken promises. As the honourable member for Menzies (Mr N.A. Brown) so eloquently has said today, the Prime Minister (Mr Hawke) has undergone a death-bed conversion-a conversion from arguing vehemently for excessive wage demands and often ludicrous work conditions to calling for restrictive work practices to be removed. One wonders what a conversion for this Prime Minister really means. We have seen similar conversions often since he has taken office. Just as the decision to have a tax summit was made on the run, we now have the work practices summit decision made on the run. It was not made by the leadership of the Government, it was made as a result of prodding by people outside the Government. The Government has been forced into this situation, not because it believes in it but because industry has made the decision that the time has come to force this Government to change things. It is not a willing, happy and enthusiastic Prime Minister who has called this summit. It is a summit of government, unions, traitors, thugs, drones, lunatics and troglodytes. Such are the words used by this Government to describe business leaders. It will be a very harmonious type of meeting, which obviously this Prime Minister wants to have, when the people he has called to this summit have been described in those terms. Such comments are made all the more interesting when one of the people to whom the Prime Minister referred as a political troglodyte and an economic lunatic managed a company whose profits increased from $27.2m to $50.2m in the year to 30 June. This contrasts with the record of this Government, which has presided over Budget deficits totalling in excess of $23 billion and the highest real interest rate since the Great Depression, and it is the highest taxing government since World War II. It is not the managers of companies to whom the term `economic lunatics' applies; it is to the Hawke Government. The record stands to show that that is the case. The coalition published its industrial relations policy in May this year. It addressed the rigidities of the labour market and the inflexibility of the Australian Conciliation and Arbitration Commission-a Commission that could well be described by many employers as the humiliation and arbitration commission, because it so often caves in to big union pressure. It has humiliated employers, particularly small businesses, to the point where many have closed because of totally ludicrous on-cost wage structures. Not only did the coalition recognise months ago that the rigid and strait-jacket approach to industrial relations matters had to go, but also so did most industry associations. We have already heard what Moody's Investor Services Inc. said about Australia when it downgraded our AAA credit rating. The Government has hung on to an 80-year-old industrial relations structure that is now outdated. It has done so because it wants to protect the big power blocks and the officials of the Australian Council of Trade Unions. Those officials want to maintain a forum which they have corrupted and twisted to serve their own ends. That is why they want to maintain the system. Now let us look at some of the costs and practices that have grown up-not just happened, but have been argued for, demanded and supported in the past by people such as the Prime Minister. When the Minister at the table talks about what coalition governments have done over the last 30 years, he should remember who was the head of the ACTU when the biggest outburst in these sorts of things occurred. We all know who that was; it was the Prime Minister of Australia and he is now suffering the consequences of what he vehemently argued for in the 1970s. Let us take just one particular example of the National Building Trades Award. It is very interesting to look at the additional costs under that award. I will run through them. The annual leave entitlement is four weeks; sick leave, two weeks; public holidays, two weeks; the effect of smokos, two weeks; and idle wet weather time, four weeks. The total is 14 weeks. That means that in Australia there is 38 weeks of work for 52 weeks of pay. That is not all. There are additional costs on top of wages that employers have to pay under that award. The annual leave loading of 17 1/2 per cent is equivalent to 0.7 week's wages; long service leave is equivalent to 1.04 weeks' wages; payroll tax is equivalent to 3.17 weeks' wages and workers' compensation is equivalent to 14.85 weeks' wages. As the honourable member has said, we could go on and add the fringe benefits tax and other things, but the total is 19.76 weeks. Many of these on-costs occurred when the ACTU was led by Bob Hawke, the now Prime Minister of Australia. The result is that for every 1.9 weeks costs there is only one week worked. That is what the employers are faced with and it is no wonder that Australia is not competitive. When these imposts were fought for so stridently and vehemently with the blunt use of radical trade union power, as I have said before, the Prime Minister was the President of the ACTU. Now that he is on the receiving end of the outcomes of those practices, along with many others, he has the audacity to orchestrate the agenda of the coming work practices summit to include management practices. The question must be asked: Who is responsible for the management of our private companies? Heaven forbid that a government, of any political persuasion, should meddle with the management of the private sector of this economy, let alone the Hawke Government. Do honourable members remember Bourke's store and ACTU-Solo? I wonder what management skills were used there. Yet this Government has the audacity to talk of drones, lunatics, troglodytes and management practices. The Government must be joking, naive or foolish; most likely all three. The Director-General of the Confederation of Australian Industry has stated that he does not understand what is meant by the need to improve management practices and he has quite logically clarified that management does not enter into the question of work practices. Management is about producing more wealth and greater productivity, whereas restrictive work practices are debilitating and impede productivity and greater wealth. Management must be allowed to manage. As mentioned already in this debate, restrictive work practices are legion. In August a telex, printed in the Australian, highlighted some of those restrictive work practices. I will outline a few of those work prcatices that were mentioned. This helps to focus on this issue, which has been raised by people such as Stan Wallis, a spokesman for the Business Council of Australia, and by Peko-Wallsend Ltd. It stated: For some unions a general foreman cannot directly pass an instruction to an employee. In other words, the foreman cannot have direct control over the people for whom he is responsible. It went on: Instructions must go through the leading hand, who is elected by his workmates. The chosen leading hand may not be the most competent person for the job. Another illustration of restrictive work practices is: Dust suppression on roads is undertaken by watering. The unions insist that the water trucks operate even when it is raining. The unions have also refused to allow the company to introduce dust suppression agents commonly used throughout the industry to reduce watering and improve road surfaces. . . . . Two persons must be employed for each piece of mobile equipment used on stockpiles in the port area. One person operates the machine while the other rests- I guess he has a good sleep while he is waiting on the job- They change over every 2 hours. The future for Australia to have a dynamic, internationally competitive and responsive economy lies in harnessing the human resources of employees and employers. These resources include creativity, inventiveness, motivation, entrepreneurial vision, skill, knowledge and a desire to better family lifestyles. It is going to be the coalition's handling of the industrial relations area that will put those things into practice in this great country of ours. Business enterprises centred around families must be given a greater opportunity to participate meaningfully with their employees and to develop legally binding agreements that meet the unique needs of each enterprise. It is time for Australia to meet the challenge of the future by moving gradually but steadily towards a system that gives greater control of industrial matters to employees and employers at the enterprise level, and which enhances the removal of restrictive work practices. It is sad for Australia that the Hawke Labor Government has had to be prodded, pushed and dragged by the neck to recognise the debilitating nature of the hundreds of work practices in this country. Mr DEPUTY SPEAKER —Order! The honourable member's time has expired. Mr SAUNDERSON(Aston)(3.37) —I have some pleasure in standing up to speak on this matter of public importance, but I must say that I am quite amazed to find the Opposition put this matter up for debate as it has constantly shown that it has absolutely no idea at all of industrial relations. Certainly the Opposition has shown that it does not understand anything about the private enterprise system, industrial affairs and the management of this country. The Opposition comes in here and criticises what it calls the rigid industrial practice and industrial systems we have in Australia. We really have to look at what it talks about because when in opposition it has always been the catchcry of those opposite that they will fix everything up. However, honourable members opposite were in government for 30 of the last 37 years. They presided over this arbitration system and when in government they made no attempts at all to really correct the system in line with what they saw as its shortcomings. The reality is that in those 30 years when the Opposition was in government, we were not governed. The previous Government watched over what happened. It it worked out all right, the previous Government took the credit for it, but if it did not work out, it simply blamed the unions, the employees or anybody-it had to be somebody's fault; it could not be its fault because it was not governing. The Opposition has always been incompetent. What highlights the fact that the Opposition does not know what is going on is that most of the restrictive work practices are not as a result of the rigid industrial system but as a result of the flexibility of the system. Those work practices in the main have resulted from agreements between employers and employees. In the main, they are not in the awards of trade unions. They are not things that were agreed to by Australian Conciliation and Arbitration Commission commissioners who did not care what came before them and who just agreed to any work practices being introduced. In fact, they were part of local agreements between managers and employees. In many instances the managers were absolutely irresponsible in agreeing to those practices but they did not care because they were good times, they could still make a quid and as long as they could do somebody else out of business, that is all they cared about. They did not have any long term concerns for the industry overall. Because they had a government that really was not interested in industrial affairs, they knew that they would be able to go to the Government and say: `Look, the overheads have gone up a bit, it is a bit hard to compete, what about upping the bounty or giving us a bit more protection here and there?'. They knew they would get it because they had a government that did not care or take an interest in those things. This Government has recognised all along that there are problems in industry. We have set out to look at the areas where industry has been in trouble. When we have examined them and introduced changes we have recognised the need for existing work practices to be examined and improved upon. Nobody is suggesting that there is a fixed system which cannot be examined. It concerns me that the honourable member for Braddon (Mr Miles) said that he sees restrictive work practices as being things such as annual leave, long service leave, sick leave and leave loading. They are all restrictive work practices which he wants us to open up. All I can say is that during the long period of industrial development that has gone on right around the world, many restrictive work practices have been introduced. For instance we abolished slave labour and the exploitation of children. I hope that people are not really saying that we want to go back to that era. Obviously, benefits exist in any employment situation. The fact that someone is paid wages can be interpreted as a restrictive work practice because it restricts the profit an employer may make. Obviously, we are not talking about that. We are talking about some of the conditions that have been agreed to because of attempts to get around the system, where local employers have fallen for the three-card trick and agreed to the conditions on a short term basis. Our attack on those who have recently attempted to change the system was also mentioned. The example of industrial relations processes given by the Leader of the Opposition (Mr Howard) was to have a thousand Mudginberris all over the place-little bushfires everywhere. He does not recognise that the major problem our exporters have is convincing countries that we have a stable country and an industrial situation which is not volatile. The Leader of the Opposition wants a thousand bushfires. Everyone would look at us and see that there were strikes everywhere, and that no system was operating at all. The attack that took place over the management of the Robe River situation was also mentioned. We have to consider who was responsible and who was irresponsible in that action. This country was under stress in its export markets. We had a delegation in Japan attempting to convince Japanese importers that we were a country that could be relied upon. What does the manager of Peko-Wallsend Ltd do? He decides that he will attack restrictive work practices. So he sacks everybody on the spot. How do the Japanese feel when we are over there telling them that we are reliable exporters and the manager of one of our big companies says: `I have had it, I am a bit peeved about these restrictive work practices; you are all sacked and we will start again.'? It was irresponsibility of the highest order and damaging to this country when the manager of Peko-Wallsend already knew-as did most iron ore exporters and others-that the Japanese were looking for other markets. He already knew that other competitors were prepared to take over the market. Yet he instigated an action which has damaged our record overseas and which will reflect later on our export earnings. At the same time the manager of Peko-Wallsend was whinging about restrictive work practices, as someone pointed out, his company made record profits. Nobody is suggesting that we should not examine restrictive work practices or that there are not some practices that are now outmoded and no longer required because new technology has taken over. But the way to resolve the problem is not by disputation. The way to resolve it is through proper consultative processes. That is what this Government is talking about. We have already highlighted the problem. For the three years we have been in office we have recognised it as a problem. In the car industry and in all the other industries we have been looking at, every time we have talked to both the unions and management we have been saying: `You have to look at your practices and at making yourself more competitive by getting rid of the practices that are no longer required'. We now have both management and the trade union movement coming together and talking about the need for change. So a scenario is being developed in which people are prepared to talk about the problem, and things can be done amicably. We will not achieve anything by confrontation. We also have to recognise, as have many of the business councils, that it is not just the employees-not just the people on the work floor-who are operating restrictive work practices. I have not heard any Opposition member talking about the old business lunch that goes for most of the afternoon, about the days on the golf course for the managers, about the free holidays or about the fact that the manager can have his kids' private schooling paid for and all that sort of stuff. No one is talking about those costs or those restrictive work practices. We have to consider the practices right throughout the industry-not just on the employees' side. Many employee practices were introduced for safety reasons, whereas many management practices are simply designed to give management a good life. It has to be accepted as a fact of life by everybody that the problem is across the board and not just within one little group in an industry. The Deputy Leader of the Opposition (Mr N.A. Brown) attempted to make some play out of the fact that one of the candidates for the Senate from Victoria is an ex-member of the Communist Party. What he failed to recognise were the many years of service that person has given to the trade union movement and the fact that that person's recognition of the real problems in the industry and his ability to have his union co-operate, not only with the Government but also with management, has enabled people in that industry to retain their jobs and the industry to improve its competitive position. A person like that would contribute far more in the other chamber than anyone in the Opposition. Mr DEPUTY SPEAKER(Mr Leo McLeay) —Order! The honourable member's time has expired. The debate is concluded. Mr WEST(Cunningham-Minister for Housing and Construction)(3.47) —I move: That, in accordance with the provisions of the Public Works Committee Act 1969, the following proposed work be referred to the Parliamentary Standing Committee on Public Works for consideration and report: Construction of a new wharf and seamanship school at HMAS Cerberus, Crib Point, Victoria. The proposed work is to redevelop the existing waterfront area at HMAS Cerberus to provide new maritime facilities and a seamanship training school. The new wharf and seamanship school are the first phase of a staged redevelopment of the facilities at HMAS Cerberus which is the principal training establishment for Royal Australian Navy personnel. The existing facilities in the waterfront area are considered unsatisfactory for the operation and training activities of the seamanship school. The timber wharves were constructed in 1920 but are structurally unsafe and were condemned in 1981. The nine buildings that accommodate the school were constructed some 60 years ago or provided as temporary accommodation and are in sub-standard condition. The Hann's Inlet channel and turning basin at the wharves requires to be dredged as this has not been done since 1970 and the patrol boats are unable to manoeuvre at low tides. The work proposed under this submission comprises, provision of temporary accommodation for seamanship training, demolition of existing structures and buildings, dredging of Hann's Inlet and spoil disposal, construction of wharf, marina and boat ramp, repair and replacement of channel marker piles, construction of seamanship training school and provision of associated engineering services. The estimated cost of the proposed work is $13.5m at July 1986 prices. It is intended that construction will commence by July 1987 and be completed by the end of 1989. I commend the honourable member for Dunkley (Mr Chynoweth), who has, over a period, supported and pressed for the construction of these facilities. I table plans of the proposed work and commend the motion to the House. Mr BEALE(Deakin)(3.50) —I thank the Minister for Housing and Construction (Mr West) for making the information available to the Opposition. The Opposition does not oppose the motion. I draw the Minister's attention to the fact that he said that the estimated cost of the proposed work was $13.5m, whereas page 27 of the Estimates document says that the estimated cost of the work is $13.9m. We on this side of the House are very well aware of how this Government's numbers blow out. We know that this year's estimated Budget deficit of $3.5 billion will be a great deal higher than that. But rarely does a $400,000 blow-out occur instantaneously, as has occurred between the time that the Minister moved his motion and a reading of the Estimates. I ask the Minister to give some attention as to why the difference occurs between the number that he has given and those which appear in the Budget Estimates. The Minister has said that work will commence in July 1987. That is something of a coincidence because, with the Government's record on deferrals, it looks as though this project is simply another one that has been pushed over into next year. An amount of $100,000 is to be spent this year, and presumably the bulk will be spent in following years. That is yet another indication of how the Government's budgetary policy has gone off the rails. It is deferring a whole series of projects to buy a little time this year, but that will give it a great deal of trouble next year. I shall refer to a few of those deferrals. The Government has deferred the indexation of pensions, the poverty trap measures the-- Mr Hand —What is going on? Mr BEALE —The honourable member for Melbourne asks: `What is going on?' Some economic sense is being pointed out to him for a change. I suggest he listen to it. Mr DEPUTY SPEAKER(Mr Leo McLeay) — Order! The honourable member for Deakin might stick to the matter before the Chair, which is the referral of a matter to the Public Works Committee. The honourable member for Melbourne might, again, cease interjecting, otherwise he might have to consider his position. Mr BEALE —The Government has also deferred expenditure on the Museum of Australia, Parliament House, and it has made some-- Mr DEPUTY SPEAKER —Order! I asked the honourable member for Deakin to stick to the matter before the Chair, which is the referral of a matter to the Public Works Committee. We are not yet debating the Appropriation Bill. Mr BEALE —I beg your pardon, Mr Deputy Speaker. I thought that you were asking the honourable member for Melbourne (Mr Hand) to keep quiet. To us, this matter looks like something of a fiddle. It is yet another deferral of public expenditures into next year. The whole time schedule looks suspicious. I have no doubt that the chickens will come home to roost on this matter. Question resolved in the affirmative. Mr WEST(Cunningham-Minister for Housing and Construction)(3.54) —I move: That, in accordance with the provisions of the Public Works Committee Act 1969, the following proposed work be referred to the Parliamentary Standing Committee on Public Works for consideration and report: Development of HMAS Albatross, Nowra, New South Wales, stage 1. The proposed work is for the construction of new facilities to support a squadron of Sikorsky Seahawk helicopters at HMAS Albatross. The proposed work also includes the development and upgrading of existing facilities for the effective and efficient operation of the base. The primary function of HMAS Albatross is to provide base support for all Royal Australian Navy aircraft. The Navy is being equipped with the Seahawk helicopters for the FFG destroyers and the base squadron of helicopters is required to provide support to the fleet helicopters. The first helicopter is scheduled for delivery in March 1988. The work proposed under this submission comprises: A new building to house a flight simulator and aircraft weapons system support centre; a maintenance facility; extensions to the avionics workshops building; a new building to house the Royal Australian Navy tactical electronic warfare support centre; improvements to the fire protection in hangars; and upgrading of base services. The estimated cost of the proposal is $19.2m at August 1986 prices. It is intended that construction commence early in 1987 and that it will be completed by late 1988. I table plans of the proposed work and commend the motion to the House. Mr BEALE(Deakin)(3.56) —I again thank the Minister for Housing and Construction (Mr West) for making this information available to me. The Opposition does not oppose the motion. However, I draw the Minister's attention to what appears to be an inconsistency in the figures that he has given us today compared with those contained in the Estimates. The Minister has stated that the estimated cost of the proposal is $19.2m. The amount shown in the Estimates for what is described as `facilities for destroyer utility helicopter' is $6.1m. The only other reference in the Estimates does not appear under the naval area. It appears under Department of Defence items. It amounts to approximately $312,000 for HMAS Albatross housing improvements in 1985-86. I ask the Minister to explain that and to ensure that the Public Works Committee understands that the money that is suggested to have been set aside for the project includes more than is shown in the Budget Estimates. Furthermore, of the $6.1m estimated cost in the Budget Estimates, which would be the unexpended balance as at 30 June 1986, only $200,000 is estimated to be expended in the current year. The Minister has said that the construction will commence early in 1987. I fail to see how, on a $19.2m project, with construction beginning early in calendar year 1987, only $200,000 can be spent in the current year. I do not know what the Minister is up to, but I believe that he has an obligation to clarify for this House exactly what he means, and he should ensure that the Public Works Committee understands what it is looking at. Furthermore, we see from the Estimates that if the Government is to spend only $200,000 out of an estimated $6.1m on the project in the current year, it is fiddling the books. Again, the Government has deliberately pushed out the major expenditure on the project to buy itself some time to contain the Budget deficit in the current year. The Opposition makes the point to the Government that the consistent deferral of such projects, as with the deferral of the indexation of pensions, poverty trap measures and certain capital works, will only lead us into a position in which our economic crisis will be much greater, if that is possible, next year than it will be in the current year. Question resolved in the affirmative. Debate resumed from 19 August, on motion by Mr Hurford: That the Bills be now read a second time. Mr DEPUTY SPEAKER(Mr Leo McLeay) —I understand that it is the wish of the House to consider orders of the day Nos 2 and 3 concurrently with order of the day No. 1. There being no objection, the Chair will allow that course of action. Mr CARLTON(Mackellar)(4.00) —The purpose of these three Bills quite simply is to increase sales tax by $358m in a full year. These are yet more of those measures that this high-taxing Government is bringing in to increase taxes and try to reduce the Budget deficit. It is part of the $1.5 billion of extra taxes levied in this Budget. The need for these measures arises from the failure of the Government to cut expenditure satisfactorily. That should be the main means of reducing the Budget deficit. Of the $2.2 billion deficit reduction in this Budget, $1.5 billion came from extra taxation revenues and $0.6 billion came from increased Reserve Bank of Australia profits from trading in Australian dollars. This is another example of the failure of the Government, first, to tackle the problem of expenditure reduction and, secondly, to reform the Australian taxation system. The Prime Minister (Mr Hawke) stated last week that he saw taxation as being a key issue in the next Federal election. He could not be more right. For once, the Prime Minister is exactly right. The failure of this Government to lower taxes and to reform the taxation system will be a major issue in the next election campaign. The additional $358m embodied in this set of measures is yet another part of the Government's failure to honour its trilogy commitment on taxation. Before the 1984 election, the Prime Minister promised that taxation would not exceed 25 per cent of gross domestic product through the course of this Parliament. That pledge has already been broken once. In 1985-86, taxation revenues got up to 25.2 per cent of GDP, and that represented an extra $400m in taxes on the Australian people. For the year 1986-87-we have already entered that year and it is the one to which the Budget applies-the forecast of taxation as a percentage of GDP is 25.5 per cent; that is, half of a per cent higher than the trilogy commitment of the last election or, in dollar terms, $1,400m extra in taxes beyond the promise of the Prime Minister. This legislation, together with other legislation on taxation, highlights clearly the failure of the National Taxation Summit, the Government's tax reform package, and its failure to meet its election promises. It also demonstrates the ad hoc nature of the Government's decision-making process. It has made a number of on-the-run decisions in its Budget formulation which are very damaging to Australian industries. Included in the Bills are new imposts on wine, fruit juices and flavoured milk, which will cause great harm to the relevant industries. We do not like this legislation. Our priorities would be different. The Government has been gutless on expenditure restraint. We would have cut spending more. This legislation is a Budget revenue-raising measure. The Australian Democrats no doubt will seek to amend it to enhance their popularity with the affected groups. However, although we can amend to reduce revenues, as an opposition we have no power to force through spending cuts. Thus we have the capacity to expand the deficit, but not to close it. We would therefore be acting irresponsibly if we opposed this measure. We do not like it, but we will not oppose it. Let me look at some of the particular measures in these Bills, and first at the increase in the tax on wine, from 10 per cent to 20 per cent. I remind honourable members that the Government made the 1983 election promise not to impose a wine tax at all. This Government got into power on the understanding that it would not impose such a tax. In the 1984 Budget, it introduced a tax of 10 per cent, which had a very serious effect on that industry. Here again, two years later, the Government has chosen to ignore the stagnation of wine sales growth. We have seen an annual growth rate of only 1.5 per cent for the 1985-86 financial year-the lowest since 1970. It has ignored high wine stocks, depressed prices, low wine industry profitability and the financial crisis of thousands of wine grape growers. The Government has also ignored the findings of its own Inquiry into the Wine and Grape Industries in April last year-the McKay Inquiry-which recommended that there should be no increase in the sales tax until sufficient time has gone by to measure the impact of the present tax; that is, at least two or three years. During that period the industry introduced wine coolers, which gave a substantial boost to certain sections of the industry, to offset the ill effects of the earlier tax. But wine coolers, too, are to be subject to this additional tax. Having set up an inquiry to look at the effects of the original imposition of a 10 per cent tax on wine, the Government has ignored the findings and recommendations of that inquiry and has introduced the double whammy-a 20 per cent tax on an industry that is reeling. It has to be said that it is totally illogical for the Government to be providing money for a vine pull scheme to allow grape growers to adjust out of the industry while at the same time increasing the financial pressure on the wine industry through increased taxation. In the last financial year, $1.3m of taxpayers' funds were set aside for the vine pull program, and in the current Budget no less than $5.3m has been set aside for that adjustment process. It is quite illogical to provide that money for adjustment in the industry, acknowledging its very difficult position, and then to double the tax on it and put it into an extremely difficult position. The doubling of the tax also runs contrary to the Government's policy of encouraging exports. This is an export industry. By doubling the pressure of taxation on it at this time the Government reduces the ability of the industry to fund wine export marketing and promotion. Before the Budget, the Government was again told that, for wine exports to grow, the domestic industry must be healthy and profitable. Overall, this imposition of a double tax has shattered any belief that rural producers might have had that the statement on rural industry by the Minister for Primary Industry (Mr Kerin) earlier this year had any real meaning. They now know, as a result of this and other measures, that this Government really hates the people in the bush. It is not standing by them in their moment of difficulty. I go on to another rural industry-the citrus growing industry. Fruit juices are to be subject to a 10 per cent tax for the first time. This is a shameful measure at a time when things are very difficult in this area. The retail price of fruit juice products will be increased, and this measure will certainly result in reduced consumer demand at a time of great economic difficulty. It will reduce by 50 per cent the incentive for manufacturers to use Australian fruit juices in their products, particularly fruit juice drinks and fruit juice cordials. The decision could encourage manufacturers to increase their use of cheaper imported juices and pay the 20 per cents sales tax on those in preference to using Australian juices and paying the 10 per cent tax. This could have a dramatic effect on the orange juice and lemon juice sectors of the industry, where a large amount of product is used in drinks and cordials, and it could result in the loss of fruit sales by growers and reduced employment in the industry. The Government's decision is a further blow to citrus growers and processors, who are already suffering hardship in the current season due to the collapse of world orange juice prices and a dramatic fall in incomes from both the processing and domestic fresh fruit markets. These are clearly ad hoc decisions made under the pressure of bringing together a Budget in which the Government was too scared to make decent expenditure cuts. It was looking round frantically for additional revenue measures, and it happened to chance on these unfortunate industries. The third one I would like to mention is the dairy industry. The dairy industry has now had a 10 per cent tax imposed on flavoured packaged milk. Mr Lloyd —They are just milking the industry. Mr CARLTON —Just milking the industry, as my friend the honourable member for Murray so correctly points out. This industry, heaven forbid, has a $200m adjustment program. As if we did not have enough difficulties of adjustment within the industry already, in the dairy industry, at a time when those adjustments are having to be made, with very considerable difficulties in many areas, an additional tax has been imposed on flavoured packaged milk. Mr Hand —Tell us about fraud in the dairy industry. Mr CARLTON —The next area is one of those areas which the Labor Party simply cannot keep its fingers out of. It has decided to single out high priced cars for an increase in sales tax. Mr Robert Brown —I will have something to say about that, too. Mr CARLTON —I know that Moscow corner would probably be very pleased about this, and even my good friend the chairman of what passes for the Government back bench economy committee-- Mr Robert Brown —The economic committee. Mr Hand —Tell us; where would you make the cuts, Jim? Come on. Mr CARLTON —Even he would support this particular measure. This is an increase from 20 to 30 per cent-- Mr DEPUTY SPEAKER(Mr Mildren) —Order! I think the honourable member for Mackellar can do without the interjections. I also ask the honourable member for Mackellar not to incite members on my right. Mr CARLTON —I will not follow the lead of the National Executive of the Labor Party in that respect, Mr Deputy Speaker. From Budget night, sales tax on luxury cars and station-wagons was increased from 20 to 30 per cent. The vehicles affected were those with prices above $29,646. The expected revenue yield is $28m. That is most unlikely to occur because the sales of those vehicles will, of course, fall. The Labor Party's great envy spasm, which does not seem to extend to the collection of First Empire clocks, does extend to the purchase, apparently, of BMW and other motor vehicles. The envy principle overcomes economic common sense. The motor industries employ many people. They are experiencing extraordinarily great difficulty at the moment. Because of the failure of the economic policies of the Hawke Government there has been a 40 per cent depreciation of the Australian dollar on the trade weighted index, and over a 50 per cent depreciation of the Australian dollar against the Japanese yen. This has had a devastating effect on the motor car industry. I refer not only to fully imported cars but also to the domestic industry, because a lot of components are imported. In addition, because of the tariff walls, the domestic industry puts its prices up to get closer to the imported car prices. So here we have an industry which is reeling because of the heavy depreciation of the Australian dollar, increased sale prices, an earlier increase in sales tax of about one per cent last year, the introduction of lead free petrol engines and, of course, the notorious fringe benefits tax, which had a devastating effect on the motor industry. The Premier of South Australia-a Labor