Thursday, 25 September 1986 Madam SPEAKER (Hon. Joan Child) took the chair at 10 a.m., and read prayers. Motion (by Mr Young) agreed to: That the House, at its rising, adjourn until Tuesday, 7 October 1986, at 2 p.m., unless Madam Speaker fixes an alternative day or hour of meeting. Debate resumed from 19 August, on motion by Mr Hurford: That the Bill be now read a second time. Mr CADMAN(Mitchell)(10.01) —The Australian Institute of Multicultural Affairs Repeal Bill 1986 is a result of the decision announced by the Government on 12 August 1986 as part of its new strategy on multiculturalism. It will repeal the Australian Institute of Multicultural Affairs Act 1979 and the Australian Institute of Multicultural Affairs Amendment Act 1985. In essence, it will abolish the Institute. The legislation vests all rights, property and assets of AIMA with the Commonwealth at the time of abolition. The Bill requires that a final report and audit of the Institute will be prepared and laid before the Parliament. It also prescribes that any surplus funds available from the winding up of the Institute will go to the Department of Immigration and Ethnic Affairs. The Director of AIMA will be retained as an employee of the Department of Immigration and Ethnic Affairs on a temporary basis for just six months. The rest of the staff will lose their jobs. In the second reading speech by the Minister for Immigration and Ethnic Affairs (Mr Hurford) he noted that the Bill would protect the Commonwealth's interests in the process of abolishing the Institute. He reminded honourable members that the National Economic Summit Conference in April 1983 stated: The future wellbeing of this country depends upon the acceptance of the cultural, social and economic implications of a multicultural Australia. The Government's response to this mandate has been to dump one of the institutions which has been inextricably linked with the development which the Summit described. The Australian Institute of Multicultural Affairs was established by legislation in November 1979. The Fraser Government took up a significant recommendation of the Review of Post-arrival Programs and Services to Migrants, better known as the Galbally report. Galbally said: If we are to achieve the real benefits of a multicultural society, its development must be guided, supported and given direction by independent experts of high calibre. The six years of operation of AIMA present a record of considerable achievement. The Institute has been called upon to undertake a wide range of activities in providing advice to the Government, research, the publication and dissemination of information and community education. Among its major achievements, projects and activities are an evaluation of the effectiveness of labour market programs and the particular problems and impact of unemployment on migrant and refugee young people and a review of migrant and multicultural education which provided the impetus for the funding of ethnic schools, many of which have been highly successful in developing, preserving and sustaining the traditional values of migrant communities. The Institute conducted a most important study of the circumstances of Australia's ethnic aged. The quality of the research in this instance and the recognition of the specific problems of many of our aged settlers of non-English speaking background should be of immense value to the Government in undertaking special programs for the elderly. AIMA was also responsible for evaluating the way in which the recommendations of the Galbally report were implemented. The Fraser Government, which expressed and demonstrated a compassionate and practical commitment to the migrant community, acted on this evaluation. The result was a major increase in grants-in-aid for migrant welfare and the extension of multicultural television services throughout Australia. AIMA has also been involved in the community education sphere and has produced a package of material around the theme of the migrant experience in Australia. This educational material was developed alongside a six-episode television series and materials for schools. The Australian Institute for Multicultural Affairs has also liaised with education centres, particularly in Victoria, for the display and dissemination of education resource materials on multicultural issues. Twenty-eight research reports have been published by the Institute, including 12 in the past year. It has also published a regular newsletter and kept a communications flow with individuals and organisations concerned with the problems and needs of migrants in our country. The Institute has been involved in major conferences and has sponsored two such conferences. One was entitled `Promoting Tolerance in a Multicultural Society'. The other conference, on research, was entitled `Ethnicity and Multiculturalism'. The Institute has been an active participant in the conferences of Commonwealth, State and Territory Ministers of Immigration and Ethnic Affairs and the National Population Council and has collaborated in a number of projects with Commonwealth and State agencies. The proposed new Federal strategy on multiculturalism and this Bill to abolish AIMA is brought to us by a Government, a Prime Minister and a Minister for Immigration and Ethnic Affairs who continue to demonstrate their contempt, lack of understanding and care for this special group of our fellow Australians. This Minister has so far distinguished himself by presiding over an increasingly frustrated and delayed immigration program. He has acted as a cultural commissar to determine which artists will be served up on the platter of Australian entertainment and he has attempted to scoop quid pro quo with the media. The abolition of AIMA is also his decision. The Minister's statement of 12 August 1986 suggests that the new strategy on multiculturalism and, consequently, the abolition of the Institute of Multicultural Affairs is the first response to the findings of stage 1 of the Review of Migrant and Multicultural Programs and Services headed by Dr James Jupp. The review Committee did not recommend the abolition of AIMA. It recommends the Institute's retention as an independent research and community education organisation with a role in advising on access and equity within the delivery of government programs and services. The review recommends the establishment of an Office of Ethnic Affairs within the Department in addition to the retention of AIMA. This information has not come to me from the Minister, nor from AIMA but from other sources. The decision to abolish AIMA is suggested to be a budgetary measure. The Government has stated that savings of $1m will be achieved in 1986-87 from the abolition of AIMA with $2m of savings in a full year. However, the Senate Estimates committee indicates that the actual savings in 1986-87 will be $692,000, not the $1m claimed by the Minister. To replace the Institute the Government will establish an Office of Multicultural and Ethnic Affairs. Nowhere in the Budget is there an indication of the cost of operating this new office. Of even greater significance than the inconsistency of the Minister's statement was the divisive and selective nature of the announcement of the abolition of AIMA and other measures announced ahead of the Budget. It was not a decision announced along with other Budget cuts. It was deliberately announced before the Budget. It was put forward with the Government's proposal to amalgamate the Australian Broadcasting Commission and the Special Broadcasting Service. It was a deliberate and selective announcement aimed at the unsuspecting and the unprepared. Is it any wonder that organisations such as the Federation of Ethnic Communities Councils feel completely let down on behalf of their communities? The Sydney Morning Herald encapsulated the actions of the Government and the Minister in their inconsistent attitude towards ethnic affairs. I quote from the Sydney Morning Herald: Two days after the Government abolished the Australian Institute of Multicultural Affairs, merged the Special Broadcasting Service with the ABC, cut back the English as a Second Language Program by almost half, ended the Multicultural Education Program, and closed down regional departmental offices, he (the Minister for Immigration and Ethnic Affairs) said: `The Government is reinforcing its commitment to multicultural principles by bringing them to the forefront of decision making.' Mr Macphee —That is a marvellous way to reinforce it. Mr CADMAN —Yes, exactly. This is not the first time that the Government has decided to attack the AIMA. The Government received the report of the committee of review of the Australian Institute of Multicultural Affairs set up by the then Minister, the honourable member for Cunningham (Mr West), in November 1983. That review recommended the abolition of AIMA and the replacement with another statutory and independent authority. That review was soundly criticised as a-I quote Frank Galbally-`divisive, corrosive and entirely political document'. Further review and discussion throughout 1984 led to the introduction of amendments to the Australian Institute of Multicultural Affairs Act in February 1985. At that time, the Minister stated: I am anxious that the Institute should have a much more prominent public profile and increased role in the education of all our people in the benefits of our multicultural society. He continued: The new Council is made up of members who have special relationships with communities and interests with which they are linked, and is poised to create an institution which will be greatly valued by all Australians. Despite the Minister's acknowledgment of the important role of the Council, the Minister chose not to consult with it on the decision to abolish the Institute. All he offered were platitudes on its role in having developed the profile of the Institute and having introduced many initiatives. In no way has the Minister or the Prime Minister substantiated, as yet, how AIMA has failed to meet the objectives which this Government imposed on the Institute. In 1985, amendments were introduced to the Institute's Act which effectively increased its statutory functions and at the same time reduced its budget by nearly 30 per cent. The amendments charged the Institute to respond to the Government's wishes for it to increase its public profile and its community education activities. Yet the Minister, having changed the charter for providing policy information to that of a public relations educational authority, now, in abandoning AIMA, asserts that it has failed to give adequate policy advice. In the debate in this House in 1985 on the AIMA amendments, the Minister made some significant statements of absolute and unequivocal support for the Institute. He said: I want to say, firstly, how happy I am to be the Minister in charge of the Australian Institute of Multicultural Affairs. I am very hopeful that under my stewardship and, of course, the stewardship of this Government, which will continue for the next 10 or 15 years, we will be able to make a great contribution in this land of many cultures through the Australian Institute of Multicultural Affairs. That was said barely 12 months ago. Mr Macphee —Where is the Minister now? Mr CADMAN —Where is the Minister now? The Minister said last night when it was indicated that the debate would be on that he would not be here. The Minister also made it clear that a government department and bureaucracy was not the appropriate mechanism for achieving the objectives of independence and the development of strategies and values of multicultural programs. He said: I really hope that the Australian Institute of Multicultural Affairs will do just that job, (shout multiculturalism from the roof tops), not in an abrasive way but in a quiet, persuasive way. I do not believe it is the job of Government departments or even of us in this Parliament to do it too often. I think it is much better that it should be done by a body such as AIMA. So much for the Minister, this Government and what they believe in. Now the Minister wants to do the shouting, using the words prepared for him by this new unit to be established within his Department. The Council of the Institute and its Chairman, Archbishop David Penman, have advised the Government of their concern about the decision to abolish AIMA in favour of establishing a new Office of Multicultural and Ethnic Affairs with no statutory independence or autonomy. The independent status of the Institute was one of the fundamental principles of its establishment in 1979 by the coalition Government, and as recommended by the Galbally Review of Post-arrival Programs and Services to Migrants. Such a view has been confirmed by the present Government's own review. In his second reading speech, the Minister also alluded to the abolition of AIMA as a result of `a further re-evaluation'. We want to know exactly what that evaluation is. To date, no one has any idea as to what process of re-evaluation of the Institute has been undertaken. The Minister has not declared it; the Government has not produced it; and it certainly was not done in those terms by Dr Jupp, who recommended its retention. I call on the Minister to table this re-evaluation and have his decision accountable to public scrutiny. The migrant communities and the Council of AIMA should, at the very least, be accorded some of the privileges which have been extended to the trade union movement by being included with the consultative process. It would seem that unless one is a Crean, a Kelty or a Halfpenny, there is no real access to or equity in this Government's decision-making process. The Government has also attempted to remove the bipartisanship which has existed in so many of the policies governing the development of ethnic affairs. The Australian Labor Party had always supported the coalition Government's initiatives that an independent body, reporting to Parliament, would provide a valuable, sensible and constructive mechanism for engaging in research on multicultural and ethnic issues, Yet the Government has decided to replace an independent body with a bureaucratic body, accountable to and reporting to only the Minister. What is the reason for this? The Minister gave his answer in his second reading speech, when he said: . . . in our view, the continuing life of AIMA is no longer the most effective means of achieving our objectives. Is this Government afraid of independent research and reports that may be critical of its actions or its inactions? It is clear that this Minister has the desire to manage that which people should know. He seems to have a desire to bring independent research and evaluation under his direct control. However, it would be grossly unfair to place the entire blame for the betrayal and deceit at the feet of the Minister. Much of the blame belongs fairly and squarely with the Prime Minister. On 22 August, the Prime Minister gave an answer to a dorothy dix question from the honourable member for Calwell (Dr Theophanous), the Chairman of the Government's Immigration and Ethnic Affairs Committee, on the Government's commitment to multicultural values. He said: The Government, through the Minister for Immigration and Ethnic Affairs and, on this occasion, through me, commits itself unequivocally to enhancing multicultural values. How do he and his Government do this? They abolish AIMA; they merge the Australian Broadcasting Corporation and the Special Broadcasting Service; they abolish multicultural education programs; they slash the English as a second language program; and they close six regional offices of the Department of Immigration and Ethnic Affairs. So much for the Prime Minister's commitment. His Government gives a 12.1 per cent increase in grant-in-aid to migrant community groups, yet he gives the trade unions a 23.1 per cent increase. Then he cuts the number of assisted passages for refugees by 3,000 places. The Prime Minister went on in that answer to speak about people from non-English speaking backgrounds. He said: They have to make a language adjustment when they come to this country. They need advice from social and welfare workers to assist them in making adjustments and this Labor Government has improved all these programs which especially help people of non-English speaking backgrounds individually at the grass roots. With this in mind, his Government cuts 44.7 per cent from the English as a second language program. With this in mind, the adult migrant education program, although increased by 4.3 per cent in money terms, was cut by 3 per cent in real terms. In addition, his Government has increased the level of citizenship and immigration fees revenue by 75 per cent. He has given migrants the opportunity to be hit first and hit hardest in the firing line of the Budget cuts. This Government has denied equal opportunities to migrants in producing an ad hoc and second-hand ethnic affairs program. What the Prime Minister offers will have disastrous implications for those people and their families seeking to make a secure economic base for their future and on the capacity of community groups to participate in equitable access to services. One of the most incredible, illogical statements made by the Prime Minister, which appeared in the same answer, was this: . . . although the Australian Institute of Multicultural Affairs in Melbourne is being phased out, a new office of multicultural and ethnic affairs is being created within the Department of Immigration and Ethnic Affairs. Of course, some people would have considered it nice to have both, but every sector had to make sacrifices. Of the two bodies, the Office of Multicultural and Ethnic Affairs will be much more effective, not just cost effective, in promoting multicultural value. The Office will be located in Canberra. No matter what criticisms have been made of AIMA for its academically biased research, no matter what criticisms have been made of AIMA for its remoteness from ethnic communities, its location in Melbourne, where such a significant number of non-English speaking people live, makes it much closer to the community than the establishment of a new office located in Canberra. For the Prime Minister to suggest that the bureaucracy of the national capital is the closest point to the people is both an absurd and a ludicrous notion typical of the extent to which this Government has isolated and deluded itself. It has lost touch with the electorate and with the community. Does the Prime Minister seriously believe that by wrapping research in red tape it will identify with migrants? Did the honourable member for Calwell, when he posed his question in the hope that the Government might extract itself from the loud protests of disappointment, expect that he would have received such an inane and convoluted answer? I bet he did not. I am aware that the Director of AIMA, Dr Peter Sheldrake, has been offered a temporary post to head the new Office for six months. The rest of the staff of the Institute will lose their jobs. The Government is very good at intervening with private industry when retrenchments become inevitable, but it certainly shows no consideration for its own employees and their placement. Surely something can be done to assist some very competent and dedicated staff in finding jobs. Support by the Government in gaining consideration for appointments to universities, colleges and other institutions would be good employer practice-something we hear about every day in this place from Government members. Let us see a little of their rhetoric put into action. The Chairman of the Institute, Archbishop David Penman, said the decision was `a backward step in the Government's commitment to multiculturalism'. One of the most serious issues raised by Dr Penman was the lack of consultation by the Government and the Minister on this decision. Mr Macphee —They did not consult anyone. Mr CADMAN —They did not consult a single person, yet they claim they have reviewed it. I thank the honourable member. I quote from the Melbourne Age of 13 August 1986 regarding Dr Penman's claims: He claimed that the Government had not consulted with the institute about the decision and that an office within the Minister's department would lack the independence of a statutory authority. Mr Hurford said the new office would be more independent than a normal departmental division and would be headed by a more senior public servant. I do not know how one makes it more independent. That