Premier-made personal representations to this Government in order to try to have the fringe benefits tax on motor cars withdrawn because of the devastating effects it would have on the motor industry in his State. So here we have yet another industry that has been devastated by a whole series of government decisions. The Government is now loading an additional impost at the top end of the market-which still employs people in Australia-because of the overall envy principle which is present within the Labor Party. The final area affecting industry that I want to mention is the imposition of tax on computer software. The Treasurer (Mr Keating) in his Budget Speech stated: Avoidance of sales tax occurs through the device of selling only the discs and tapes on which computer software is embodied and licensing the consumer to use the software itself; sales tax is then payable only on the value of the discs, which is a small fraction of the total price. So the sales tax law is to be amended to include the value of the software for tax purposes in the assessment of tax. That is all very well, but this will raise an extra $80m in tax from business during this financial year. As can be seen from the revenue estimates, it is a substantial item. It will have a substantial impact on business. It will also affect the technological development of new software in Australia. Software can be a significant business cost. For example, the price of an accounting package ranges from about $3,000 to $35,000 and beyond. Some software can cost over $100,000. So an extra 20 per cent represents a substantial price increase. Of course, it is an increase in the price of the inputs into export-competing businesses in Australia. Therefore, it cannot be overlooked. The overall issue is that this Budget contains measures which will collect an extra $358m in wholesale sales tax. In the package which was announced on 19 September last year an additional $110m in wholesale sales tax was added. So nearly half a billion dollars in extra wholesale sales tax will be collected-a tax which the Treasurer said was a bad tax. That is really what we are facing up to. The taxation White Paper which was issued before the National Taxation Summit last year states: The existing wholesale sales tax is a narrowly-based tax which applies only to selected consumption goods and some intermediate goods. It does not cover any services, and it has many anomalies and inconsistencies . . . Its lack of comprehensiveness in coverage, and its multiple tax rate structure, lead to a number of problems . . . There appears a full page of problems concerning wholesale sales tax that the Treasurer has outlined in his paper. Later, he states: The inherent and introduced limitations of the wholesale sales tax constitute strong arguments for its replacement by a new broad-based tax. At the National Taxation Summit the Treasurer followed up this theme by saying : There was a strong theme, nevertheless, that option A- that is the terrible package that has been introduced- could fully meet our tax reform objectives . . . We certainly agree with that. The Treasurer also said: The Government believes the optimum route is to shift the huge preponderant dependency upon the income tax system to a base in consumption. That is what he said in his speech to the Taxation Summit in July 1985. There was a lot of discussion on these proposals. Towards the end of the discussion the Treasurer said: It has to be understood that by cutting out the broad-based consumption tax we cut out the heart of the package and with it the opportunity for significant increases in benefits and reductions in tax rates . . . There is no getting away from the fact that whatever proves to be feasible in the income tax base broadening, it is only by broadening the indirect tax that really substantial changes can be made. We all know what the outcome was. The Treasurer failed in his attempt to get the Government to agree to a broadly based indirect tax. He was lumbered with the wholesale sales tax. Following that, he introduced an increase in that wholesale sales tax-in his own words, this thoroughly unsatisfactory tax-of $110m. Now it has been further increased by $358m-a total of $468m. Of course, this adds about half a percentage point to inflation. The fundamental failure and the fundamental reason why he is having to do this at this stage is that the Government has simply failed to cut expenditure in any meaningful way. The Prime Minister is quite correct. Taxation will be a major issue in the next election. There is a need to reduce the top marginal rates of income tax. There is a need to extend the indirect tax base. There is a need to remove the anti-business and anti-investment taxes that have been introduced by this Government-the fringe benefits tax, the capital gains tax, and all those other taxes that have reduced the capacity of Australian industry to invest. But the first and prime requirement for doing those things is to make substantial reductions in government expenditure. That is something that this Government, the highest taxing government in Australia's history, has failed signally to do. Indeed, it has even broken its most recent promise-the tax trilogy promise-by increasing taxes above its trilogy commitment by $1,400m a year. That is yet another failure on the Government's part to meet its commitment to the Australian people. I shall summarise the position because I do not wish to take any more time. I am aware that my colleagues wish to talk about the specific industries that will be affected by these measures. We do not like the Bill, which does not follow the priorities that we would follow in office. We deplore the Bill's effect on the industries that will suffer under its provisions, especially the wine industry, the citrus growers, the dairy industry, the motor industry and the computer software industry. These are the main industries that will be hit by this measure. We shall not, however, be collaborating with the Australian Democrats to try to amend or reject the Bill in the Senate. As an Opposition we can, with the Democrats, widen the Budget deficit by knocking off tax measures, but we cannot close it by reducing expenditures. Only a government can do that, not an Opposition. For that reason, and that reason alone, we shall not be opposing these particular measures. Mr LEE(Dobell)(4.21) —The Sales Tax (Exemptions and Classifications) Amendment Bill imposes an increase in the sales tax which applies to wines and other products produced from grapes. I would have expected an overflowing gallery in the National Party corner of the chamber, and I am amazed that not one National Party member has come in to listen to the shadow Treasurer, the honourable member for Mackellar (Mr Carlton). We have only one of the shadow Treasurer's colleagues in the chamber. (Quorum formed) It is pleasing that I can say that there is now one member of the National Party in the chamber. When I made my earlier statement not one National Party member was in the chamber. It was nice of the honourable member for Murray (Mr Lloyd) to enter the chamber to call a quorum on me. If ever we wanted to know whether the shadow Treasurer was a wimp, the answer has been given to us by his speech this afternoon. He wrung his hands and said that the Opposition does not like sales tax measures but it will not oppose them. He then proceeded to give us 15 minutes of bellyaching about why he was against each of the measures which the Government has introduced in sales tax Bills. Mr Brumby —Is the honourable member a wimp or not? Mr DEPUTY SPEAKER(Mr Mildren) —Order! The honourable member for Bendigo will remain silent. Mr LEE —I tend to agree with the comments of the Treasurer (Mr Keating) in a recent Four Corners program, when he said that as far as he is concerned, wimps are out. That is my attitude on this as well. It really comes back to the Opposition trying to play politics on the tax debate. It says that it is opposed to every taxation measure which this Government introduces and says also that the Government has not done a good enough job in restraining expenditure, but whenever the Government asks the Opposition where it thinks that expenditure cuts should be made, Opposition members refuse to tell us whether they would abolish the Department of Veterans' Affairs and the Department of Sport, Recreation and Tourism and whether they would cut back the bounties that are paid to Australian manufacturing industry. They refuse to tell us which areas of rural assistance will be cut. I can assure the honourable member for Mackellar that the Australian electorate is certainly awake to its behaviour and that it will not cop it. As the honourable member for Melbourne (Mr Hand) said earlier, if the Liberal Party ever forms a government we shall be left wondering whether it will have any taxes at all. The honourable member for Mackellar said that the measures before us would raise $358m in a full year. I am not quite sure where he gets that figure. It is stated in the explanatory memorandum, which covers the three Bills, that a net revenue gain of $249m would be derived in a full year. There is some confusion there and perhaps the next Opposition speaker or a later speaker in this debate could examine the inconsistency. In any event, I hope that an Opposition speaker will examine the inconsistency and advise the House how the Opposition has come up with $358m. It is important to remember what the sales tax regime was when the Liberal-National Party went out of government. We know that it was a total mess. We had various rates: 0 per cent, 7 1/2 per cent, 10 per cent, 20 per cent and 32 1/2 per cent. We had the famous Kit-Kat problem; no one knew whether a Kit-Kat should be taxed or not. A Kit-Kat was considered to be a piece of confectionary yet an almost identical chocolate wafer biscuit was considered to be food and exempt from sales tax. I applaud the measures which the Treasurer introduced last year which tidied up the sales tax regime. We now have only 0 per cent, 10 per cent, 20 per cent and 30 per cent. This system is much simpler and it cuts the costs of administering the sales tax regime. I should like now to address one of the more controversial matters in this legislation, which is the proposal to increase sales tax on the wholesale prices of alcoholic wine and cider from the current 10 per cent to 20 per cent. As many honourable members will be aware, there is heavy discrimination in the level of taxation that is currently applied to beer and spirits. There is an excise of 76c per litre on beer and more than $23 per litre of alcohol on spirits. In many ways wine is treated favourably in comparison with beer and spirits. The average Australian tends to drink more beer than wine-I accept that that is changing-and the concessional rate that applies to wine drinkers tends to favour those on higher incomes. Two years ago, many of the grape growers suggested the Government's decision to impose a 10 per cent sales tax on wine would put the entire industry out of business. That has been shown to be a total exaggeration. The problems of the industry are the result of competition from imports, particularly from Europe, from where, in my view, wine has been dumped on the Australian market. The devaluation of the Australian dollar will, I think, make a very significant contribution towards cutting back the level of imports of wine into Australia. I am sure the Government will keep this measure under review in the coming years to ensure that there will be no significant disruption to the industry. Some members of the Opposition have suggested that it is wrong for the Government to impose a 10 per cent sales tax on the wholesale price of flavoured milk. We should remember that the main competitors in the milk bars for flavoured and sweetened milk are things which are already subject to sales tax. Carbonated soft drinks-such as Coca Cola and Pepsi Cola and all the other things that do wonders for teeth-are subject to a 20 per cent rate of sales tax. Under this Bill Australian fruit juice drinks will also be subject to a 10 per cent sales tax. In comparison, if any school children drink packaged unflavoured milk-that is the real milk that is better for them-they will still pay no sales tax on that. I can see that there is a lot of support for that in the House this afternoon. I suppose we could expect some members of the Opposition to argue that we should not tax flavoured milk because children drink it and that we should not apply sales tax to anything which children purchase. The question then arises: Does the Opposition intend to abolish the current sales tax on soft drinks and on confectionery? Of course, it will not. We have to remember that a lot of adults, including myself sometimes, purchase flavoured milk, so it is simply illogical for the Opposition to argue that the 10 per cent sales tax on flavoured milk hits children. The Opposition could use the argument with cigarettes. Does the Opposition say that because some children purchase cigarettes we should abolish all taxes on cigarettes? Mr Brumby —That is what they are saying; that is their logic. Mr LEE —As the honourable member for Bendigo suggests, that is the logic of the arguments the Opposition is putting forward today. Another measure in this Bill which has my very strong support is the proposal to increase sales tax on luxury motor vehicles. It applies only to vehicles with a retail price of more than approximately $29,500. I listened to the bellyaching of the honourable member for Mackellar who said it would cause great disruption to the industry. As far as I am aware the industry does not manufacture and assemble Volvos, BMWs and Mercedes-Benz in Australia and if someone decides to buy an Australian car, which is cheaper, in preference to a Mercedes or a BMW-- Mr Robert Brown —And better! Mr LEE —Not only does he get a better car, as the honourable member for Charlton suggests, but he will get a car which is assembled with more Australian labour and more Australian parts manufactured by Australian small businesses. So I think that is something which deserves the unanimous support of this chamber. On top of that I suppose some people could argue that those who currently own luxury motor vehicles have actually received a bonus from this Government because the second hand value of those existing Mercedes and BMWs will have actually increased. Because of the generous exemptions in the capital gains tax legislation of this Government they have just received a special tax free bonus. The important thing to remember is that we had to raise a certain amount of money through these sales tax measures and by imposing this increase in sales tax only on the luxury car market we will hit those with the greatest capacity to pay, and that is why this measure has the support of this side of the House. I was totally unable to understand the views of the honourable member for Mackellar on the new measures to tax computer software. This Government is introducing a measure which will smash a current tax avoidance scheme and the Opposition is saying that while Opposition members will not vote against the measure-they do not want to have their names recorded as voting against it-they will oppose it in their speeches and bellyache about it. In fact the current sales tax avoidance scheme means that sales tax is being collected only on the monetary value of the medium of the computer software. So if a person purchases a computer disk or a cassette tape with that software on it, the company provides the purchaser with a licence to use the software and sales tax is levied only on the value of the cassette or disk; and that is nowhere near the true market value of the computer software. Most of the value of the computer software is the research and development which has gone into preparing the program, its debugging and testing, and the final production. Yet the Opposition claims that this is a substantial impost on small business. I do not consider IBM Australia Ltd, Digital Equipment Corporation (Australia) Pty Ltd and NEC Australia Pty Ltd to be classified as small businesses, and I certainly think this measure is very worthwhile. It is important to note that computer software which is used in-house or which is available for export will be exempt from this new computer sales tax measure. Another important measure in this Bill, which has not had a lot of publicity, is the current exemption for the purchase of computers, calculators and other scientific instruments by people such as teachers at schools, lecturers at universities and students. This exemption was granted because of an association with some teaching institution. That is to be abolished, and I support that measure. We are still allowing purchases by the institutions concerned-universities and schools-to be exempt. But as every honourable member in this chamber should know, any teacher or lecturer at a university can make arrangements with particular retailers of computer equipment. In effect any teacher or lecturer does not have to pay sales tax on any computers or calculators which they purchase. I think that is unfair to the rest of the community, who have to pay a higher rate of tax-- Mr Brumby —They used to buy colour television sets like that, too. Mr LEE —As the honourable member for Bendigo suggests, they used to use that lurk to purchase colour television sets, but I understand action was taken to make sure that that no longer applies. I wholeheartedly support the measures which have been brought into the chamber today. It is interesting that while the Opposition does not have the courage and the guts to vote against the measure it will use the rest of the debate today to try to take cheap shots at what is an excellent piece of legislation. Mr DRUMMOND(Forrest)(4.37) —I wondered whether during this debate any member of the Australian Labor Party would show any sensitivity whatsoever to what the Government is doing by bringing in some of these measures. On Budget night all that was said about the doubling of the tax on wine was that it would reduce the heavy taxation discrimination against beer and spirit drinkers in favour of wine. The rate of sales tax on alcoholic wine and cider is to be increased from 10 per cent to the standard sales tax rates of 20 per cent. This is expected to increase revenue by 47 per cent. When the Minister Assisting the Treasurer (Mr Hurford) introduced the Sales Tax (Exemption and Classifications) Amendment Bill, he said: Given the comments already made by the Treasurer in his Budget Speech . . . I will do no more than outline briefly the changes proposed. He then went on to say: Firstly, the rate of sales tax on alcoholic wine and cider and other similar fermented alcoholic beverages is to be increased from 10 per cent to 20 per cent. I thought some honourable members might give a little more of an explanation or rationale in this debate about these new taxes, particularly those on the wine industry, to demonstrate why, other than for those reasons of some sort of parity with beer-I will go into that a little later-they disagree with the legislation. The honourable member for Dobell (Mr Lee) has given us a very sketchy look at that. I know that time in this debate is very limited. Some of the other measures, particularly the introduction of sales tax on fruit and vegetable juices and the dairy industry, will bear down very heavily on those industries which are in economic difficulty already. I know other speakers on my side of the Parliament will be enlarging on those areas, and I particularly want to talk about the wine industry. The Government has introduced a 20 per cent wholesale sales tax on wine. The wine industry did not pay any sales tax two and a half years ago. The new taxes have come at a time when the industry is suffering from structural change and when grape growers returns are at a record low level. The average real wine grape price has fallen by 30 per cent since 1983. The Bureau of Agricultural Economics has predicted that grape growers in certain areas of Australia will have a negative income next year of some $700. There is no doubt that the low rate of returns, particularly for grape growers, is a significant problem facing the industry. What Australia needs at this time is a government prepared to handle the situation with extreme sensitivity. We need to reduce overall production; we need a concerted national program to buy Australian products and find new export markets; we need a uniform code of wine standards; and we need the prompt introduction of plant variety rights. Instead, the Government has ignored the McKay report of the Inquiry into the Grape and Wine Industries and advice from the Australian Wine and Brandy Producers Association Inc. and has taken action which can only be regarded as traitorous. In the 1984-85 Budget the Government stated that it would gain an additional $62m from a 10 per cent tax on wine and cider. This year an additional $47m will be extracted from the wine industry. That means about $109m will be taxed from the industry this year. The McKay report said that there should be no increase in the sales tax until sufficient time had gone by to measure the impact of the present tax. Sufficient time has gone by to measure the impact of the tax, and it has been disastrous. The 10 per cent sales tax arising out of the 1984 Budget was largely absorbed by wine producers and retailers in an effort to maintain wine sales. Consumer price index figures prove that. During the period August 1984 to December 1985 wine prices rose an average of 6.3 per cent while the CPI, on all goods, rose by 11.2 per cent. Remember that at the same time a 10 per cent sales tax had been imposed. It may surprise many Australians that Australia is now a net wine importer, so while our premium wines are sitting on the shelves Australians are ripping off themselves by purchasing inferior expensive imports. The House may be interested to know that as recently as 1980-81 Australians imported and exported an equivalent litreage of wine. The very recent trend is an increase in our imports and a decrease in our exports, and the new wine tax has helped this disastrous trend. In value terms last year, Australia imported $51.3m worth of wine while our exports languished to $20m. There has been an encouraging upturn in the last few months, but we must remember that we are exporting only some 3 to 4 per cent of our whole production. Since the turn of the century Australia has been a net exporter of wines. Our golden years were 1925-40 when our annual exports averaged well over 15 million litres. Last year we managed to export only 8.75 million litres. I realise that wine exports are exempt from sales tax, but the Government must understand that it has driven down the domestic industry to such a level that wine companies are restricted in simple budgetary terms to pursuing new wine markets or developing different products. One cannot starve an industry of funds and then tell it to find new markets and develop new products. Exporters of today export at a very marginal rate. It is not as though we can say: `Okay, we are exporting $20 million-worth'. Maybe it costs our exporters about that to sell their wine overseas. While the Federal Government is extracting $120m annually out of the wine industry it has condescended to return $5.3m in terms of a very limited grape pull scheme. I guess that is good arithmetic for the Government but it is pretty lousy arithmetic for the wine producers. Obviously, the Government recognises the plight of the industry as it is involved in a grape pull scheme of that magnitude. All of this comes on top of the disallowance of entertainment expenses, which has had a marked effect on our premium wine producers. The depreciation of the dollar has caused a significant rise in the cost of bottles, corks, oak casks and many other items which, of necessity, are imported. The industry has had to put up with the extraordinary vacillations of this Government trying to make up its mind on grape spirit excise. The first Hawke Budget introduced an excise of $2.61 per litre of alcohol used for wine fortification. This was very destabilising, and it was not until there was a 50 per cent reduction in the production of grape spirit that the Government came to its senses and cancelled the tax. That was not the first time that Labor governments have introduced a tax and had to repeal it before it destroyed the wine industry. One can go back to the Scullin Government in the 1930s, which introduced a general sales tax of 2.5 per cent and, after a decline in white wine sales, the tax was removed. I regret that the next lesson was learned by the coalition Government when an excise of 50c per gallon was introduced in 1970. Two years later that excise was abolished as wine sales took a sharp decline. In short, the wine industry is very susceptible to changes in cost. It is what economists call an elastic commodity-low prices lead to consumption and higher prices lead to the purchase of alternative beverages. Historical evidence makes it quite obvious that high taxation can destroy this industry. As I said earlier, the wine industry throughout Australia has suffered a series of problems and about 80 per cent of those problems could have been solved if the Government had handled its policy in this area with more sensitivity. In my electorate and in the adjacent areas of Mount Barker and the Frankland River are well over 70 producing wineries. The emphasis is on the production of premium quality wines. Generally, the wineries have been financed and then subsequently supported by non-farm income. The area has been rapidly developing since the late 1960s and many wineries, in strict economic terms, have been overcapitalised and, hence, the return on capital is very low. The wineries have not had time to consolidate. These areas produce about 5,500 tonnes of grapes, and that is about one per cent of total Australian production. But that one per cent represents some of the highest quality wines produced in Australia. The Forrest region alone would employ some 350 people directly in making wine but many more would be employed in the related industries of service-retailing and tourism. One can multiply that figure to appreciate the number of people who would be so employed throughout the nation. It has been the premium quality wines from overseas that have made the inroads on the Australian market. Overall it is only about 5 per cent of our production but it is about 17 per cent of bottled premium wine. What the Government is doing with this 20 per cent wine tax is to threaten the viability of the most susceptible end of the wine market, that is, the premium wines of Australia. Many will argue about which end of the market this tax will hurt the most. Those in the greatest difficulty would probably be in the Riverland and other parts of what may be called the lower end of the market. Mr Tim Fischer —Sunraysia. Mr DRUMMOND —Sunraysia and the irrigation areas which are more concerned with bulk production and which were in extreme difficulties before this tax was considered. It is irrelevant that the 20 per cent sales tax is not paid on exports. If our wineries cannot survive on the domestic market with this new cost imposition, there would be no one left to do the exporting. While the combined Federal and State taxes act like an engorged parasite on the back of the wine industry, it will never be able to reverse our wine trade imbalance; it will be financially too weak. Currently, through State liquor taxes and the Federal Government's wholesale tax, combined governments will take $217m out of gross liquor sales of some $550m, leaving company profits-honourable members should listen to this-of $20m to $30m. That is a tax-profit ratio for the wine industry of some 8 : 1, yet we are trying to compare the wine industry with the beer industry. There are 400 different wineries, 6,000-odd different producers and thousands of people who are involved in this industry on a regional basis, yet the overall profit of wineries is some $25m to $30m. That must be compared with that of the beer industry. Recently we heard about one beer baron who intends spending $10m on advertising-equivalent to one third of the profit of the whole wine industry. The industries just do not relate. This is a regional industry. As I said, 6,000-odd people are directly employed, there are 400-odd wineries, and there are massive problems with over-supply. There is no justification for this measure. I have extended my time a little and I apologise to my colleagues. I wind up by saying that this level of taxation is primarily responsible for our wine trade demise and imbalance. It is a disgustingly high level of taxation. It is a further tax on Australia's productive sector. After the money has gone through the Government's administrative mangle we can be sure that it will be redistributed to the totally non-productive and non-job producing sector. I appeal to this Government, as I have to previous Labor governments, to repeal this tax before it does any more damage. Debate (on motion by Mr Peter Fisher) adjourned. Mr COLEMAN(Wentworth) —Mr Deputy Speaker, I wish to speak on a matter of privilege. Mr DEPUTY SPEAKER(Mr Mildren) —The honourable member may proceed. Mr COLEMAN —In a nutshell the facts are these: In the last couple of weeks I have been distributing all over Sydney a dodger inviting people to assemble at Mrs Macquarie's Chair, on Sydney Harbour, on the morning of 29 September to welcome the large group of naval vessels from the United States, the United Kingdom and other countries which will be arriving to join in the Royal Australian Navy's celebration of 75 years of service. This dodger says that I should be contacted for further information, and it gives my office phone number. It also says that there will be a welcoming flotilla organised and for information on that people should phone Michael Yabsley, my State colleague from the seat of Bligh. It gives his office phone number. Last Saturday there appeared in the `For Sale' column of the Sydney Morning Herald, at page 153, an advertisement for common bricks at $90 per thousand-which is half price, I understand- and it gives my office phone number. In the `To Rent' column on page 145 there appears an advertisement for a four-bedroom house in Liverpool with garage and phone, close to transport, for $135 a week. That is also a very keen price, and it also gives my office phone number. In another newspaper there are similar advertisements giving Michael Yabsley's phone number, as it appears in this dodger. The result is that today, all day, every five minutes, the phone has been ringing-I know there is an element of a practical joke in this, Mr Deputy Speaker, but I can assure you it is not a joke-and no constituency work has been able to be done. This has affected my constituents' problems regarding immigration, taxation, health, social service or whatever. The House will, of course, be familiar with the work of a member's office. The phone has been going all day with people asking about renting this house in Liverpool or about buying these bricks at the bargain basement price. Mr Robert Brown —How many bricks have you got? Mr COLEMAN —If the honourable member thinks it is funny, it indicates his attitude to constituency work. I can assure the House that that is not my attitude. Mr DEPUTY SPEAKER —Order! I ask the honourable member for Wentworth to ignore the interjections. Mr COLEMAN —Yes, that is best, Mr Deputy Speaker. No constituency work has been done and my office has been disrupted. The same applies to Mr Yabsley and his office. The matter is also a police matter-and it has been referred to them. But it has disrupted my office and continues to do, so my constituents are not being served as they should be and expect to be. I ask that you, Mr Deputy Speaker, refer this matter to the Committee of Privileges. I present the advertisements with the pages and dates circled. Mr DEPUTY SPEAKER —I will refer the matter raised by the honourable member to Madam Speaker for her consideration and report to the House. Debate resumed. Mr PETER FISHER(Mallee)(4.55) —The Sales Tax (Exemptions and Classifications) Amendment Bill, the Sales Tax Laws Amendment Bill and the Sales Tax Acts Amendment Bill increase sales taxes on a broad range of household appliances, gardening and industrial tools, computers, sound recordings and videos, wine and cider. A number of new items never before taxed will have sales tax levied on them by this Government. As my coalition colleagues participating in this debate will discuss the full impact of this legislation, I intend to contain my remarks to the tax on wine, fruit juice and flavoured milk. I should emphasise that this debate is being conducted not in an atmosphere of major tax reform-that is, broadly based indirect taxation with low personal tax rates-but at a time when overall government taxes are the highest ever. In our economic climate, which demands tax relief and incentive but which is getting from this Government an insatiable demand for revenue to reduce the size of the deficit, the Budget deficit should be cut by public expenditure restraint. It is inconceivable that the rural industries of dairying, viticulture and citrus growing should be further penalised at a time when domestic cost burdens are intolerable, interest rates are rising and the debt structure of these three industries is at its highest ever. This legislation does just this. The rate of sales tax on alcoholic wine and cider and other similar fermented alcoholic beverages is being increased from 10 per cent to 20 per cent. Certain presently exempt non-alcoholic beverages are to be taxed at the 10 per cent rate. These include flavoured milk, non-alcoholic wine and cider and similar beverages and, broadly, all non-carbonated fruit juice products containing not less than 25 per cent by volume of Australian fruit juice. The Australian wine industry comprises almost 7,000 growers and numerous diverse and competent wine makers. Our wine industry is part of our national culture and way of life, and should be supported. Two successive Australian Labor Party government imposts-first, a 10 per cent tax and now an increase of that tax to 20 per cent-are putting this industry at risk. Many grape growers and a number of wine makers will not survive the next 12 months. This measure will cost the industry another $109m in a full year. There will be a further erosion of domestic sales. Exports of Australian wine increased by 24.7 per cent in 1985-86, and were worth $205m, and could have been expected to continue their market consolidation. The competitiveness of those exports has now been further undermined. It is inappropriate to increase the sales tax on wine or coolers while a large degree of structural adjustment is occurring in the grape growing industry. An illustration of this is the fact that the area of grapevines not yet bearing in South Australia has almost halved in the last three years, reducing from 2,179 hectares in 1982-83 to 1,231 hectares in 1985-86. Of course similar figures can be shown for other producing regions. Unlike industries producing other alcoholic beverages, the grape and wine industries are major contributors to the economies of rural communities. The Government does not appreciate the relationship between and the dependence upon each sector. This measure will drive more producers into the dried fruit area. This point was well made in Mildura last week at an Industries Assistance Commission hearing into the citrus industry. Henry Tankard, Chairman of the Australian Dried Fruits Association, said that social and political upheaval will occur if dried fruit downturns coincide with downturns in the citrus industry. That is exactly what is happening. However, we should also remember that 70 per cent of all grapes used by the wine industry do not have any other use. Bureau of Agricultural Economics figures show that the average real return to wine grape growers has been negative for four of the last five years and is estimated to be even worse in 1986-87, with average farm income on family farms being reduced to minus $700 per farm. This is a disastrous figure and the doubling of the tax on wine will only increase the problem facing grape growers and the communities in which they live. The nature of the wine and grape industries is such that rapid adjustments cannot be made following changes in government policy. This has been noted by both the McKay Inquiry into the Grape and Wine Industries and the report of the Senate Standing Committee on Industry and Trade. The effect of the 1984 sales taxes is slowly becoming clearer and its severity on grape growers is apparent from the response to the vine pull scheme. This untimely additional tax can only add to the welfare costs of government in, and reduce the revenue from, the rural economies. There is a desperate need to look at a number of related issues to assist the wine industry-for instance, the method of taxation of wine producing stocks; tax charges on brandy, including imported produce; the interrelationship between the wine and brandy industries; quality controls and labelling requirements, and their application to imported products; wine promotion arrangements, with particular emphasis on export, which should be given incentive and encouragement; and the continuing issue of the research and development of new products and industry methods. This new tax was the last thing that should have been introduced at this time. I turn now to citrus imports. These will increase the retail price of fruit juice products, which will result in reduced consumer sales in the present difficult economic circumstances. It will reduce by 50 per cent the incentive for