is just impossible in our system. It must be a statutory body and separate, or it must be part of the Department. The ethnic communities are most concerned that the Government's proposals for the new Office of Multicultural and Ethnic Affairs will not ensure independence. For example, the Chairman of the Ethnic Community Council of Victoria, Mr Tony Bonnici, who is well known to members of the House, is reported as having stated that the Minister did not favour having a body like the Institute and was trying to bring it under his control. Ms Frances Milne, of the Federation of Ethnic Communities Councils, was reported in the Sydney Morning Herald of 13 August as having said: . . . it was essential that the office be independent of the department, that it receive adequate resources for community education and research, and that the conduct and results of that research be readily available to the public. Comments such as those from community leaders have led to speculation that the Prime Minister will take significant responsibilities away from the Minister for Immigration and Ethnic Affairs-except for administration. Nothing could be a greater indictment of the abject failure of the Government in immigration and ethnic affairs than for the Prime Minister to be forced to take over from the Minister. A couple of days ago the Melbourne Sun reported: He- the Prime Minister- is believed to be considering taking charge of the proposed new Office of Multicultural and Ethic Affairs, due to begin operation at the beginning of next year. In order to bail his Minister out of yet another mess, the Prime Minister, it seems, will have to take charge of the new operation. The philosophy of the coalition parties has always been dedication to political liberty, the freedom and dignity of the individual, individual choice, economic freedom, the expansion of wealth through private enterprise, the use of this wealth to assist the disadvantaged, the decentralisation of political power and a country in which family life is seen as fundamental to the well-being of society. In government we have been parties of high immigration. Having paralleled and complemented Australia's growth and development, we have always believed that the immigration mix which balances economic advantage and the relief of hardship or persecution has served the dual objectives of self-interest and compassion. One of the notable features of our administrations in relation to immigration and ethnic affairs has been the lack of fear of the migrant and the ready recognition of the outstanding contribution migrants have made to our nation. Our opponents' concern with immigration numbers and the threat to jobs has been enshrined in the prices and incomes accord. The significance of different philosophical outlooks between the parties is easily demonstrated when the Liberal commitment to the individual is contrasted with the socialist categorisation of individuals as class groups. We do not have any of the difficulties with different nationalities, including perceived threats to class or interest groups of a large, balanced immigration program which our opponents seem to have. Nor have we shied away from providing innovative programs to assist new arrivals in settlement or in their participation with other Australians. The Opposition, unlike the Government, believes in a responsible, compassionate and understanding approach to ethnic affairs. We believe in consultation. We believe that the Government could not have handled this matter in a more insensitive manner. Australians share common goals of liberty, equality of opportunity and commitment to the family which are able to go above and beyond origin and background. The social idea of multiculturalism was developed and enhanced by coalition governments to create acceptance, respect and understanding of individuals from differing backgrounds. People from different backgrounds should have equality of opportunity. This equality is able to be achieved only if people of different backgrounds can participate in Australian society on an equal basis. We must recognise the private culture and traditions of individuals. The objective surely is a cohesive society and one which forges unity from diversity. An individual is entitled to express his own identity. At the same time there must also be an affirmation that our society does share national goals and values. People in Australia should be citizens and residents who are able to live in an environment which allows everyone to achieve his own individual potential; which allows equality of opportunity to participate in a competitive society and in local community, State and national affairs; and which encourages people to share the commitment, the responsibility and the benefits of our nation. We in the Opposition are astounded by the Government's inept handling of a wide range of Budget and Budget related decisions. On behalf of the Opposition, I move: That all words after `That' be omitted with a view to substituting the following words: `whilst not declining to give the Bill a second reading, the House- (1) is of the opinion that the Government's decision to abolish the Australian Institute of Multicultural Affairs: (a) will break yet another promise to the Australian community; (b) will establish a bureaucratically controlled research office; (c) has ignored the government's own Review of Migrant and Multicultural Programs and Services; (d) does not achieve savings of the magnitude announced by the Government; (e) signals a downgrading of many important programs; and (f) was instigated without any consultation or consideration for those who would be affected, and (2) further calls on the Government to explain how it intends to obtain data of the kind and quality provided by the Institute in order that governments, generally, might make appropriate decisions regarding our society'. Both the Leader of the Opposition (Mr Howard) and I have begun a series of extensive consultations with leaders of many ethnic community groups. The actions of neither the Prime Minister nor his Minister for Immigration and Ethnic Affairs indicate the slightest glimmer of understanding of the seriousness of their decisions. We in the Opposition do not agree with many of the Budget decisions, but it is not our Budget. Any government which selects children's milk and orange juice to increase its taxes-any government which selects one section of the community to bear a disproportionate share of pain-is incompetent. Even to the most bigoted Labor Party supporter, the huge list of cuts to migrant and multicultural services does not conform to the Government's slogan of `restraint with equity'. The Opposition gives a binding undertaking that upon coming to office, when research and surveys are required, we will commission them based upon independent advice. Research and surveys exclusively commissioned by the Department are no substitute for independently and objectively commissioner projects. The closed shop commissioning of research which the Government is now about to deliver, flies in the face of bipartisan attitudes, which have existed in this country for ten years. Independent experts of high calibre have contributed to the depth and direction of our society through the establishment of AIMA. I conclude by saying that I consider that the self-delusion of this Government must be assigned by our friends in the migrant community to the waste bin of politics and substituted by practical, thoughtful and deliverable policies. In order that this may be achieved there must be a commitment to the concepts of social cohesion, cultural identity and equality of opportunity and access. The Government has rejected these concepts. We reaffirm them and nobody should settle for less. Madam SPEAKER —Is the amendment seconded? Mr Ruddock —Yes. I second the amendment and reserve my right to speak. Mr KENT(Hotham)(10.32) —We just heard that speech by the honourable member for Mitchell (Mr Cadman) expanding on some new found interest in ethnic affairs that his Party is now pronouncing. I ask the honourable member where he was in the 1950s and 1960s when migrants were brought out and the conservatives considered them as factory fodder. They still consider them as factory fodder. I saw the honourable member laughing with glee and lapping up every word of his colleague the honourable member for Denison (Mr Hodgman) praising Blainey. This is his record. No one in the migrant community will be misled-- Mr Cadman —Madam Speaker, I find those comments completely repulsive and I wish to have them withdrawn. Madam SPEAKER —Order! The honourable member for Hotham will resume his seat. The honourable member for Mitchell has a point of order. Mr Cadman —Yes, Madam Speaker. There was an implication of a previous debate there that I cannot accept and I would like those remarks withdrawn. Madam SPEAKER —I am sorry, I did not hear the remarks as I was reading my papers. Mr KENT —My remarks were, and I repeat them, that I have seen the honourable member sitting over there in his seat while the debate about the Blainey affair was going on, lapping up every word with glee. I am not withdrawing that. That is my observation and the expressions are parliamentary. If he has got a personal explanation to make he can make it later. Mr Cadman —Madam Speaker, I find those remarks offensive and I want them withdrawn. Madam SPEAKER —There is nothing unparliamentary in the remarks the honourable member is making. Mr Cadman —The rules that were enunciated yesterday by the Deputy Speaker here in a very intensive debate over a period of time were that if an honourable member finds remarks offensive they are to be withdrawn. The other rule was that if he, the Deputy Speaker, found them offensive- Madam SPEAKER —Order! That is not the standing order at all, and if that was put forward yesterday it is incorrect. The standing order states that the Speaker is given the right to decide whether the comments are unparliamentary or not. They are not unparliamentary and I call the honourable member for Hotham. Mr KENT —Madam Speaker, I found the whole speech of the honourable member offensive to me and to the migrant community. I found it offensive-- Madam SPEAKER —I suggest to the honourable member for Hotham that he get on with his speech. Mr KENT —Thank you, Madam Speaker. I am rising in this debate to support the Australian Institute of Multicultural Affairs Repeal Bill with some regret. The effect of this Bill before the House will be to abolish the Australian Institute of Multicultural Affairs. Let me say at the outset that I support the Bill as, under the circumstances of requested cost cutting, I agree that it would be less damaging to abolish AIMA than to cut direct services to the ethnic community, such as the on-arrival English language program or grants-in-aid. If faced with this dilemma I would have done exactly the same as the Minister for Immigration and Ethnic Affairs (Mr Hurford) has been forced to do. I also welcome the decision to set up an Office of Multicultural and Ethnic Affairs which will be staffed and funded by the Department of Immigration and Ethnic Affairs. That will bring the function of AIMA, or what will remain of it, under the direct control of the Department, a long-standing wish of its head, Mr McKinnon. However, that is purely coincidence. It is bureaucrats' luck when a cost-cutting exercise such as the abolition of AIMA removes some thorns from their sides. It has been long known that the Institute's very existence outside the bureaucratic control of the Department was a source of irritation to some people, to say the least. The Australian Institute of Multicultural Affairs was established under Commonwealth legislation in 1979, following a recommendation of the Galbally Review of Post-arrival Programs and Services to Migrants. In subsequent years the Institute undertook and compiled a number of projects and studies such as the report entitled `Ageing in a Multicultural Society' and `Migrants in the Labour Force', to mention only two. In the six years of its operation the Institute's achievements have been considerable. It undertook a wide activity in research and community education. As a result of its work on the review of migrant and multicultural education, funding of ethnic schools was introduced. Following the evaluation of post-arrival programs and services a major increase of grants-in-aid to migrant welfare service flowed as well as the extension of the transmission of multicultural television broadcasting throughout Australia. Altogether some 28 research reports have been published, 12 in the past 16 months. A review of migrant services in the Springvale region in my electorate is just about completed. I have read the draft report and have nothing but praise for its authors-Josef Petyanski and Richard Chauvel. I wish to go on record as praising these two hard working members of the Institute for their excellent research. Similarly, I would like to acknowledge the work of the rest of the staff of AIMA who, during the years of the Institute's existence, contributed so much to the welfare of the ethnic communities in Australia and to Australia's multicultural development. In 1983 the Institute was reviewed and the Government amended the Australian Institute of Multicultural Affairs Act in 1985. Since then AIMA has functioned in its revised form. To understand the work of the Institute let us look at its objectives as defined in the Australian Institute of Multicultural Affairs Act. According to the Act, the objects of the establishment of AIMA include; the Development in the Australian community of an awareness of the existence and contribution of various cultures; the promotion of mutual respect, self-esteem and a cohesive Australian society by encouraging sharing and cultural diversity, and the promotion of equality of access and equality of opportunity and other measures which contribute towards the realisation of a just and equitable society in Australia. The Act also outlines the functions of the Institute. Briefly, these include providing on-going advice to the Commonwealth Government, conducting and promoting community education, research, collecting and disseminating relevant information and providing reports to the Minister and the general public. Given the broad and wide-ranging scope of the objectives and functions of AIMA one can only lament the abolition of the body which was established to achieve these valuable goals. One would need an incredible imagination to believe that a desk, or even as the Minister puts it, an office in his Department, can fulfil these objectives. I remind the Minister that his Department is much more suited to hunting down prohibited non-citizens and deporting them than to building bridges between communities and assisting the multicultural integration of Australians from various backgrounds. It is far too shortsighted to place our future as a multicultural nation into the hands of department bureaucrats whose main concern is to apply rigidly the rules rather than to promote human sensitivity and understanding. However, as I said at the outset, I accept that economic necessities brought about the decisions which we face today. I reject the accusations of the Opposition in this place and that of some members of the ethnic elite outside it that the Australian Labor Party has abandoned the path of multicultural development. One fashionable criminal lawyer has even accused us of committing multicultural murder. We should be more bipartisan and forget about political point-scoring. Immigration and the successful settlement of migrants in our community is far too important for us to play politics with it. After all, immigration and ethnic affairs are not just a process of adding numbers to our population; they are about human beings, men, women and children, whose successful settlement and happiness will contribute to our development as a nation. I call on the migrant communities not to listen to those short-sighted, self-appointed, elitist leaders who want to manipulate them by encouraging anti-ALP sentiments. Let us remember that we migrants owe a debt of gratitude to the ALP, whose Minister, the late Hon. Arthur Calwell, engineered Australia's post-war mass immigration program. Those opposite, the members of the Liberal and National parties, who are now shedding crocodile tears over AIMA always considered and still consider migrants as factory fodder. During their era of government in the 1950s and 1960s there were no services for the hundreds of thousands of new arrivals into this country. All they did was to set up camps, like cattle yards, to herd migrants together and direct them into factories to turn the wheels of industry. Never once did they stop to consider that we have human needs too, that our children need extra English tuition, that our history and culture should be recognised. `Assimilate, or stay a second class citizen' was their motto. Now Opposition members have the hide to come in here to lecture us on multiculturalism. They feign moral indignation, forgetting that they did nothing for the ethnic communities for two decades during their rule in the 1950s and 1960s. It was the Whitlam Labor Government which first introduced services for migrants. It was, and still is, the Labor Party which recognises the human needs of migrants. The Opposition now wants to make political capital from the fact that certain measures in our Budget fall more heavily on the overseas-born than on the rest of the community. Migrants should not be misled by the crocodile tears of the Opposition. It was the conservative forces which demanded the reduction of government outlays. The Leader of the Opposition (Mr Howard) has proudly announced the conservative ideology of the need to further curtail government expenditure, which will mean further cuts in services, including services to ethnic communities. While they do not want to disclose where those cuts would be made, I have no doubt that they would abolish many existing services for migrants, such as the grant-in-aid, welfare services, interpreter services and assistance to ethnic schools. As I said, certain measures undertaken in this Budget fall more heavily on the ethnic community rather than on the general community. I think that we all acknowledge that difficult economic conditions, such as those facing us now, demand sacrifices from all sectors of society, and the migrant communities are no exception, nor would they wish to be. However, it is nonetheless unfortunate that three otherwise unrelated measures in three different portfolios, such as the abolition of AIMA, the merger of the Special Broadcasting Service with the Australian Broadcasting Corporation, and the cut in funding for the teaching of English as a second language, occurred simultaneously. To avoid the repetition of this occurrence in future Budgets, it is imperative to ensure that careful consideration is given to the consequences of Cabinet decisions for youth, women and, in this case, ethnic communities. One way in which effective government decisions can be monitored is to separate immigration from ethnic affairs and place the latter under the jurisdiction of the Prime Minister, as is presently the case with the Office of the Status of Women and the Office of Youth Affairs. There are many benefits to be gained by locating the responsibility for ethnic affairs, or, as I would prefer to call it, multicultural affairs, in the Prime Minister's office. Such a development would give added emphasis to the importance which we as a Government attach to the maintenance of our good record of complementing large immigration intakes with successful post-arrival and settlement programs. It would also assist the development of more responsive and sensitive ethnic or multicultural relations between government and ethnic communities and ethnic communities and the wider community. In my opinion, ethnic or multicultural affairs should have been separated from Immigration and placed under the responsibility and guidance of the Prime Minister a long time ago. Most of us refer to the Immigration Department and tend to forget that it also has a mandate to promote and foster ethnic and multicultural affairs. This is a perception which reflects practice. The Department of Immigration, not of ethnic affairs, has characterised the role played by the Department through the post-war period. During this period the Department has been initiating, administering and enforcing immigration