manufacturers to use Australian fruit juices in their products, particularly fruit juice drinks and fruit juice cordials. The decision could encourage manufacturers to increase their use of cheaper imported juices and to pay the 20 per cent sales tax in preference to using Australian fruit juices and, in this case, to pay a 10 per cent tax. This will have a dramatic effect on the navel juice and lemon juice sectors of the industry, where there is a large usage of the products in drinks and cordials. This will result in a loss of fruit sales by growers and reduced employment in the industry. As the honourable member for Fisher (Mr Slipper) said, this is a disgraceful decision, and it is a further blow to citrus processors who are already suffering hardship in the current season due to the collapse of world orange juice prices and the dramatic fall in incomes from both processing markets and domestic fresh fruit markets. The average income on a citrus property last season was $51,000. The average cost was $66,535, which left a deficit on the average citrus growing property of $15,478. Citrus production and its viability are important. It is important to the Sunraysia and Murray Valley regions of my electorate and the electorate of my colleague, the honourable member for Farrer (Mr Tim Fischer). It is essential to the electorate of my colleague from Riverina-Darling (Mr Hicks), where 30 per cent of farm output in the Murrumbidgee irrigation area comes from the citrus industry. There, as in other horticultural areas, cash flows are badly depressed. Like the tax on wine, this tax has been introduced at a time when an Industries Assistance Commission inquiry is taking place and when there has been an abrupt drop in prices of concentrate citrus from $1,800 a tonne to $800 a tonne in a few months. I am quite sure that even honourable members in government would understand that no one can suffer a drop in the price paid for a product in such a short period of time and survive. It is ridiculous that Brazil, with its extremely low wage structure and subsidised industry, should be permitted to ruin our industry. It is even more ridiculous that Brazil should have developing nation preferential tariff entry concessions into Australia. Citrus is unfairly penalised in a number of ways. Imports of Californian citrus come into this country while our products are kept out of the United States of America due to dubious quarantine requirements in relation to septoria spot. Surely the prevalent canker in the United States is a greater threat to our industry. These unfair protective measures must be resolved. I also ask why our own supermarket chains show a greater commitment to imported Sunkist Californian citrus than to Australian grown products. I think this also requires investigation. Time does not allow me to speak about flavoured milk, but I warn the Government that, in relation to the 10 per cent tax imposed on flavoured milk, the same argument applies in the dairy industry as it does to the tax imposed on the wine and citrus industries. Communities are dependent upon our irrigated horticultural industries. They are probably the most successful examples of regional development in this country but today they are all in trouble at the one time. As the honourable member for Wakefield (Mr Andrew) has said, the cumulative result of this will be disastrous. These industries are nationally important. They are efficient industries. The protection that is provided to the citrus industry in Australia is in the vicinity of about $33 a tonne. In the United States it is $58 a tonne and in Japan it is $120 a tonne. These are all industries that are capable of export and foreign exchange earnings. Other major nations are dramatically deserting their idealistic free trade policies, and we in Australia are the suckers. Our nation's critical economic position demands that we apprise this policy until the world is ready to reciprocate. We are also left in a declining competitive position. We have industries here of an extremely high labour content and the multiplier effect is unusually high. Our nation's labour costs, comparative with our competitors, are impossibly high. As I have said, these are industries of exceptionally high decentralisation and environmental value. Entire regional communities are suffering hardship as a direct result of Labor's taxes and charges. I remind the House again of taxes other than these-the fringe benefits tax, the assets test, the capital gains tax and, as far as the wine industry is concerned, the entertainment tax. There is no justification for these taxes and I am surprised that no member of the Labor Party who represents a wine growing area, such as the honourable member for Kingston (Mr Bilney), the honourable member for Ballarat (Mr Mildren), the honourable member for Bendigo (Mr Brumby), honourable member for McEwen (Mr Cleeland), the honourable member for Hunter (Mr Fitzgibbon) or the honourable member for Calare (Mr Simmons), are speaking on these Bills. I wonder why they are not speaking on these Bills. I suggest that they are not in the House because they are probably hiding in an empty wine cellar in their particular electorates. While they may be getting paid at this moment for doing what is supposed to be their jobs, I can assure the House that at the next election the wine and citrus industries will ensure that they are unemployed. I am appalled that these honourable members justify these taxes in relation to the brewery industry when, as one of my colleagues has already said, last year the wine industry had a net profit of $30m while a number of the beer barons in the brewing industry spent more than that annually on their own advertising campaigns. There is absolutely no justification at all for these taxes and I am appalled that the Labor Party has introduced these new measures. Mr DUBOIS(St George)(4.58) —The Sales Tax (Exemptions and Classifications) Amendment Bill 1986, the Sales Tax Laws Amendment Bill 1986 and the Sales Tax Acts Amendment Bill 1986 before the House today are an integral part of the Budget. They are part of the revenue raising measures. The Budget recognises the cut in our incomes which the rest of the world has imposed on Australia. This Budget adjusts our economic life to the harsh realities, however unpalatable they may seem. The domestic economy is sound. Our present difficulties are the result of decisions taken overseas and, therefore, beyond our control. It would be irresponsible of us to ignore the drop in our export income. We cannot go on spending more that we earn and still expect the rest of the world to continue lending money to us out of its savings so that we can continue to live beyond our means. The Budget addresses the problems facing Australia today. The Government has cut back to zero real growth in outlays. The deficit will be reduced to $3.5 billion. If we had not taken certain steps to rein in the deficit, it would have been somewhere in the order of $7.5 billion. It will now be less than half this amount. The Government has imposed on itself the most rigorous financial discipline in managing the economy. The Government had to increase some taxes while at the same time reduce its own spending. The financial impact of the sales tax Bills before the House will be a net revenue gain of $196m in 1986-87 and $249m in a full year. The consumer price index will increase by less than 0.18 percentage points as a result of these measures. These adjustments to receipts and outlays will allow the Government to introduce the next phase of tax reforms-that of reductions to personal income tax rates. When this Government came to office it reduced the lowest marginal tax rate from 30c in the dollar to 25c in the dollar. That priority could not wait until more widespread changes were introduced. This rate will be further reduced to 24c in the dollar along with reductions to other marginal rates. The highest rates, currently a punitive 60c in the dollar, will be reduced to 49c and the 48c and 46c rates will be reduced to 40c. The threshold before tax is payable will be increased to $5,100 per annum. These substantial cuts will produce a fairer and more efficient tax system. For so long the pay as you earn taxpayer has borne the brunt of taxes while others have manipulated their financial affairs in such a way as to minimise their tax liability. Additional sales tax revenue will come from increases on wines and alcoholic beverages, on luxury cars, on previously exempt non-alcoholic beverages and on correcting certain anomalies that have emerged in the levying of sales tax. Cars, station wagons, and four-wheel drive vehicles which retail for more than $29,649 will attract an increase in sales tax from the general rate to the luxury rate of 30 per cent. This amount of $29,646 is the present upper limit on which depreciation is allowable for income tax purposes and will be indexed each July. This increase in sales tax will redress the generous tax treatment still enjoyed by people who drive luxury imported cars. Despite the fringe benefits tax, these people still get a little help from the public purse in indulging themselves in this way. The majority of cars produced in Australia will not be affected as they retail for below $29,646. Mr Robert Brown —Workers' cars. Mr DUBOIS —Exactly. It will be the imported cars that will cost more because these measures, together with the effects of the changes in the exchange rate, will give Australian-made cars a further price advantage in the market-place. An increase in the rate of sales tax from 10 per cent to the general rate of 20 per cent has been imposed on alcoholic wines, ciders and similar fermented beverages. This will mean an increase in about 40c per cask of wine and of about 55c for a bottle of premium wine retailing for about $7. I agree with the honourable member for Forrest (Mr Drummond) that wines from the Frankland River district are amongst the finest in Australia. However, the small wine makers of Australia-admittedly there are many-tell me that the biggest threat they face is from the PLO. When I asked them who the PLO was they said it was the Penfolds, Lindemans and Orlandos of this world. Mr John Brown —Terrorists. Mr DUBOIS —Yes, indeed, financial terrorists. There is the view that wine should attract sales tax, that the industry should pay its own way. It is standing on its own two feet and there is no reason why it should continue to be exempt from sales tax. The long suffering beer drinker, who has been the mainstay of many Treasurers in the past, has not been affected in this Budget. These sales tax measures correct an anomaly that has allowed wine drinkers to pay tax-and only recently-at a lower rate than that of beer drinkers. The Bill also removes the exemption from sales tax for certain beverages and reclassifies them under the schedule that attracts a rate of 10 per cent. Packaged flavoured milk that contains not less than 95 per cent milk will be taxed at 10 per cent. This will result in about a 2.5c increase in a 300-millilitre carton of flavoured milk. If that flavoured milk contains less than 95 per cent milk, it will continue to be taxed at 20 per cent. Unflavoured milk and certain dry powder products will continue to be exempt from sales tax. Fruit juice and other Australian non-alcoholic wines and ciders will also be reclassified to the third schedule and attract a 10 per cent sales tax. The price of a two-litre pack of orange juice is expected to increase by about 23c as a result of these changes. Imported non-alcoholic wines and ciders will continue to be taxed at 20 per cent. Other soft drinks made in Australia, such as lemonade and carbonated beverages, are also currently taxed at 20 per cent. That type of beverage suffered a relative disadvantage when compared with fruit juice beverages. Sales tax will be extended to developing photographs at the same 20 per cent rate currently applicable to prints. Swimming pools and associated equipment will also be taxed at the general rate. A 10 per cent rate will also apply to bathroom fittings, sinks, basins et cetera. These items will be treated the same as furniture, refrigerators, washing machines and other household goods. Other changes include the closure of certain loopholes, such as the tax free purchase of scientific instruments by students and teachers. The purchase of computers and calculators by universities and schools for their own use will continue to be exempt from sales tax. When these instruments are purchased by teachers and students for home use they will no longer be exempt from sales tax and sales tax will have to be paid. These sales tax measures are both fair and equitable. They spread the tax burden to those items which should contribute, exemptions for which can no longer be justified. They remove anomalies that have crept into the system. These measures will generate the receipts needed to implement the greatest tax reform ever seen in Australia. When the income tax cuts are implemented in December this year and in July next year, the sales tax increases will be seen in their true perspective. It will become clear to the people of Australia that this Government is delivering on its promise of a better and fairer go for all Australians. I commend the Bills to the House. Mr PORTER(Barker)(5.17) —After the 1983 election there was a period of economic growth in this country. However, that growth was not stimulated by the Government; it was brought about by the breaking of the drought. We were lucky enough to have a wages pause in place and the international economy was improving. Instead of encouraging the private sector to grow unhindered, the Hawke Labor Government set about a major expansion of both the size of government and government expenditure. Instead of fostering the productive private sector, the Government set about competing with the private sector for both funds and resources. That government action pushed up interest rates and the inflation rate. The Government was living on borrowed time and borrowed money. Now the chickens have come home to roost. As the deficit has skyrocketed, together with the high inflation rate and higher interest rates, the international community has sold our dollar down. Let me give a couple of indications of our international competitive position. For example, at the moment Australia's short term interest rate is about 17 1/2 per cent. In Japan it is 4.7 per cent; in West Germany, 4.4 per cent and in the United States, 5.6 per cent. Under this Labor Government, labour costs have gone up by around 6.6 per cent. In Japan last year they went up by 2.2 per cent; in the United States by 2.4 per cent and in Canada by 2.6 per cent. No wonder we are facing such an economic crisis. The Government has realised in more recent times that, as a result of its gross economic mismanagement in which it has squandered Australia's economic future, we as a nation can no longer go on with the mounting level of debt built up by its economic policies. By June next year Australia will be looking at a gross external debt in excess of $110 billion-nearly $7,000 per person. The message given by the public to the Government was that the way to get out of the problem was to reduce the size of government and government expenditure. Instead, the Government took an alternative route. It said: `No, the way we will get out of our problem is by increasing tax'. Tough decisions were needed but they were not taken. Axe, not tax, was the message from the community, but the Government could not make the hard decisions to cut expenditure. Instead, it moved to substantially increase taxes, which will have a disastrous impact, especially on country areas. I refer to two areas of significance to my electorate-that is, the sales tax on wine and citrus. Despite firm promises not to impose a new wine tax, the Government first imposed a tax on wine in 1985, and now it has doubled the tax to 20 per cent. It will be recalled that in 1983 the Government imposed an excise on grape spirit used in the fortification of wine. Mr Andrew —That was a mistake. Mr PORTER —It was a mistake. Under pressure from the Opposition and industry, it withdrew it in May 1984, but that did not stop the Government. Later that year it imposed a sales tax, which it has doubled. The Government was not going to give up in its determination to break the pledge it gave to the people of this country not to impose a tax on wine. Mr Andrew —And break the grape growers, too. Mr PORTER —It will break the grape growers. Certainly, it will break some grape growers. I remember the campaign when we were in government and were urged to put a tax on wine. Treasury and the brewers urged us to put a tax on wine. Nevertheless, over seven years we resisted the temptation to put a sales tax on the wine industry. That is not so with this Government. It is determined to squeeze the last drop of tax out of the industry, even if that means doing substantial damage to the viability of many in the industry. The tax is introduced at a time when major sections of the industry are in real financial difficulty, particularly in the Riverland in South Australia. According to the Bureau of Agricultural Economics, since the 1984 imposition of sales tax, the real price of wine has fallen by about 5 per cent. Growers have had to absorb the tax increase because of the very competitive wine sales market. In 1986-87, returns to wine grape growers with average farm income on family farms are expected to be minus $700. In the area which includes a number of war service settlement blocks along the River Murray in the Riverland, the impact of the extra tax will be, for many, the final straw. The Government has already acknowledged the depth of the problem by granting funds for vine pull. About 400 growers will share in a total of $5.25m of State and Federal funds spent in the 1985-86 vine pull. However, that will still leave some 300 growers who applied for, but were not granted, funds under that scheme. That was before the latest increase in tax. The number of growers who will now seek vine pull funds, inevitably, will substantially increase. For a government that pretends to be interested in the small battler, and to have a social conscience, this move to throw a large number of blockers in my area or to the economic scrap-heap is economic and social vandalism. The painful process of structural adjustment was steadily taking place to the advantage of those being assisted out of the industry and to the benefit of those who stayed in it. Already, in the past 10 years or so, the number of hectares under vines has dropped from 71,000 to around 64,000. The trickle of those needing assistance will be turned by this Government's additional tax into a torrent. The increased tax comes at a time when there are already over 2,000 people in the Riverland area on the unemployment benefit. The Labor Government has been told frequently that now is not the time to tax the wine industry, but it has ignored that advice. Its own inquiry, the McKay Inquiry into the Grape and Wine Industry, gave it that advice. Its Labor State colleagues in Victoria, in a report on the wine industry by the Victorian Parliament, made the following recommendation: That, given the estimated elastic demand for wine and having concern for the existing level of taxation on the industry, the State Government- that is, the Victorian Government- should seek the co-operation of the Commonwealth Government to not increase the overall taxation on wine. Where is Mr Cain now? We know that many people have raised their voices against an increase in tax on wine. However, what we do not know is what the many Government back benchers who are affected by the measure are doing. What are the honourable members for McEwen (Mr Cleeland), Bendigo (Mr Brumby) and Ballarat (Mr Mildren) saying? The honourable member for Kingston (Mr Bilney) has the wine maker Hardy's in his area. That will be seriously affected by the tax. Where are the honourable members for Hunter (Mr Robert Brown) and Calare (Mr Simmons)? Why are they not here standing up for their constituents who will be cast on the economic scrap-heap as a result of the tax? They have left their constituents high and dry. This tax is a disaster. While we have made it clear that we will not block the Government's Budget, I urge the Cabinet to listen to the sweet voice of reason and reverse its decision. If it does not do so, I promise it that it will reap the electoral backlash it deserves. The other major industry in the Riverland is the citrus industry. That is also being slugged by the Government in this Budget. That industry has been hit with a new sales tax-a 10 per cent sales tax on citrus juices. After a relatively good year last year, the citrus industry has been subject to import competition from frozen orange juice concentrate from Brazil at prices which are so low that they suggest that dumping is taking place. The industry approached the Government for action early in the year. In May this year, the Minister for Primary Industry (Mr Kerin) said that action would be taken and that there would be an Industries Assistance Commission inquiry. Where is the inquiry? Months went past and nothing happened. Four months later, the Minister for Industry, Technology and Commerce (Senator Button) eventually announced, after the Budget, that there would be an IAC inquiry. In the meantime, Brazilian imports have steadily eroded domestic prices. Citrus producers currently hold stocks of 195,000 tonnes, which is equal to 45 per cent of the year's consumption of about 472,000 tonnes. The Government has picked now to impose a tax on the industry. This will be the first time that a tax has been imposed on a food such as orange juice. Tax is not imposed on the bacon and eggs which a person has for breakfast. It is not imposed on the milk one puts on one's cereals or on the cereals. But if one dares to have an orange juice one will pay the tax. For the first time, this Government has extended sales tax to the food industry. Where is the equity in that? Mr Lee —Mineral water. Mr PORTER —Honourable members opposite joke. They will not be here after the next election, as a result of this and a number of the other aggressive taxation actions that the Government has taken. It is the highest taxing government this country has ever seen. This blow to the citrus industry comes at a time when citrus growers are building a valuable fresh fruit export market. But there will always be a percentage of the crop that is unsuitable for fresh sales, so the juice market is a vital part of the financial viability of the citrus growers. The industry claims that the price increase as a result of the tax will force consumers out of the 100 per cent juice category to the cheaper fruit beverages with lower fruit content, and thus reduce the demand for processed citrus. The industry claims that the Government's likely revenue from the measure this year is $15.7m and that the disastrous social consequences will cost the community $196m. Where is the economic sense in that? There will be more unemployment benefit payments and the social consequences of these two sales tax measures taken together will be disastrous in areas such as the Riverland. These taxes are not fair or equitable. They are economic insanity. They are a further blow to the rural sector of this country. This Government seems to be intent on doing everything it can to ride the rural sector to its knees, and these two measures in particular in this sales tax legislation are a disaster. I urge the Government to review the wine tax and the tax on citrus products in the interests of all those involved in those two industries. Mr ANDREW(Wakefield)(5.31) —I am delighted to have this opportunity to participate in the debate on the Sales Tax (Exemptions and Classifications) Amendment Bill, the Sales Tax Laws Amendment Bill and the Sales Tax Acts Amendment Bill. In following my colleague the honourable member for Barker (Mr Porter), I echo some of the sentiments that he has expressed in the chamber this afternoon. I make the point, with a great deal of respect to the honourable member for Barker, that while the speech he has delivered has taken slightly longer than he had originally intended, I am more than happy to prune my remarks to accommodate the time he has taken because he has most eloquently expressed the dilemma faced by the wine and citrus industries, in particular the real dilemma faced by the wine and citrus industries in South Australia. Dr Blewett —We would much rather hear you. Mr ANDREW —I welcome the interjection of the Minister for Health, a fellow South Australian. Nowhere in this chamber-apart from the Minister for Health, who is here under obligation-is there an Australian Labor Party member from South Australia to stand in defence of these South Australian industries. Furthermore, in the entire appropriation debate held in this chamber since the Budget of 19 August, no ALP member has mentioned the fact that the Government has chosen to tax the wine and citrus industries. There was not even a whimper of protest. Well might the wine and citrus growers across the nation ask themselves, `Whose voice was raised in the ALP Caucus when this idea was mooted?'. Where were the voices of the honourable member for Hawker (Mr Jacobi) and the honourable member for Grey (Mr O'Neil) or, even more acutely, where were the voices of the honourable member for Makin (Mr Duncan), the honourable member for Hindmarsh (Mr Scott) and the honourable member for Kingston (Mr Bilney)? We have not heard them in this chamber. What are the chances of their having been heard in the Caucus room? Mr Downer —Men of silence. Mr ANDREW —There was not even a whimper from the South Australian Ministers, the honourable member for Port Adelaide (Mr Young), the honourable member for Adelaide (Mr Hurford) and the honourable member for Bonython (Dr Blewett). As the honourable member for Mayo (Mr Downer) said, there has been a deathly silence. I put it to the chamber that if silence is golden, the people involved in these industries will be spared only by the gold that we might hope will flow from that silence. In no way have they been defended by the ALP members who represent their industries. The honourable member for Dobell (Mr Lee) had the sheer audacity to come into this House and, in his usual throwaway style, ask, `What would the Opposition do?', as though the Opposition were in government. Is he asking us to correct the Government's errors? If he is, he should bear in mind that nothing can be done in this chamber unless every member of the ALP from South Australia and two or three others are prepared to act courageously in the first place. Where, I ask you, Mr Deputy Speaker, is the honourable member for Burke (Mr O'Keefe)? Where is the honourable member for Hunter (Mr Fitzgibbon), whose electorate is so affected by this tax? Not only has he been silent in this debate, but he was almost certainly silent in the Caucus and has been silent ever since this decision was taken. I do not suggest that Opposition members come into this chamber with absolutely clean hands, but never have we treated these industries as the Government currently treats them and never, in a year in which the Government has been obliged to institute a vine pull scheme would we have proposed such an horrendous taxation measure. In the very year when, as we know from Bureau of Agricultural Economics statistics and as the honourable member for Barker said, there will be a 30 per cent fall in incomes and a negative income of $700 for the average grape grower, the Government has thrown 7,000 growers to the wolves, and it has done so without even a whimper of protest from the Government benches. The Government acknowledges that there is a problem in the grape industry. The honourable member for Dobell stood up and said that. The Government acknowledged it by introducing a vine pull scheme, but now it proposes to bring in this tax. It is as though the grape growers were dying of thirst, and the Government has said: `Here is a cup of water'. But what happens? Hopalong Cassidy Keating rolls up mounted on his steed-- Mr Price —On a point of order, Mr Deputy Speaker: The honourable member should refer to the Treasurer by his title. Mr ANDREW —Point taken. Treasurer Trigger rides up on his horse, sees this grape grower about to take a sip of water from the cup, and proposes to shoot a hole in the bottom of the pannikin. Mr Robert Brown —On a point of order, Mr Deputy Speaker: Your expectation quite early was that the reference to the Treasurer in unparliamentary terms would be withdrawn. The honourable member is now compounding the mistake he made earlier. He should withdraw it and refer to the Treasurer, and other Ministers, of course, by their correct titles. Mr DEPUTY SPEAKER(Mr Cowan) —I would ask the honourable member to withdraw. Mr ANDREW —Of course I withdraw that reference to the Treasurer should he find it offensive. But I return to my illustration of the grape grower, desperate for a drink, being offered a cup of water, and that cup having a hole shot in it by the Treasurer, who so callously brings in this 100 per cent increase in the tax on wine in a year in which he has acknowledged that there is a dilemma and has introduced a vine pull scheme to try to solve that dilemma. We have the absurd position of the honourable member for St George (Mr Dubois) coming in here not 10 minutes ago and saying that the wine industry can stand on its own two feet. Even the Minister for Primary Industry (Mr Kerin) has acknowledged in response to a question from the honourable member for Forrest (Mr Drummond) that the wine industry has a massive problem of oversupply that is reflected by the 60 million litres of wine currently held in an Australian wine lake. Then the honourable member for St George, in another throwaway line, said that this is a fair and equitable tax. What absolute nonsense. The people who are bearing the brunt of this tax are the wine grape growers. Any survey of the figures shows that there is no money in the industry for wine makers. Any survey of the figures shows that there is no money in the industry for retailers. Everyone knows that the wine industry is price-elastic, so that an increase in shelf price will reduce the number of sales. Who, then, is left? Only the grape grower with a negative income is left to carry the brunt of the Government's callous taxation reforms. In this speech I want to extend an invitation to the Prime Minister (Mr Hawke)-an invitation that he will not often get-to come into the electorate of Wakefield, which was once the promised land, and see for himself in the Clare Valley and the Barossa Valley just what the Government's measures have done over the last three years. He should see for himself the heaps of vines bulldozed up to burn and answer the question: `What do you do with what have been historically prime wine grape growing areas?'. While the Prime Minister is on this regional tour, perhaps I might be able to persuade the honourable member for Barker to allow him into one corner of the Riverland, there to see what has happened to the citrus industry as a result once again of this Government's absurd obsession with reforming taxation and tackling those who are most disadvantaged in the process. Mr Porter —I could not guarantee his safety. Mr ANDREW —That is a fair comment from the honourable member for Barker. As he has already said, the citrus industry has been enjoying relatively comfortable times, with prices that at least allowed growers to meet their commitments. But those prices have fallen-it is difficult, depending on the region, but I could nominate at least defensible prices-from $180 a tonne to $80 a tonne or, for citrus growers now picking valencias, to as low as $55 a tonne. As the honourable member for Barker has said-and I do not want to go over the same country as he has traversed-juice makes the base price for the citrus industry. Inevitably, when the price of juice falls apart, growers choose to flood on to the market fruit that would other- wise find its way into juice. The industry is in trouble because the Brazilians have chosen, in what might well prove to be a dumping situation, to flood juice on to the Australian market. In referring to it as dumping, I do not want in any way to be accused of sensationalising what is happening. Those who grow oranges in Florida and California have taken dumping action against the Brazilians. So it is fair to suppose that there is a reasonable case for the Australian citrus grower to pursue as well. This year, with the growers facing that dilemma and that reality, this Government has chosen to impose a tax on citrus juice. I do not want to focus my barrage of attacks on things that the honourable member for Dobell has said; but he chose to draw some sort of analogy between the citrus industry and the dairy industry, by saying that it is appropriate to tax flavoured milk, anyway. Does he not appreciate the gross inconsistency in the taxing of all citrus juice? Even the industry has said that it may be appropriate to impose a tax on some areas of its product that bear a relationship to carbonated waters. But what sort of consistency is there in applying a tax on 100 per cent orange juice-orange juice which does not contain any additives, which is effectively a food, which might be compared to whole milk? Yet it is now to be taxed. There is no consistency in that. What sort of advice does this Government get? What sort of advice does it govern with? It strikes me that it governs with whatever it feels is expedient at the time. That sort of approach is currently crippling two of South Australia's major industries. Mr ROBERT BROWN(Charlton)(5.43) —After a Budget has been brought down, of course, it is usual for the Parliament to consider sales tax Bills because during the year it becomes obvious to the Government, the Opposition, the community and the Australian Taxation Office that a number of anomalies have developed in the application of the sales tax provisions. I was particularly interested to hear some of the comments made by members of the Opposition who are on record as supporting-both individually and collectively, in their two political parties-the introduction of a broad-based consumption tax. Yet most of the issues against which they have railed during this debate have been examples of taxes of precisely that kind. I think it is obvious that, if we were to go among members of the Parliament on both sides of the House, we would find different attitudes, different responses, to some of these provisions. I would be less than honest if I were to say, for example, that I was happy with all of them. The simple fact is that I am not. Nor would any one member of this Parliament be able honestly to say that every aspect of these three sales tax Bills-the Sales Tax (Exemptions and Classifications) Amendment Bill, the Sales Tax Laws Amendment Bill and the Sales Tax Acts Amendment Bill-is one that he or she would personally support. I can understand, too, the advantage which is taken by members of the Opposition in order to pursue some of these questions and to make it appear that if they were in government the situation would be otherwise. Of course, the truth is that it would be nothing of the kind. When they were in government they also took advantage of the opportunity to introduce legislation at this time of the year to haul out of the sales tax arrangements some of the abuses, anomalies and inconsistencies that had developed. We do not have the opportunity to go into very much detail on each of these provisions. I am sorry that that is the case, because, as far as I am concerned, there are a number of issues which are extremely important. I would like to refer in particular to some of these provisions. One of them has already been mentioned by previous speakers; that is, the proposed increase from 20 per cent to 30 per cent in the sales tax on motor cars-commonly referred to as luxury motor cars-which retail for a price in excess of $30,000. I would like to give a couple of examples so that we know exactly what those honourable members who scream and cry tears of anguish about the severe penalty, the imposition, the hardship, the sacrifice and the rip-off that will be involved in the application of this higher sales tax are talking about. Let us take the example of a 928S Porsche. It would have cost $137,000. As a result of this increase in sales tax, it will cost $146,000. My heart bleeds for those people who will find that the price of the cars that they are buying has increased from $137,000 to $146,000, simply because they are going to be required to pay into the Federal coffers an additional $9,000 out of the price of $146,000. Of course, Mr Deputy Speaker, as you know, the Porsche is completely imported. Not one skerrick of Australian enterprise, not one skerrick of Australian resources, not one skerrick of Australian management, not one skerrick of Australian sweat, goes into the production of the Porsche. Let me give another example so that those members of the Opposition can continue their screams of anguish about how we are ripping off the people who buy what we call luxury cars. The Rolls Royce Silver Spirit-- Mr Downer —A great car. Mr ROBERT BROWN —A great car. Alexander Downer probably has one. If he has, it cost him $220,000. Mr Andrew —I raise a point of order. Mr Deputy Speaker, in keeping with your earlier rulings, I am compelled to ask you to ask the honourable member to refer to the honourable member for Mayo by his correct title. Mr DEPUTY SPEAKER(Mr Cowan) —The point of order is quite correct. I am sure that the honourable member for Charlton will refer to him by his proper title. Mr ROBERT BROWN —The honourable member for Mayo probably has a Silver Spirit in the dolls' house. Before the increase, it would have cost him $220,000. If he buys one now, after the increase, it will cost him $235,000. My constituents, for that amount of money, would probably buy-- Mr Goodluck —Two. Mr ROBERT BROWN —Most of my constituents, who buy secondhand cars, could buy 100 secondhand motor cars for that money. What we are doing is suggesting to people who spend that much on one motor car that, out of their largesse, out of their concern for the welfare of the Australian nation, they can afford to pay the extra amount. We have said: `Will you put into the Commonwealth coffers, out of all of the gains that you have quite clearly sweated to earn, an additional $15,000 of the $235,000 that you spend on a motor car?'