policy. While undertaking these tasks, the part of the portfolio which represents the cultural and human development role has been neglected. It has become increasingly apparent that enforcing rules on the one hand is not compatible with the development of the kind of sensitivity which is fundamental to the nurturing of ethnic or multicultural relations on the other. One analogy which immediately comes to mind is that of placing the Australian Federal Police in charge of the Department of Social Security. The rationale for placing and then maintaining ethnic or multicultural affairs within the same portfolio which has the responsibility of policing and enforcing immigration laws is equally questionable. The absence of an adequate policy or service response to the issues which are embraced under the umbrella of ethnic or multicultural affairs has been apparent for some time. The Minister's decision and the Bill before us are consequences of the recommendations contained in the draft report of the first stage of the Review of Migrant and Multicultural Programs and Services. In looking at ways in which to extend and strengthen the scope of the multicultural perspective, Dr Jupp considered various strategies and structures to replace AIMA. One of these included the establishment of an office like the Office of Youth Affairs in the Department of the Prime Minister and Cabinet. The proposal to establish such an agency has considerable advantages, including providing it with `Considerable influence (while remaining) organisationally independent from those responsible for services which it could have to monitor', namely the Department of Immigration and Ethnic Affairs. In spite of the recognition of a likely conflict of interest, nonetheless Dr Jupp concluded that the new organisation should be placed under the responsibility of the Minister for Immigration and Ethnic Affairs. I am afraid that my brief analysis of the draft report of the first stage of the review indicates that Dr Jupp yielded to the same kind of pressure to which the new Office of Multicultural and Ethnic Affairs will also succumb-that is, by virtue of its location within the Department of Immigration and Ethnic Affairs and its direct responsibility to the Minister it has an inherent vested interest which militates against the achievement of its objective of promoting the multicultural perspective throughout the decision-making process of our society. The failure to achieve the kind of just and equitable society outlined in the objects of AIMA should not be placed entirely at the door of the Institute. As I said earlier, the Department of Immigration and Ethnic Affairs, by neglecting its role of ethnic or multicultural affairs, bears much of the responsibility for the outcome. Multiculturalism can be successfully nurtured and developed in this country only by taking the responsibility for ethnic or multicultural affairs away from immigration bureaucrats and placing it in the care of the Department of the Prime Minister and Cabinet. It is imperative that we do not underestimate the importance of this issue. We should keep in mind that the adverse economic conditions encourage the Blaineys and the public expression of racist and discriminating attitudes and sentiments. Let us not forget either that it was the Opposition which sought to obtain political capital by supporting Blainey's racist outbursts. It was the Prime Minister who had come into this chamber to tell the Opposition that we, a Labor Government, will never allow or promote the practice of discrimination against individuals on the basis of culture ethnicity or race. While I may not agree with my leader on every issue, let me say loudly and clearly that so long as the honourable member for Wills (Mr Hawke) is the Prime Minister of this country, the Blaineys of this world will not have their way. It is no wonder that I would like to see ethnic or multicultural affairs placed under the Prime Minister's jurisdiction and responsibility. I believe that in this way the ethnic communities will have their needs met and receive the attention which they rightly deserve. Finally, let me reiterate that the Minister's dilemma in attempting to reduce expenditure in these difficult economic circumstances was considerable. The choice of where to apply cuts is unenviable and difficult. By recognising that the decision was not an easy one, I congratulate the Minister for his success in maintaining direct services to ethnic communities and securing increased funding for the adult migrant educational program and the grants-in-aid scheme. Once again I extend my congratulations to the members of the staff of AIMA for their contribution to the promotion and greater understanding of ethnic issues in our society. I hope that their talents will continue to be placed in the service of achieving a genuine multicultural society in Australia. It is with some regret that I commend this Bill to the House. Mrs SULLIVAN(Moncrieff)(10.52) —Whilst not for one minute wanting to indicate that I hold the honourable member for Hotham (Mr Kent) and his views on the subject of migrants and multiculturalism in anything other than high esteem, because I believe that he is genuine on that subject, I find some difficulty in responding to what was a rather schizophrenic speech on the Australian Institute of Multicultural Affairs Repeal Bill. On the one hand, the honourable member pointed out the unique job that the Australian Institute of Multicultural Affairs has done. His words were that it will take `an incredible imagination', to imagine the Department doing the job, as is the Government's intention. However, at the same time he supported the Government. I point out to the honourable member that there is a difference between reducing something and annihilating it. There is pressure on the Government to pull its head in fiscally. There is pressure on the Government to be more responsible. However, I would not agree that this is a responsible way to approach the matter. If one wants to prune a tree one does not start immediately above ground level. This measure is not a reduction; it is an elimination. The fine words about AIMA we have heard today from both sides in this debate are a eulogy for AIMA. That is what this debate is. I would be very curious to know who the Minister for Immigration and Ethnic Affairs (Mr Hurford) is going to invite to the wake. Certainly, I suspect that it will not be the Government speakers in this debate. It will probably be some departmental people. However, at no stage can the Minister be congratulated for what he has done in this portfolio and specifically in this area. I take issue with the honourable member for Hotham and his assertion that the Opposition has a new-found interest in the subject of multiculturalism. It was the Liberal and National parties in government which established AIMA, wrote its charter, saw its need and set it up. It is they who should get full credit for the considerable fruits-a number of which the honourable member for Hotham referred to in his speech-that have flowed from it. These benefits are not just for migrants but for the whole Australian community. This issue is very serious. One would have thought, given the very significant and special role that AIMA has played in the last seven years, that one would have got something a little better than the Minister's second reading speech. I diverge for a minute to note that the Minister is not here. The shadow Minister indicated in his speech that the Minister had said to him that he could not be present last night when the debate should have taken place had we not run out of time. I accept that there are occasions when Ministers cannot be here but I would like this point conveyed to the Minister. On previous occasions when we have debated citizenship and immigration Bills the Minister has also been absent. I have yet to see him be present for a debate on legislation relating to immigration. I accept that there may be pressures on his time. However, I would like those who are listening to the debate on his behalf-if he is not listening in his office at the moment-to convey to him the following message before he replies to this second reading debate. In the debate on citizenship several months ago, the Minister was almost criminally misbriefed by those who he said had briefed him. He admitted that he had not been able to listen to the debate but he said that others had listened on his behalf and had briefed him. It was very apparent in his reply to the second reading debate, and in his contributions in the Committee stage, that he had not been truthfully briefed because he referred to certain issues which had been discussed constantly throughout the debate in a way which clearly showed that he thought he was introducing something new into the debate, something to which he thought people were oblivious. So I ask those listening on his behalf to make sure that this time he is told what the substance of the debate is so that for once we can get a second reading reply from the Minister that is relevant to the points the Opposition has raised and that, apparently, Government members are also raising in objection to this decision. One has to ask what are the Government's objectives in multiculturalism when it takes such a dramatic step as abolishing this unique statutory authority. As I said a minute ago, the Minister's speech is remarkable for its brevity. It is insultingly brief. He makes a glancing reference to the achievements of AIMA but any sense of justification of why this is to happen is simply not present. I will quote some parts of the speech, which was a matter of only some half a dozen paragraphs. He said: We believe that enormous improvements were made to AIMA over the ensuing year-- that is, following amendments last year- but not sufficient to avoid a further re-evaluation. The Review of Migrant Multicultural Programs and Services . . . which has recently reported, has convinced us of the need for a range of approaches that will more effectively ensure that multicultural principles are accepted. The report of the review has been in the Minister's hands for some little time. It has not yet been tabled in Parliament. The implication of the Minister's speech is that the report recommends the abolition of AIMA. We have reason to doubt that that is what the report recommends. The Minister does not say it but he implies it. When that report is tabled it had better have some strong justification for the abolition of AIMA or the Minister stands condemned as duplicitous in his approach to this subject. I would not have expected that a report which recommends ranges of approaches would suggest that an independent body in this area should be shoved into the Department. That does not seem to do much for a range of approaches. The other part of the Minister's speech I refer to is the solution he proposes and the justification for it that he gives. He says: Part of our strategy involves the setting up of an Office of Multicultural and Ethnic Affairs to be staffed and funded within my portfolio . . . We are given no details about the Office. We are not told about the level of funds. We are not told which staff are to be used. Will they be proven, excellent, research staff from AIMA or will they not? What is the establishment? What is the saving, if a pruning and saving is the reason this measure is justified? The Minister said at the end of his speech: The Institute will therefore be wound down and abolished before the end of this year at a saving of $1m during 1986-87 and $2m in a full year. The Minister has some explaining to do to this House about that assertion. The explanatory memorandum to this abolishing Bill under the heading `Financial Impact' states: It is expected that savings of $1m in the financial year 1986-87, and some $2m in subsequent years, will occur as a result of the abolition of the Institute. We will need a very good explanation of how this function will be carried out within the Department at less cost-indeed zero cost-compared with now. Appropriation Bill (No. 1) 1986-87, under the heading `Department of Immigration and Ethnic Affairs', shows that for the entire year 1985-86 AIMA's expenditure and appropriation was less than $2m; in fact, it was $1,964,000. The Bill shows the appropriation this year is $1,272,000. Some figures are missing from the Minister's speech and from the explanatory memorandum. My arithmetic tells me that the anticipated saving, according to the Appropriation Bill, is less than $700,000. By wiping AIMA out, there will certainly be no $2m appropriation in future. If the function is to be undertaken in the Department, there will be a cost to the Department. There will be an increase in its costs. One would expect the cost to be at least as high or nearly as high. There are few economies of scale in the bureaucracy. By merging functions, one cannot expect always to save. The Minister must explain whether his second reading speech and the explanatory memorandum, also authorised by him, reflect the truth? Are we saving $2m in a full financial year, or is there simply a transfer of cost? The Minister's speech was insulting in its brevity. I reiterate that the report of the Review of Migrant and Multicultural Programs and Services should have been tabled before the debate took place. It is ironic that the March 1986 issue of Mosaic, an information newsletter from AIMA, had this to say about the review: The Minister for Immigration and Ethnic Affairs has established a review of migrant and multicultural programs and services, aimed at ensuring that migrants and their families will be able to participate fully in Australia society'. This implements an earlier Government decision accepting a recommendation made by the Institute in its Evaluation of post-arrival programs and services. I doubt whether the Government would have had the evaluation to proceed on had it not been for the existence of AIMA. I echo the views of the honourable member for Hotham that I doubt that we will get anything like the objective output of data and reports on the subject of the settlement of non-Australian born citizens in future that we have had in the past. The 1984-85 annual report of the Australian Institute of Multicultural Affairs says this about its own objectives: The Australian Institute of Multicultural Affairs is an independent statutory authority established by an Act of Parliament in 1979. It reports to the Minister for Immigration and Ethnic Affairs. The objects of the Institute include: Developing an awareness of the diverse cultures in Australia and an appreciation of their contributions Promoting tolerance and understanding and a cohesive Australian society Promoting a society which is just and equitable, in that it accepts people irrespective of their background and affords them the opportunity to achieve their own potential. The Act provides that these objects are achieved through: Providing advice to Government Undertaking community education and research activities, and disseminating information Liaising widely with, and promoting co-ordination between, government and community agencies Promoting the right of ethnic organisations to make representations- it will be very interesting to see how the Department does that- encouraging the conservation of cultural materials. I do not believe that those functions will be met in future by any office in the Department of Immigration and Ethnic Affairs. I hasten to say that I am not bucketing the Department. I have had extensive experience of it in my time as a member of parliament, especially regarding representations on behalf of people wanting to migrate here. I have found, in my dealings with it, that it is of a high standard. Its officers seem to be well motivated in the work they do. However, as the honourable member for Hotham pointed out, they have a function and a role that has nothing to do with what the Institute of Multicultural Affairs was all about. I do not believe that it would be possible for a Public Service department to meet those objectives. I repeat: How are departmental officers going to advise individuals or groups on how to make representations which inevitably will challenge the Department, and probably also the Minister? The publications that have followed the very high standard of research that the Institute has carried out have covered very profound and important subjects, such as: `Ageing in a multicultural society'; `Atlas of youth unemployment, 1981'; `Australia's people: a resource collection of curriculum materials'; `Differences in the earnings of Australian and overseas born youth: an economic analysis'; `The disabled migrant: an annotated bibliography'; `The ethnic aged: an annotated bibliography and selected statistics'; `Evaluation of post-arrival programs and services'; `Migrant and refugee youth and the Australian labour force: an annotated bibliography'; `Papers on the ethnic aged'; and `A profile of the Italian community in Australia', which was published with Comitato Assistenza Italiano. Will the Department be in a position to undertake research and publications in conjunction with organisations such as Co.As.It? I doubt it. Other publications are: `Reducing the risk: unemployed migrant youth and labour market programs', an overview report; and `Review of multicultural and migrant education'. That research covers a wide range of subjects and people in our community. It was excellent research. I do not believe that it will be done in future. There is only one way I accept that it would be possible for that sort of activity to be carried out with a government department involved and that would be for some independent body to determine what the research subjects were to be. If the Minister is to tell the unit what it is to research and if the Department is to decide what it is to research, one can bet one's bottom dollar it will not be ferreting out those sensitive and politically dangerous areas that must be addressed, and have been addressed in a responsible way by AIMA. How very ironic it is that the Minister for Immigration and Ethnic Affairs, who has presided over a convulsion in migrant services through the Budget should at the same time grandstand about what he has achieved. I refer to some of the Minister's comments last year in debate in this chamber on an amending Bill relating to AIMA. He said: I want to say, firstly, how happy I am to be the Minister in charge of the Australian Institute of Multicultural Affairs. I am very hopeful that under my stewardship . . . we will be able to make a great contribution in this land of many cultures through the Australian Institute of Multicultural Affairs. The Minister was either talking through his hat, speaking with forked tongue or he is a failure. He is a failure if judged by the fact that we are even debating this Bill today. He continued: The next point I make is that we need a body of this nature to achieve certain objectives. I would like briefly to go through them- he was not too brief, by the way- In regard to multicultural issues, there is the community appreciation of and adaption to Australia's cultural diversity that I have talked about. But there is also the need for a respect for the rights of migrants to remain free, to retain and express their ethnic identity, subject, of course, to the provisions of Australian law and without sacrificing their right of equal access to all community resources and government programs. There is the need for the development and maintenance of Australia as a society in which all groups have the same rights, responsibilities and opportunities and share a common identity as Australians. When it comes to community relations issues, there is the need for maintenance of a social environment which accepts racial and cultural diversity and the contribution of the migration program to Australia's national development. I do not want to forget, too, encouragement for the integration of immigrants and their dependants into Australian society and the elimination of racism, discrimination and prejudice against racial and ethnic minorities in Australia. The Opposition says `Hear, hear' to all those sentiments. They are the sentiments that we expressed in government, and, as one of the major means of achieving them, we established the Australian Institute of Multicultural Affairs. Just last year, the Minister was pointing out the central and important role of the Institute of Multicultural Affairs in achieving those laudable