. Honourable members will have heard the cries of anguish that have arisen as a result of that. I refer now to the increase from 10 per cent to 20 per cent in the sales tax on alcoholic wines. That is one of the matters about which I am concerned. I am disappointed. I know that restructuring has taken place in the industry. I would have liked to see that provision delayed for another one or two years, or at least for another period to allow more time for that restructuring that has been taking place to become consolidated, because there is a great deal of initiative in the wine producing areas of Australia. In the Lower Hunter, an area with which I have had the great pleasure in the past of having had some personal association, there are some great family names, such as the Tyrrells, the Draytons, the Elliotts, the Wilkinsons and the Tullochs-people who have made a great contribution to the development of the Australian wine industry. Mrs Darling —The Browns. Mr ROBERT BROWN —I claim no credit for the Browns' wines, but someone in my clan, as the honourable member for Lilley (Mrs Darling) has said, has made a great contribution to the development of quality wines in Australia. Unfortunately, the Browns' wines do not come from the Lower Hunter. There are large companies in the Pokolbin area such as McWilliams, Lindemans, Hungerford Hill, Rothbury Estate and Hermitage. There are small wineries too that are run by people such as Jim Roberts, Murray Robson and Ian Peterson. All these people have developed the industry in the Lower Hunter and they would all prefer, of course, that an increase in sales tax should not take place at this stage. I wish to emphasise that since the end of 1984, as a result of the Government freeing or floating the dollar, there has been an effective devaluation of the dollar against the trade weighted index by 40 per cent. That means that in effect the price of the imported rubbish wine that was coming into Australia and causing damage to our wine producers-at one time it was thought by some to be sophisticated to buy imported wine, but now we know that those who buy imported wines instead of the great quality wines that we produce in Australia are ignorant and that there is an element of stupidity in doing so-has been increased by 40 per cent. At the same time our exports have been reduced in price on the overseas market by the equivalent of about 40 per cent, despite the fact that the monetary return to our producers in Australia is much the same. I shall give a couple of examples of the way in which wine producers in the Lower Hunter have been able to overcome any types of difficulty that exist. They are people of courage, competence, initiative and great drive, and they are great advocates for the industry. Indeed, they are making great strides in the development of it. For example, Murray Tyrrell has his largest overseas markets in the United States and New Zealand and he has increased his sales to the United States by 150 per cent over the past six months. Mr Simmons —By how much? Mr ROBERT BROWN —He has increased his sales by 150 per cent and that is a great effort. Of course, that does not just happen. Murray Tyrrell is now exporting about 2,000 cases of wine a month to New Zealand. There is a penetration of overseas markets by those who have a go and show initiative. In 1985 Murray Tyrrell entered three of his wines at the enormously important Atlanta wine show. By entering those three wines Murray Tyrrell won two gold medals and one silver. I have mentioned some of the industries in the Pokolbin area and I am sorry that I cannot refer to them all. However, there is one of which I should like to make mention-namely, the Wyndham Estate at Branxton. I wish also to refer to Brian McGuigan. What a promoter that fellow is. He is one who gets out and does the job. He does not sit around like the wimps on the Opposition side of the House. He does not sit around waiting for things to happen or for things to be handed out to him. He is someone who gets out and has a go. As a result of that, his export sales over the past 12 months have increased by 166 per cent. Brian McGuigan's greatest market is in Canada, and he is also the leading Australian exporter of bottled wines to Japan. In addition, he has been the most successful exporter at the Bristol wine show for the past four years. In 1985, he was voted the second most successful exporter in the world. I am not talking about someone from France or California. I am talking about someone from New South Wales, from the Lower Hunter. Brian McGuigan of Branxton is showing the world what can be done. He is not a wimp; he does not want things handed out to him. He knows that if someone has the necessary courage and drive and is producing wines that will sell-for example, great wines from the Hunter Valley-he will be able to succeed. There is one other person to whom I wish briefly to refer. He is an example of the way in which people can overcome whatever difficulties we may be suggesting are in their way. A pharmacist in Toronto in my electorate has had a few acres in Pokolbin for a number of years. His name is Ian Peterson and he is in the Mount View area. He planted his first vine in 1971, and from then until about 1981 most of the grape that he was producing was sold on to the larger wine producers. In 1981, he produced his first vintage, the first release wine from his relatively small vineyard. Since then he has become the most successful exhibitor and small wine producer in the Hunter Valley. That has been his success between 1983 and 1986 inclusive. His latest wine has increased his total tally of awards to 12 trophies, 19 gold medals, 37 silver and 62 bronze at local and national wine shows. Ian Peterson has recently won the Grant and Knowles trophy for the best chardonnay classes 3 and 32 at the 1986 Perth wine show. I have taken more time than perhaps I should, but I become a bit tired of the wimps on the Opposition side of the House whose comments suggest that Australian producers, whether they are rural producers, manufacturers or people who provide services, lack the competence, drive or initiative to have a go and to show what they are capable of doing. There is evidence from the lower Hunter alone, from Pokolbin, that when people want to get in, when they know that they have a good product, especially when they have produced it themselves as a result of their own initiative, development and drive, all of the things that we refer to as problems pale into insignificance. Mr Hand —Sit down, Bob. Mr ROBERT BROWN —As the honourable member for Melbourne (Mr Hand) says, my time is exhausted. I wish only to pay a great tribute to the wine producers in the Hunter Valley and to all the other primary producers to whom special reference has been made by Opposition members. Mr CONQUEST(Hinkler)(5.56) —If there were a tax to be levied on intoxicating speeches, I think that the honourable member for Charlton (Mr Robert Brown) would be up for a massive tax payment to the Taxation Office. He has told us of everyone who has won a medal for wines in his district and I congratulate everyone to whom he referred. I hope that everyone can continue to produce despite the impost that is to be placed on them by the Government. Notwithstanding the supposed reform of the Australian tax system, which is in effect a mish-mash of consensus politics, our tax regime is now but a relic of its former self. Sales tax once had a simple rate and a broad base but now it has multiple rates and fewer commodities in its taxable base. I will concede that the Treasurer (Mr Keating) has broadened the tax base, particularly since September 1985. However, the apparently indiscriminate use of broadening the base appears to be motivated more by a requirement for revenue than by the following of a preconceived plan. I think that everyone accepts that taxes are necessary to finance government expenditure. There is no argument there. Some of these `goods' could be provided by the market, such as health and education but others could not, such as the police, a service which benefits everybody except, perhaps, the criminal element. Another example is defence. It is impossible for such services to be priced in the market-place. It is recognised that governments have an onerous task in ensuring that taxes are levied and that subsequent expenditures satisfy the basic requirements of equity, efficiency and simplicity. Another important consideration is that the cost effectiveness of each tax is related closely to the revenue which it raises. That is because the cost incurred in the administration of a tax is largely independent of the tax rates that are applied. There is no doubt that the cost of collection falls more heavily on the private sector than the public sector as it is there that sales are recorded and sales tax is determined. It is within the private sector that forms are processed and it is those within the private sector who ensure that cheques are delivered within the required 21 days, unless they want to incur a penalty. No understanding is shown for the longer periods of credit that are required during depressed economic circumstances. This is something that should be taken up in respect of the time that is given to companies to reimburse sales tax moneys from their manufacture. A previous speaker, the honourable member for Barker (Mr Porter), when referring to the imposition of sales tax on flavoured milk and fruit juice, said this was the first time that a tax had been placed on food. But it is not; it is the second time. Last year a tax was placed on ice cream, which is considered to be a food according to the Australian Bureau of Statistics in its consumer price index calculations. As a result of a survey by a Queensland Institute of Technology nutritionist ice cream was considered as vital for correcting a calcium deficiency in Australian school children. Therefore this is not the first time we have had a tax on food, but the second time, so there has been a progressive move to placing a tax on food. The imposition of sales tax on flavoured milk and fruit juice will mean that our local milk and fruit juice vendors will be regarded as wholesale merchants for a substantial part of their day's trading and as retailers for the remainder. These people buy from a distributor, be it a factory or whatever, and in some cases then sell direct to the public as retailers. In this case their supplier is effectively the wholesale merchant and adds the necessary sales tax to the price of the product on the invoice. In those cases where the milk or fruit juice vendors will be selling to shops such procedure as mentioned before does not apply. What happens is that the vendors now become wholesale merchants and add the sales tax figure to the invoice and effectively become gatherers of tax. The procedure is further complicated where the vendors travel some distance to outlying areas and that introduces an element of freight into the wholesale cost of the product. Of course freight is taxable so it must be added to the wholesale price before the sales tax component is calculated. In addressing this problem of sales tax on freight, I notice that the honourable member for Capricornia (Mr Wright), speaking as a member of the Hawke Government's rural policy committee, is mentioned in an article in the Sunday Sun of 29 September 1985. He said that freight was an enormous component in rural living costs. He mentioned that it was taxable and that he was seeking from the Treasurer some means of balancing this sort of tax. Mr McVeigh —Who mentioned that? Mr CONQUEST —The honourable member for Capricornia, who is another one who is a lion in his electorate and a lamb when he gets down here. As yet there have been no offsets to a removal of the impost of sales tax on freight for rural Australians, so I take it he has not pursued the matter too strongly or he may be finding it a little difficult. I think most of us would recognise that the sales tax component on freight is a difficult question to be resolved. I believe it is one on which we should take a bipartisan approach in this House to see whether we can find out how it can be resolved. The Minister Assisting the Treasurer, Mr Hurford, on 16 October stated in Hansard: . . . we are all interested in this issue. We would love to be able to do something about it. However, it is a very complex issue. Years ago it was considered by a Senate select committee and to date no one has been able to devise a legislative solution to this problem. It may be that we have had one review of it by a Senate committee. I think it is high time we had another look at it because these costs are getting a little out of hand. It is a pity that Mr Hurford, with all his experience, did not advise the Prime Minister (Mr Hawke)-- Mr DEPUTY SPEAKER(Mr Leo McLeay) — Order! The honourable member will refer to the Minister by his title. Mr CONQUEST —I missed your point, Mr Deputy Speaker. Mr DEPUTY SPEAKER —The Standing Orders provide that you have to refer to honourable members or Ministers by their title. Mr CONQUEST —Righto, the Minister. Mr DEPUTY SPEAKER —The Minister for Immigration and Ethnic Affairs. Mr CONQUEST —If he had advised the Prime Minister (Mr Hawke), before he gave that rural policy speech at Griffith in New South Wales on 20 February 1983, because he obviously knew the complexities, he could have advised the Prime Minister not to make a promise to reduce the sales tax component on freight. But what did the Prime Minister say? He said: `The added cost for country people imposed by sales tax calculated on the freight component of goods will be abolished'. That was an election commitment by the Prime Minister given during the rural policy speech at Griffith. It is another election commitment that he has not stuck to. He is silent on it now, and silence is certainly not a significant characteristic of the Prime Minister, because he is ready to speak on all things at all times. But he has remained- Mr McGauran —He is a liar. Mr DEPUTY SPEAKER(Mr Leo McLeay) — Order! The honourable member for Gippsland will withdraw that remark. Mr McGauran —I withdraw, Mr Deputy Speaker. Mr DEPUTY SPEAKER —And the honourable member for Gippsland will note that one shall not make contributions in the House except from one's seat. Mr CONQUEST —I get back to the subject of flavoured milk and fruit juices, which we spoke about before. The taxes will affect the dairy industry, which has already suffered the impost of levies placed on milk fat. This matter was brought up by the honourable member for Mallee (Mr Peter Fisher) in regard to citrus juices. Last year, when the tax was put on ice cream, we saw a situation emerge over the ensuing 12 months of a loss of $2.5m to the dairy industry and a loss of $1m to the sugar industry. I believe we will have further buyer resistance and, because of the book work that the Government has placed upon the vendors and because they have never had this imposition before and perhaps because singularly the sales of those flavoured milks are small to their business but collectively they may be large, they will stop providing flavoured milk to a lot of those shops. This Budget has been promoted as being a low deficit Budget. It is nothing but a sham. There has been little in the way of real cuts but a facade of deferments and postponements and windfall profits for the Reserve Bank of Australia. Outlays as a percentage of gross domestic product are still higher than ever before. So it is still a big spending government which is taxing the children of this country to finance its profligate spending. All it is doing is taking the money out of children's piggy banks by taxing flavoured milk and fruit juice. I will wind up by saying that this Government has been a very high taxing government. There is no doubt about it; the records have shown that. No matter how much it tries to place all the problems, the ills and the woes of this nation on a previous government, it is just not wearing with the people in the general community. They will not buy that because it has been going on for too long. This Government has been in office long enough to correct any perceived ills that it may want to say are there. This Government is going to go on imposing higher and higher taxes because the only way it can finance programs that it has instituted will be to raise more taxes. We think it is time that that was stopped. Mr DOWNER(Mayo)(6.07) —I join with my colleagues in expressing my great concern about the Sales Tax (Exemptions and Classifications) Amendment Bill and cognate Bills that have been brought before the House, and in particular I join with the honourable members for Wakefield (Mr Andrew) and Barker (Mr Porter) in condemning in the strongest of terms the doubling of the wine tax, which is part and parcel of this package of Bills, which compensates for the Government's failure to cut back on public expenditure in the recent Budget. The wine tax affects my electorate in a very real way, particularly the areas of the Southern Vales and Langhorne Creek. The Southern Vales are particularly relevant in this debate because at the town of McLaren Vale in 1983 the now Minister for Primary Industry (Mr Kerin) accompanied by the honourable member for Kingston (Mr Bilney) addressed a public meeting. At that meeting they promised that an Australian Labor Party Government would not introduce a wine tax. That promise was as hollow as so many of the other promises we have heard from this so-called Administration. The simple fact is that the Government has not only broken its promise but imposed yet another tax, another impost on the enterprising part of Australia. After all, wine making and grape growing is something that Australians actually do well and it is an industry that has enormous potential for the future and in particular potential in export markets. Yet the Government is milking this industry in order to finance the squandermania of socialism, which is what Labor is always about. This wine tax, this doubling of the wine tax I should say because we already have a wine tax, comes at a critical time for the industry. Indeed it could not have come at a worse time as officers from the Department of Primary Industry will be only too aware. This is a time when the industry is suffering from over production and there is a need to reduce those problems of surpluses. But those problems should not be exacerbated by a doubling of the wine tax. Rationalisation will come about by its own means. Secondly-this is related to the first point-wine sales in the last financial year increased by just 1.5 per cent, which is the lowest level of increase since 1970-71. In other words, in terms of sales the industry is running into a great deal of difficulty already without the added imposition of a doubling of the wine tax. There was an increase in sales in the industry only because of the introduction of what are called coolers, which found a very ready market in Australia. The causes of the slump in wine sales are numerous but it is important to enumerate just a couple of them. First of all, the effects of a 10 per cent wine tax are now flowing through into the market-place. It is interesting to observe that in the year the wine tax was introduced, in 1984, growth in sales was 5.6 per cent. Now that the 10 per cent tax is having an effect on the industry, growth has already fallen to 1.5 per cent. The industry's growth has also been inhibited by high levels of imports from the European Economic Community-although it is true that the devaluation is helping to cope with those problems now-it has been inhibited by the highest interest rates Australia has known, and it has been inhibited by the introduction of the entertainment tax. With a doubling of the wine tax, prospects for the next financial year are a fall in sales of 3.4 per cent. The industry is heading into a recession and something like $20m worth of sales are expected to be lost next year. The third reason why this is a critical time for the industry is that prices are depressed, and that obviously affects not just the wineries but the grape growers. In the 1985-86 financial year prices increased by 2.4 per cent compared with a increase in the consumer price index of 8.2 per cent. Clearly, growers are being crushed and so are the wineries. Fourthly, the industry is being hit by an almost exponential increase in production costs. The costs of processing aids and equipment have increased in the last year by 50 per cent; and whilst the devaluation obviously will help export penetration, it is important to remember that the costs for wine producers associated with imports are very significant and that devaluation, in particular, has forced up the costs of things such as wine presses and corks, which cannot be produced in Australia. All this has led to a very severe decline in the profitability of the industry. The return on capital in the industry is now less than 5 per cent, and as the honourable member for Barker and the honourable member for Wakefield pointed out, growers' incomes in 1986-87 are expected to decline by some 30 per cent. One-third of grape growers in the industry are now in very real difficulties. In South Australia alone 700 growers are applying for the vine pull scheme. More land under vines in South Australia is being torn up than in all the Hunter Valley. Let me refer to the taxation arrangements for the industry. It is important to note in the first place that the 10 per cent tax was largely absorbed initially by the wineries. However, that meant that the wineries had less money to pass on to the growers. So the people who suffered initially were the growers, and that, of course, is why the vine pull scheme has been not only so necessary but also so popular in the industry. This new doubling of the wine tax has been opposed by everybody in the industry. That goes without saying. It was also opposed by the McKay Inquiry into the Grape and Wine Industries, set up by the Minister for Primary Industry to investigate the state of the wine industry. I understand that it has been opposed very strongly by officers of the Department of Primary Industry. That is not surprising when one looks at the tax situation in the wine industry. The total tax burden on an industry with a turnover this year of $624m will be $241m. The 20 per cent wine tax will take $124m, State licensing fees will take another $82m and the brandy excise yet another $35m. When all of the industry's costs have been paid on top of the taxes, it will end up with profits of around $30m. Let us look at the tax to profit ratio. For every $1 that that industry has earned in profits, it has paid out $8 in tax. So it pays $8 tax for every $1 profit. When one compares that ratio with that of the breweries, and of the manufacturers of spirits-who are mainly foreign-one sees that the wine industry is not a privileged industry; it is an industry which is very much on its knees. Doubling the wine tax is simply savaging an industry when it is at its weakest. The Australian Labor Party always pretends-we know it is a pretence-that it is a party of compassion. There has been no evidence of it in the last three years. It pretends that it is a party of compassion, and yet it will kick an industry when it is down. I think that is pretty unattractive. The result of this measure will be that the Government will be forced to pay enormous compensation to growers and wineries which will be made to fail because of Labor's taxation policies. The Government says that it has increased its contributions to the vine pull scheme by some $3m. Clearly, that amount will be totally inadequate. More money will have to be provided for the vine pull scheme; more money will have to be provided to the industry through the rural adjustment scheme; and, of course, social security payments will pick up where growers are forced out of the industry altogether and can find nothing else to do. It is estimated by a lot of people in the industry that the Commonwealth will be forced to pay out an extra $20m to the industry as a result of this enormous imposition of a doubling of the wine tax. I think it is also important to mention that the Government should do some constructive things to try to help the industry. It could start by producing a wine policy, because one of the things the wine industry lacks is stability. Under the Fraser Government it had seven years of stability, but under this Government twice it has had unexpected tax impositions placed on it. If there is one message one gets from growers and the wineries it is: `Please tell us what you are doing. Give us some stability so we can plan for the future. We don't want a lot of bureaucrats and a lot of politicians coming up with their clever ideas which bear no relationship to the problems on the ground. Most of those people have never spoken to anybody on the ground and have no compassionate understanding of the industry or even an economic understanding of the prospects this industry really has'. Talking of prospects, it is about time this Government did something to try to promote exports for this country in all the sorts of ways the Opposition has been describing. It is about time the Government looked at creative ways of helping the wine industry's exports. Recently I was at the Bristol wine fair in the west of England-one of the best of all the European wine fairs-and the Australian contribution to that wine fair could only be described as utterly pathetic. The Australian Government, through the Australian Wine and Brandy Corporation, is not providing the resources to help wine exports. If only the Government would promote our products on the world market-they are as good as one will find anywhere in the world-perhaps the industry will have some future. Finally, let me point out that the Government first introduced a 10 per cent tax, then it doubled it to 20 per cent, and yet it has never produced a single economic study of the industry. It has made no effort to find out what the consequences of the fringe benefits tax would be for the car industry, and now it knows that it has suffered $1 billion-worth of lost sales. It has done nothing of that sort for the wine industry either-no economic study, no policies for the future; just a lot of bureaucratic claptrap and impositions which are so much part of the socialist philosophy. In conclusion, this is a government which is not interested in productivity. It is hitting the creative and productive parts of the Australian economy with ever-increasing taxes and redistributing those funds to all its friends in the trade union movement, peace groups and fellow travellers with the Labor Party. It is about time the Labor Party and the Government as a whole woke up, examined the problems of our industries in a constructive way and did something to help our country get ahead. Doubling the wine tax is destructive and unnecessary. Mr PRICE(Chifley)(6.20) —I was a little surprised to hear the contribution of the honourable member for Mayo (Mr Downer). I have often listened to him speaking on customs and excise legislation, particularly as it applies to the Australian manufacturing industry. The honourable member for Mayo is amongst the driest of the dries when it comes to cutting out assistance to industry in whatever form, but when it comes to the wine industry he is the wettest of the wets. Not only does he believe that the consumer should not be given freedom of choice but he also believes that there should be government intervention to make wine a cheaper proposition for those who consume alcoholic beverages. He has no confidence whatsoever in the Australian wine industry and its ability not only to produce first class wine for the Australian market but also to open up the export markets available to it in America, Japan, England and other countries. I remind the House that the real problem confronting the wine industry is the dumping of imported wine in Australia. If any measure has made a significant contribution to overcoming that problem it has been our Government's economic policies and in particular the floating of the dollar, allowing it to devalue by something like 40 per cent. That is the greatest measure of relief that could have been provided to the wine industry. Beer attracts an excise duty of 76c a litre, brandy attracts duty of $20.07 a litre of alcohol, and other spirits attract duty of $23.21 a litre of alcohol; so, notwithstanding the increase for wine, these excise duties on beer, brandy and other spirits still enable wine to have a competitive advantage. I say with great respect to the Opposition that it has shown a good deal of hypocrisy on this matter. I will give the honourable member for Mayo one point: He conceded, although grudgingly, that the flotation of the dollar had assisted the industry. I commend him for his integrity, but that same integrity, unfortunately, did not carry over to the shadow Treasurer, the honourable member for Mackellar (Mr Carlton), when he was speaking about the industry. I was a little surprised at some of the remarks made by the shadow Treasurer and, like the honourable member for Dobell (Mr Lee), I felt rather sorry for him as he had only two speakers to support him. Perhaps the second most important speaker for the Opposition was able to attract to the House only two of his coalition colleagues to listen to him. He tried hard and I thought that he was worthy of support greater than that given him by his colleagues. The shadow Treasurer tried to paint the devaluation of the dollar and the tremendous advantage it has conferred on our rural industries and our manufacturing industries as bad economic management by the Government. The shadow Treasurer also talked about option C in the tax reform package. If I have one criticism of the Opposition in relation to tax reform it is that it has allowed this Government, the Australian Labor Party, to go through the agony of trying to make changes but not once has it tried to adopt a bipartisan approach. It is all very well for the shadow Treasurer to talk about the merits of option C, but I cannot recall listening to speeches made by the shadow Treasurer suggesting that the Opposition is prepared to take a bipartisan approach to the Government's White Paper or to support the Government at the National Taxation Summit. I feel that the Opposition has not only let itself down but also it has let down the public. I do not want members of the Opposition coming into this House and pontificating about what the Government should or could have done at the Taxation Summit. Let the people of Australia understand that we have brought in a tax reform package, the greatest tax reform legislation that this country has seen in many years, without one scintilla of assistance from the Opposition. I was staggered to hear the shadow Treasurer arguing against the tax that has been imposed on luxury motor vehicles. The honourable member for Mayo suggested that the Australian Labor Party is a party of compassion. I agree with him on that point, but I am staggered that the coalition parties still seek to maintain their traditional ground as the parties of privilege and oppose this measure which imposes an increase from 20 per cent sales tax to 30 per sales tax on high priced luxury motor cars. I am staggered that the Opposition would not defend the desire of the ordinary people of Australia to own a Commodore, a Falcon or any other Australian made cars, but would wish to protect the importation of Rolls-Royces, Bentleys, Mercedes and Volvos. I assure you, Mr Deputy Speaker, that whilst I understand my Liberal opponent in the seat of Chifley owns a Mercedes-Benz, not too many of my constituents own a Mercedes-Benz and I am not aware of anyone owning a Rolls-Royce or a Bentley. This measure will not affect the hardworking people of the electorate of Chifley or even of Dobell, but it certainly will affect quite a few silvertails. Once again we find the coalition parties complaining bitterly about the imposition of this luxury tax. I am one of those members on this side of the House who, when this nation faces the economic challenges that it does, would like to see further impositions on a broader range of luxury goods so that we could share our economic sacrifice more evenly. The honourable member for Mackellar also spoke about changes to the sales tax on computer software that is proposed in this legislation. Mr Lee —He opposed them. Mr PRICE —Yes, he opposed them. I regret to say that he made a couple of misleading statements. This sales tax has been put in place to overcome what is a new tax avoidance or evasion scheme. It is nothing other than that. Previously, the disk and the information put on the disk was subject to sales tax, but by innovative licensing it is now possible, without this legislation, to pay sales tax only on the medium-that is the disk or the cassette. The really costly part of the process, the research and development and the de-bugging that went into the software, is not taxable. This legislation removes that anomaly. Yet, again we see the coalition parties wanting to protect a bit of avoidance and evasion. Mr Lee —A rort. Mr PRICE —A rort. When will they ever learn to be fair dinkum to the people of Australia? I am sure the people are waking up to them. The shadow Treasurer went on to say that this legislation will seriously affect the export of Australian software. There is no doubt that the information industry is capable of greater domestic production and dramatically increased exports. The industry is so ripe for such expansion that the Government is developing an industry plan. The Opposition, in the seven years of the Fraser Government, were never ever guilty of bringing forward a practical and realistic industry plan-but this Government is. I now turn to the compromising of exports. I quote from the second reading speech of the Minister for Immigration and Ethnic Affairs (Mr Hurford) in which he quotes the Treasurer (Mr Keating): . . . in-house production of software will not be affected by these changes-- and here is the rub-- nor will software produced for export. It is disappointing that the shadow Treasurer should have understood so little the impact of this legislation. I commend one aspect of the speech of the honourable member for Wakefield (Mr Andrew). He suggested that the Opposition did not come into this debate with clean hands. I have no choice but to agree with him. To expose some of the dirty hands and some of the rhetoric that has been put forward by Opposition members, we ought to examine the tax record of the Fraser Government. In that period taxes grew by 143 per cent, from $18 billion to $44 billion, and increased as a share of gross domestic product from 25 per cent to 27.2 per cent. As well, the Fraser Government left a deficit of $9 billion. Sitting suspended from 6.30 to 8 p.m. Mr IAN ROBINSON(Page)(8.00) —I rise to support the very strong opposition expressed in this debate against many of the sales tax propositions that are embodied in the legislation that is before us. In particular I want to emphasise the very serious disability for the dairying industry in Australia as a consequence of the 10 per cent sales tax on flavoured milk. If we look at the circumstances of that industry we find that it is an embattled industry. It faces the consequences of very severe restrictions on its export potential because of the Economic Community and the world market situation. As a consequence, it is very dependent on the domestic market in Australia. It will be recalled that only in recent months in this House legislation was dealt with in respect of the dairying industry. That legislation introduced a new and, at this stage I am bound to say, somewhat difficult proposition for the dairy industry-a levy imposed on the production of whole milk to try to bolster the income that would be ultimately derived on the manufactured side of the industry. By the manufactured side of the industry, of course, I refer to all of the products other than whole milk. In this House there was very extensive debate about the problems confronting the industry and the circumstances in which it was found that very extensive restructuring had occurred in some States and the very heavy impost that is upon the capital invested in that industry for the participants in the industry to survive. Yet the Treasurer (Mr Keating) introduced in this House a hefty 10 per cent sales tax on flavoured milk. We heard earlier today of the difficulties confronting those engaged in the wine industry and we heard of the imposition of sales tax on the citrus industry. I just want to say that there are sections of primary industry in the field of dairying which are equally damaged by this sales tax impost. If one looks at the impact the sales tax impost will have, there is no doubt that it will affect the marketing of whole milk at a time when the whole emphasis of the industry, at the behest of the Government, is to place emphasis on encouraging the domestic market in Australia. To encourage that domestic market means to go out in every possible direction to seek a higher consumption of dairy products domestically. So what did we find? In a matter of weeks the Government made a decision to introduce, for the first time, a 10 per cent impost on flavoured milk. Mr Slipper —Stabbed them in the back. Mr Nehl —Stabbed them in the back. Mr IAN ROBINSON —As my colleagues from Queensland and New South Wales said, it was a stab in the back for the industry. It is more than that; it is clumsy government. It is inept government. It certainly does not show any balance in the matter of where the Government is going economically because if one damages an industry, as this 10 per cent sales tax will do, it reduces the industry's potential for employment, it reduces its viability and it places just one more industry in the category of an industry at risk. So we find that despite the posturing this afternoon of honourable members on the back bench of the Government on the whole issue of this sales tax and the other related sales taxes-it is all very well to say that it means that the Government will have an additional $90m at its disposal to help reduce the deficit-what we put from this side of the House is that the propositions in the main in this sales tax legislation are unwise and are taken on the run. There has not been an assessment of what their effect will be on the overall economy. It is merely a matter once again of the Government taking very bad advice and one can almost see the political background to it-let us hit all of those industries that do not have big employment and that do not have the basis that city-based industries have, and let us bash the country once again. This is occurring in a way that is certainly very disadvantageous for the non-metropolitan areas of Australia. What the Government has overlooked, of course, if that is the philosophy, is what it means in terms of costs. If it were this Government's intention to try to minimise costs-after all, the cry from that side of the House for a long time now has been that if there is to be some moderation of wage escalation, the concern is rising costs-what do these indirect sales taxes do? If we look at them in relation to the primary products I have just mentioned and then look at the other categories, without doubt they mean a further escalation in terms of costs. Surely this is not the intention of a government that is determined to fight the economic crisis that is so adversely affecting the whole of this nation at present. But not on your life! It has not looked at that aspect at all; it just wants to find ways and means of raising certain revenue without any consideration as to the consequences of the imposition of these additional measures. What I want to say in particular about the sales tax legislation that is before us is that it has been described as modest and as an action to increase the revenue take in a way that is not going to be a great burden in the field of indirect taxes. I have just put the proposition that it is a great burden and I want to say why it is that I believe it is a far greater burden than people generally realise. I make that assertion for this reason: For two Budgets we have had a situation where there is an automatic increase in indirect tax simply because of indexation of taxation. This level of indexation is taking us through the roof in the field of indirect taxes. It is causing an inbuilt effect so far as costs are concerned. Whileever that exists, there is no escape from the real problem of moderation, so far as the overall economy is concerned if we are to consider both wage escalation and cost escalation. I put it to the Government and to the Treasurer in particular that he is hoodwinking the consumers of Australia by not making it clear at all what the total take is in the field of indirect taxes because of indexation. What do the Budget Papers do? They give us very little information in this respect. In fact, they give us no information at all. Certainly there have been no statements to indicate the step by step increase that has occurred. If these sales tax propositions are to be linked-undoubtedly they will be-to that same proposition, they will be part of the indexed system from now on. One starts at a level of the sort that has been introduced in this legislation and it escalates beyond reason as time goes on. I believe that is a very vicious attack so far as the particular areas are concerned to which we have referred in this debate. Not only the indexation aspect but also the changes envisaged in respect of the collection of the tax are very serious matters. Earlier this afternoon the honourable member for Hinkler (Mr Conquest) referred to this aspect. The frequency of returns that will be expected from those to whom the Government will turn to collect the tax will be a very severe imposition. It will be a burden beyond all burdens for small business. I believe that this tax is in tandem with the fringe benefits tax. The form filling, the preparation of returns and the way in which small businessmen will have to account for sales tax under these measures is very unfortunate. This country has enjoyed some sanity in the way taxes have been collected in the past. But since the advent in the last year or so of this Government's tyrannical approach to tax collection-certainly in the field of indirect tax, such as sales tax and fringe benefits, and also in so many other fields-there has been a total departure from a commonsense procedure for tax collection. We vehemently oppose that aspect of the propositions that are before us this evening. Mr BRAITHWAITE(Dawson)(8.12) —We are debating tonight some very complicated measures in connection with sales tax. I was advised by somebody in private practice as a public accountant that throughout Australia there might be 11 or 12 people who would understand the implications of sales tax in their entirety. I am not referring to the people in the advisers' box tonight; they may be specialists. My informant suggested that these people were outside the Australian Taxation Office-not inside it. I recall that in my years as a public accountant the most devastating thing one could have put on one's desk was a request for an interpretation of sales tax. That was some 11 or 12 years ago. I suggest that nothing has improved, either with this legislation-the Sales Tax (Exemptions and Classifications) Amendment Bill, the Sales Tax Laws Amendment Bill and the Sales Tax Acts Amendment Bill-or with previous legislation. It is very important to realise that sales tax is an indirect tax. It has a strong influence on the inflation rate. Because the tax is hidden the Government assumes that, once legislated for, it is of no concern because it just rolls on. Another influence of these indirect taxes is the tremendous windfall that has been given to this Government by the devaluation of the dollar over the last 18 months. As the cost of imported items increases, the import duty goes up and sales tax on both the import prices and the increased domestic retail price flows into the coffers. These sales tax measures, taken on a year by year basis, will have an influence of 12.3 per cent compared to what was charged during the previous year. Customs duty will show the same increase for the reason I have just mentioned. I want to deal with the increase in sales tax on motor cars and station wagons with a wholesale price for tax purposes above $19,892. This measure relates to the tax deductibility for depreciation purposes of vehicles used in business. I object to a comment by Government members that this increase is necessary to stop rorts. When Government members mention rorts they are talking about Mercedes Benz, which unfortunately only the Treasurer (Mr Keating)-not other members of parliament-can afford, Rolls Royce and the lot. A particular instance where the measure will affect, again, predominantly country people is the increase in the cost of imported four-wheel drive vehicles, such as Toyota Land Cruisers. The price of one of these vehicles 20 months ago, before the devaluation, was about $20,000. The price today is about $35,000 to $36,000. Mr McVeigh —Who is getting the rip-off? Mr BRAITHWAITE —The Government is getting this 10 per cent rip-off and the other taxation rip-offs. It is not good enough for Government members to come in here and refer to rorts without referring to actual examples of how taxpayers will be hurt. As the honourable member for Page (Mr Ian Robinson), who spoke previously, said, it is another attack on country people. Mr Blunt —What are the depreciation limits on cars? Mr BRAITHWAITE —The limit on cars is indexed to this wholesale price. Again, talking about rip-offs, the measure will mean that people who are legitimately using vehicles for business purposes and who are paying tax on that resulting income are denied. There is also to be a sales tax on certain household goods. I would like to read excerpts from an article published in the prestigious pages of the Mackay Daily Mercury on 12 September headed `Sales tax hits Mackay firm': The recent introduction of a 10 per cent sales tax on bathroom fittings has had a dramatic effect on Murraycraft Fibreglass at Slade Point. The company's manager-owner Mr John Buchanan said yesterday he had been forced to put off three employees since the tax was announced in the Federal Budget. `The tax has dramatically hit our major source of income . . . Immediately after the Budget, we had many orders cancelled for bathroom fittings and shower recesses. Our business in that area has dropped to only 20 per cent of its former volume.' Mr Buchanan said his former staff of 12 had been reduced to nine. The influence of this tax on the person on the factory floor can be seen immediately in a reduction in domestic sales and in numbers in the work force. That is only one example. Let us consider other aspects where this Budget sets out to tax the basic necessities of life-at least what I thought were the basic necessities of life. I refer to flavoured milk. I have been told by people who operate tuck-shops in schools and other facilities that already they have noticed a transfer from the purchase of basic good health products such as milk to junk foods which can be purchased for a lower price. Mr Slipper —Why does Labor put a tax on the health of children? Mr BRAITHWAITE —If we are not careful, mothers' milk may be sales taxed in the next Budget. I suggest that nursing mothers look very carefully at that. It would not be below this Government to do just that. We are seeing a tax on food products and their sugar content. It is very important that the people of Australia realise what is happening. I want to address a comment that was made by the honourable member for Page who spoke before me. It is very important to realise that this tax is a tax on services. We have already had the influence of sales tax on freight, to which country people have objected for many decades. We are told that nothing can happen about that. Mr McGauran —We are always told that. Mr BRAITHWAITE —If people would only realise it, what we have now is a tax on not only flavoured milk but also the service that puts it into the hands of the individual, the consumer-that is, a tax on freight, on carrying capacity. In Queensland alone I have been told that 1,500 additional retailers and vendors will become the collectors of this tax. That figure is significant when one realises that, if the tax were to apply at the processor level only, eight tax collection points would be necessary. At the moment there are 60,000 sales tax collection points in Australia, with 1,500 in Queensland alone. I suggest that right around Australia we are faced with a 20 per cent increase in the number of tax collectors. Who in Australia wants to become a tax collector, after we have asked every small business, every local authority and every government instrumentality to collect the wretched fringe benefits tax? That will go over like a lead balloon. It is important to realise that although we are told that within the context of such taxes we are collecting an additional amount of tax in the name of equity and fairness and to stop rorts, it is nothing of the kind. It is said to be a tax to remove anomalies. What always frustrates me in that regard is that there are yearly adjustments to correct anomalies but they always seem to impose additional taxes and bring something else into the network. There is an exemption, however, for goods entering Australia which have some bearing on the America's Cup. Perhaps it is not all bad news. Mr Blunt —The artful dodger has another tax rort. Mr BRAITHWAITE —That is right. In Western Australia, that could be true. It is important for the people of Australia to realise that the legislation provides a method by which collection points are increased. Every Australian should ask himself what the Treasurer has in mind beyond trying to create additional collection points. A tax will be imposed on basic food commodities and on the necessities of life. Mr McGauran —On ordinary Australians. Mr BRAITHWAITE —It is a tax on ordinary Australians, those in the poverty areas who regard milk and natural health foods, such as sugar, as necessities of life. Taxing such items means that people will switch to buying junk food. There are windfall gains involved for the Government, but it is not prepared to acknowledge them. The example I gave of a firm in my area is an indication of how the effects will be felt across Australia. Mr Slipper —What is going to happen on 1 November? Madam SPEAKER —Order! I am sure that the honourable member for Fisher is trying to be helpful, but I think that the honourable member for Dawson is doing quite well on his own. Mr BRAITHWAITE —It is an important question, Madam Speaker, because on 1 November, after the collection of this tax, the fringe benefits tax will be collected right around Australia. It is important that Australians realise that. The tax represents an attack not only on consumers but also on small business people. There is evidence that there will be a reduction in sales in that important area of dairying commodities, an area in which we are trying to keep domestic sales up. All this is being done under a very clever guise by the Treasurer, who says that the Government will just collect a further amount, but it will be 13 per cent above last year's figure. I draw the House's attention to the anomaly whereby small business is asked to make a sale, to collect the tax on a credit basis and then, perhaps, remit it by the 21st of the following month. The amount may not be collected for at least a week-perhaps three or four weeks-thus placing a further commitment on the finances of small business. Small businesses have particularly asked that they be treated fairly and be given extension of time. I know that the question has been raised with the Treasurer and the Department. They say that the measure is fair because the majority of sales around Australia are made on a cash basis. As I understand it, the only sales made on a cash basis are those in the motor vehicle industry, and that is a decreasing number in terms of the taxes that the Government is imposing. For goodness sake, let the Government have some thought for those who operate on a credit basis and let it give them an extension of time in that regard. Mr LAMB(Streeton)(8.24) —The performance of honourable members opposite-such as the honourable member for Wakefield (Mr Andrew), the honourable member for Barker (Mr Porter) and the honourable member for Mayo (Mr Downer), all of whom are from South Australia-has been amazing. Because their electorates take in part of the wine industry of Australia, I can understand that they have some concern. The honourable member for Dawson (Mr Braithwaite) did not mention the wine industry. I can only assume that he reflects the attitude of most honourable members opposite-that is, either he does not drink wine or he has no interest and concern for that industry. Honourable members opposite have huffed and puffed in this place declaring that they will fight the sales tax increase on wine to their utmost. However, as I shall outline shortly, that is somewhat less than true; it is posturing at its best. Honourable members are devoid of any constructive and positive suggestion for the industry. Being so base, it is politicking at its worst. Of course, they do not actually oppose the sales tax increases. They are in favour of, and are on record as being in favour of, consumption taxes. They actually want to move from direct taxes to more indirect taxes. Yet they bleat in this House about the effects on wine sales should the price rise due to the increase in sales tax. Honourable members opposite are the confused people who wanted to return to option A-one of the three options canvassed at last year's Tax Summit. Have they forgotten that option A represented a dramatic increase in direct tax? Have they forgotten that it was business, unions, primary industry and welfare groups across the spectrum that overwhelmingly opposed the consumption tax? Yet honourable members opposite clamour for it. Because they oppose some of the very progressive tax reforms imposed by this Government they would have to increase the consumption tax beyond the suggested 12 1/2 per cent to probably some 15 to 20 per cent. That is what they would do if they had a chance to bring in their unpopular, despised and rejected tax reforms. Have honourable members opposite forgotten also that option A, for which they clamour, contained a fringe benefits tax? They cannot have it both ways. They criticise the sales tax increase; yet they want a hefty consumption tax. They criticise the fringe benefits tax; yet they want a return to option A of last year's Tax Summit. They are confused. It is not surprising that the wine industry does not see them and trust them as its allies. It is because they have politicked and postured on this one isolated example of a sales tax increase. They will not discuss tax reforms and the whole Budget in the context of the wine industry. Let me give some examples of the wine industry around my electorate of Streeton. Perhaps the top cool-region wine area in Australia-the Yarra Valley-is in my area. I am proud to remind honourable members that at the recent Royal Melbourne Show one of the wineries, the Seville Estate, which is owned by Peter McMahon, won the media wine award. Journalists who drink, savour and write about wine probably know wine as well as the judges. That winery received top award at that show. I mention Yarra Burn, owned by the Fyffes; Mount Mary of John Middleton, which has won acclaim overseas, increasing its export sales to California; Fergussons; and Yeringberg to mention a few. They are top wineries. Those wineries will benefit from the devaluation of the Australian dollar. The wineries are strongly associated with tourism. The Yarra Valley, the Barossa Valley, the Hunter Valley, and elsewhere, will receive more and more high-income visitors from Japan and the United States of America with money to spend who will savour our top wines. When they return to their countries, thanks to the devaluation of the Australian dollar and the promotion of the trade commissioners overseas, there will be a greatly expanding market for exports of top quality table wines. The Yarra Valley wineries will be at the top. I remind honourable members opposite that I have more confidence in the wine industry than they have. I do not believe that it should have excessive protection. I believe, as do the Treasurer (Mr Keating) and this Government, that the 10 per cent increase in sales tax puts it on a more equitable footing with competitive commodities such as beer, and so on. Those commodities do not need protection. I have confidence, as do the Minister for Primary Industry (Mr Kerin) and the Government, that the wine industry will be able to expand, given the Budget that we have prepared. People argue, for instance, that the wine industry has enjoyed an increase in sales. The honourable member for Mayo said that there was an increase last year of 1 to 2 per cent. Perhaps it has plateaued-Australia is one of the largest consumers of wine, in terms of litres per head of population, and one cannot expect sales to grow astronomically all the time. When the 10 per cent sales tax was introduced, the wine industry largely absorbed the extra cost, and it was very hard to judge the true impact on the response of buyers to the rise in sales tax. But we have a different position with this increase of another 10 per cent. The major buyers of top table wines-of premium wine-are enjoying big tax cuts. Towards the end of this year, they will have more money in their pockets. They will be able to enjoy more wine and buy more wine despite the increase in the sales tax. That is my point. The people opposite, who pretend to represent the wine industry, have never really talked to them and have never seen their operations in the context of the Budget as a whole. They are trying to curry favour by pretending that they will fight the sales tax, but in reality they are not doing that, because they believe in high consumption taxes. At the same time, they are not being truthful enough to realise that consumers, with more money in their pockets, and devaluation, which means more tourists with more money in their pockets, will lead to greater promotion of wine and more sales in the wine industry. Let me give honourable members one concrete example of how this Government has urged our trade commissioners overseas to encourage people to consume Australian wine. Let us turn to London, which is only one capital city, where, in the last 12 months, under Austrade-the campaign for Australian exports-30,000 dozen bottles of top Australian table wine have been sold. Yet in the five years before these campaigns by the Government, only 5,000 dozen bottles of wine were sold. What is it that makes the wine industry tick? It is not protection; it is not special or favourable treatment, as those opposite want-it is having enough confidence in the industry to know that it will stand on its own two feet, and promoting it. People buy wine because they can afford it, and with the tax cuts they can buy more. With promotion, with Austrade and with the devaluation of the dollar, our wineries are poised to exploit the opportunity. Instead of French and Californian wine coming here and swamping the market, people will turn to the local product, and why should they not? In every place in Australia that produces wine we can find a top product. It is also said of this Government that it is encouraging beer as the workers' drink as against wine. I take it, therefore, that the people opposite think that only high income earners-only the elite of society-drink wine. Nothing could be further from the truth. The fact is that wine is marketed and presented in various forms, qualities and volumes. Due to the promotion of the wine industry, the worker now drinks vast quantities of cask wine and, in addition, is introducing himself to bottled wine. The fact is that the worker, the middle income earner and the high income earner are all consumers of wine, so let us hear no more from the Opposition that this Government has turned its back on the wine industry or wants to bash it around the head. Through devaluation, overseas promotion and tax cuts, the wine industry will enjoy the future that it has wanted for years. Let me give one more example of how this Government, through its buy Australia campaign and through devaluation, has been able to assist the wine industry. As a member of the rural task force who talks to representatives of the wine industry, I was told that the little caps that go on the top of wine bottles had doubled in price due to cost increases overseas and devaluation. Due to support and promotion by the Australian Government, for the first time an Australian manufacturer is ready to produce the same seals for the bottles at half the price. That is one more example of how this Government sees the wine industry not in terms of tax revenue but in terms of promotion. We know that with the tax reforms that have been introduced, the wine industry will enjoy increased sales, increased income and increased employment. It is true that the McKay Inquiry into the Grape and Wine Industry said that there should be a period of adjustment and review before any further increase in sales tax. But because the sales tax was largely absorbed by the wineries, it was difficult to calculate thoroughly the price elasticity of demand for wine given that sales tax increase. However, there had been a further increase in the consumption of wine, so, with due review, we have felt it appropriate within the Budget context not to continue this special treatment to the wine industry. I have found it increasingly difficult, as I have said to winery after winery, to defend this privileged treatment vis-a-vis the 10 per cent advantage in sales tax over similar commodities. I have said to them, and they accept it, that we see it in the context of the Budget, with its advantages for consumers and advantages for producers. Far from what the Opposition has said, this Government sees the wine industry in the whole context of taxation reform and industry generally. We are not politicking, as the Opposition would have it, on the 10 per cent sales tax. I and the Government believe that we have a solid, sound wine industry, and we are confident that it will prosper. Mr HODGMAN(Denison)(8.36) —We have just heard from another former public school socialist. His former mentors at Scotch College must be rotating in their private enterprise Presbyterian graves. The effect of what the honourable member for Streeton (Mr Lamb) is saying is that the people of Australia should be grateful because they have been raped only once when the Government could have raped them twice. This disgraceful sales tax legislation-this vicious, iniquitous, Hawke socialist Government legislation-will strike a mortal wound in our wine industry. It will again batter the dairy industry, which the Government has brought to its knees, and it will adversely affect every fruit producer in the country. May I start by endorsing the remarks of the honourable member for Page (Mr Ian Robinson). I support everything that he said in what I submit was a very fine and persuasive speech. Mr Slipper —An erudite speech. Mr HODGMAN —A most erudite speech and one which reveals the statesmanlike experience of the honourable member for Page. I draw attention to the point he made about the collection of this vicious, outrageous tax. Under new law made in Australia for the first time under the Government's wretched fringe benefits tax legislation, which I will continue to tear up publicly day in and day out until it is repealed from the statutes, the Government has transferred the obligation to pay tax from the person receiving the benefit to someone else. It has made the employer pay the fringe benefits tax; in this sales tax it will make tax collectors of every milk vendor, fruit juice vendor and other purveyor of such products. It reminds me of the Treasurer (Mr Keating), who said that a former Government that we had put in office would put a representative of the Australian Taxation Office at every petrol bowser. This Government will put an officer of the Australian Taxation Office at every bottle of milk, every carton of flavoured milk and every carton of fruit juice. Let us have a look at what the Government has done. I will prove in a moment-the honourable member for Streeton will be blushing with embarrassment-that this Government has sunk lower than any other government in the history of Australia. This point has not been raised in the debate; it is certainly a most unsavoury matter that I have to mention but it is in the Government's legislation and I shall expose it to public attention in a moment. What does the legislation do? First, as we have been told, the rate of sales tax on alcoholic wine, cider and other similar fermented alcoholic beverages is to be increased from 10 per cent to 20 per cent-a 100 per cent increase. As the honourable member for Franklin (Mr Goodluck) has pointed out, what will that do to Tasmania's fledgling wine industry and our century-old cider industry? I note the presence of the honourable member for Bass (Mr Smith). Magnificent cider is made in his electorate and the wine industry there is also very prominent. We have a second proposition. We seem to be attacking the teetotallers of Australia. I have said this before and I will say it again: If people ever want to see a dull bunch, they should look at the socialists, Pritikin diets and the lot. One can hardly get a smile out of any of them. They are dull, gloomy, miserable, little people. Some of them are very miserable and some of them have become morbid and depressed since they transferred from alcoholic to non-alcoholic. Mr Deputy Speaker, as a man of catholic tastes, you must be horrified that the present exemption for non-alcoholic beverages is to go and they are to be taxed at the 10 per cent rate. Mr DEPUTY SPEAKER(Mr Leo McLeay) —I do not think that the honourable member should involve the Chair in the discussion. Mr HODGMAN —We will leave your drinking habits out of it, Mr Deputy Speaker. I will not utter another word on your drinking habits; we will take it as read. In regard to the non-alcoholic beverages-- Mr DEPUTY SPEAKER —Order! I think that, even though the honourable member said that in jest, he should withdraw. Mr HODGMAN —Very well. What has the Government got against people who drink non-alcoholic-- Mr DEPUTY SPEAKER —The honourable member might complete the form. Mr HODGMAN —I did withdraw. I have laryngitis. I am sorry if you did not hear me. Why is this Government attacking people who consume non-alcoholic beverages? It is attacking packaged flavoured milk also. Mr Slipper —The poor farmer. Mr HODGMAN —The poor farmer and the poor little kids of Australia. What about the Big M? What about all of those young ladies on television and in posters encouraging young people of the country to drink milk? My mother told me: `Milk is not a drink, Michael; it is a food'. To make the milk more popular, flavouring is added. There is chocolate flavoured milk, for instance. You are probably too old to know this, Mr Deputy Speaker, but there is banana flavoured milk also. Many flavours are available. Milk is good for young people's teeth. It helps to get calcium into their bones. The Hawke socialist Government wants to have a generation of kids whose bones will crumple and whose teeth will fall out because they did not get enough milk, to the Government's eternal shame and damnation. That is the sort of rubbish for which the Government is responsible. What else is it having a go at? I have laryngitis, but I will not be stopped on this, Mr Deputy Speaker. I will bring the truth to the public attention. Sales tax will be imposed on non-alcoholic wine-those magnificent Sanitarium wine products. Think of all the people who go to weddings who do not drink alcoholic wine. They will now be slugged with sales tax by this miserable Hawke socialist Government. Sales tax will be imposed on non-carbonated fruit juice products containing not less than 25 per cent by volume of Australian fruit juice. At this time fruit juice is being dumped in this country, and the wretched Government has done nothing about it. Does the Government want to put the Australian fruit juice industry out of business? That is what it will do. My electorate does not contain only up-market city people; I have farmers in my electorate-at Ferntree, Neika, Leslie Vale and historic Collinsvale-and by heavens, I will fight for them. I am a bit of a primary producer myself at heart. I am a former life member of the Tasmanian Farmers Federation. Let us turn to motor vehicles. How many four-wheel drives-- Mr Beazley —You have been shot. Mr HODGMAN —I have not been shot. The Minister is on the way out. The Minister wants to introduce U-boats. They did not win in World War II and they will not win now. U-boats for Australia! What are we coming at? How many four-wheel drive vehicles will farmers of Australia be able to buy for less than $19,000 a piece? Why is the Government hitting the farmers? Mr Goodluck —They want us to buy the Russian ones. Mr HODGMAN —That is right. The honourable member for Franklin says that this crowd opposite wants us to buy those Russian ones. They are about as reliable as a two-bob watch. I would not mind betting that some people are on a commission from the Soviet Embassy. Why is the Government hitting the farmers? I now turn to the items that nobody has mentioned, but I will-swimming pools, spa pools, spa baths, hot tubs and accessories. What about the elderly who need them for their muscles? Talking about the elderly, the honourable member for Melbourne (Mr Hand) has entered the chamber, bloodied but unbowed. What about the old people who need these items for muscular relief? I will talk later about a sauna in a hotel in Sydney. But that is another story. There are many people-- Mr McGauran —The Boulevard Hotel. Mr HODGMAN —Yes, you are right again, the Boulevard Hotel. That is quite right. I will come to that later. There will be a lot of fight, fun and fury. What about the old people? Mr Hand —You have been drinking again, have you? Mr HODGMAN —Not at all, you little weasel. I do not go to the Soviet Embassy and get on the vodka and caviare. I have been attending a seminar, and drinking orange juice. I come to the lowest of the low. Who would have thought that we would ever have a government in this country that was so low that it would put a sales tax on dunnies? Mr Lamb —On dunnies? Mr HODGMAN —On dunnies. That is what the Government has done. My ears pricked up when I heard the words uttered by the Minister for Jeremy Cordeaux, the Minister for Immigration and Ethnic Affairs (Mr Hurford). In his second reading speech he referred to household fittings and sanitary ware. I said to myself: `What is this sanitary ware that the Hawke socialist Government is going to raise a bit of revenue out of?'. So I looked at the small print. Some honourable members will pale at the fact that I have to read it to the House, but I am going to. This is how low the Government has stooped. It is getting $358m out of these sales tax measures. A team of wild horses could not get me to vote for it. The day that I vote for rotten legislation like this is the day that it will snow in the Nullarbor. In regard to sanitary ware, this is how the Government intends to get Australia back on the right economic track: Examples of these goods are household fittings and sanitary ware- listen to this- household septic tanks, chemical sanitary units, mov- able toilet pans, and chemicals and other materials or preparations for use in such goods. The honourable member who is hiding over there, spoke about the problem of unconnected sewerage in Australia. He raised it over and over again. Does it make him feel proud that he is a member of a government-I will not name him because he is in enough strife without my adding to his trouble-which has stooped so low that it is whacking a 10 per cent tax on sanitary ware and septic tanks-a sewerage tax for a sewerage government? I think this is disgraceful. I know how I would like to describe it if we were not in a chamber for which I have some respect. The Government has stooped to the lowest depths. I speak on behalf of every family in Australia whose home does not have connected sewerage, every family in Australia that has to tolerate a septic tank, every family in Australia that has to utilise movable toilet pans-is that not called the night-cart in old fashioned language?