objectives. Today, we stand here to see the burial of this organisation, with only a scant reference by the Minister on this occasion to what it has achieved. I hope that the reference is scant because he is ashamed of this decision by the Government and ashamed of his inability to persuade the Cabinet and his Prime Minister of just how important a function in the whole social fabric this organisation was playing. I will wholeheartedly support the amendment moved by the honourable member for Mitchell (Mr Cadman), the shadow Minister for Immigration and Ethnic Affairs, and I say that the Government's sincerity on multiculturalism stands condemned by its actions here today. Dr THEOPHANOUS(Calwell)(11.11) —I know that you, Mr Deputy Speaker, and many other honourable members here take an interest in multiculturalism. Listening to the speeches of the honourable member for Mitchell (Mr Cadman) and the honourable member for Moncrieff (Mrs Sullivan)-I know that the honourable member for Goldstein (Mr Macphee) will speak later-one might have thought that their views were the views of the Opposition. The fact is that they are not the views of the Leader of the Opposition (Mr Howard); they are not the views of the dominant extreme conservatives in the Opposition. The Opposition puts up spokespersons to talk about defending multiculturalism, yet the Leader of the Opposition is not prepared to say anything or commit himself to any policy in defence of multiculturalism. The amendment moved by the shadow Minister for Immigration and Ethnic Affairs, the honourable member for Mitchell, says `whilst not declining to give the Bill a second reading', and yet goes on to attack the Government. If it is the view of the Leader of the Opposition that AIMA should not be abolished, why is the Australian Institute of Multicultural Affairs Repeal Bill not being opposed by Opposition members? Why do they want to have it both ways? On the one hand, they get up and give us pious talk and, on the other hand, they go along with the line of the Leader of the Opposition, which is to cut government services everywhere. Mr Cadman —You will be able to vote for the amendment, then. Dr THEOPHANOUS —The Leader of the Opposition has put pressures-- Mr Cadman —Vote for the amendment, then, Andrew. Dr THEOPHANOUS —The honourable member had his go. Now I will have my go. The Leader of the Opposition has stopped the mouth of the shadow Minister. The shadow Minister cannot go around saying that he opposes these policies, because it would totally expose the hypocrisy of their position. The conservative forces in this country have been calling for more and more cuts in government services and for more and more reductions in the public sector. Yet we hear lengthy speeches from the honourable member for Moncrieff and the honourable member for Mitchell about how wonderful AIMA is. One can make speeches supporting every sector of the Public Service; but one cannot do that and then, as the Opposition has been doing, attack the Public Service repeatedly and call for more and more cuts in the Public Service and in the fiscal process. What we have here is hypocrisy, and that is why they have not opposed the Bill but have simply moved some mealy-mouthed amendment. Let us make it perfectly clear that the Leader of the Opposition is not a friend of multiculturalism; nor are the key people around him. The fact that he can produce a few honourable members here-I respect their views-to make some comments on multiculturalism in no way means that the Opposition has changed its views about multiculturalism and ethnic affairs. It has been opposed to it, and it continues to be opposed to it. I say to the honourable member for Mitchell that, rather than coming into this House and giving us pious speeches, he should go back to the shadow Ministry and get some real motions and real policies on multiculturalism. Mr Cadman —You failed, with the Government. Dr THEOPHANOUS —That is what he should be doing. The honourable member says that I have failed. I will come back to that in a minute. I do not come into this House and pretend that everything is rosy in this area or put a pious and hypocritical view, as the honourable member has. The fact is that the Minister for Immigration and Ethnic Affairs (Mr Hurford) was told that he had to cut $4m from his budget. That was the overall economic strategy, which was determined on the basis of attacks from the New Right and the business sector, which were pressuring the Government. They are the very people whom the Opposition supports. If the honourable member for Mitchell were put into that position, what would he have done? Would he have cut the grant-in-aid welfare program? Would he have cut the adult migrant education program? What would he have cut? That is the issue. Of course, this is the luxury of opposition. The luxury of opposition is that honourable members can talk about rejecting this cut, that cut and the other cut without specifying where they would cut. Yet at the same time they are trying to tell us that they would make much more substantial cuts than those we have made. The Minister was faced with that position, and to suggest that he took pleasure in making this difficult decision is an outrage. Of course, he did not. Who would? This was a difficult decision, but it was taken within the context of the overall Budget. As I say, if the honourable member were the Minister faced with that difficult decision, what responsible alternative would he have suggested? Would he have reduced welfare to the ethnic communities? I dare say that he would, but the fact is that the Minister did not do so. He chose instead a difficult and regrettable course, but nevertheless a course which was the least of the evils available. In doing this, the Minister also took on board the recommendation of the Jupp Review of Migrant and Multicultural Programs and Services for the establishment of the Office of Multicultural Affairs. The honourable member for Moncrieff said that the figures do not add up. The figures do add up. Basically, the Minister will save $2.5m in the full year from the abolition of AIMA, and in the full year will spend at least $1m on the new Office of Multicultural and Ethnic Affairs. That is what will happen. Of course, the honourable member for Mitchell has an opportunity to refer to a number of government decisions in this area. As my colleague the honourable member for Hotham (Mr Kent) said, a number of the decisions taken in relation to multicultural affairs were taken by different Ministers and, consequently, there was an overall impact on multiculturalism which was not intended by the Government. The Prime Minister (Mr Hawke) himself has admitted that. He has said that that impact and perception were unfortunate, but certainly unintended. As the honourable member for Mitchell mentioned, in reply to a question that I asked in this Parliament of the Prime Minister, he said that the Government is `unequivocally committed' to multiculturalism. He replied that the Government will be committed to those principles. But what happened in the Budget process was that a number of Ministers were making decisions and, unfortunately, the overall impact on the ethnic communities was tough. We need to work out ways of ensuring that this sort of problem does not arise in the future. I will have more to say about that in a little while. But to suggest that it is a deliberate attack on multiculturalism by the Government is to be mistaken. This is not to say that every member of this House has an appreciation of multiculturalism. One of the problems in Australia is that people make many statements in support of multiculturalism but have not been prepared to put their money where their mouths are, and thus governments have not been prepared to deliver sufficient services. We have to educate the nation about the importance of a multicultural society. I appreciate that some honourable members opposite want to do that. I do not include the Leader of the Opposition in that group because he has never made a statement on the matter and he has never supported it. However, I do appreciate the support given by other honourable members opposite, especially the honourable member for Goldstein, in pressuring for the support of multicultural programs. Multiculturalism needs to be promoted further in Australia. It needs to reach the consciousness of the highest levels of government. In order to do that, the new Office of Multicultural and Ethnic Affairs must be given the highest status. My colleague the honourable member for Hotham and other members of the Caucus immigration and ethnic affairs committee have suggested that the Office be put under the auspices of the Prime Minister, with the Minister for Immigration and Ethnic Affairs assisting him. That ought to be seriously considered, because the lack of co-ordination in the preparation of this year's Budget ought not be repeated. We support the idea that, because multiculturalism is an area covered by a number of portfolios and departments, the Prime Minister ought to have responsibility for it. Mr Kent —Hear, hear; a good Prime Minister, too; the best person for the job. Dr THEOPHANOUS —As the honourable member said, the credentials of the Prime Minister in relation to multiculturalism have been good. The status of multiculturalism in Australia must be elevated through the elevation of this Office. Let me turn to the specific attacks that have been made by the Opposition in relation to what is to happen. I explained that the abolition of AIMA was a decision that was made within a financial context. It was not a decision in which the Government took any particular pleasure. It was a regrettable decision and a difficult one, but it had to be made within that context. As my colleague the honourable member for Hotham said, we wish to pay tribute to the work of AIMA. AIMA played a positive role-especially, I might say, after it was reconstructed by the Labor Government, because in its first few years it was a disgrace. I have spoken about that in other places. Prior to the review by Dr Cass of the operations of AIMA, we had a very difficult situation because the Liberal Party, through its appointees, was virtually running the Australian Institute of Multicultural Affairs. We had heard from the honourable member for Moncrieff that the abolition of the Institute of Multicultural Affairs will mean that the Government will not get any politically unbiased advice. I say to the honourable member for Moncrieff that during the period the Fraser Government was in power AIMA never produced any politically neutral advice because it was always under the control of the Liberal Party. Mrs Sullivan —Oh, rubbish! You have not read the research. Dr THEOPHANOUS —Who was the head of AIMA during that period? Everyone knows the answer to that question. Let me now turn to the question-- Mr Cadman —It is not about an ideal, it is about political control; is that right? Dr THEOPHANOUS —No, it is certainly not. Mr DEPUTY SPEAKER(Mr Leo McLeay) — Order! There are far too many interjections. Dr THEOPHANOUS —Mr Deputy Speaker, this is obviously a lively topic. Let me turn to what the Office of Multicultural and Ethnic Affairs will be doing. Obviously, this Office has the potential to strengthen the role of multiculturalism in government planning. The creation of this unit is a necessary demonstration to the ethnic communities of Australia of this Government's continuing commitment to multiculturalism. As a unit within a government department, this Office will be able to offer advice to the Government as a whole and serve as a liaison point between the ethnic communities and those responsible for policy making and implementation. We understand the concern expressed at the closure of the Australian Institute of Multicultural Affairs, since research is vital for the development of multicultural policies. However, the replacement of AIMA with the Office of Multicultural and Ethnic Affairs has the potential to improve research and to make it more relevant, with greater prospects of policy implementation and greater accessibility to both the ethnic communities and the Government. How can this be done? One way in which it can be done is if, in addition to the work being done by the Office, other work is contracted out to research institutes such as universities and colleges, which I remind the honourable member for Mitchell, will be able to undertake that research on an objective basis. There is nothing to prevent the Government and this unit from contracting out this sort of research. There are many key people in universities and colleges in Australia doing excellent research in multicultural affairs, and we can use those people. In fact, I understand that financial provision will be made within the Office for precisely that task. So, that is part of what will happen. As I say, it is of critical importance that this Office's potentiality be realised. For this to occur, the Office should not be-- Honourable members interjecting- Mr DEPUTY SPEAKER —Order! Both the honourable member for Mitchell and the honourable member for Hotham will cease interjecting and allow the honourable member for Calwell to complete his remarks in silence. Dr THEOPHANOUS —Thank you, Mr Deputy Speaker. I know that you are very interested in multiculturalism and want to hear what we are saying. Let me continue: For this to occur, the Office should not be just a research centre; it should also be an action centre, giving direct advice on its findings to Ministers and pressuring for the implementation of programs. That is one function that AIMA was not able to achieve. It is important that the new Office be not merely a source of research and a source of policy formulation but also a source of policy implementation. It should be able to pressure for the implementation of programs. It must be staffed by experts in the field, preferably with representation from the ethnic communities. It must draw on the expertise and resources that already exist in AIMA, the universities and amongst the various organisations that act for the ethnic communities. As part of a government department, the new Office can be accessible to people all over Australia, if staff are given sufficient flexibility to travel and have contacts. I hope that that will form part of the provisions that are given to the new Office. I hope that it will become a truly national body, taking full account of communities all around the country, consulting with them and involving them in its work. I repeat: As the new Office will be part of a government department, it will be involved in actual policy formulation and advice to those who decide on and implement policy. It will not be just a think tank. Many studies have been carried out on the problems and needs of ethnic communities, but the link between research and action has not been good enough. Also, if this Office maintains a constant and genuine contact with the ethnic communities, it will provide for the first time a much needed channel for those communities to be heard by government and the bureaucracy. The most important thing about this new initiative is that there must be consultation with the ethnic communities about the establishment, formation and structure of the Office. If this Office is to be successful in changing the direction of multicultural policies, it must have the confidence of the ethnic communities and it must be responsive to their concerns. In addition to promoting multiculturalism, the new Office will develop and enhance the Government's access and equity strategy for people of ethnic background. Discrimination remains a problem in the community, and it is important that the Government's anti-discrimination objectives be achieved. The Office of Multicultural and Ethnic Affairs should be able to work together with the amended Human Rights Commission to help to eradicate discrimination and achieve greater equity. The Minister for Immigration and Ethnic Affairs has issued a draft series of possible functions for the new Office and I hope that this will be referred to by the Minister when he replies. I say to the Government and the Opposition that we expect the fulfilment of the assurance that was given by the Prime Minister on 22 August: And I want to say that the Government, through my Minister for Immigration, now here with me on this occasion, commits the Government unequivocally to enhancing multicultural values. It is important to ensure that the problem of the lack of co-ordination of multiculturalism policies be resolved and that multi-naturalism promoted through the establishment of the Office of Multicultural and Ethnic Affairs-- Mr DEPUTY SPEAKER(Mr Drummond) —Order! The honourable member's time has expired. Mr NEHL(Cowper)(11.31) —In any calm assessment of where we are going with multiculturalism and in any debate on a Bill dealing with the institutions that have been provided to look after it, it is probably just as well to consider what multiculturalism is and perhaps what it should be. The word `multicultured' has been borrowed from Canada and it has never had any clear meaning in an Australian context. It seems to be used in Australia as an antonym for assimilation, and for many of those who could be deemed to be multiculturists, that is a swear word. Multiculturalism is used in Australian politics to promote the cultural and economic interests of certain non-Anglo-Celtic sections of the Australian community. In the Canadian context, multiculturalism has served to balance the competing interests between two large and diverse groups, namely those of British and French origins. The word `ethnic', seems to have taken on a peculiar meaning in Australia-namely, non-Anglo-Celtic people. The definition that appears in the Macquarie dictionary is as follows: Pertaining to or peculiar to a population . . . referring to the origin, classification, characteristics . . . pertaining to members of the community who are migrants or the descendants of migrants and- as, of course, this is the Macquarie dictionary- whose native language is not English. That particular definition has become enshrined in the Australian language. However, in reality, `ethnic' means the initial definition as given in the Macquarie dictionary. `Multiculturalism' seems to wander in meaning through a spectrum ranging from respect for difference and non-conformity, and the recognition that one's own values are neither infallible nor unique, to separatism that is based on ethnicity, or apartheid, the euphemism for which is separate development. This spectrum is sometimes characterised as having soft multiculturalism at one end, proceeding to hard multiculturalism at the other. The multicultural growth industry has asserted for many years that multiculturalism is necessary to reverse the historical social trend of migrants being absorbed in the broad Australian community. I have to ask why? What is wrong with the historical social trend of migrants being absorbed in the broad Australian community and becoming Australians. Multiculturalism of the sort that is being generally advocated today seeks, through administrative and educational intervention, to push for the harder forms of multiculturalism. This has meant that values are often promoted which are quite at variance with Australian social mores, and which basically deny those attitudes of liberalism and plurality upon which Australian society is based. Support for the values of some minority communities means support for a sheltered, separate, limited and thoroughly sexist upbringing for, as an example, daughters. It means, for some communities, inculcating racial and ethnic mythologies theoretically irrelevant to the future of Australia but having a politically and literally explosive potential for our future. It means, in some instances, perpetuating the notion of killing to maintain family or blood honour. It means that members of Aboriginal communities may properly be maimed, speared or even killed by other Aboriginals if they are judged to have violated Aboriginal customary law. Multiculturalism is not about free-flowing wine, exotic cuisine or simple dancing. It is not even about reinforcing exotic aspects of the cultures of migrants to Australia. Instead, it is about what Professor Lauchlan Chipman has called: . . . the preservation of ethnic integrity, the reinforcement and imposition on the new born of sets of traditions, beliefs and values, which include, as well as those which are noble and enlightened, some