-and chemicals and other things. The honourable member for Streeton went to Scotch College, and he is voting for this. The Government has chosen to impose a tax on those items. Last but not least I refer to the gardeners of Australia. Every little green finger in Australia, wherever he is, will know that the Hawke socialist Government regards his activities as something which it must get a little money out of, because every single little gardener in Australia, thanks to the bandicoot and the ferret, will have to pay 20 per cent sales tax on his gardening tools. Mr DEPUTY SPEAKER(Mr Leo McLeay) —Order! The honourable member for Denison has used an allusion such as that before and the Chair has pointed out to him that that is an unacceptable allusion. Mr HODGMAN —You know who I am talking about, don't you? Mr DEPUTY SPEAKER —The honourable member may think that it is intelligent to set these situations up. He will withdraw, and if he wishes to mention people, he shall use their proper titles. Mr HODGMAN —I withdraw, and I will name them. Everybody in Australia now knows that I refer to the Prime Minister (Mr Hawke) and the Treasurer. They are now known throughout the length of the country-- Mr DEPUTY SPEAKER —Order! The honourable member will not continue the allusion. He will use the correct title for individuals and members. Mr HODGMAN —The Prime Minister and the Treasurer; I withdraw. In conclusion, I say that the fact that even the Chair knows what I was talking about proves that it is only a matter of time before that beautiful coat of arms is changed and the emu-- Mr DEPUTY SPEAKER —Order! The honourable member has also been warned by the Speaker about what he is about to say. He shall not do that either. Mr HODGMAN —I simply say that I will live to see the day, while people opposite are in power-which will not be for very long-when the Australian coat of arms will become a bandicoot and a ferret fighting over a bunch of bananas. That is the way we are going. Mr DEPUTY SPEAKER —The honourable member for Denison will not proceed along that line. Mr HODGMAN —On that basis, Mr Deputy Speaker, I think that I have proved my case. I will not vote for this legislation. Mr O'Keefe —On a point or order, Mr Deputy Speaker: I believe that the matter which you insisted be withdrawn was again referred to. Mr DEPUTY SPEAKER —My recollection is that the honourable member for Denison withdrew. Mr O'Keefe —And the honourable gentleman again referred to it. Mr DEPUTY SPEAKER —The honourable gentleman is not assisting the Chair with his persistence. Mr O'Keefe —The honourable gentleman again referred to it and I would draw that to your attention, Mr Deputy Speaker, as possibly even being in contempt of the Chair. Mr DEPUTY SPEAKER —The honourable member for Burke is not assisting the Chair. Has the honourable member for Denison concluded his remarks? Mr HODGMAN —I had until that person interjected. I would simply say that the honourable member should clean the wax out of his ears and listen to what I am saying. The point of order has provoked me to add a further comment. If we were faced with a sales tax alone, that would be bad enough. However, we have a sales tax, plus a fringe benefits tax, plus the grave-robbing, granny-bashing capital gains tax. These taxes all combined will see this rotten, miserable Hawke socialist Government thrown out of office at the next election. I can hear in my ears now the screams of the Prime Minister as he is dragged from the Lodge. If it happened tomorrow, it could not be soon enough for me and for the overwhelming majority of Australians. Mr HICKS(Riverina-Darling)(8.51) —I rise to contribute to the debate because I was rather alarmed by some of the remarks of the honourable member for Streeton (Mr Lamb) about the wine tax. As honourable members will know, the Murrumbidgee Irrigation Area is within my electorate, and perhaps the electors of Riverina-Darling will be more affected than any other electors in Australia by the latest Budget brought down by the Government. Apart from all the other taxes that have been imposed on the Australian people-I believe about $1,500m worth-we in the MIA find that we have the citrus tax and the wine tax. In addition, we have some dairy farmers in the area who will be adversely affected. I am particularly angry because I remember a day in 1983 when the Prime Minister (Mr Hawke) was in the electorate. He was attending a meeting at the Yoogali Club in Griffith. He gave a pledge to all the growers who gathered there to meet him-he was then a candidate for the office of Prime Minister-that there would be no tax on wine, and I was one of those who believed him. I thought that the wine industry was in such a position that if that promise had been made the gentleman concerned would surely not go ahead and put a tax on wine, and nor would a government which he led. Of course, that is all history now. Within a few months we had a tax on wine. That brought the industry to its knees, and then the Government reneged on that policy and changed the tax. We have had toing and froing all the time in the wine industry. One of the main problems for the industry is that taxes are imposed, taken off and replaced by different taxes. The industry does not know where it is going because of government interference. I heard the honourable member for Streeton say that we have wonderful wines and that we are going to export them, and that we are going to do this, that and the other. However, the Government's varying tax impositions would make it difficult to export some of our good wines. There would not be the time to allow them to mature and it would be very difficult to get our extra special wines overseas. I do not think that it would be possible to gather enough together. I may be wrong, but I am sure that there would be some difficulty because of the aging process and the amount of tax involved. Mr Cunningham —The honourable gentleman is wrong. Mr HICKS —The honourable member for McMillan says that I am wrong. Those to whom I have spoken in the wine industry tell me that I am right, so I am not sure about that. One of the arguments advanced by the honourable member for Streeton was that wine has been taxed because it brings the product into line with a number of other beverages. I know that the beer industry has had a great deal to do with this. It mounted a campaign to the effect that the tax placed on wine should be increased because it is not fair that beer drinkers are paying a larger amount of tax than wine drinkers and that there should be fair competition. That is rather like saying: `I shall jump in the lake and so everybody else should do so as well'. That is a ridiculous argument. The beer industry and most Australians should have been arguing: `For heaven's sake, how about taking some of the tax off us and not putting on more'. However, that is the argument that the beer industry used. I would describe it as puerile, and it is one that I do not go along with. I know that the wine industry does not as well. It is not a manufacturing industry and it can make wine at only a certain time of the year from grapes. The grapes can be used only at one time of year. To compare wine with beer is a nonsense. Members have spoken about wineries but my concern is not restricted to them. Wine grape growers in my electorate are already experiencing great difficulty-I know that the honourable member for Mallee (Mr Peter Fisher) and South Australian members are having the same problem-and the additional tax will not make things any easier. The growers are really the basis of the industry and they are finding things difficult. I would say that in some areas some of the wine grape growers will have to go out of business. The citrus industry-- Mr Tim Fischer —Is in crisis. Mr HICKS —It is in absolute crisis. An anti-dumping investigation is proceeding and there are citrus industry meetings all over the place. What do we find? We find that taxation is imposed on the industry or on citrus juices. Since the 1930s-alterations were made in the 1950s-there has been an arrangement whereby Australian juices were exempted from taxation when over 25 per cent of Australian juice has been used. The idea in the early days was to ensure that the elderly and the young could have juices without having to pay tax. They provided vitamin C and the other vitamins and minerals that these people needed. The Government has decided now that that is no good and that there must be a tax on juices. That is because it is the biggest taxing government in history. It has to raise more and more revenue if it is to give away money as if it is going out of fashion. It says: `We must get money in from somewhere; so let's tax those who are trying to do the right thing by trying to create some wealth for the country by providing the produce and vitamins for the young and the elderly'. We find now that we have a tax on citrus juice. I do not know what else will be taxed in future but I think that everyone will want to be extremely careful. I have spoken on these issues many times on previous occasions and so I shall not detain the House this evening. I am saying to the Government: `For heaven's sake, before you put the citrus growers out of business as well as the wine grape growers, the wineries and the factories that are producing citrus juice, reconsider the matter before it is too late.' If these people are forced to leave the land, there is nowhere for them to go. We talk about diversification but we have great difficulties in the MIA. I think that the long term future is good but in the short term we are facing difficulties. I ask the Government to look closely at this tax at this late stage and not to place a tax on wine grape growers. It is seeking to impose the tax for all the wrong reasons. It is not doing the industry, including the wine grape growers, any good, and in the long term it will not do the Government any good. The citrus industry is saying: `For heaven's sake, think of the growers, the industry and Australia'. I do not think that the Government has imposed the tax because it has any malice towards the growers. I do not know why, but I think that it is ignorant of the facts. I urge it to think again and not to place the tax on the industry. I know that I am parochial when I say that it will affect my electorate very much, but I am sure that it will affect many others in Australia. It will throw many people out of work and cause great difficulties. Mr BEAZLEY(Swan-Minister for Defence)(8.59) —The Whip has asked me to thank everybody who has participated in this debate because it has provided him with a great deal of interest this evening. I thank almost everybody who has, the exception being the honourable member for Denison (Mr Hodgman) who always manages to call down a plague of locusts on this House and a plague of boils on the population of Australia and to say that leprosy will descend on Tasmania if this Government remains in office another minute. I thought we got a little lucky when he announced himself, in the course of his remarks, as a former life member of the Tasmanian Farmers and Graziers Association, and all that we were witnessing in this chamber was a ghost. But he seemed real enough as he wandered over to this side of the House, so I expect we will hear from him again. The only thing I would say about the generality of the speeches of honourable members opposite is that we are grateful for their support on the Sales Tax (Exemptions and Classifications) Amendment Bill and cognate Bills. The fact is that they could proceed with some of the tax promises that they have been putting forward only by a substantial expansion of the sales tax base. Of course what we will be discussing in this House, if they put those propositions forward in any serious political way, is not the question of sales tax on wine, flavoured milk or whatever, but on many basic items such as food, and we will be determining in debate here before we go to the people whether that constitutes a responsible act of government. I again thank all honourable members who participated in the debate. Question resolved in the affirmative. Bill read a second time. Leave granted for third reading to be moved forthwith. Bill (on motion by Mr Beazley) read a third time. Consideration resumed from 19 August, on motion by Mr Hurford: That the Bill be now read a second time. Question resolved in the affirmative. Bill read a second time. Leave granted for third reading to be moved forthwith. Bill (on motion by Mr Beazley) read a third time. Consideration resumed from 19 August, on motion by Mr Hurford: That the Bill be now read a second time. Question resolved in the affirmative. Bill read a second time. Leave granted for third reading to be moved forthwith. Bill (on motion by Mr Beazley) read a third time. Debate resumed from 19 August, on motion by Mr Barry Jones: That the Bill be now read a second time. Mr BEALE(Deakin)(9.03) —The Opposition does not oppose the Customs Tariff Amendment Bill (No. 2), which proposes the removal of the 2 per cent revenue duty applicable to gold imports, mainly to gold bullion. We note that gold imports are of the order of $1m a year, and this Bill will have a revenue effect of only about $20,000 annually. The Minister for Science and Minister Assisting the Minister for Industry, Technology and Commerce (Mr Barry Jones) in his second reading speech refers to the possibility of Australia being an attractive alternative place for the storage of gold bullion because, amongst other things, of its political stability. I would like to take a couple of minutes to talk about the political stability of Australia. I wonder whether the Government thinks that the MX missile fiasco represents political stability. We had the Prime Minister (Mr Hawke) wandering off to the other side of the world but keeping in touch with his numbers men back here. He changed his mind, changed it again, and this left a terrible impression. As a result of that the Australian dollar started to fall, and it does not seem to have stopped falling since. I wonder whether the Government considers that the backdown on the Bill of Rights legislation represents political stability. I remind the Minister that his colleague in the Senate, the Minister for Resources and Energy, Senator Gareth Evans, said that the backdown on the Bill of Rights was a victory for the troglodytes, and that presumably means for the majority of his colleagues in the Cabinet. I wonder whether the Government thinks that the turnaround of the Treasurer (Mr Keating) on the withholding tax, less than one month after it being put into operation, represents political stability. Mr N.A. Brown —Mr Halfpenny's nomination. Mr BEALE —Does he think that Mr Halfpenny's nomination-a former member of the Communist Party of Australia-to join the Victorian Senate ticket represents political stability? What about the walk-out by members of the Left during the Budget debate? I wonder what the world thought about that. Did the world think that was political stability? The Treasurer one month proclaimed the age of endless economic growth and the next said that Australia was a banana republic. I cannot see that political stability is exemplified by the performance of this Government. Also the Minister, in his second reading speech, said that the duty is impeding the development of the Australian gold market. But what else is impeding the development of the Australian gold market? I can tell honourable members that it is the threat of a gold tax. If the Government wants to have a freer market in gold, why expose the industry to higher costs? Where is the Gutman report? It has been with the Government since 28 August. Why has the Government not released that report? Why is it hiding it? What is there to hide? There can be only one thing to hide, and that is that the Government is afraid of the recommendations of that report. It is afraid of seeing the honourable member for Kalgoorlie (Mr Campbell) come across to this side. If the Government were now to say no to a gold tax it would not impede the development of the Australian gold market. Business needs stability, political stability, and a framework in which it can operate properly for effective decision making. Examples of this are the car and steel industries. Why will the Government not do that for the gold industry? Why will the Government not say something about the gold tax? The contribution of the gold industry to Australia in the last few years has been exemplary. Gold exports this year are expected to double to about $1.5 billion. Gold cross-subsidises many other metals to keep the mining industry going in difficult times. Thousands of people are employed in the gold industry. Gold is the fastest growing mineral export industry, and the tax will deal it a body blow. Furthermore, this is at a time- Mr DEPUTY SPEAKER(Mr Mildren) —Order! I am finding it rather difficult to relate the comments of the honourable member for Deakin to the substance of the Bill. I ask the honourable member to be mindful of the need to remain relevant. Mr BEALE —Mr Deputy Speaker, I remind you that in his second reading speech the Minister said that the duty is impeding the development of the Australian gold market. I am talking here about the development of the Australian gold market and it is entirely relevant in the context of our $14 billion trade imbalance, the causes of which are our inflation rate, which is many times that of our trading partners, massive overregulation of industry in Australia-and the examples abound-and inflexibility in the labour market. The Government itself has focused on work practices and accord mark 3, if it involved big business and big unions in some kind of deal would be a disaster because it would further institutionalise our high inflation rate, which is impeding the development of the Australian gold market. This would lead to the freezing out of small business entrepreneurs when we depend on them for the community's wealth creation. Worse still, the gold tax, which will impede the development of the Australian gold market, will not raise any significant further revenue. What of the imputation system which, if reversed, would preclude the need for a gold tax altogether? It is one year since the announcement of the imputation arrangements and still we have seen no details. No doubt it will be like the fringe benefits tax and the capital gains tax; long in coming, and when it comes, very complex and with lots of anomalies. I need hardly remind you, Mr Deputy Speaker, that the coalition will repeal the fringe benefits tax and the capital gains tax. At a time when the Government is screaming for investment in export oriented, internationally competitive and innovative industry, such as the gold industry, it is preparing to belt it with a gold tax. The coalition will repeal any gold tax on return to office, but in the meantime we do not oppose this Bill. Mr RONALD EDWARDS(Stirling)(9.09) —As the honourable member before me, the honourable member for Deakin (Mr Beale) indicated, the Customs Tariff Amendment Bill (No. 2) is about the removal of import restrictions on gold and, to put it in its proper context, it is part of the move that this Government has made towards reducing those areas of regulation in the economy where we believe that regulation should sensibly be removed. I think it is important to reflect-for the benefit of the honourable member for Deakin-that when the Opposition parties were in power, they were reluctant to reduce this sort of regulation. The Australian community has less than fond memories of that experience. The Opposition did not take up the substantial issues of reducing regulation, and we well know it. This piece of legislation is really about reducing that regulation, so we have to get it in place. As part of the internationalisation of the Australian economy, this Government has moved, where possible, to reduce restraints upon trade. It is interesting to reflect upon the work of the Minister for Trade (Mr Dawkins) at the moment in Uruguay. In particular, the flotation of the Australian dollar was one of the ways in which this Government brought a more responsive and flexible Australian economy into the world scene. The previous Government failed to address itself to that matter; it dodged the issue and left us with a massively overvalued exchange rate. This piece of legislation fits within the framework of what we would regard as suitable deregulation of the Australian economy, and I think we really have to test that. The performance of this Government with respect to regulation has been to deregulate in areas which the Opposition, when in government, was unwilling to act. We could spend a moment or two reflecting upon why that may be the case, but I do not think it is appropriate in this debate. However, I think it is appropriate to point out that when the opportunity was there-there was substantial opportunity-the Liberal and National parties did not proceed towards such a pattern of deregulation. From the point of view of Western Australia, my home State, removing this import restriction is very important, because in Western Australia we are moving towards a more effective gold mining industry. I will say something more about that in a moment. Our move towards a more effective gold mining industry has been taken up particularly by the State Government. I note for the record that the State Government has been very effective in recent times in trying to market Australian gold internationally. That climate is very important, and we should be seen to be fostering it. Clearly, the opportunity for this country to become a place in which gold reserves can be based is a very important move. The honourable member for Deakin talked about political stability. He raised a number of issues, but I do not think that on an international view-if we were to compare Australia with a number of other countries-Australia would be seen as politically unstable. Clearly, that is not the case. Australia has been politically stable. If we talk about instability, I suppose we can refer only to 1975 as being a period of contrived instability. Again, this debate is not the appropriate place to talk about that, but it is important to say that on a world scene, the Australian economy and the Australian Government are seen as having great stability and performance. The Treasurer (Mr Keating) has pointed to the recent assessment by Moody's Investor Services Inc. of the capacity of the Australian Government to manage international and domestic issues. What we are saying with respect to this legislation is that we believe that as part of the internationalisation of the Australian economy, not only are we allowing the entry of foreign banks into Australia-that is clearly long overdue-but we are also allowing the Australian dollar to float. The third aspect is that we are saying that if people overseas wish to use the Australian economy as a place in which they can base gold reserves, we would provide a suitable base for those reserves. Clearly, we have a sophisticated infrastructure. The Minister for Science (Mr Barry Jones) would say that the future lies in our becoming very sophisticated in terms of our ideas, the level of sophistication of technology we must have and the people who go with that technology. This is part of the move towards saying: `We have a lot to offer our immediate region'. For example, our immediate region can benefit from the skill level in the Australian work force, the high level of formal education offered, the skills and reliability of communications systems, the effective banking system we have, and the historical experience of having had democratic governments for a long time. All of these factors, when put into context, suggest that we are saying to the world community: `In terms of your judgment and of our performance, we are prepared to offer the Australian economy if you wish to base gold reserves here or undertake other sorts of investment activities. We believe that we can stand up and be counted'. That is what this legislation is really about. I think my colleague indicated his support for that measure. It is a view we are getting across to the Australian community, and it is long overdue. For a long time we have said: `We have a very narrowly defined economy and we have very narrow expectations for ourselves'. We are saying that that does not have to be the case. We can have an economy that has high levels of expectations and high levels of performance, and we can redefine our capabilities. We on this side of the House are very clear. We believe that we have the work force, that we have the infrastructure and that we have the performance. We can certainly provide the leadership at the level of government to deliver in terms of industries-and this is one of those. As the honourable member for Deakin has indicated, currently the matter of the gold tax is of some concern. Western Australia is concerned about the level of production, the performance of marginal mines and whether the gold tax will result in a net gain to revenue. Those are the sorts of issues about which we are concerned. However, I can say with some confidence that those are the sorts of issues that Cabinet is addressing, and clearly, they are issues we would regard as being of considerable importance in terms of the operation of a gold mining industry if there were to be a gold tax. I think there is a need to put an interpretation upon this legislation. This legislation is about saying that we desire the removal of impediments to the movement of gold bullion into this country. The removal of those impediments is very important, because we believe that we can offer an economy which is sophisticated, politically stable and capable of performing. I know that honourable members opposite have made some remarks that go towards that, but clearly, if one looks at the macro picture, at the level of employment, at the level of production and at the general overall question of economic growth and the direction of the economy, it stands to reason that people overseas would say: `Yes, we do have faith in the Australian economy'. We on this side are in no doubt about that. It gives many honourable members on this side of the House a lot of pleasure to be able to say at the moment that what we are endorsing to the Australian community is: `Get out there and support the Australian economy; get out there and buy Australian; get out there and get behind what we regard as being a good, effective Australian economy that can deliver goods and services of high quality to its own market and international markets'. When we ask: `Will people overseas be prepared, for example, to risk gold bullion in the Australian community?', we have no doubt about the answer. We see ourselves as having a regional role. The Minister for Foreign Affairs (Mr Hayden) is charting a whole new agenda as far as our regional role is concerned, and it is an admirable move. Mr Price —And the Minister for Trade. Mr RONALD EDWARDS —The Minister for Trade is setting standards, as my colleague mentions, in terms of what we regard as the rational way to conduct trade. It is true that there is a rational way to conduct trade, and it is certainly not the path down which the European Economic Community has gone. We ought to pay tribute today to the Minister for Trade for his achievement in getting those moves on trade in general. We are pleased that this legislation is one of the many moves that this Government has undertaken towards the developing sophistication of the Australian economy. We believe that it is the way to go; we believe that the Australian community recognises that and so do our neighbours. What we need now is a lot more enthusiasm and support for these goals. When we go around our electorates, as do my colleagues in the chamber, and talk to people in the community, we see a sense of commitment, a sense of purpose, and it is now up to us, at this level of government, to show leadership. We are confident that the leadership is there to be shown. Mr BARRY JONES(Lalor-Minister for Science and Minister Assisting the Minister for Industry, Technology and Commerce)(9.19) —in reply-I thank the honourable member for Deakin (Mr Beale) and the honourable member for Stirling (Mr Ronald Edwards) for their contribution to this debate. I want to provide some information about the Gutman report of the inquiry into taxation of gold mining, carried out by Mr Gerry Gutman, not the even better known Kasper Gutman of Maltese Falcon fame-although that did have a relationship with gold. The reason that we do not have the report already is that there was a request by the Western Australian Gold Policy Committee for a two months delay in closing dates for submissions. Originally it had been expected that the report would have been dealt with and the decision announced a good deal earlier, but there was a request both from the Gold Policy Committee and the Western Australian Government to extend the date by two months. It meant that the reporting date was delayed until 29 August 1986. I think one would have to say that three weeks or so is not an undue delay given the precedents set by the Fraser Government and other governments in dealing with reports on sensitive matters. The Government has already indicated that if any legislative measure were to be introduced after the report was considered such measures would have effect from 1 July 1986. I think people know where they stand. Things are coming to a pretty pass when the Opposition starts raising political objections to the legislation proposed by the Government, an offence I thought compounded by the honourable member for Deakin by his ranging so widely. I am glad to see that my colleague from Western Australia, the honourable member for Stirling (Mr Ronald Edwards), pushed the State interest just a bit and hardly raised politics at all. I thank honourable members for their contribution to the debate. Question resolved in the affirmative. Bill read a second time. Leave granted for third reading to be moved forthwith. Bill (on motion by Mr Barry Jones) read a third time. (Budget Debate) Debate resumed from 19 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 N.A. Brown(Menzies)(9.22) —This Budget is a complete failure. It does not face up to the economic disaster confronting Australia; it provides no solutions to that impending disaster and, if anything, it will only make the economy worse than it is now. It has been almost universally rejected and condemned both within Australia and overseas. The final and most humiliating rejection came on 10 September, Australia's day of shame as I described it this morning, when Moody's Investor Services Inc. denied us, for the first time, our AAA rating and Australia was held up to international ridicule. What are we faced with in the Australian economy? We have an inflation rate that is twice the Organisation for Economic Co-operation and Development average and many times the inflation rate of the countries we trade with, we have interest rates that have gone through the roof, we are now trading at a loss of $14 billion a year, we have enormous overseas debts that put us up with the big league of debtor nations, we have negative economic growth, we have investment that is actually set to fall this year, we have now had two consecutive quarterly declines in production in our manufacturing industries, and, to cap it all off, we now have rising unemployment that is already higher than it was during virtually the whole of the seven years of the Fraser Government. Surely that is enough, without any more, to demonstrate to anyone that the Australian economy is in decline and that we face a disastrous situation. Surely that is enough to demonstrate to anyone that we needed urgent action to be taken in the Budget-urgent action to reduce government spending to get our inflation rate and interest rates down, urgent action to stimulate investment, and urgent action to get the taxation burden off the backs of business people and to restore incentive and encourage people to have a go. But instead of that urgent action, we have been given a Budget that shows nothing more than that the Government is suffering from sclerosis. All that we got was the same old lack of leadership, the same big spending, the same tax burden sapping the incentive of the productive sector and the same old refusal to face up to the rigidities and the stitched-up inflexibilities of so much of our economy. The biggest single failure of the Budget, and the failure that I want to concentrate on, is its utterly inadequate response on wages policy. The strategy of the Budget, so far as there is any strategy to be perceived in it at all, is apparently a strategy, so it is said, based on the twin approach of tightening fiscal and wages policies. The Government has clearly failed on the first of these because it has utterly failed to bring down a sufficiently tight fiscal result. It has failed to tackle any of the big items of expenditure and many of the so-called cuts in expenditure are nothing more than delays and postponements in expenditure. It has not cut expenditure; it has simply postponed it. Government spending this year will total 29.4 per cent of gross domestic product, the fourth largest percentage in our history-the three largest are the other three Hawke-Keating Budgets. And if we needed any evidence of this at all, we now know it to be true because the Treasurer (Mr Keating) and the Minister for Industry, Technology and Commerce (Senator Button) have both admitted as much by saying that we need a mini-Budget to implement further cuts in expenditure. So much for the fiscal side. The Government has also failed on the other leg of its apparent approach because it has failed to deliver the promised tighter wages policy. Not only has it failed to deliver a tighter wages policy, but it also has failed to do a single thing to use our wages structure and our industrial relations structure to encourage employers and employees to exert themselves and to increase productivity. Before the Budget, the Prime Minister (Mr Hawke) told us that when we got the Budget we would see that it contained, as he called it, an unequivocal statement on wages. We certainly got that. We got an unequivocal statement that in the face of a shrinking economy, with falling investment and rising prices, the Government would push for a 2 per cent wage increase. It dresses it up, of course, by saying that it will argue for the 2 per cent discounting of a 4 per cent claim in the next national wage case. But, stripped of this smokescreen, the Government will argue for a two per cent wage increase to be piled on top of a stalled economy, on top of high inflation and on top of rising unemployment. As if that is not enough, the Government also wants to pile on top of our wage structure a further wage increase of 4 to 5 per cent next April, with no undertaking that it will argue for any discounting at all. This is an utterly irresponsible position for the Government to take at a time when the economy is clearly starting to grind to a halt. To make it worse, the Government peddles the absurd claim that this policy of higher wages would see wage outcomes broadly in line with those of our major trading partners. That is the basis on which we are said to be going to trade out of our economic difficulties. This is utterly false and has no foundation whatsoever. I say that because the Budget Papers tell us that nominal wage increases for the next year will be over 6 per cent. The average for our OECD trading partners will be 4 1/2 per cent, in the United States of America wages will increase by less than 2 1/2 per cent, and in Japan they will increase by less than 2 1/2 per cent. They are countries whose terms of trade, like those of most of our trading partners, will improve this year when Australia's terms of trade will continue to decline even further. So when we are faced with rising inflation, rising unemployment, rising costs and shrinking trade, what is the Government's response? Its response is to increase wages by 2 per cent now and to increase them by more than our trading partners will increase theirs. If the Government were not blinded by its complete adulation of the trade union movement, it would see what it is plain for everyone else to see-that this is a formula for absolute disaster. To pile more wage costs on to a struggling and shrinking economy is exactly that-a formula for disaster. It should be plain to anyone that the 2 per cent discount is certainly not enough when Australia is faced with the economic factors with which it is faced. It is nothing more than a political figure forced on to the Government by the strait-jacket of the prices and incomes accord which has shackled the Government and which now shackles the economy of this country. There is only one responsible course open to the Government-to support full discounting for both the direct and the indirect effects that the depreciation of our dollar has had on the consumer price index and to then argue for that in the Australian Conciliation and Arbitration Commission with all of the authority and all of the conviction that a central government can carry. Not only is this common sense but also the Treasury has told the Government that it is common sense. I say that because in the Budget Papers we are told: If we are to hold the competitive gains of the past 18 months, labour cost increases in Australia will need to be kept broadly in line with those of our major trading partners. That is critical to fostering the necessary restructuring of the economy, and related to that, more buoyant levels of business investment. The Budget Papers go on to say: If adequate profitability is to be achieved, additional restraint needs to be placed on labour costs. Yet in the face of common sense and in the face of what the Government has been told by the Treasury it should do, the Government has taken the politically expedient course of promoting a wage increase that will put our wage costs well above those of other trading nations, and that way spells disaster. If wages are to play their part in economic recovery, we have to do more than have complete and full wage discounting. Indeed, as we in the Opposition put it, we have to change our whole industrial relations and wage fixing structure. If we do not do that, we will continue to have wage increases piled on to the cost structure of all of our industries, even though they clearly cannot afford to pay. I say that because that is the essence of our present centralised system. If a case for a wage increase is made out, because of the very fact that the system is universal and is compulsory, that wage increase is applied to all industries and to all employers, big and small, whether they can afford to pay or not and, indeed, even if they have to go out of business as a result of decisions handed down by the Arbitration Commission. That is an accurate description of our present system, but when one describes it like that one must come to the conclusion that it is an utterly absurd system to determine wages. But there is no need for anyone to take my word for it. One can look at the most recent condemnation by overseas observers of this ridiculous system. I have said this before today, and it deserves to be said again, that when Moody's Investor Services Inc. took away our AAA rating, it commented on one of the reasons that justified its action. As the Minister for Employment and Industrial Relations (Mr Willis) tried to do today, it is not enough to wipe off this reason by saying that really it was not very important, as this is one of the reasons given by this international agency for reducing our AAA rating. Moody's said: Industrial and labour market rigidities are further expected to hamper the country's on-going efforts to shift economic resources into areas of high foreign exchange earning capacity. There is no doubt that Moody's, like all objective observers and, indeed, as common sense would tell us, has come to the conclusion that if one has a rigid system that is compulsory and universal and which is prohibited and prevented from looking at the wages that are needed and the conditions of employment that are needed in individual industries and individual enterprises, one will continue to have resources going into unproductive and uneconomic areas. If the system continues to have that effect, which it will if the system is not reformed, the same thumbs down international judgment will be passed upon the Australian economy as we have seen passed over the last few months. It is for this very reason that the Opposition has argued-the debate has clearly moved in our direction on this issue, even to the extent that the Prime Minister seems to be picking up parts of it-that we must let individual employers and their employees agree on wages and conditions of employment that are justified by the real world conditions that exist in the individual enterprises in which they work. Until we do this and until we reform our industrial relations system in this way and have it take more account of economic reality than it presently does, we will continue to have resources flowing into unproductive areas, as highlighted by Moody's only a couple of weeks ago. What we in the Opposition say we need in this country if we are going to keep the present industrial relations system, is first of all a system of full discounting because of the devaluation of the Australian currency. That is what we must have if we are going to retain the present system. There must be full discounting because of devaluation, otherwise the system will wreak its own vengeance. What we need far more than that is a new system that will bring flexibility into our wage fixing process and not the phoney flexibility that the Government and the ACTU have dredged up because the whole public debate is now moving swiftly away from them. We need a real flexibility that enables employers and employees to work together for their mutual prosperity by agreeing on wages that the enterprise can pay, wages that the employees know the enterprise can afford, wages that will help the enterprise survive and expand, conditions of employment that will encourage a more productive and happier work force and, above will, work practices that will get costs down and productivity up. What a lame, half-hearted response the Government has given to the need to reform the antiquated work practices that bedevil so much of Australian industry. It is going to have yet another talkfest. We have to acknowledge that at long last the Prime Minister has seen the need to reform our work practices. But it is a death bed conversion seized on by the Prime Minister before the debate leaves the Government well behind. It is a death bed conversion by a man, after all, who has spent virtually all of his working life piling excessive wages and extravagant conditions on to struggling industries. There is only one way to reform work practices in Australia and that is by changing the law so that we can get employers and employees at the individual work place together so that they can agree amongst themselves to reform the way that work is done, free of the dead hand of the trade unions, and so that they can work together for their mutual prosperity and their mutual success. That is what the present system prevents and deters them from doing. That is why the present system is in such desperate need of reform. But the Budget, like the Government's whole economic strategy, is silent on reform. Not only is it silent on reform but also it has set its face against the reforms that we so desperately need. The Government has locked this country into high inflation, low investment, big debts and now, it seems, almost guaranteed high unemployment. Its deliberate policy to slow down the economy, its over-reliance on monetary policy and its utterly inadequate wages and fiscal policies will force more people on to the dole queues as the rest of this financial year unfolds. We are already seeing this because unemployment has now gone from 7.6 per cent to 8.3 per cent in only two months. All of the economic indicators show that jobs, like the economy as a whole, are shrinking. As if that were not enough, on top of this the Government has promoted policies that will force interest rates up, discourage investment and stifle incentive by imposing new and higher taxes on business, on wage earners and on the productive sector as a whole. So, one cannot come to any conclusion other than that the Budget is a disaster and the one consistent element is that the Government that promotes it is also a disaster, and the sooner we get rid of that Government, the better. Mr CUNNINGHAM(McMillan)(9.40) —The 1986-87 Budget has been lauded and welcomed by the vast majority of Australians. It has been criticised and condemned by a minority-a minority in most cases with a direct political alliance with the Opposition and certainly by the Opposition itself. An even smaller group, made up of those on the extreme right, acting in chorus with some on the extreme left, have sought to add their voice in the negative to the Budget debate. The Budget is an integral part of the Government's strategy to lift Australia into the real world of international competition. For too long Australians have been denied the opportunity to develop industries which would and could support our primary industries and a diminished manufacturing sector in earning export income. Conservative governments-in particular in past years-have failed to realise that those working in farming and mining, whether with their capital or with their trade skills, could not sustain our growing appetite for a higher standard of living and a massive amount of imports. In fact, for seven disastrous years the Fraser Government encouraged cheap imports with an overvalued dollar as a policy weapon allegedly put into place to contain inflationary pressures-inflationary pressures which we were told would come from the famed resources boom, the boom we heard so much about in 1979 and 1980. Where did that resources boom disappear to? What were we left with? We were left with a legacy of massive imports and a manufacturing industry torn apart and a country now trying to redevelop its position to earn the necessary money to sustain our standard of living. To illustrate this point I remember, back in the early 1980s, in my electorate the State Electricity Commission of Victoria was talking about a plan to establish numerous new power stations in the Latrobe Valley. Thousands of hours of valuable time were wasted on policies of the conservative governments. This was symptomatic of the total lack of credibility in Liberal and National Party policy positions. Let me turn to this Government's approach. Let us look at the Government's strategy. On 29 May 1983 the Treasurer (Mr Keating) announced that the Government had decided to commission a report on the Australian financial system which would have regard to the recommendations of the committees of inquiry into the Australian financial system, the Government's economic and social objectives and the need to improve the efficiency of the financial system. The Government's fundamental objective at that time was interpreted by the group that was established as the implementation of economic policies, including monetary policy, that were directed at combating inflation and reducing unemployment simultaneously. The Government has been successful on both counts. It was further interpreted as being the implementation of policies aimed at ensuring that the benefits of economic growth are equitably distributed and that the pursuit of broad economic objectives proceeds consonantly with the enhancement of opportunities for economically and socially disadvantaged groups in the community. We have certainly succeeded in both those areas. It was interpreted as being the provision of opportunities for Australians to participate in the development of the nation's resources. We are certainly working towards that objective. The Prime Minister (Mr Hawke), in his John Curtin Memorial Lecture of September 1983, observed: Social democrats have no reason to deny the capacity of markets to allocate resources efficiently, or the great productive power that is associated with this capacity. I see no virtue in regulation of economic activity for its own sake, and believe that where markets are working efficiently they should be left to do their job unless there are clear reasons in equity for government intervention. We are conscious of the various reasons why the workings of a market-oriented system might not always be consistent with the Government's economic and social objectives and the community's overall interests. In such circumstances there will always be occasions for government intervention directed at achieving particular objectives such as economic and institutional stability, more competition, greater equality of opportunity for all Australians and a more equitable distribution of income. The Government does not ignore its responsibilities in these areas. In conjunction with business and the trade union movement-the trade union movement particularly through the prices and incomes accord-the Government has certainly, over the last three years, worked to that particular strategy. Let me now turn to the outcome of three years of these strategies, bearing in mind the extra liability of a savage decline in commodity prices which developed in the economy 12 months ago. I turn to the recently published 23 September edition of the Bulletin. The article I refer to puts the lie to comments made by the Deputy Leader of the Opposition, the honourable member for Menzies (Mr N.A. Brown), who spoke before me in the debate. He was indulging in his usual practice of prophesying doom and gloom and attacking wages and the work force. The heading of the article reads `Corporate chiefs scotch talk of recession'. I do not know whom the Deputy Leader of the Opposition claims he represents but certainly, from looking at this article, it is not the business people of Australia. The preface to the article states: `Leaders of Australian business are optimistic about the future. David Haselhurst tells how, to a man, they discount the gloomsayers' talk of an imminent recession'. The article states: Sir Peter Abeles-managing director of TNT Ltd-was due this week to announce a record net profit for 1985-86 of more than $100m, up from $72.5m previously. Abeles said: `I do not agree a recession is necessarily there. It will depend, of course, half on our own actions and half on the rest of the world's economy. If they (the forecasters) say business will be subdued I would agree with that-but do not forget we have had some very big years. In saying that he was talking about the last three years. The article continues: John Saunders, joint managing director of Westfield Holdings Ltd and the manager of Australia's biggest shopping centre trust, said he definitely didn't agree a recession was imminent. He said: `I'm prepared to bet my bottom dollar that if interest rates come down 2 per cent a month before Christmas we'll see a Christmas trading boom. Everybody is trying to paint a picture of gloom which has made people and particularly consumers nervous. I'm not a banker, but I cannot believe interest rates can stay high for more than another three or four months . . . Brian Quinn-managing director of Coles Myer Ltd-said that while the economy was `recessed' at the moment he questioned the idea that it would worsen. I do not understand where the honourable member for Menzies gets his advice from when these views come from Australia's business people. Brian Quinn continues: My own view is that it will not. Things are not as bad domestically as they are being painted. While retail sales are not buoyant they are by no means poor. We're feeling reasonably comfortable about sales leading up to Christmas and about Christmas itself. . . . On another hopeful note, Quinn said Coles-Myer had significantly lifted its purchases of Australian-made stock as a result of the devalued Australian dollar, particularly in textiles and hard goods such as stationary, crockery and fancy wares. This suggests that the government's budget strategy is working to the extent that it is aimed at holding in domestic demand while at the same time stimulating import replacement and improved exports. This is a clear indication that the strategy of the last three years, of which this Budget is an integral part, is certainly working. Let us move on: Treasurer Paul Keating would perhaps get some comfort from the strategies under way at Amcor Ltd-the major packaging, paper, building products and transport group (through its half share in Mayne Nickless Ltd). Amcor managing director Stan Wallis conceded that technically Australia may already be in a recession with little prospect of overall improvement in the short term. But, he said, some segments of industry were now more competitive than ever. `The processing critical issue is-can we capitalise on the opportunity this presents?' We certainly can capitalise on it, and many people in Australia are capitalising on it. However, it appears that Opposition members, and particularly the honourable member for Menzies, have not been talking to the right people. The article goes on: Amcor believes that it can. At the end of last month, the company announced it would build a $70m wood processing plant in the Bathurst-Oberon region of New South Wales in joint venture with New Zealand Forest Products Ltd. The processing plant would produce medium-density fibreboard with an output largely capable of both replacing imports and opening up export opportunities. Amcor is also spending $60 million on rebuilding its Maryvale plant to expand capacity for making high-quality ``white'' paper and other quality paper now supplied by imports. Wallis said the company was confident of maintaining steady progress in 1986-87 and `will help to ensure the J curve will be a reality'. To make sure there is no real recession, he said two key objectives must be to ensure minimal wage escalation in the next 18 months and a reduction in interest rates. He also called for more incentives to invest and expand. From these comments by some of Australia's business people, as reported in the Bulletin, there is every indication that the Government's three-year strategy, of which the Budget is a only an integral part, is working. To come into this House, as the Deputy Leader of the Liberal Party, the honourable member for Menzies, has just done and talk in the mode that he did of doom and gloom, and of the fact that it is all to do with wages, is to forget that a strategy is in place. He seems to ignore the fact that everyone in Australia is aware that we have had an enormous downturn in our commodity prices which has affected our economy drastically. We have had our ability to earn money overseas cut by in excess of 6 per cent. That has fed its way through the economy and has had an impact on the confidence of the nation. However, the strategy that the Government put in place from 1983 on has been not only the correct strategy to put Australia back on the map but also a strategy capable of handling the massive downturn in commodity prices. On top of the normal approach that would have been taken, we have had to deal with the savage blow dealt to us by the overseas situation. The strategy is certainly bearing up. Every indication, as I have just quoted from the Bulletin, is that there are many opportunities Australian-wide for business to grow and develop. The floating of the dollar, the accord and everything that is in place now is working for the benefit of Australia and Australians. To unnecessarily move in the directions espoused by some of the extreme Right in the country, especially those supported by the honourable member for Menzies, who attacks work practices in a way that seeks confrontation, can only set back that strategy. Anybody who knows anything about industrial relations-I have taken note of the position in my electorate of McMillan and there has not been a serious industrial dispute in the State Electricity Commission of Victoria since 1977-is aware that there has been an ongoing position, especially since the accord was established, to sit down with management and negotiate on work practices. That is happening. It is not something new that the Deputy Leader of the Liberal Party and the Leader of the Liberal Party (Mr Howard), have suddenly cottoned on to. It is part of the strategy to which the Government has been working. The Prime Minister in calling a special meeting in Melbourne next week, has accentuated the fact that it is happening, that there are reasons why the Australian community needs to be aware that it is going on, and that business people in the community should not be duped by the approach taken by the Opposition and some people on the Right in Australia who understand that because of the strategy that has been in place for the past three years, there is a golden opportunity in the next 18 months for the Government that is elected in early 1988 to be the Government that will stay in power in this country for a long time. With the strategy that has been put in place, the opportunities for Australians have never been better since the late 1950s and early 1960s. I strongly support the Budget strategy. I strongly support what the Government is doing. I am sure that by the time the next election comes around the great majority of Australians will concede that and will return the Hawke Government to office. Mr COBB(Parkes)(9.54) —On 17 August this year, the Prime Minister (Mr Hawke) made the remarkable statement: The party is over-finito-and Australians have to understand that it's finito. We are now in a crisis which is as great as the crisis of war. Two days later, the Dads' Army elected to fight that war brought down the battle plan for the coming year-the Budget. What a disappointment that turned out to be. In our position of crisis, we needed a restoration of incentive, a lifting of government burdens and an encouragement of investment. Instead, we got the old-fashioned, out dated, dog's breakfast of increased taxes and charges-$1,500m worth of them. In this war situation, as the Prime Minister describes it, the public were crying out for cuts in government expenditure, for the hard decisions to be taken. However, the Government could only muster the courage to run up the pole a flag fashioned out of white feathers. The war cabinet generals who occupy our Government's front bench had decided to lead from behind. The problem areas in our society are the same or worse today as they were the day before the Budget. That is the crux of the failure of the Budget. I refer to indicators such as inflation, interest rates, unemployment, stifling taxes, and our overseas debt. Nothing in that area will change for the better. I shall deal briefly with each one in turn. Since this Government came to power, the gap between our inflation rate and that of our trading partners has widened. Our rate is running at between 8 and 9 per cent while that of our trading partners is between 0 and 2 per cent. That alone puts enormous downward pressure on our dollar. The Budget has done nothing to improve that. Interest rates, running at near-record levels of nearly 20 per cent, do more than anything to kill off business in this country. They have risen since the Budget due to the direction of the Treasurer (Mr Keating) to the Reserve Bank of Australia to prop up the dollar, and they will continue to remain high in the foreseeable future. Unemployment, at 8.3 per cent, is rising and threatens to soar. The Budget prediction is for only a modest increase. Unfortunately, many commentators estimate that levels will reach 10 per cent next year which, in extra dole payments alone, would blow out the Budget by a further $500m. We should not forget that the predicted Budget deficit ran over by $826m last year. The Budget deficit figure of $3.5 billion was in itself a welcome figure-until one realised that it had been arrived at not through cuts in government spending but in increasing taxes. An amount of $1,500m of extra tax has been plucked out of the economy at a time when business is desperately short of investment capital. What an absurdity. The Budget has done almost exactly the opposite of what was needed. Before considering those taxes, let us look at our overseas debt, which highlights more than any other figure, I believe, the serious financial position Australia is in today. When this Government came to power, our external debt was not much above $25 billion. That was a high enough figure. It had taken 83 years to reach that figure, including the mad spending Whitlam years. What is that debt today? It is something over $86 billion. Next year it will go over $100 billion. This Government has taken three years to triple what it took 83 years to achieve. However, those figures do not tell the full horrific story. The public sector component of that debt is increasing at a rate double that of the private sector component. The terms of the loans that are taken out to cover the debt, which once were measured in years, are now measured in months. An even worse position emerges when we consider what the debt is spent on. In the past, overseas funds were raised to finance investment spending; that is, they were used for investment ventures that would create wealth which would increase the standard of living of us all-- Mr Braithwaite —The coal mines of the Bowen Basin. Mr COBB —That is a typical example-and at the same time, service and repay the debt itself. However, today a gigantic and increasing part of the borrowing is used simply to bankroll government consumption spending-in other words, to create little or nothing, and return little or nothing-in non-productive areas. Once this sort of pattern emerges, as it has, it has the look of irresponsibility written all over it. It creates uncertainty. It is worthwhile remembering that the debt in this country per head of population is of the order of the debt in Mexico, Argentina and Brazil, and it is only our ability to service that debt which still has us on our present credit rating. But this debt must lead eventually to a downgrading of our credit rating, as is already happening. Our once AAA credit rating has already slipped one notch; I guess that when it finally gets down to a B rating, the B will stand for banana. We are fast becoming the only Third World country in which you can still drink the water. The state of the economy, as reflected in the falling value of the dollar, is best summed up when we hear that the name of one of the candidates on the Victorian Australian Labor Party Senate ticket for the next election is Halfpenny. Mr McVeigh —He is a com, isn't he? Mr COBB —He used to be. However, if the world's greatest antique collector is not soon relieved of office, perhaps the Victorian Senate candidate should change his name by deed poll to Farthing. Let me now look briefly at some of the Budget taxes and changes. Some time ago the Prime Minister promised that he would cut the fuel price by 3c a litre. What has happened? Federal excise has quadrupled from 6c a litre to 24c a litre in the term of this Government and, in the Budget alone, another $700m is to be extracted out of the Australian economy as a result of a 3c rise. No sooner was the Budget brought down than, eight days later, we had another rise of 2c a litre, which takes another $500m out of the economy. Mr Conquest —Shame. Disgraceful. Mr COBB —It is disgraceful. Only tonight I heard on the news that petrol is to go up again-this is the third rise-in the middle of next month. It is almost beyond belief. We all remember the Prime Minister's promise that there would be no sales tax on wine. In the last Budget a sales tax was introduced, and this time it is to be doubled. What about the tax on children? The 10 per cent sales tax on fruit juices, introduced for the first time in this country, will be particularly damaging to the citrus industry, and a 10 per cent sales tax on flavoured milk will do the dairy industry, which is already in desperate straits, no good at all. The Federal bank accounts debits tax will go up by 50 per cent and take another $90m out of the economy. One of the most horrific areas is health. The Medicare levy will go up by 25 per cent to 1.25 per cent of income. There we have another broken promise. Prescription charges will rise by 100 per cent, from $5 to $10. A rise of that proportion is almost beyond belief. Mr McVeigh —You can't trust those Labor guys. Mr COBB —That is quite true. Road funding alone will drop by 8 per cent in real terms in the coming year. Perhaps that was one area where we could have seen an increase in spending. Aboriginal funding is to rise in real terms and will peak at $570m this year. I mention that figure because it is very doubtful whether the expenditure of all that money will actually benefit the Aboriginal people. A new direction is urgently needed in that area. Funding for Priority One has been increased $67m in a desperate attempt to fulfil the already broken promise that 10,000 jobs would be provided by June this year. In New South Wales alone, the number of jobs created in private enterprise through Priority One is zero. It is almost beyond belief. Priority One has become Priority Zero. What did the Budget do about the fertiliser subsidy? It was removed from the imported product and transferred to locally manufactured fertilisers. Therefore, we will have dearer imported fertilisers. Let us remember that not all high analysis fertilisers in demand by farmers are made in Australia. Transferring the subsidy to the domestically made product will mean that production will become more inefficient. It will become a monopoly area, and that must mean dearer fertilisers for farmers. Let us look at social security. We have seen that pension rises, like income tax cuts, are to be deferred-yet another broken promise. Unemployment benefit payments are to rise by $436m to a total of $3,558m. Mr McVeigh —Are they going to have to work for that at all? Mr COBB —Not at all. The supporting parent benefit is to rise by $123m this year alone, to $1,361m. It is the fastest taxpayer growth area of all. However. I note that there is to be a cut in family allowances of $173m which is an anti-family measure. I have nothing against cuts, but the Government seems to have them all in the wrong place. Pay as you earn tax is up 10 per cent due to bracket creep, despite the 1 December tax cuts, and Government receipts will be up by 11 per cent. I seek leave to incorporate in Hansard a table showing the major aggregates of the 1986-87 Budget. Leave granted. The table read as follows- MAJOR AGGREGATES OF THE 1986-87 BUDGET AND COMPARED WITH 1985-86 BUDGET 1985-86 1986-87 (estimate) $m % $m % Outlays... 69,917 + 9.7 74,764 + 6.9 Receipts- Tax... 58,399 +11.4 64,885 +11.1 Non-tax... 5,792 +26.7 6,376 +10.1 Total... 64,191 +12.6 71,261 +11.0 Deficit... 5,726 3,503 This Budget clearly called for a wage pause, but what are we to get in the coming year-a wage rise of 6 per cent. It called for expenditure cuts, but we are getting net rises of 6.9 per cent. This Budget called for fewer taxes, but we are to get more taxes. The Budget called for changes to industrial relations and a freeing-up in the area of wage fixing, but that is not to be. People were crying out for changes to existing taxes that are stifling business. I am thinking of the fringe benefits tax-the FBT or `farewell Bob tax'-but that is not to be. The capital gains tax will also remain in place. The result is that none of the problems of the economy has been addressed. We will have more taxes and bureaucracy. It is in effect a Budget of no courage. It was a last chance Budget for this Government. It has missed that chance, and as the economy steadily deteriorates it will ensure the Government's slaughter at the next election. Mr RONALD EDWARDS(Stirling)(10.06) —The first issue that needs to be clarified in the Budget debate is the Government's overall strategy. This Government is set to put in place a comprehensive strategy for the management of the economy. If we reflect on the remarks made by some honourable members opposite, it is evident that they do not have a comprehensive strategy. I find it interesting that they talk about the difficulties that we face on the external account and juxtapose that issue wages, with wages saying that it is a wage-related matter. Their problem in arguing that is that the big loss areas on the external account have been our major commodities. In a general sense, many of those major commodities do not come from labour-intensive industries; they come from capital-intensive industries. So it is very hard to argue, for example, in regard to the drop in the market for iron ore-between 1982 and 1986 iron ore prices have fallen from $US21.90 a tonne to $US16.10 a tonne, which is a reduction of 26 per cent-that the labour component is very significant. It is not. What is significant with respect to that industry is the declining market for iron ore. We are all aware of the impact on demand for iron ore and coal of the decline in the world steel industry. Let me give another example in amplification of the argument that I am putting before the House. To take the beef industry, between 1980-81 and 1985-86 the price for Australian boneless frozen beef in the US market fell from an average of $US2.55 a kilo to $US1.95 a kilo-down 24 per cent. The most recent price was $US1.84 a kilo. Again we are not talking about an industry which is labour-intensive. In terms of the total output of that industry, labour tends to be a relatively small component, so it is very difficult to sustain an argument that focuses upon wages policy and says that the impact of the wages policy has caused a decline in those markets. It does not hold. I shall return later in the debate to say that we need a comprehensive central wage-fixing policy, which is what we have, to address the whole question of wages. It is something which Opposition members have chosen to shy away from, and it does them no credit. It will do them no credit out there in the electorate until they have addressed the major issue of wages policy. Let me also turn in this analysis to coal. Between 1982-83 and 1985-86 average coal export prices have fallen from $US54.85 a tonne to $US39.41 a tonne-down 28 per cent. The most recent prices are about $US31.72 a tonne. Again we are not talking about an industry which, in terms of volume, is impacted upon very much by wages. Indeed, with the large open cut mines the wage component in the coal industry is quite small. The argument being advanced by honourable members opposite-the honourable member for Parkes (Mr Cobb) is one of those-that somehow our wages policy is central to the decline in those export industries just does not hold up. We are talking about industries which have declined due to other factors, and they are not wage factors. They are declining due to economic conditions-that is, the demand for those industries into which those commodities go and, beyond that, the health of the economies which use those finished products for which those commodities constitute a basic resource. I turn to another example. Let us look at silver. Between February 1983 and August 1986 the London Metal Exchange-LME-silver price fell from $US13.97 an ounce to $US5.31 an ounce-down 62 per cent. Again, the wage component in that is very small. What we are talking about is a market-related factor. The market-related factor is that there has been a decline in those particular commodities and those markets. I find it interesting to have to make these remarks, given the fact that the Opposition is presenting itself as a market-oriented party. I find that difficult to sustain; nevertheless, it tries to argue that. What we are talking about is market factors and market forces at work in relation to commodity prices. What we are saying in this place is that if one wants to go down the path that the Opposition wants to go down-that is, of a deregulated wage system-one will see market forces at work and the kind of wage conditions that characterised the market-place in 1981-82, in what one might call the staggering final years of the Fraser Government. The Australian community has not forgotten that; nor have we on our side, because we recognise the deficiencies of that approach to policy making. We will not risk that again, because clearly the Opposition is not capable of putting together a series of comprehensive wages or other policies. I will round off this segment of the argument by talking about some other commodity movements. I refer to wheat which, again, is not a labour-intensive industry. However, between 1980-81 and 1985-86, wheat prices fell from $US181.90 a tonne to $US133 a tonne-down 27 per cent. The most recent price is about $US103 a tonne. We are all aware of the impact that subsidised United States wheat sales are having on our potential to sell wheat to markets. We must focus on the external conditions that shape the market for our commodities. For the Opposition to argue that the central focus of the economic debate is applied by wages policy is to miss the substance of the economic forces at work. I would like to develop the argument further. Obviously, time will prevent me from completing my arguments this evening. But what we on this side have is a series of policies which fit together. We have fiscal policy which, fundamentally, the Budget incorporates. We have monetary policy which has been a central element in our policy making this year. We have a trade policy. We also have a wages policy. We have a foreign credit policy-and external policy. All of those aspects fit together. What we are waiting on, in terms of the Australian debate, is to find out the Opposition's policies. It has an industrial relations policy, but it has not carried very much weight with the audience to which it has been addressed. In fact, that audience has been very unreceptive of its industrial relations policy. If we look at the way in which the policy is being developed, we see that it is really one which tends to try to borrow some of the more extreme elements of the Australian political scene. What we on this side of the House are concerned about is to put together a comprehensive policy. Mr Hand —The ratbag element. Mr RONALD EDWARDS —As my friend the honourable member for Melbourne says, it is the ratbag element. Clearly, what is happening is that the Opposition, in a vain search for policy, is attracting the ratbag element of the Australian political Right, like fleas to a dog. The honourable member for Denison (Mr Hodgman) need not turn to acknowledge those comments. We well know that there are some substantial problems with respect to the Opposition's wages policy. The substantial problems that it faces in terms of its Party and wages policy is that it is now running the risk of falling into the control of the Copemans of this world. The community will not wear it, because it is not substantial. It is a very ineffective way to go about developing a wages policy. What we saw in 1981-82 was the inability of the conservative parties of this country to have a wages policy because, in terms of operating a sophisticated economy such as ours, one cannot proceed without a comprehensive wages policy. What we are saying is that we have one and the Opposition has not. The Opposition, in the absence of a wages policy, will not have a credible economic strategy. Debate interrupted. Madam SPEAKER —Order! It being 10.15 p.m., I propose the question: That the House do now adjourn. Mr EVERINGHAM(Northern Territory)(10.15) —I want to talk tonight about a matter of double standards. I want to talk about someone who should be purer than Caesar's wife. I talk of someone who is savagely slamming the most swingeing imposts on all and sundry in the Australian community; someone who is called the world's best and who is, after all, paid $2,000 a week to be the world's best; someone who has been described as jesuitical, which to me has always implied pure and above reproach; someone who is a fighter and a soldier, but obviously also someone who has been a hair splitter as well; someone who applied the blow torch to any in the previous coalition Government who transgressed; someone with expensive habits, expensive time pieces, hour glasses, imperial tick tocks and expensive hobbies. These sorts of things apparently breed backsliding. He is someone who tells us that what the nation needs is example; someone who tells us to tighten our belts; yet someone who has awarded himself an effective pay rise of $947 a week. People have to let their belts out three or four notches when they hear that sum. Effectively, that is what anyone in the private sector would have to be paid to match the travelling allowance perk our Federal Treasurer (Mr Keating) is awarding himself, because in private enterprise the sum of $17,000 or so in travelling allowance would attract fringe benefits tax. When everyone else in the community is beset by higher taxes, indexed excise and capital gains and fringe benefits tax, what do we find the architect of our banana republic doing? The man who dreams up the nasties has dreamed himself up a dream run. How does he do it? After all, we know that he owns a swish house which is undergoing lengthy renovations without permits in Sydney's swish Elizabeth Bay. He actually lives in the equally salubrious suburb of Forrest in Canberra. His name is on the roll in Canberra. Presumably, he applied to enrol here. That is where he lives with his