which are at least as inhuman, as grotesquely ignorant, and as racist, and as bigoted as any that can be squeezed from even the most appalling of ockers. That quotation acknowledges the regressive nature of multiculturalism, which asserts that cultures are static and unvarying from one place to another, and that these cultures must be preserved in as pure a form as possible, no matter how irrelevant this may be. Multiculturalism in its present form in Australia seeks to retard the evolution of Australian culture and society by preventing interaction between different heritages in a liberal and plural background, such as exists in Australia. The pursuit of multiculturalism in its present form in Australia will eventually see Australia reduced to a confederation of ethnic tribes warring with one another for political ascendancy and the financial gravy train that follows in its wake. This is completely at variance with the democratic values held in Australia. A democratic society is characterised by lack of discrimination and the presence of individual freedom. In such a society there is cultural freedom and the freedom of conscience. An individual is free to engage in cultural activity by himself or in association with others, to live where he chooses, and to intermingle and interact as he chooses. What is not permissible is the imposition of either state-sponsored culture or rules of behaviour. Wave upon wave of immigrants have come to Australia, not because of a state-guaranteed cultural environment but because Australia affords opportunities for individual advancement and freedom. Multiculturalism is the antithesis of these liberal values. It is most important at this stage in the development of Australian society that we do not blindly accept the concepts of multiculturalism that are now being promoted. I know that because I am querying multiculturalism and, bluntly, suggesting that it is a mistake and not in the best interests of Australia, it is likely that cries of condemnation will be directed at me to the effect that I am racist or prejudiced. If that is the position, I can accept it. I have broad shoulders. While waiting to speak I made a quick list of the nationality of close personal friends of my wife and myself. It is certainly not exhaustive, but it includes Australians whose heritage is Greek, Yugoslav, Italian, French, Korean, Chinese, Malaysian, Indian, Pakistani, American, German, Danish, Norwegian, Argentinian, Indonesian and Vietnamese. That is probably typical of every ordinary, fair-minded and tolerant Australian. That is the pattern throughout our society. We must query, however, where we are going as a nation. Are we seeking to build up ghettos? Are we seeking to build up separatism? I do not believe that that is the track to follow. There is no reason to be ashamed of being Australian, and I make no apology for saying that and there is every reason for those who come to this country to become Australians to do so. I do not for one minute challenge the value of migration to Australia. In fact I would be one of the greatest exponents of the value of migration. I can recall, as a very young boy before the war, when growing up in Newcastle, going into a ham and beef shop in Beaumont Street, Hamilton. The shop was called a ham and beef shop because that is what it sold. It sold ham and beef and pickled onions and gherkins and a sausage or two. One of the sausages was originally called, I think, the German sausage but during the war, of course for patriotic reasons, we changed the name to Empire sausage. Of course if we were very, very daring- Dr Theophanous —That was a really good exercise in multiculturalism. Mr NEHL —Oh, get back in your box, Andrew. If we were very daring we would have some garlic sausage which had a wave of one clove of garlic per bullock. Since the war we have seen such an amazing growth in the variety of cuisine in this country. We have benefited amazingly from the people who have come here from all over the world. If we go to any restaurant in Australia we can see how we have been so enriched in a culinary sense by the people who have come to dwell in Australia and be Australians. Every one of us who is not an Aboriginal comes from a migrant heritage. I see no difference between me, with Scottish forebears, and the honourable member for Calwell (Dr Theophanous) who I think has a Greek ancestry-he has never told me but I think I am correct in my assumption. I see no difference between me as an Australian and the honourable member. I am an Australian of Scottish and English heritage and background and the honourable member is an Australian of Greek heritage. I believe that he has every right to cherish that background of his forefathers, just as I have with my Scottish forebears. As a young man I was very keen and enthusiastic about this and I started to learn how to play bagpipes. I did not get very far. I can speak a few words of Gaelic and I still maintain an interest in that Scottish background. I think that is great; I think everybody is entitled to do that. But I do not believe that the best interests of any Australian will be served by creating dissension and by creating a divisive situation. As the honourable member for Mitchell (Mr Cadman) said earlier today, we have to exercise respect, acceptance, understanding and tolerance for other people. When people make the decision to come to Australia the great bulk of them want to come here to live, to work and to have a better life than the one they had from where they came and, most certainly, to provide a better life for their children. Who can quibble with that ambition? It is one that millions of Australians have taken on board and done amazingly well. I made reference earlier to the vast number of personal friends that I have from varying countries around the world who are here as Australians. They are not Italians living in Australia, they are not Greeks living in Australia but they are Australians of Greek, Italian, Scottish and other heritage. I think this point has to be made very strongly: We cannot have a situation where a government, whichever government it may be, is shovelling money into creating a situation which ends up causing divisiveness. Some years ago in Melbourne, from 1969 to 1971 I think, I had the opportunity of working in the management area of migrant hostels. I was on the managerial staff at Maribyrnong, Holmesglen, Broadmeadows and Springvale. The honourable member for Hotham will know about one of those migrant hostels because it has just been closed. For those years I actually lived in migrant hostels, longer than most migrants did at that time. My wife was a teacher teaching English as a foreign language. If we are going to consider anything, one single point stands out about the welfare of migrant groups in Australia, and that is that the program for the teaching of English must have absolute priority and must have every bit of funding that it needs. That is absolutely vital. The Minister sitting at the table, the Minister for Transport (Mr Peter Morris), said last night in his summing-up on another Bill that the member for Cowper came in in the morning and said cut back on this, and then came in in the afternoon and said spend more on this. There is nothing inconsistent in that because it is a question of priorities. I make that point to say that the priority of this Parliament and of government members should be to provide every dollar that is needed to have enough teachers so that every non-English speaking migrant in this country will have the full facility to learn English. Dr Theophanous —Why hasn't Howard said anything about it? Mr NEHL —I do not know, but I know that this is what is absolutely essential. I also know this: We have areas that some people regard as ghettos, such as Leichhardt in Sydney which is regarded as an Italian ghetto. Over recent decades many Italian Australians have lived in Leichhardt. There are other areas such as Marrickville, Lakemba and so on where other migrants live. The point is-I am sure the honourable member for Calwell will agree with me-that when people who migrate to Australia, such as Italians in this case, leave a migrant hostel they want a staging post. They want to live in a situation where they can do their shopping in their native tongue and where, if they get into any problem, they can discuss it in their native tongue and where they can feel comfortable, relaxed and secure. Dr Theophanous —What is wrong with that? Mr NEHL —Who is suggesting that anything is wrong with that? Wake up. You are not really a dummy so do not behave like one. What I am saying is that those particular areas are staging posts and very naturally, if I were going to live in Rome I am sure that with my total lack of Italian, I would be happy to live in a situation-if there were one-where I was in an English speaking neighbourhood. But the reality is that when the people move in there they become knowledgeable about Australia. They get some English and then move on to somewhere else. When I lived at Abbotsford in Sydney I had Italian neighbours, and very good neighbours they were too. In Coffs Harbour, where I live, there is a very big Italian community-a community of Australians of Italian heritage-and they are very good Australians too. I have never met a bad one. The reality is-I come back to this point because I believe it is absolutely vital-that every necessary dollar must be made available for the teaching of English as a foreign language. I do not believe it is appropriate for the Government to provide funds in an area which would create divisiveness and separate development. There are enough problems in the world and enough problems in Australia without that. We do not want another country within our country. With the caring and compassionate society that we have we need to provide assistance to those people who need it, not on the basis of race and colour or anything else but on the basis of need for every Australian. That is what we need and that is what the coalition will do when it gets back into power at the next election. Mr RUDDOCK(Dundas)(11.49) —Mr Deputy Speaker, thank you very much for the call in this debate. I want to take the opportunity, in the discussion on the Australian Institute of Multicultural Affairs Repeal Bill, which is abolishing the Australian Institute of Multicultural Affairs, to make some points about the way in which the Government has gone about this task that it has set itself. I also want to deal with the reasons for the Fraser Government putting in place the Institute of Multicultural Affairs and the reason why multiculturalism is so important in Australia. In doing so I will take up the comments of at least one of my colleagues who spoke immediately before me in this debate, the honourable member for Cowper (Mr Nehl). The honourable member for Cowper acknowledged that multiculturalism can mean different things to different people and that there were at least two extremes. On the basis of the extremist approach he set up a straw man and then proceeded to knock him down. I do not think anybody on this side of the House would argue, nor have I heard people on the Government benches argue-there may be some Marxists around who advocate a more extremist approach-for separatism or apartheid in Australia. I certainly would not support any concept of multiculturalism which envisaged separatism or apartheid in Australia. Likewise, I do not see my background and my cultural heritage as being the one cultural background and heritage which ought to give rise to that amorphous group of people whom we now call Australians. The fact that we are Australians is derived from the variety of backgrounds of people who have settled in this country and have made it the great country that it is. What people who talk about multiculturalism are anxious to dispel is the concept that was advanced at one time-that we ought to adopt an assimilationist approach, that our culture was static, that all those people who came to Australia thereafter had no role to play, no cultural benefits to give to the rest of us and nothing to offer, and what was here was that which everybody else had to assume when they became Australians. It seems to me that multiculturalism is that view which adopts what the honourable member said was so important, that is, a liberal and pluralist approach. Certainly that is the approach that the Fraser Government took and it is the very reason the Fraser Government introduced the Institute of Multicultural Affairs. Malcolm Fraser commented on this matter when he set out his Government's commitment to multiculturalism. He stated: Australian society and culture has already been enriched by artistic, intellectual, lingual, culinary and other contributions of migrant cultures. The development of a multicultural society involves the recognition of the rights of ethnic groups to maintain and foster their ethnic languages and cultures, and requires efforts on the part of all Australians to adopt a multicultural perspective and to promote social harmony in cultural interaction. He then said that the Government accepted the guiding principles of the Galbally Review of Post-Arrival Programs and Services to Migrants and he made this point: (a) All members of our society must have an equal opportunity to realise their full potential and must have equal access to programs and services; (b) Every person should be able to maintain his or her culture without prejudice or disadvantage and should be encouraged to understanding and embrace other cultures. That is what it is about. This organisation which we are abolishing was committed to enhancing the Australian understanding of these objectives. The Government, which has to put so much emphasis upon multiculturalism and its importance to Australia and Australia's future development, is now seen to be dismantling the very institutions that are designed to enhance that perspective of Australia. The abolition of AIMA and the repeal of this organisation through this Bill we are debating today must give rise to doubts in the minds of some Australians as to the commitment of this Government to multiculturalism. I was aghast when I saw the second reading speech of the Minister for Immigration and Ethnic Affairs (Mr Hurford). It provided no reasoned argument for the abolition of the organisation; it provided no persuasive arguments about why we ought to be supporting the Bill; it was not based on any report or recommendations to the Government that this approach should be taken, and it was certainly not a persuasive speech. Mr Downer —It was a weak speech. Mr RUDDOCK —It certainly was a very weak and duplicitous speech in the sense that it is totally and absolutely internally inconsistent. The Minister had this to say: The review of migrant and multicultural programs and services (ROMAMPAS), which has recently reported, has convinced us of the need for a range of approaches that will more effectively ensure multicultural principles are accepted. In dealing with diversity, we must use diverse approaches to achieve acceptance of the values and benefits of our developing identity built on multiculturalism. The Minister then had the audacity to say that the Government must take direct responsibility for achieving these objectives. So the institute that provides part of that diversity is to be abolished and the Department is to assume total responsibility. There is no diversity in that; it is totally and absolutely internally inconsistent. It is the approach of a Minister who is not at all convinced about the arguments he is being pressed to put on this matter. If he had any strength and character in relation to this question other approaches could be taken and resignation is one of those that is often resorted to by those who have strong views on a matter of this sort and are prepared to ensure that people know and understand their position on the matter. I think one has to look at the way in which this Government has acted in relation to AIMA. On coming to office the Government had a review of AIMA. It was carried out by a former Labor Minister and Labor shadow Minister for Immigration and Ethnic Affairs. The report was critical of AIMA but it was not critical of the need for an independent body advising in this area. In fact the report went further and said that AIMA should be not only reconstructed but also significantly changed to enhance its ability to be able to work in this area. The Government looked at that review and it had other reports before it and it ultimately determined an approach. It modified marginally the structure of AIMA and so AIMA was constituted in the form that the Government wanted. The Government then proceeded to make new appointments to the body's council. In June last year it was announced that the Government had appointed the Most Reverend Dr David John Penman, Anglican Archbishop of Melbourne, as Chairman of the body. Clare Dunne, Anna Emamy, Al Grassby, Michael Liffman, Alan Matheson, Ms Nihas, Basil Taliangis, Eric Willmott, Katie Young, and Peter Sheldrake were appointed to the body after the Government had advertised for the appointment of council members. In an advertisement, which I have before me, in the Canberra Times of 13 April the Government made it clear that it was seeking appointments of people to this body. The advertisement stated: Appointments under the provisions of the Australian Institute of Multicultural Affairs Act will be made by the Governor-General for terms of up to 3 years. People, many of whom were very distinguished Australians, were invited to join this body in good faith and to contribute to it. A mere 12 months later the organisation is being abolished and these important Australians, who wanted to contribute in this area, are being dismissed without there being even a note of thanks to them for their work and effort in the speech of the Minister. I acknowledge that some members of the Government have spoken on this matter and thanked the members of the Council and members of staff for their contribution. However, I regard the abolition of an organisation in this way without even bothering to thank the people who have contributed to it as the most insulting and offensive action that can be taken. These people responded to the Government's advertisements to the Government's inquiries-an injunction to come forward and contribute. Time is limited in this debate and I have been asked to contain myself in relation to this matter. I find that very hard to do because I have been through the speeches of honourable members opposite as recently as March 1985 when we discussed the Government's amending Bill on the Institute of Multicultural Affairs. When one reads the speeches of honourable members opposite, one sees no indication that AIMA might be abandoned. The honourable member for Calwell (Dr Theophanous) indicated that the Government was proposing in this Bill to see that AIMA was structured on the principles of multiculturalism and the acceptance and active encouragement of cultural diversity. The honourable member for Barton (Mr Punch) had some comments to make about AIMA and its reports. He commented most favourably on them, particularly in relation to youth and the aged. Honourable members may find something prophetic in what he had to say about youth. He said: They are undoubtedly, particularly in the Rockdale region, amongst those in greatest need of urgent help. Perhaps the people of Rockdale who will also be voting in Barton will have cause to look at their own member's words in relation to that. The honourable member for Macarthur (Mr Martin) spoke on this matter as well and indicated that there was great enthusiasm for AIMA. He gave no indication that Labor members would be pressing for its abolition. We had the comments by the Minister for Immigration and Ethnic Affairs, to which the honourable member for Moncrieff (Mrs Sullivan) so ably drew attention. The only argument put forward by honourable members opposite was that the Government was faced with some very difficult budgetary decisions. They said that the matter was one of priority-presumably in the Department of Immigration and Ethnic Affairs. It is a question of priorities, but when I look at the priorities I would be asking whether, in areas where there are acknowledged needs, the priorities ought to have been based on needs or whether they ought to have been made in other areas. I have been challenged as to whether I could suggest any possible avenues of expenditure