family. He has no livable residence in Sydney. He cannot even hang his hat in Sydney-so much so that he flies back to Canberra on Friday nights and other nights on VIP jets. By any standard, Canberra is the Treasurer's principal place of residence in accordance with the Remuneration Tribunal determination. The Treasurer has admitted that he does not live in his Sydney house. Canberra is his permanent place of residence under the Commonwealth Electoral Act. But, by opting to have as his home base a place where he does not even hang his hat, he is $17,290 a year or $370 a week tax free better off. No wonder the arro- gance of the Labor Right astounds the Australian Labor Party Left and threatens to split their fragile alliance apart and asunder. Of course, it is all done with mirrors, not even with First Empire clocks. There is a secret Cabinet decision, the Keating decision, that allows all of this. How the drover's dog must squirm. After all, even the stripper of dying butterflies' wings, now the Premier of New South Wales, was forced to repay travelling allowance which he claimed by saying that he lived at Tweed Heads. Public clamour claimed the career of a Northern Territory Chief Minister who was thought to have unwarrantedly claimed only $9,000 in travelling allowance. There may be nothing illegal about the Treasurer's actions, but is illegality the standard by which Australia's Federal Treasurer should be judged? No private employer could pay the fringe benefits tax on the benefit that the Treasurer has awarded himself by administrative sleight of hand, without it costing almost $950 a week. Is this the example to set in Australia, which is searching for its lost soul and diving for a sinking dollar? No, it is the height of cynicism. It is the sort of unprincipled self-serving, double standards type of decision that one has come to expect from this Government. Mr MARTIN(Macarthur)(10.20) —It is obvious that the honourable member for the Northern Territory (Mr Everingham) has set the standard for tonight, so I am happy to oblige and get right into it. I am pleased to see that Senator Michael Baume has entered the gallery tonight. In the National Times on Sunday of 21 September there was a front page story under the title `Enter, the real Steve Martin'. This article stated: The seat of Macarthur in the House of Representatives that Michael Baume once held for the Liberal Party is now held for the Labor Party by Steve Martin. Steve Martin also writes a regular column for the financial pages of the Sydney Daily Telegraph newspaper. But the Steve Martin who writes the column . . .'' That Steve Martin is none other than Michael Baume. I should like to point out that I take a great deal of displeasure from having to see my name associated with such an article and the series of people who write under that particular by-line in the Sydney Daily Telegraph. I can recall that in times gone by it was written under the heading `Martin's Place'. I can accept that, but when it was changed and was written under the by-line of Steve Martin, which is a fictitious name that allows Senator Baume and, he reliably informs me, others to write their comments I find it rather personally distasteful. I should like to ask a couple of questions of the honourable senator, and I hope that at some stage he will have the opportunity to answer them. If he is writing under the by-line of Steve Martin and other people are doing likewise, I want to know who is paying the income tax. At some time in the future will someone come to me to tell me that I am a bloke who owes income tax because someone has been using my name? What happens at some time in the future if a procedure that is designed to stop tax avoidance is launched by the Taxation Office? Will inspectors come to suss me out because my name has been linked? Is the person who is writing under my name afraid to use his own name-the same applies to the others who are involved-because he does not want to put his name to the sorts of statements, the far out to the far Right statements, that appear in the newspaper? Everybody knows that imitation is the best form of flattery, and I suppose that in some respects I should feel flattered by my colleague from Wollongong, the honourable senator, but I draw the line at being flattered by Liberal Senators, in this instance a failed Liberal candidate for the seat of Macarthur in elections gone by. The honourable senator, when he was the member for Macarthur, came up against the Labor Party in 1983, and was defeated. I wonder whether that triggered off his misrepresentation of my name. When I subsequently became the member for Macarthur, it happened to be at about the time that the by-line started to appear in the Sydney Daily Telegraph. That is when my name, or the name itself, was used. I do not mind my name being bandied around, but I draw the line when people at Wollongong come up to me and say: `I thought that you represented the Labor Party and yet you are writing all this rubbish in the Sydney Daily Telegraph'. I reply: `It isn't me'. I have to wait until I find out from the National Times on Sunday that Senator Baume and others are using my name to confuse people in Macarthur and other areas of Australia. Why is it that a man who worked as a partner in a firm of stockbrokers, as finance editor for the Bulletin and as a senior adviser to the Leader of the Opposition (Mr Howard) has to hide under somebody else's name? Could it be that he is afraid to put his own name to the articles that he writes? Maybe that is the position. The article states: There is certainly no conflict between his position in the Opposition and his work for the column. He doesn't write about Opposition policies. Of course he does not. That is because the Opposition does not have any policies. That is why he does not write about any such policies. The Opposition does not have a policy with which to bless itself. I used to write a column in the Illawarra Mercury of Wollongong and my name went under it. I used the name Stephen Martin because that was the name with which I was christened. Every Press release that I issue is accompanied by the name Stephen Martin because I do not wish to be associated with the nom de plumes of those who write far out, far right statements that go to the inaccuracies and distortions that are used by some when describing the Government's policies. I hope that the honourable senator will see the light and have discussions with Mr Roger Scott of the Sydney Daily Telegraph who, I understand, is his friend. They might decide to revert to the by-line `Martin's Place'. I would not mind if they did that. Maybe they should call it `Baume's Place' or any other name that they can dream up themselves, such as `Patrick Partners' or `Have another go'. At least they could identify themselves properly. Madam SPEAKER —Order! The honourable member's time has expired. Mr HODGES(Petrie)(10.26) —I rise to add some facts and comments to those of the honourable member for the Northern Territory (Mr Everingham). That which the Treasurer (Mr Keating) has been involved in is scandalous to say the least. The Treasurer lists his Sydney property at Elizabeth Bay as his `principal place of residence', but recent statistics issued by the Special Minister of State (Mr Young) reveal that the Treasurer may have spent no more than 11 nights in his so-called home base in Sydney in the past year. In answer to a question asked by my colleague the honourable member for Flinders (Mr Reith) on 17 September challenging the Treasurer's right to list Sydney as his home base, when in fact he lives in Canberra, and his receipt of thousands of dollars in travelling allowances as a result. The Prime Minister said that a Remuneration Tribunal determination concerning travel allowance allows Ministers to nominate their home base. Additionally, he stated that the Treasurer's claims had been made in accordance with that determination and with `the relevant Cabinet decision'. We do not know what that Cabinet decision is. The Leader of the Opposition (Mr Howard) has asked the Prime Minister to make public the contents of that decision. That was several days ago; yet the Prime Minister has not responded. It is important that we know the details of that decision. It may not relate only to the Treasurer. It could also be relevant to other Ministers, Government members and Opposition members. The details surrounding the Remuneration Tribunal's interpretation of the `principal place of residence' historically have not been helpful. Prior to 1 July 1982, a `home base' was determined by the Tribunal as the home of a Minister, senator or member, unless he nominated otherwise to the Minister for Administrative Services. After 1 July 1982, The Remuneration Tribunal determined that Ministers, office holders and members of Parliament would nominate to the Minister for Administrative Services their home base, which would be their principal place of residence. As Senator Sir John Carrick, then Minister for National Development and Energy, pointed out in 1982, this introduced, as he said: . . . an element of uncertainty into the process of claiming and determining amounts of travelling allowance. He said that different people could attach different meanings to the term `principal place of residence'. To remove this uncertainty, the Tribunal was asked to interpret the phrase `principal place of residence'. The Chairman of the Tribunal, Mr Justice Mahoney, was approached by the Secretary to the Department of Administrative Services, Sir Peter Lawler, for his interpretation. I might add that the response was most unhelpful. Mr Justice Mahoney in this letter of 17 November 1982 said: The determination itself contains no definition of it and accordingly its meaning is to be taken from what the words, understood according to their ordinary meaning, convey. Mr Justice Mahoney concluded by saying: In the end, the question of whether a particular place is the principal place of residence must be determined according to the ordinary meaning of the term and the facts of the particular case. All that we have to go on is that response, which is really inadequate, and a Cabinet decision which remains secret. If Ministers and others were to nominate their principal place of residence for travelling allowance purpose as the place at which they reside for most of the time, or the place where their family is normally based-in other words, what may be understood as the ordinary meaning of the term `principal place of residence'-the Treasurer's principal place of residence would be Canberra, where indeed he spends most of his time and where his family resides. There is no shortage of evidence to prove that even the Treasurer thinks this. In the Four Corners program on 18 August 1986 we were told by journalist Kerry O'Brien: `Back in Canberra is where the Treasurer and his family now live for reasons of sheer practicality'. The Treasurer's wife stated that she preferred Sydney to Canberra but: `We decided it was better for Paul and the children to live in Canberra'. That is where they live. The Treasurer is hiding behind uncertain rulings in the conditions-- Madam SPEAKER —Order! Could I just point out to the honourable member that there is a standing order which states that, if he is going to be critical of the conduct of the Minister, he needs to do so under a substantive motion. I have been listening carefully and so far he is in order, but I suggest that he take a bit of care from now on. Mr HODGES —I finish by saying that the Treasurer is hiding behind uncertain rulings in the conditions of payment relating to travelling allowances in Australia for Ministers, office holders and members of parliament. He is also hiding behind a secret Cabinet meeting which presumably paved the way for the Treasurer to claim at least $17,600 tax free. Madam SPEAKER —Order! The honourable member's time has expired. Mr RONALD EDWARDS(Stirling)(10.31) —It is extraordinary for us to be in the chamber tonight to hear-- Opposition members interjecting- Madam SPEAKER —Order! Could I suggest that the honourable member for the Northern Territory, who was heard in comparative silence, show the same courtesy. Mr RONALD EDWARDS —It is extraordinary to hear the comments of this Opposition, which has, as one of its major constituents, the National Party of Australia, and I refer in particular to the Queensland National Party. There could not be a more disreputable political organisation in Australia that claims any title to government than the Queensland National Party. As the President of the Queensland Branch of the Liberal Party said: `They make corruption a way of life'. We are talking about a party that comes in here as fellow travellers of this lot opposite, this disreputable Opposition, and tries to present itself as having an alternative economic policy. What have we got here? We have a personal attack upon the Treasurer (Mr Keating). Where is the Opposition's economic policy? The Australian community is waiting to hear its economic policy. It has not got a wages policy, a trade policy, an external policy or an industrial policy. What we now have is this frivolous courting of the far right of the Australian political spectrum. I suggest to honourable members opposite that when they get up in this place and commence personal attacks upon the Treasurer, they first of all look at their fellow travellers. I refer to the Queensland National Party and its record in public office of deception and of misleading the public and its failure to have a public accounts committee. I refer to the sorts of goings-on that one Liberal Party member has mentioned, and that is the President of the Queensland Branch of the Liberal Party, who has talked about the conduct of the Queensland National Party, which makes corruption a way of life. So let us get that record straight. We have heard from the honourable member for the Northern Territory (Mr Everingham), and we are not quite sure where he lives. He gets up and presents himself as a person of considerable position. I say to the honourable member that he has left a legacy with respect to Federal Hotels Pty Ltd which he would do well to take a lot of distance from. When people get up in this place and start parading themselves as people of principle, they ought to reflect upon the company they keep and they ought to reflect upon their history. Let me turn to the history of those opposite. Their period in office presents a sorry history indeed. They left a record level of unemployment and they also left an economy in shambles and negative growth. When they come into this place and start to attack the character of the Treasurer I suggest they look at their recent past. I also suggest that they look at themselves and see what policies they are putting up. First of all, the policies are not there. The industrial relations policy that has creaked itself into the public gaze is not a substantial policy at all. It is a policy which at the moment is designed to try to flatter the Copemans of this world but to do nothing about the substantive economic problems of this country. What we do know about the Opposition's past is that the coalition was reluctant to address the difficult question of tax avoidance and tax evasion in this country. I accept here what the honourable member for Bennelong (Mr Howard) did. When he was Treasurer in 1978 he was prepared to start to tackle the question of tax avoidance and tax evasion in this country but he was sat on by his colleagues in the Cabinet. The honourable member for Bennelong is on record as saying to the Institute of Chartered Accountants in Perth in 1978, in an address that was given by the now honourable member for Goldstein (Mr Macphee): `These practices should be stamped out'. Those opposite did not do so. The Australian community knows they did not and so do the professional institutions. Now it is up to the honourable member for Bennelong. He was prepared to declare himself then and deal with tax avoidance and evasion. It was only later that he was prepared to try to address those issues. So when Opposition members come in here and try to present themselves as people of principle there may be one or two among them as people of principle but there is a large number who do not shape up. When we look at the quality of the company that some of the honourable members opposite keep-I refer here to the people of the Queensland branch of the National Party-I think many of them have a lot of explaining to do. They should look at their own public record and at the absence of policy in terms of the way they present themselves. The Australian community is saying: `Where are the Opposition's policies?' It is well known that the Opposition budgetary policy is not comprehensive. It is looking towards reducing the deficit but at the same time doing away with particular tax areas. What we have to address in this place is comprehensive policies. I say to those opposite: We have comprehensive policies. I ask people to look at the company those opposite keep and at the legacy they left in terms of the Australian community. The Opposition has a very sorry record. It has some very difficult fellow travellers in the form of the Queensland National Party. I refer to the President of the Queensland Branch of the Liberal Party. He is the one who said that they are the people who make corruption a way of life. I also suggest that, if members of the Opposition think that salvation lies in embracing the far right of Australian politics, they had better look at the company they keep. Madam SPEAKER —Order! The honourable member's time has expired. Mr COBB(Parkes)(10.36) —If ever there was a man who presided over the demise of this country, it is the Treasurer (Mr Keating). From his plethora of anti-business policy it seems that the world's greatest antique collector is hell-bent on a mission to wind back the clock of progress in Australia. In the last 12 months or so we have had an avalanche of taxes created out of this man's fertile mind and imposed on the citizens of this country. They are the entertainment tax, the new tax created by the abolition of negative gearing, the assets test tax on pensioners, the superannuation lump sum tax, the capital gains tax and now the fringe benefits tax. The Treasurer is obsessed with tax, and nothing highlights more how out of touch he is with the community than the way in which he insists that the fringe benefits tax is to be imposed. For starters, the provider of the benefit must pay something which is almost unique in the world and violates every tenet of decency and fairness. This has created such an uproar that the Prime Minister (Mr Hawke) would love to drop it. But he dare not, because he has rebuffed the Treasurer twice and he is not going to do it again. But the Treasurer is so pigheaded that he insists on going on with it despite everyone else being able to see that this fringe benefits tax, the `farewell Bob' tax, is alone going to cost the Government the next election. The Treasurer has put a tax on the healthy bodies of children with the tax on flavoured milk and fruit juices. He has put a tax of 46c in the dollar on the healthy minds of children by taxing pony clubs. But with his typical demented logic he is going to exempt the profits of horse racing clubs from the fringe benefits tax because these are gambling clubs. When he goes back to wind up the clock in his principal place of residence, as I am told he does 11 times a year, perhaps the alarm bells will go off in his mind as to the inconsistency of his reasoning of that action alone. People have yet fully to realise the enormous bureaucracies that will have to be set up to administer all these extra taxes. The Treasurer has, in effect, set up a police state. Not even in Russia do people have to log every mile they travel in a car; not even in Russia do people fear that if they fail to record something accurately-- Honourable members interjecting- Madam SPEAKER —Order! The honourable member will resume his seat. Those on my right will cease interjecting. Mr Howe —Madam Speaker, I raise a point of order. I think the remarks of the honourable member are highly disorderly. They are certainly offensive to me and I am sure they are offensive to the Treasurer, and I ask that they be withdrawn. Madam SPEAKER —I am listening to the honourable member. To date he is not out of order. However, I will be listening to see that he does not breach the Standing Orders. Mr COBB —I am pleased to see that the Minister is the only one prepared to stand up and defend the Treasurer. The Treasurer himself has misled the House on a number of occasions and only last week he claimed, when talking about-- Mr Chynoweth —Madam Speaker, I raise a point of order. I am prepared to defend the Treasurer at any time. Madam SPEAKER —Order! There is no point of order. Mr COBB —Only last week the Treasurer said in the House: All they need do is enter the private mileage in the log book each day and the balance is automatically designated as business mileage. That is the exact opposite of the truth. The Treasurer knew full well that only six days beforehand the Australian Taxation Office had given ruling No. 2026, which clearly restated what everybody already knew. That ruling stated: The total number of private kms is determined by deducting from that the kms travelled on business journeys, which are required to be evidenced by log book entries. The ruling goes on explain that unless journeys are logged as business kilometres they will be treated as private journeys. The Taxation Office later stated: It should be noted that entries for private journeys are not required. The Confederation of Australian Industry has said that the Treasurer is wrong on the fringe benefits tax and the Real Estate Institute has said that the world's greatest Treasurer confuses business again. Unless the Treasurer is deliberately misleading the House with his statements, he is thoroughly confused. So how can the rest of us expect to understand the fringe benefits tax? Either way, the Treasurer has again shown his incompetence. The fringe benefits tax must go and so must the Treasurer. Madam SPEAKER —Order! The honourable member for Parkes may not accuse the Treasurer of misleading the House. Mr GEAR(Canning)(10.41) —I am suffering somewhat of a handicap tonight because, unlike honourable members opposite, I have not had the benefit of having 2,4,5-T. I notice the attack tonight on the Treasurer (Mr Keating) by several members of the Opposition. I will tell honourable members who is not here listening, and that is the Leader of the National Party of Australia (Mr Sinclair). If honourable members really want to know about rorting the system, they should just ask the Leader of the National Party, and half the old Cabinet of the Fraser Government. Madam SPEAKER —Order! The honourable member will remember that there is a standing order that does not allow members of the House to be critical unless doing so under a substantive motion. Mr GEAR — Thank you for your guidance, Madam Speaker. Mr Slipper —Madam Speaker, I raise a point of order. The comments made by the honourable member in relation to the Leader of the National Party were offensive. I believe that they should be withdrawn. Madam SPEAKER —Order! The honourable member will resume his seat. The Chair is listening to the honourable member for Canning. Mr GEAR —It seems that I have touched a nerve in the Opposition. My reason for rising tonight was to bring to the attention of the House a publication-Artforce-and to refer to the Opposition's Waste Watch Committee. One of the Opposition's mindless Press releases states: `Arts funding for unions a scandal, says Federal MP'. Before the honourable member for Mayo (Mr Downer) became a member of parliament he said that the assets test was a great thing, but as soon as he became a member of parliament he did a U-turn. All I can say for the honourable member is that he has leadership potential in the Liberal Party. The article in Artforce states- Mr Price —Is he a wet or a dry? Mr GEAR —I do not know. He looks a bit damp. He is certainly a bit pink; a bit wet behind the ears. If I leave him to the Special Minister of State (Mr Young), I am sure he will stitch him up. Let us look at the contrast between the `arts funding scandal' of the so-called Waste Watch Committee and a letter that appeared on an inside page of Artforce from Senior Commissioner Collier, not a person who, under normal circumstances, would take sides. Commissioner Collier stated: Recently I was in Karratha- that is in the north of Western Australia, for those who do not know- where this Commission was sitting in Court Session and this coincided with a performance of the play `Permanent Days' which was sponsored by the W.A. Trades and Labor Council. My colleagues and I attended the evening performance. Each of us has had a long involvement in the volatile iron ore industry of the Pilbara and, frankly, we were astounded at the accuracy with which the producer and cast managed to portray the social and industrial pressures on those from both sides of the industrial fence who live and work in this environment. Even the industrial tribunal was not missed!! I was so impressed that I took others to see the production when it returned to Perth and they too appreciated both the performers and their message. I will not read any more but that just shows the contrast with the cheap Press releases put out by the Opposition so that its views can be published in newspapers-- Mr Downer —Weak. Mr GEAR —The Opposition, including the honourable member for Mayo, would not have a clue about how the working people of this country live. I am referring to people who are stuck in the north of Western Australia who, unlike some Opposition members, earn this country a quid. No doubt Opposition members would say that all this is a waste of money. For their information, they may like to know that the same publication Artforce said: Unions too are increasing their cash support, whilst continuing with administrative and logistic support. In the past financial year it is estimated that unions contributed- the Opposition should listen to this- between $150,000 and $200,000 towards the costs of art projects. Not only are the Australian people rightly putting in money through the Australian Council of Trade Unions but so too are the unions themselves. Opposition members may shake their heads, but the fact is that the Australian Government puts money into the arts not only for the blue rinse set up on the North Shore of Sydney but for the workers of this country. We believe that they are entitled to it, that they also make their contribution. Before Opposition members put out another mindless Press release, they should get off their bums and get out and see how the other half of the country lives. Madam SPEAKER —Order! The honourable member will withdraw that last comment. Mr GEAR —I withdraw the remark if it is offensive to honourable members opposite. Mr REITH(Flinders)(10.45) —Honourable members on both sides of the House are concerned about the `black' economy. Literally billions of dollars escape the tax net annually, thereby depriving the Commonwealth of vital revenue and shortchanging the innocent taxpayers of Australia-and, I might add, shortchanging the homeless as a result of the increases to which attention was drawn by the honourable member for Melbourne (Mr Hand). The recent debate on the fringe benefits tax has raised some interesting questions about which I earnestly seek information in the form of specific answers so that I might properly advise my constituents as to their rights, duties and obligations. I am aware, for example, of the confusion relating to travel-travel not just on the ground but in the air. I would like to know, for example, whether the fringe benefits tax is payable on free helicopter travel provided by a company both for its own benefit and for the benefit of the persons enjoying the free helicopter ride. I would like to know also what is the position with respect to loans at very concessional interest rates made, for example, by statutory authorities in New South Wales to officers or employees of the Municipal and Shire Council Employees Union. If the loan is advanced to procure industrial peace and if the interest rate is unbelievably low, is a fringe benefits tax payable by the lender, or is additional tax payable by the borrower on the basis of the financial advantages accrued by the very favourable terms, including interest rates? Specifically, I also seek information as to the basis upon which property transactions are now to be taxed, having regard particularly to the capital gains tax and the person engaged in property and chattel transactions who does not declare himself to be an investor and relies on some other form of remuneration, purportedly involving full time employment, for example as a member of this Parliament. Are these property transactions declarable in the register of members' interests? At what rate of tax are the said transactions assessed by the Australian Taxation Office? Do the same rules apply to valuable assets other than real estate and including antiques, clocks and objects d'art? What principles apply in relation to the taxation rate on joint venture business operations and the profits arising therefrom when the parties concerned are from both the public sector and the private sector? What is the position if one of the parties is, for example, a member of parliament and the other is engaged solely in private enterprise? Is the position aggravated if the private enterprise person is engaged in bottom of the harbour activities and has therefore deliberately evaded paying tax which was lawfully due? What is the position if the private enterprise person has filed an incorrect return as to the amount of profit made by his companies. Finally, I seek clarification of a position where a person in public office provides, for valuable consideration, letters of introduction and references to a person in private enterprise for the expressed purpose of assisting that person to obtain preferential financial commitment. Is the financial benefit thereupon conferred subject to tax and, if so, at what rate? I raise these matters in the public interest because in each instance prima facie evidence is raised against the Treasurer (Mr Keating). These things have been done by the honourable member for Blaxland, the Treasurer of Australia. Madam SPEAKER —Order! The honourable member will take heed of the fact that if he wishes to criticise the Treasurer or any honourable member of this House he will do so under a substantive motion. Mr REITH —Is the Treasurer above the law? Is he above suspicion? The Treasurer must come clean. Madam SPEAKER —Order! The honourable member will stop there as he is getting into an area in which he will be criticising a member of this House. Mr REITH —I am very happy to conclude by inviting the Treasurer to respond. Madam SPEAKER —Order! The honourable member's time has expired. Mr CUNNINGHAM(McMillan)(10.51) —Tonight we have witnessed in the Parliament a series of five-minute attacks on a member of this Government. Probably no Minister in the last 20 years has had a more onerous task and has carried out his duties more effectively than has the Treasurer of this nation (Mr Keating). The tragedy of tonight is the fact that, whilst we have been in this Parliament day after day, Question Time after Question Time, we have not heard a single question of substance from the Opposition in relation to the economy. We have not heard any sort of approach by members of the Opposition on the Government's policies at Question Time. Tonight, during the adjournment debate, we see the honourable member for Bennelong and Leader of the Opposition (Mr Howard), whose attacks on the Treasurer in Question Time have had no substance, sitting here, having abandoned all leadership and handed responsibility to his back bench, which has carried out a garrulous attack on the Treasurer when the Treasurer is not even in the House. No doubt this is a move by the Opposition's tactics committee A or perhaps by its tactics committee B. Is it the tactics committee of the front bench? I would hardly believe so, but perhaps it is as the Leader of the Opposition is sitting in here. Maybe we should ask whether the discredited former leader of the Northern Territory, who led the attack tonight, is the leader of the tactics committee, or is it the honourable member for North Sydney (Mr Spender)? The man who led the attack tonight is the man who in the casino area has been quite prepared to take funds in relation to-- Madam SPEAKER —Order! The honourable member will take note of the fact that such criticism must be made by way of a substantive motion. Mr CUNNINGHAM —Yes, Madam Speaker. It is quite obvious that the attack seen here tonight is an attack by an opposition which has absolutely given up using the parliamentary system which is available to an opposition to attack a government. We are witnessing tonight an opposition that has its own leader sitting on the bench listening while his back bench is given the objective position of trying to attack the Treasurer personally, with innuendo. It is playing the man instead of playing the ball. It is bereft of position. It is a tragedy for Australia to see the Opposition in such disarray with its tactics committee C, the tactics committee from right up the back. We have heard from the honourable member for Flinders (Mr Reith), who came into this House. He got to the front steps the first time before he turned around and went back again, but he had another go and he has made it. The honourable member is well known in the Phillip Island area of his electorate for his land deals. Madam SPEAKER —Order! The honourable member will not go any further. Mr CUNNINGHAM —I withdraw that, but I am quite prepared to put it in a substantive motion. We are not afraid to use the correct method. I say clearly that the Australian community will judge the Leader of the Opposition for his effort tonight of sitting on the front bench as a lonely little man while his stooges on the back bench have attacked the Treasurer of this nation. Madam SPEAKER —Order! The honourable member's time has expired. Mr HODGMAN(Denison)(10.56) —There is no doubt about it: The Treasurer (Mr Keating) must go. He has not only brought Australia to the brink of bankruptcy, but also, as has been clearly proved tonight, he is unfit to hold the high office of Treasurer. Madam SPEAKER —Order! The honourable member for Denison has heard me suggest repeatedly that if members wish to criticise any member of this House they will do so under a substantive motion. The Chair has told both sides of the House the same thing and will continue to do so. The honourable member for Denison will withdraw his comment about the Treasurer. Mr HODGMAN —I withdraw. The honour- able members for the Northern Territory (Mr Everingham), Petrie (Mr Hodges), Parkes (Mr Cobb) and Flinders (Mr Reith) have all properly and effectively raised evidence in this Parliament tonight. I refer to a matter which occurred just a few days ago when the Treasurer of this country, the honourable member for Blaxland, demonstrated in this House that he did not understand the legislation which he is calling upon 600,000 Australian small businesses, farmers and individuals to comply with. I refer honourable members to page 711 of the Hansard of 16 September, which records the Treasurer telling the people of Australia and the members of this Parliament that it was not necessary for them to fill in their log books in respect of the business use of motor vehicles. As the honourable member for Parkes has demonstrated, the Treasurer has been repudiated by his own Australian Taxation Office on the ruling he has given. When the Treasurer of this country cannot explain his legislation to this Parliament and cannot get up and accurately state what the law that he has brought into the Parliament says, how can he call on ordinary Australians to comply with that law? Worse still, I raise the matter of confusion in the Australian Taxation Office. Mr Cunningham —I raise a point of order. The honourable member is making a substantive attack on the Treasurer. Madam SPEAKER —Order! The honourable member for Denison is attacking the policies. Mr Cunningham —Under the Standing Orders, if he wants to attack what the Treasurer allegedly said, he should be using the terminology of what the Minister allegedly said in the House and not his version of it. I think he is misrepresenting the position and creating a diversionary tactic in order to attack the integrity of the Treasurer. Madam SPEAKER —There is no point of order. I am listening carefully to ensure there is not. Mr HODGMAN —Only last week a businessman based in Canberra, with a wife and three children living in the city, was informed by his employer that he would be required to work in Sydney. He contacted the Australian Taxation Office advisory service in Canberra and asked what the position was in relation to his travel allowance. He was told that it was a clear ruling of the Australian Taxation Office that one's home base is where one's wife and children reside. I will repeat that. The Australian Taxation Office stated that one's home base is where one's wife and children reside. The Treasurer has deliberately defied the law. Mr Cunningham —I raise a point of order. In view of the attack on the Treasurer and his family, can the honourable member vouch for the information that he is providing to the House in relation to this unsubstantiated attack? Mr HODGMAN —Not only can I vouch for it; the businessman wants to give evidence on it. Madam SPEAKER —Order! It being 11 p.m., the House stands adjourned until 2 p.m. tomorrow. House adjourned at 11 p.m.