reduction in the Department of Immigration and Ethnic Affairs. I offer a bit of advice on one area in particular-grants-in-aid, particularly those grants-in-aid made to the trade union movement. I am shocked at the extent to which the trade union movement, which ought to have a commitment to multiculturalism, rather than using its own funds receives funding from government as a priority over programs for the aged and youth, which we see as being so important. If I were in government, I would be advocating change to the funding of the grants-in-aid programs in favour of more important objectives. There is one other challenge that honourable members opposite have thrown down to us regarding this legislation. Dr Theophanous —So you would cut the grant-in-aid program? Mr RUDDOCK —I would cut it in relation to the trade union movement. One other point was made. Honourable members opposite were asking why we were not voting against this Bill. We would vote against this Bill, but there would be no obligation upon the Government to find the funds to continue to support it, even if the AIMA were to remain on the statute book. The only way to save AIMA would be to reject the totality of the Budget. It will be a matter for which the Government has to take responsibility and be prepared to wear it. The Government cannot absolve itself from this decision and say that we could save AIMA by our vote on this legislation. In such a case we would have to reject the Government's Budget in its totality. I am sure that is not a step that honourable members opposite would encourage. The honourable member for Calwell attacked our parliamentary Leader in relation to this matter and indicated a lack of commitment to multiculturalism on the Leader's part. The Leader of the Opposition (Mr Howard) has played a very significant part in ensuring the maintenance of a bipartisan approach to immigration and ethnic affairs, and he has ensured that when these matters are discussed, as they have been discussed in the past and are at present, they are put in a proper perspective. It does not do the honourable member for Calwell any good trying to save this Government's bacon on this important question by attacking the Leader of the Opposition. The Leader of the Opposition is as committed to the concept of multiculturalism as any honourable member on this side of the House. Dr Theophanous —In what statements? Mr RUDDOCK —Statements were made in debates in this Parliament on previous occasions, when members on the honourable member's side were suggesting that the Liberal Party had an approach other than one of a bipartisan nature to the maintenance of immigration and the maintenance of multiculturalism. The fact is that this Party has a policy on immigration and ethnic affairs, and it has an approach to multiculturalism which appears in its platform and its published policy. It is important to remind honourable members again of our policy. It is obvious that the honourable member for Calwell has not taken any note of that. I will read the policy statement, which was part of our record for the last election. It was in this form: We believe in multiculturalism as an enhancement of the Australian way of life; to be welded into our national tradition and to be recognised as strengthening our nation. We recognise the desire of ethnic communities to participate equally in all aspects of Australian political, economic and cultural life. We agree this means that all Australians should be able to relate to all our institutions and that measures should be taken to ensure equal opportunity to participate in both the benefits and the sharing of responsibilities. There is no lack of commitment by honourable members on this side of the House. I will not want to sit in this House again, at any time, to hear arguments about a lack of commitment on the part of honourable members on this side of the House to a bipartisan approach to immigration and ethnic affairs when this Government is now responsible for the abolition of the Australian Institute of Multicultural Affairs, for the closing down of six immigration offices in various parts of Australia, for halving the funds available for teaching English as a second language in our schools, for the abolition of other programs designed to enhance the teaching of ethnic languages in Australian schools, and for the amalgamation of the Special Broadcasting Service with the Australian Broadcasting Corporation. They are all steps that the Government has taken in this Budget-there have been others as well-that have had a very significant impact upon the whole concept of immigration and ethnic affairs. It needs to be understood that this is now part of the Government's record. It will be on the record from now on. Whenever the Government wants to lecture us about these matters, I will be able to draw upon each and every one of those decisions. The honourable member for Hotham (Mr Kent) suggested in this debate today that there were reasons for these decisions. He suggested that one of them was to ensure that the decisions were all made at once so that the Government would not haemorrhage, I suppose, over time, by having to make some of the decisions now and others at a later time. I do not know that that is the case; I certainly hope that it is. If I were an ethnic person concerned about these matters and if I were reading the speeches, I would have to have some doubt-having regard to the Government's record to date-as to whether this is the end of the matter or whether we could take it for granted that there would be no significant cuts in these programs by this Government in the future. The Government's record arouses very considerable doubt as to its commitment. Certainly, there is no scope for it to be suggesting that there will be any shortcomings on this matter on this side of the House at any time in the future. Mr DOWNER(Mayo)(12.10) —I was amused to hear the honourable member for Calwell (Dr Theophanous) call out that the Liberal Government never did anything about multiculturalism when he knows only too well that Malcolm Fraser had a very great commitment to multiculturalism. That Government's commitment was borne out by two particular decisions: First, the establishment of the Special Broadcasting Service, and secondly, the establishment of the Australian Institute of Multicultural Affairs. I do not have any recollection of the honourable member for Calwell opposing those decisions when they were announced, though it is possible that he did. He now claims that we have no commitment, yet when one looks at this Government's record one sees that it has effectively abolished the SBS by merging it with the Australian Broadcasting Corporation and through this legislation it is abolishing the Institute for Multicultural Affairs. I join with my colleagues in saying that I am extremely disappointed in the Government for making this decision. Part of the decision strikes me as being related to what could be described as a `Yes, Minister' power grab by the Department of Immigration and Ethnic Affairs. One could be excused for being suspicious that the Minister for Immigration and Ethnic Affairs (Mr Hurford) is in some way captive to the views of his own Department and is not promoting what we once understood to be the policy of the Australian Labor Party. The Australian Institute of Multicultural Affairs is to be closed and is to be replaced by a research office in the Department-an office which, of course, will be under the control of the Department, which in turn will be under the control of the Minister, and so any independent capacity the Institute has will subsequently be lost. The other argument that the Government uses on this issue is that this is a budgetary measure, that this is a matter of priorities and that multicultural issues are not a priority for the Government. That is what the Government is arguing implicitly. It claims that by closing down the Institute it will save some $2m. That is manifestly false because it is not just closing the Institute, it is also opening an arm of the bureaucracy in Canberra, a city far removed from many of the multicultural issues of Australia. That new arm of the bureaucracy in turn will cost the taxpayers a considerable amount of money. I would guess that the cost to the taxpayers would be similar to the cost of maintaining the Institute of Multicultural Affairs, yet the taxpayers lose an independent body-independent of the Minister and independent of the views of the Labor Party-which is located in a much more sensible place for multicultural issues to be discussed. Fundamentally the Government through this decision, admittedly in a small way, is turning its back on two major community goals. Neither Government members nor Opposition members would deny that the Government has some role to play in pursuing the great goals of Australia. One of the goals the Government is turning its back on is the goal of building internal stability in our society. That internal stability must be built by doing what we can to eliminate class conflict, something that those on the other side of the House have a passionate love affair with, and eliminating ethnic tolerance from our society. The Institute of Multicultural Affairs, through its work, was contributing to those goals. The Institute will now be abolished. I think abolishing the Institute also makes the greater task of building up our country, partly through constructive and progressive immigration policies, all the more difficult because by helping to alleviate some of the problems created by immigration the Institute has made the whole immigration program all the easier: or it certainly had the potential to do that. I know all members on this side of the House would agree that an immigration program is an essential part of building Australia because migrants are a very important source of creative and dynamic energy for our society. As I have explained, the Institute has played a small part in contributing to the building of those goals, and that is not surprising because it was set up by a government which, for much of its period, was very goal oriented-the Fraser Government. Of course we on this side of the House support the concept of multiculturalism, although we do not support the concept of multiculturalism propagated by the Left in Australia. We see multiculturalism as part and parcel of welcoming people from a whole array of different cultures to our shores. We encourage those people to come. We want to retain the richness of those people's cultural heritages. We do not want to see those heritages scrubbed out, eliminated. At the same time we want those people, and all Australians, to accept that as a nation we have our own unique and evolving heritage, and it is the institutions we have in this country which have evolved from that heritage which have attracted so many migrants to Australia. We must acknowledge our own unique national values; we must have pride in those national values and in turn must build on them. This was well recognised by Malcolm Fraser in his inaugural address to the Institute of Multicultural Affairs on 30 November 1981. Mr Fraser's speeches on these sorts of issues are well worth referring to. Honourable members will be aware that he had some very good speech writers. Mr Fraser said: We cannot demand of people that they renounce the heritage they value and yet expect them to feel welcome as full members of our society. Realism alone dictates that cultural differences must be responded to in a positive way. But multiculturalism is concerned with far more than the passive toleration of diversity. It sees diversity as a quality to be actively embraced, a source of social wealth and dynamism. Mr Fraser went on to say: It is about cultural and ethnic differences set within a framework of shared fundamental values which enables them to co-exist on a complementary rather than a competitive basis. I think that is an extremely important point; one way above the heads of many on the other side. He went on to say: It involves respect for the law and for our democratic institutions and processes. Insisting upon a core area of common values is no threat to multiculturalism but it is guaranteed, for it provides for minimal conditions on which the well-being of all is secured. That speech is extremely important and it is as relevant today to the philosophy of the Liberal Party on multiculturalism as it was just five short years ago. I am concerned that the concept of multiculturalism in Australia is being increasingly hijacked by the Left. Its attitude to multiculturalism is really to use it not as a building tool, as it should be used, but as a tool to undermine the evolving heritage of our country. The Left's attitude to multiculturalism is essentially iconoclastic and sadly enough it is beginning to gain the ascendancy. The Left believes that in Australia cultural masochism is an essential ingredient of community tolerance. In the Left's view, the corollary of that is that most of Australia's history, and Australia as it is today, is some sort of terrible mistake. The Left goes on to attack the existing and evolving heritage of Australia in three basic ways. First of all, it attacks what have been our united perceptions of what Australia was and is. It claims that it is a society built as a result of invasion, genocide and exploitation; that settlers in Australia have been involved in little more than land degradation; that in international affairs we are subservient to the United States of America and the United Kingdom, and that it is a society which is geared towards militarism. It argues that the institutions of our society are in some way totally out of date. It denigrates the constitutional monarchy. It denigrates our system of justice through the common law system by, for example, introducing a Bill of Rights. It ridicules the Constitution and ridicules the concept of federalism, as we have seen through the establishment of the Constitutional Commission and, in my view, the rather suspect use of the foreign affairs power in the case of the Tasmanian dams issue. In addition to that, it denigrates our national symbols such as the Australian flag. When it comes to education, its attitude towards Australian culture and our evolving heritage-I really do emphasise the word `evolving'-applies again. The education system that it prefers is a system that lacks any appreciation for the values of our society or its history. That is borne out by the simple fact that those subjects are not longer taught in many Australian schools and educational institutions in the way they used to be. In other words, what I described as Left multiculturalism is extremely negative, is iconoclastic, is undermining our heritage and is providing uncertainty and insecurity in Australia. That contrasts so dramatically with the constructive and progressive multiculturalism of the sort that was advocated by the Fraser Government and which is still advocated by the Liberal Party. Our form of multiculturalism welcomes people of diverse cultures to Australia and wants them, through their diversity, to contribute to the building of our country. But it is also a form of multiculturalism that understands that every society needs deep, growing roots. Our roots are part of our national pride and must provide us with some inspiration to go ahead in the future. Multiculturalism is building on institutions which have attracted migrants to Australia and which have provided us with a unique degree of freedom in this country and with qualities such as fairness and equity before the law. Those institutions have been developed over some 200 years. Our sort of multiculturalism recognises pride in the history of our country and in the pioneering spirit of so many of the settlers from a whole range of cultures who have come to our country and who have been so eminently successful in building up this country. Our form of multiculturalism, in a phrase, is all about a commitment to building Australia together with a whole range of groups from diverse origins. I quote Malcolm Fraser who, again in his inaugural address, said: If particular groups feel that they and their children are condemned whether through legal or other arrangements to occupy the worst jobs and housing, to suffer the poorest health and education, then the societies in which they live are bent on a path which will cost them dearly. I want to know whether the Labor Party disagrees with those comments. If it does not disagree with them-as I dearly hope that it does not-why is it striking down a very valuable institution which is contributing, in a phrase, to the building of Australia? I am sorry that my time is running out and that I have had to truncate my remarks because this is a very important debate. It is a debate which the Labor Party will hear a lot more about because its record on multiculturalism is a record of shame: Merging the Special Broadcasting Service and effectively winding it up; cutting back by half expenditure on English as a second language; and now abolishing the Australian Institute of Multicultural Affairs. The Minister has overseen what, in effect, amounts to an attack on constructive and moderate multiculturalism. He is leaving the field open to radical multiculturalism which is negative and destructive of all that is good in Australia. We on this side of the House express our opposition to this legislation and hope that in the future when the government changes we can get back to the task of building Australia. Mr HODGMAN(Denison)(12.23) —I take no pleasure in saying to this House that this unfortunate-indeed, disgraceful-legislation, the Australian Institute of Multicultural Affairs Repeal Bill, vindicates the worst fears I expressed during the time I had the honour to be the shadow Minister for Immigration and Ethnic Affairs in 1983 and in 1984. Sadly, every single prediction I made at that time has now come true. The ethnic communities of Australia have been cruelly and shamefully betrayed by a Government which told them that it was their friend and which, in the space of just a few weeks, has proceeded to destroy the Australian Institute of Multicultural Affairs, the Special Broadcasting Service and, to cut by more than half, funding for the English as a second language program. On 14 August this year I issued a Press statement, part of which I would like to read into the record. I said: Now Australia's ethnic communities really know what the Hawke Socialist Government thinks about them. When I was shadow Minister for Immigration and Ethnic Affairs I repeatedly warned that the Hawke Socialist Government would axe the Institute for Multicultural Affairs at the first possible opportunity, and would also bring about the demise of the SBS. At that time, in 1983-84, nobody wanted to hear what I was saying. Nobody wanted to believe my predictions. Many Australian Labor Party ethnic community leaders repeatedly accused me of scaremongering. They called me a racist and said that I was not speaking the truth. Now the truth is out. The ethnic communities of Australia are now learning the hard way that the Labor Party simply cannot be trusted. The Hawke socialist Government promised the ethnic communities much. Its promises are now dishonoured. At least the Liberal and National Parties under Malcolm Fraser delivered exactly what they promised. Going back through my files, I noted with interest a Press statement issued at a joint Press conference held by the then Leader of the Opposition, the honourable member for Kooyong (Mr Peacock), and me, in Melbourne on 19 January 1984. One of the matters the then Leader of the Opposition emphasised at that joint Press conference was that a Liberal-National Party Federal Government would-I emphasise this-depoliticise ethnic affairs policies and programs. I quote the statement verbatim: Under the Hawke Labor Government immigration and ethnic affairs have taken a dangerous and radical turn to the left. Mr West is simply listening to the wrong people and pandering to extremist elements who do not represent majority opinions in Australia's ethnic communities. The Hawke Labor Government has already destroyed the Australian Institute of Multicultural Affairs and now is turning its attention to the Special Broadcasting Service, a major initiative of the Fraser Government. The then Leader of the Opposition said that his Government would ensure `a balanced, non-political and equitable migration policy and a fair deal for ethnic communities, free from political favouritism, nepotism and string pulling'. In this House on 9 December 1983 I challenged the then Minister for Immigration and Ethnic Affairs, the honourable member for Cunningham (Mr West), who has now been replaced, to provide his outrageous statement that AIMA has been a costly failure. That statement made by the Minister at that time has never been proved. I challenged the Minister to prove that AIMA had not done the job for which it had been established. Again, that statement has never been proved. I challenged the Minister to justify his attack, which I regarded as a disgraceful attack, on two great Australians, Mr Frank Galbally and Mr Petro Georgiou. Again, the Minister and the Government failed to come up with the proof to support their statements. It is a sad thing for Australia's ethnic communities that they have to learn the hard way that the Labor Party simply cannot be trusted. Right through 1983-84 as shadow Minister I had to say things which people did not wish to hear. It was reminiscent of Churchill's great speech in the House of Commons in 1938 when he said: `I will now have to tell the House the ugly truth which it will not want to hear'. I take no joy in being vindicated. I note the presence in the chamber of the honourable member for Goldstein (Mr Macphee). On these three issues, the Institute of Multicultural Affairs, the Special Broadcasting Service and the English as a second language program, the honourable member and I have been ad idem. I gave evidence before the Dix Committee of Review of the Australian Broadcasting Commission and stressed that the SBS must be retained as a separate institution with separate funding. I gave evidence before the Committee of Review into the Special Broadcasting Service chaired by the Honourable Xavier Connor, QC, on exactly the same points. My position on AIMA has been consistent. I, too, am curtailed in my speech. I certainly will permit the honourable member for Goldstein to make his comments and, in fairness, the Minister has a right to reply-- Mr Hand —Oh, thank you. Mr HODGMAN —The honourable member can make as much noise from Moscow corner as he wants. I am telling him that the ethnic communities of Australia now know that he cannot be trusted. As recently as yesterday a senior ethnic community leader who is a member of the ALP said to me: `Michael, one thing. Malcolm Fraser did not promise a lot, but what he promised he delivered 100 per cent. The present crowd promised the world and they have betrayed us on every turn along the way'. The Government said to ethnic community leaders: `Do not believe the Liberals. Do not believe the shadow Minister Hodgman. We are your friends'. I had to wear that for over 18 months in very tough times. I had some unexpected supporters. People in the Labor Party actually supported me and showed great courage. People such as Mr Bill Jegorow, who stuck with me through thick and thin, are people I will never forget. The ethnic communities of Australia now know that they cannot believe the ALP. It has betrayed them over and over again. The Government is a sham and a disgrace. Any ethnic person in Australia who ever votes for this anti-ethnic Government again needs his or her head read. Mr Hand —Mr Deputy Speaker, I take a point of order. There would never have been one member of the Labor Party who supported the comments put forward by the honourable member for Denison when he was the shadow Minister. He split the ethnic communities and he divided the country. Mr HODGMAN —You ought to go back to the Soviet Embassy. Mr Hand —I take a further point of order. I ask that the comment made by the honourable member for Denison be withdrawn. I have done so before. I have never been inside one embassy in this country and I resent the fact that he uses the opportunity in this place to suggest that I visit certain embassies. He lives in certain embassies here and in other places. I do not frequent any embassy. If a foreign diplomat wants to see me, he can come and see me here. I ask that the honourable member withdraw the remark. Mr DEPUTY SPEAKER(Mr Blanchard) —Order! I call on the honourable member for Denison to withdraw the remark. Mr HODGMAN —In respect to you, Sir, I withdraw. Mr MACPHEE(Goldstein)(12.31) —Because the taxation matters are to be debated later this afternoon, I honour the request to be brief in my remarks. However, I must speak in this debate. I do so more in sorrow than in anger. I have in front of me a newsletter dated August 1986 which was prepared by the Federation of Ethnic Communities Council of Australia. Under the heading of `Multiculturalism betrayed', there is a very strong editorial on that subject which states in part: The real tragedy for ethnic communities was hidden in the Guidelines for the Commonwealth Schools Commission presented by Susan Ryan. Under the guise of integrating multiculturalism into normal mainstream education programs the multicultural Education Program, worth $5.1m, has been scrapped. Under the camouflage of rationalisation and streamlining the funds available for the Ethnic Schools Program have been cut 5%. Worst of all, the English as a Second Language program for migrant children has been savagely attacked: the general support funding has been almost halved, from $62m to $34m. Put this together with a real 4% cut in funding for the Adult Migrant Education Program, and an 8% cut in the real budget for the National Advisory and Coordinating Committee for Multicultural Education; place it in the context of AIMA's abolition and SBS's merger; and the Government's commitment to multiculturalism would seem to be a shallow rhetoric with little value in dollars and cents. A number of questions need to be asked loudly in high places. Just what are the financial commitments to the new Office of Multicultural and Ethnic Affairs? How real can access and equity be when the funds available for ESL teaching have been so reduced? How can SBS television continue to operate an independent multicultural channel under the proposed new charter? Australia's ethnic communities will need some good answers. I support the amendment moved by the honourable member for Mitchell (Mr Cadman). I support his criticisms of the Australian Institute of Multicultural Affairs Repeal Bill, as well as those of my colleagues who have spoken in the debate. I thought that the contributions were constructive. We are entitled to ask: Where does multiculturalism go now? It is true that multiculturalism is a term which confuses and bothers some people. Let me restate my understanding of the matter. I outlined it many times as a Minister and as one who administered the Australian Institute of Multicultural Affairs in its first three years in existence. Multiculturalism involves a recognition that we have a core culture which happens, by historical accident, to have come from the United Kingdom. That core culture involves the English language, the parliamentary system and the judicial system. Essentially, that is the basis of our society and all that goes with it in terms of rights, freedom and democracy. Those are the issues which all Australians, regardless of their ethnic origin, respect. It is the reason people want to come here, and they respect it. In various programs which the Fraser Government adopted, we were simply endeavouring to enable people who had the disadvantage of not having English as their native language to have opportunities via a variety of positive programs to be equal to those to whom English was the native language and to help people who were disadvantaged in other ways in terms of training and recognition of their skills. In deciding what were the proper policies for the Federal Government and the State governments to pursue, we recognised that the Department of Immigration and Ethnic Affairs, with all of its qualities-I agree with what the honourable member for Moncrieff (Mrs Sullivan) said-was ill-equipped to produce independent surveys and to really tell us what the settlement difficulties were for people of a non-English speaking country of origin. So the Institute was established. I believe that it hid its light under a bushell. It did not promote itself in the way in which it might have done, even to members of parliament. It has done some very valuable work. I join my colleagues in doubting, regardless of the bona fides of some of the individuals involved, that any office in any department can achieve the same independent research. I join the honourable member for Mitchell in saying that it is a great shame that the Government has made this decision. In my view, it has disproportionately cut the ethnic budget vote compared with other Budget cuts. I think that the Ethnic Communities Council is right to find fault with that. If the Government intends pursuing such a line and continuing with its policy, it must monitor very carefully what the new office does. We in the Opposition will be monitoring it very carefully to ensure that the same quality of independent objective surveys for decision-making by government are carried out by that body. The Government has made the decision. We wish that it had taken the further step, which the honourable member for Mitchell mentioned, to help to relocate the very worthwhile people who are in the Institute in other areas of employment, perhaps with universities or colleges of advanced education, whereby they could continue their excellent work under the funding of those organisations. I ask the Minister for Immigration and Ethnic Affairs (Mr Hurford) to direct his attention to that. Perhaps something positive can be done about it. My time has expired. I conclude by saying that I honestly hope that the Minister will look at that matter. We will be monitoring very carefully the performance of the new office. We hope that the Minister will direct attention to all our remarks. Mr HURFORD(Adelaide-Minister for Immigration and Ethnic Affairs)(12.38) —I thank all honourable members who have taken part in the debate. I very much regret that I was able to be here only for the last three speeches, but I have been fully briefed on the others. Let me explain the reason I was unable to be here. My timetable was built around the debate taking place yesterday. When it got late, I apologised to the shadow Minister that I would miss his speech and said that I hoped to be here for the rest of the debate. However, it transpired that the debate was not brought on yesterday but today. I tried to change my appointments. One of them was with Dr Pardo de Tavera, the Filipino Minister for Social Services. We have a continuing dialogue. I met her in Manila and we discussed the question of Filipino brides, and so on. I do not take lightly missing a debate such as this within my portfolio responsibilities, and I can do no other than explain that I tried to be here as soon as I possibly could. I apologise for not achieving that earlier. From what I have heard, there have been many crocodile tears from the Opposition in this debate. My colleagues have had to bear the hypocrisy of honourable members opposite, paying, on the one hand, lip service to a commitment to the Australian Institute of Multicultural Affairs and, on the other, not going back on their economic policies which do nothing more than spell out the fact that if the Liberal- National parties were in government they would cut government spending by billions more than the present Government, in the sensitive way that it has been obliged to cut government funding, has done. I thank the honourable member for Hotham (Mr Kent) and the honourable member for Calwell (Dr Theophanous) for their contributions to this debate, because they put it in the proper perspective. Within each portfolio, we have had to make tough choices, and this was one of the tough choices we had to make. If we were not cutting spending here, there would have to be a cut in spending on those services for people at the grass roots-the migrant education program, the translator and interpreter services, the grants-in-aid to social workers; and, yes, the grants-in-aid to trade unions, because we are reaching out through those trade union grants to people who would not otherwise be helped, in particular migrant women through unions such as the Miscellaneous Workers Union, who would not otherwise be helped in the way that they deserve. All of those services are intact, despite the tough decisions that had to be made in the context of the Budget. We do not enjoy terminating AIMA, and anyone who suggests that I, as Minister, enjoyed terminating AIMA is spreading an untruth. Of course we do not. If it came to a choice, as it has, between having AIMA and having the new Office of Multicultural and Ethnic Affairs, I would make the same choice again. Unfortunately, AIMA was removed in Melbourne and was not having that influence on government policy-not only in Canberra but, through our network, government policies in the States-that I expect our Office of Multicultural and Ethnic Affairs to have. We would have preferred not to have had that choice. We would have preferred to have had both AIMA and the Office; but when one has these hard choices to make, one chooses what is best for the people at the grass roots. That we have done. As was pointed out by the honourable members for Hotham and Calwell, if the Opposition had been in power, there would have been a cut in services at the grass roots. There would have been fewer places for learning English; there would have been a reduction in the translator and interpreter services; and there would not have been many of the grants for social workers which are so badly needed. I know that many more of my colleagues would like to have been involved in this debate, including the honourable member for Melbourne (Mr Hand), with his large multicultural constituency; but unfortunately we have time limits, and I must keep to them, too. I want to make it clear that the only reason why the report of the Jupp Review of Migrant and Multicultural Programs and Services has not been tabled is that we are waiting for copies to be printed. The shadow Minister has a copy. I make no claims other than that the Jupp committee had recommended the setting up of an Office of Ethnic Affairs. We have converted that recommendation into an Office of Multicultural and Ethnic Affairs. The Jupp committee did not address the question of whether AIMA should exist; that was not among its terms of reference. Among its members, as among the informed community in this area generally, one would find some who believe that AIMA should continue and some who believe that it should be terminated. I happen to believe that, if resources grew on trees, it would be nice to continue with AIMA, but when we had to make hard choices, that option was not before us. The Government's commitment to the Office of Multicultural and Ethnic Affairs is undiluted. We shall be going ahead with that. The details of the Office are being determined at present; an announcement will be made after we have gone through the necessary consultations. But the Government's commitment to multiculturalism is not reduced one iota by what has happened in this Budget. We are putting flesh on the bones of multiculturalism. We are not just going through the empty rhetoric about multiculturalism and the sloganeering which has been so much a part of political debate in this country. To us, multiculturalism is an equality of opportunity for everyone, whatever their backgrounds, to contribute to our growing Australian identity. Multiculturalism is also an equality of treatment for everyone, whatever their backgrounds. This Hawke Labor Government is making sure that those commitments are undiluted. The honourable member for Goldstein (Mr Macphee) can quote from a document issued by the Federation of Ethnic Communities Councils of Australia, but that document is inaccurate. We will find, when it comes to grass roots policies to carry through our definition of multiculturalism, that the commitment of this Hawke Labor Government to multiculturalism is no less. I commend the Bill to the House. We will be opposing the amendment. Question put: That the words proposed to be omitted (MrCadman's amendment) stand part of the question. The House divided. (Mr Deputy Speaker-Mr C. A. Blanchard) Ayes . . . . . . . . . . . 63 Noes . . . . . . . . . . . 50 —— Majority . . . . . . . . . 13 —— Baldwin, P. J. Keogh, L. J. Beddall, D. P. Kerin, J. C. Bilney, G. N. Klugman, R. E. Blewett, N. Lamb, A. H. Brown, Robert Langmore, J. V. Brumby, J. M. Lee, M. Campbell, G. Lindsay, E. J. Charles, D. E. McHugh, J. Charlesworth, R. I. McLeay, LeoChynoweth, R. L. Maher, M. J. Cohen, B. Martin, S. P. Cross, M. D. Mayer, H. Cunningham, B. T. (Teller) Mildren, J. B. Darling, E. E. Milton, P. Dubois, S. G. Morris, AllanDuffy, M. J. Morris, PeterDuncan, P. Mountford, J. G. Edwards, Ronald O'Keefe, N. P. Fatin, W. F. O'Neil, L. R. T. Fitzgibbon, E. J. Price, L. R. S. Gayler, J. Saunderson, J. Gear, G. Scholes, G. G. D. Gorman, R. N. J. Scott, J. L. (Teller)Grace, E. L. Simmons, D. W. Hand, G. L. Snow, J. H. Holding, A. C. Theophanous, A. C. Hollis, C. Tickner, R. E. Hurford, C. J. Uren, T. Jakobsen, C. A. West, S. J. Jenkins, H. A. Wright, K. W. Jones, Barry Young, M. J. Kent, L. Adermann, A. E. McArthur, F. S. Aldred, K. J. McGauran, P. J. Andrew, J. N. (Teller) MacKellar, M. J. R. Beale, J. H. McVeigh, D. T. Blunt, C. W. Macphee, I. M. Braithwaite, R. A. Miles, C. G. Brown, N. A. Millar, P. C. Cadman, A. G. Moore, J. C. Cameron, Donald Nehl, G. B. Cobb, M. R. Peacock, A. S. Coleman, W. P. Porter, J. R. Conquest, B. J. Reith, P. K. Cowan, D. B. Robinson, IanDowner, A. J. G. Rocher, A. C. Edwards, Harry Ruddock, P. M. Everingham, P. A. E. Sharp, J. Fife, W. C. Sinclair, I. McC. Fischer, Tim Slipper, P. N. Fisher, Peter Smith, W. Goodluck, B. J. Spender, J. M. Hicks, N. J. (Teller) Sullivan, K. J. Hodges, J. C. Tuckey, C. W. Hodgman, W. M. Watson, J. H. Hunt, R. J. D. Webster, A. P. Lloyd, B. Wilson, I. B. C. Free, R. V. Halverson, R. G. Staples, P. R. Shipton, R. F. Kelly, R. J. Hawker, D. P. M. Griffiths, A. G. White, P. N. D. Dawkins, J. S. Cameron, IanHumphreys, B. C. Shack, P. D. Cleeland, P. R. Connolly, D. M. Hayden, W. G. Drummond, P. H. Punch, G. F. Jull, D. F. Jacobi, R. Braithwaite, R. A. Question so resolved in the affirmative. Amendment negatived. Motion (by Mr Hurford)-by leave-agreed to: That so much of the Standing and Sessional Orders be suspended as would prevent General Business being postponed until passage of order of the day No. 1, Government Business. Original question resolved in the affirmative. Bill read a second time. Message from the Governor-General recommending appropriation announced. Leave granted for third reading to be moved forthwith. Bill (on motion by Mr Hurford) read a third time. Mr DEPUTY SPEAKER(Mr Blanchard) —Order! It being past 12.45 p.m., the proceedings are interrupted in accordance with sessionalorder 106A. The proceedings may be resumed at a later hour. Mr LEO McLEAY(Grayndler)(12.55) —I seek leave of the House to move a motion to enable Notice No. 1, General Business, to be postponed to a later hour this day. Mr DEPUTY SPEAKER —Is leave granted? Mr PORTER(Barker)(12.55) —I understand the arrangement is that Notice No. 2, General Business, be brought on first. By agreement, the time allowed for debate is to be strictly limited to 10 minutes a side. On that basis we do not oppose a postponement. Mr LEO McLEAY(Grayndler)(12.56) —I move: That so much of Standing Orders be suspended as would prevent the consideration of Notice No. 1, General Business, being postponed to a later hour this day. Mr DEPUTY SPEAKER —Is there a seconder to the motion? Dr Klugman —I will second it. Question resolved in the affirmative. Dr KLUGMAN(Prospect)(12.57) —I move: That this House- Noting that- (a) the 3 Baltic States, Latvia Lithuania and Estonia, were independent sovereign republics and members of the League of Nations from 1918 to 1940; (b) in 1940, as a consequence of the Molotov- Ribbentrop Pact between the USSR and Nazi Germany, the 3 States were incorporated into the USSR by military force and in a manner which violated elementary principles of freedom, democracy and justice; (c) like other democratic governments, Australia does not recognise de jure the incorporation of the Baltic States into the USSR; (d) under Soviet rule, well-documented violations of human rights have occurred and continue to occur in Latvia, Lithuania and Estonia, and (e) as a result of existing Soviet policies on indigenous languages and immigration, the very survival of the Baltic peoples as separate ethnic and cultural entities is endangered- (1) acknowledges the concern felt by the members of the Australian community over the situation in Latvia, Lithuania and Estonia, particularly the repression of individuals engaging in the non-violent expression of their ethnic and cultural identity and religious convictions; (2) commends the Government for its action in bringing this concern to the attention of the United Nations Commission on Human Rights at the Commission's meetings in March 1985 and March 1986; (3) invites the Government, on its own initiative and in consultation with like-minded Governments, to continue to raise formally the question of self-determination and other human rights for the Baltic States before appropriate international forums; (4) calls upon the Government of the USSR to end acts of repression against the Baltic peoples and to abide by the commitments which it has entered into under the various international covenants on human rights to which it is a signatory, and (5) requests the Speaker to bring this resolution to the attention of the Supreme Soviet of the USSR. I understand that the honourable member for Dundas (Mr Ruddock) will second the motion, to which I will speak for only one or two minutes. I would first thank the honourable member for Grayndler and the House for allowing the motion to take precedence. Those honourable members who have followed the course of events will know that on 20 February 1986 a similar, but not identical, motion was moved by me. There was some disagreement between me and the honourable member for Dundas on its actual wording. However, we came to what I think was a reasonable agreement on that subject and the result is the motion before the House. I would like again to emphasise that my personal point of view with regard to the Baltic States, and many of the other problems concerned with the Soviet Union, is not necessarily shared by either the Government or every honourable member on this side of the House. Many of the objections to the Soviet Union are fairly nationalistic objections by residents and ex-residents or many of the Soviet Republics. That is not my main objection. My major objection-I consider to the main problem as far as the Soviet Union is concerned-is that the Soviet Union is a dictatorship. If the Soviet Union were run according to its constitution, residents of the Baltic republics, the Ukrainian Soviet Socialist Republic or any of the republics or minority groups that wished to secede from or leave the Soviet Union would be able to do so. Alternatively, they might wish-I emphasise might-to remain part of the union of democratic republics. That has not happened. My own view is that, of course, the best chance of the people of the Baltic States and other persons in the Soviet Union winning freedom and the opportunity to fulfil their national aspirations would be by changing the Soviet Union from a dictatorship to a democracy. I am not suggesting for one minute that that would be easy but to my mind it would be easier than somehow persuading the current regime to free all of the republics that currently make up the so-called Union of Soviet Socialist Republics. I think it is important to note the official Australian government attitude to this issue. There is no better way of summarising that than by reading four paragraphs from an answer given by the Minister for Foreign Affairs (Mr Hayden) as late as last week to a question on notice by the honourable member for Hinkler (Mr Conquest). The honourable member asked: What steps have been taken by the Government over the last three years to press for the observance of human rights and self-determination for the Baltic States of Latvia, Lithuania and Estonia? The Minister replied: This Government over the last three years has strongly and consistently deplored the Soviet Union's unsatisfactory human rights record, including in relation to the Baltic States . . . We have expressed our views publicly as well as conveying them privately to the Soviet authorities. Australia has also joined in international efforts calling upon the Soviet Union to abide by the important principles of human rights embodied in United Nations instruments. In response to the concern over the human rights situation in the Baltic States this Government raised the question of violation of human rights in the Baltic States at the United Nations Commission on Human Rights in March 1985 and March 1986. On the question of self-determination, as you will already be aware, Australia does not recognise de jure the incorporation of Estonia, Latvia and Lithuania into the Soviet Union but recognises de facto the Soviet Government's control over the Baltic States. This Government will continue to support an end to the violation of human rights in the Baltic States and make efforts towards this end which can be assessed as constructive and not counter-productive. I do not wish to add more because I understand that the House wishes to debate another motion which is probably more controversial. Mr RUDDOCK(Dundas)(1.04) —I have great pleasure in seconding the motion in its present form. I want to thank my colleagues for giving the House the time to debate this matter briefly and ensure that it is carried today. I want as well to record the interest of colleagues who wished to speak on this matter but have forgone the opportunity of doing so. I refer to the seconder of my amendment, the honourable member for Goldstein (Mr Macphee), the honourable member for Denison (Mr Hodgman), the honourable member for Wentworth (Mr Coleman) and the honourable member for Kooyong, the shadow Minister for Foreign Affairs (Mr Peacock). By way of background, I have to note that the form of amendment that I proposed previously was the same as the resolution that was carried in the Senate. I believed that there ought to be a continuity of view as between the House of Representatives and the Senate on the matter. That was why I pressed it. I saw in the original motion of the honourable member for Prospect (Dr Klugman) a number of what I thought represented significant differences that ought to be redressed. The first was that, in the preamble of the Senate resolution, particular mention was made of the general desire of all people to live in freedom and achieve self-determination. That was omitted from the honourable member's original motion. A second omission involved the linking of Australia to other international protesters. Thirdly, the motion was drafted in order particularly to commend the Government upon raising the Baltic question before the United Nations Commission on Human Rights. I have no objection to that because I believe that the Government should be commended upon so raising it, but it is a far cry from the Whitlam Government's recognition of the incorporation of the Baltic States into the Soviet Union. Nevertheless, I saw the draft as failing to offer a continuing commitment to raising the question in all international forums. However, I must say now, by way of commendation of the Government, that on a second occasion it has raised the matter in the United Nations Commission on Human Rights. The fourth and most significant difference was the deletion of a notation of the intensive Russification, aimed at eliminating indigenous languages and culture, that is taking place in the occupied Baltic States. I saw the Government's failure to refer to the Russification process, coupled with its merely vague reference to concern about the repression of ethnic and cultural identity, as sending a special signal of lack of concern about the concept of Russification. That was the reason I pressed my amendment. I am delighted, therefore, that the government has consulted the Baltic Council about the terms of a resolution that all members could willingly support. Included in the motion are references to action taken by the Government since the Senate motion was passed. For that purpose different words have had to be used and that is appropriate. The Soviets cannot now draw any solace from the fact that certain significant thoughts were omitted from the Senate's resolution because these have been addressed in the amended motion. The amendments should be noted. Paragraph (e) provides: As a result of existing Soviet policies on indigenous languages and immigration, the very survival of the Baltic people as separate ethnic and cultural identities is endangered- Secondly, paragraph (3) provides: Invites the Government, on its own initiative and in consultation with like-minded governments, to continue to raise formally the question of self-determination and other human rights for the Baltic States before appropriate international forums. It will be quickly seen that paragraph (3) of the preamble, or notation, is a description of the process of Russification, whereby immigration policies and the replacement of indigenous languages and cultures is not only endangering but also threatening the very identity of Latvia, Lithuania and Estonia. The paragraph clearly links Australia's protest with the protests of other like-minded countries and invites action further to that which has already been taken. It refers specifically to self-determination and other human rights which we enjoy and believe should also be the right of the Baltic peoples. They are the very thoughts that are embodied in the first part of the preamble to my amendment. The paragraph also envisages that, by reference to appropriate international forums, this matter will be pressed in other bodies than just the United Nations Commission on Human Rights. Finally, the steps taken by the Government to date are acknowledged in paragraph (2). When I last spoke on the question I recounted the history of the Soviet's occupation of the three Baltic States. I raised the general violations of human rights which persist; the absence of the right to emigrate and freely travel abroad; the absence of the right of peaceful association; the absence of an independent judicial system and a free Press; the existence of censorship; the repression of religion and the absence of free trade unions. I recounted the distorting of history, the downgrading of the Baltic languages and culture and the exaltation of the Soviets, coupled with significant immigration from elsewhere in the Soviet Union to the Baltic countries. More recent events in the Soviet Union have impacted upon the Baltic people and ought to be noted at this time. They are: The conscription of Baltic people, amongst others, to perform hazardous work in the Chernobyl area over long periods and in making repairs and the like at the Chernobyl site following the recent nuclear disaster. A second matter is the concern of Swedish experts about the large Ignalina facility in Lithuania, which may be even more suspect than was the Chernobyl plant in regard to possible nuclear disaster. A motion in this form is deserving of the support and unanimous endorsement of the House. Once carried, the Government will have the responsibility of ensuring that action is taken at every opportunity to protest the Soviets' continued occupation of the Baltic States and, in the words of the motion, to raise formally the question of self-determination and other human rights for the Baltic people. For my own part I will continue to monitor the Government's actions in this regard. I am sure that the Speaker will take pleasure in bringing to the attention of the Supreme Soviet of the Union of Soviet Socialist Republics the terms of this motion. Question resolved in the affirmative. Mr LEO McLEAY(Grayndler)(1.10) —I move: That this House- (1) congratulates the Government on the success of its policy of improving the efficiency of the Australian shipping industry, and (2) commends the turnaround in operating results of the Australian National Line resulting in a $22 million improvement in 1983-84 over 1982-83. It is with great pleasure that today I present this motion in relation to the shipping industry of Australia. As an island continent, Australia is almost totally dependent on shipping to carry its international trade. Australia is also heavily dependent on shipping for bulk haulage around its coastline to bring raw materials from remote areas to processing plants in major population centres. In 1984-85, Mr Deputy Speaker, 312 million tonnes of cargo was shipped into and out of Australian ports. Some 269 million tonnes, or 86 per cent of that cargo originated from, or was destined for, overseas markets. The carriage of our overseas cargo required 6,760 vessel visits to Australia-largely unfortunately in overseas vessels. As well, 75 vessels participated in Australia's coastal fleet, and a further 11 were engaged in coastal and overseas trade and opportunities to earn foreign exchange in servicing our overseas trade have been lost. In fact, of a total freight bill of $6.7 billion for 1984-85 a mere 13 per cent was paid to Australian operators. The actions of conservative governments have allowed 87 per cent of Australia's freight bill to be picked up by overseas freighters. They are the people who now are claiming in this House that there is something wrong in having a deficit! They contributed to nearly $6 billion going out of this country in a single year to pay for foreign shipping. In 1984-85 the activities of non-resident transport operators accounted for some $2,262m of Australia's total balance of payment deficit. Australian resident transport operators contributed $138m. The net deficit on transport related activities represented nearly 20 per cent of Australia's current account deficit. All of this was caused by the trade. Shipping is therefore a vital element in Australia's economic well-being. Its costs and the degree of efficient service that it provides represent significant factors in the competitiveness of Australian goods in international markets, a matter to which the House should pay particular attention at present. It also has something to do with the ability of Australian products to compete on domestic markets with imports. Australia is a top-ranking, world supplier of major commodities such as coal, iron ore, grains, wool, wheat and meat, yet in 1984-85 Australian flag shipping carried only about three per cent of our international trade. That, I believe, Mr Deputy Speaker, is an absolute disgrace. When this Government took office in 1983 it was confronted by a sick shipping industry. The Fraser Government's lack of coherent policies on shipping and the waterfront cost this country dearly. Industry inefficiencies have imposed unnecessary costs. Previous conservative government's tinkered with, indeed smashed, the Australian National Line and the Australian shipping industry generally. Efficient and competitive Australian flag shipping could make a positive contribution to the reduction of this deficit. It is estimated that over the lifetime of a vessel up to 40 per cent of its total freight earnings will be contributed to the balance of payments. For instance, BHP's Iron Pacific, earns on each voyage some $1m in freight earnings. The Hawke Labor Government has from the outset been prepared to face up to the issues. We have instituted a comprehensive industry program of measures which are systematically tackling every aspect of these problems. The government's objective has been to provide the basis for an efficient, competitive Australian shipping industry which will be able to stand on its own two feet and gain access to cargo on commercial grounds. We are not into providing subsidies and the like, we are simply into asking for Australian shipping to be given a fair go in Australia. A clear and high priority for the government upon assuming office was the task of tackling the problems of the ailing Australian National Line. An efficient and profitable Line is clearly a keystone to the Government's efforts to improve the overall effectiveness of the industry. The government was confronted with a national line that was in a desperate situation and tottering on the edge of bankruptcy. The Line was grossly undercapitalised and saddled with massive debt and crippling interest payments which had been inflicted upon it by previous conservative governments. It is interesting to note that certain comments were made by Captain Sir John Williams, the first chairman of the Australian Coastal Shipping Commission-which is the Australian National Line-on the activities of the right honourable member for New England (Mr Sinclair) when he was the Minister in charge of transport in Australia. Captain Williams said in his book So Ends this Day: To our surprise, not long after his appointment, Sinclair informed us that we should now regard the Commission as what he termed a `Political Instrument' subject to control by his departmental officers, overlooking the fact that it had been set up by Sir Robert Menzies to operate free of interference on a private enterprise basis. Every day the Opposition seeks to tell this Government that it ought to support free enterprise, yet when the previous Minister for Transport was controlling the Australian Shipping Commission he told it that it should not act in a free enterprise way. Mr Lloyd —The right honourable member for New England was not the previous Minister for Transport. He was Minister for Transport many, many years ago. Mr LEO McLEAY —I thank my colleague, the honourable member for Murray, for confirming the fact that the right honourable member for New England was indeed a previous Minister for Transport. In referring to the Secretary of the Department, Captain Williams went on to say: Some of the tactics employed by the former were petty beyond belief and it was my impression that Sinclair was involved in the meanest of them. There is little point however in raking over the embers of long dead fires saving for record purposes and the record shows that the `Political Instrument' policy put the Commission in the red for the first time since its inception in 1956. In sharp contrast to that, this Government, when it took office, initiated immediate action to revitalise the ANL's operation and place in on a sound commercial basis. The Hawke Labor Government has provided capital injections to put the Line on a sounder financial footing, appropriate to its size as one of the larger carriers in the Australian trade. Unlike the previous Minister for Transport, the right honourable member for New England, we have amended legislation so as to give the ANL greater independence and commercial freedom. The Hawke Labor Government has restructured the ANL's senior management and has appointed a new management team with a strong commercial background. The Government believes that the ANL should be out there in the market-place working for Australia. The Government's action has produced positive results. The new management has rigorously overhauled the organisation and reviewed its commercial operations. It has terminated unprofitable services and has disposed of uneconomic vessels and terminals. The benefits of the action taken by the Government and the ANL are flowing through into the ANL's financial results. They are reflected in the Line's return to profitability. It now pays both dividends and income tax. The significant achievements of the ANL are made plain by the fact that in 1985-86 the operating profit is expected to be $38.2m. The ANL is paying its first dividend on profit since 1969-about the time when the right honourable member for New England was presiding over its activities. This year it is paying out $5m in respect of 1984-85. It plans to pay out another $5m in dividends, in respect of 1985-86. It is expected that the ANL will make its first income tax payment-since 1974-some $8m for 1985-86. These achievements have been made possible by the Government's positive action and by the willingness of the ANL's management, and employees to work together. This is a great example of a Government instrumentality, and the unions in the industry getting together to make sure that the industry stays in good health and benefits for all Australians will flow from a great public enterprise. These results are even more encouraging when seen against the world shipping industry's difficult financial position. A surplus of shipping capacity world-wide has led to the collapse of several large shipping groups, the crisis restructuring of others and an unprofitable operation for many leading shipowners. On the broader industry front, the Government took early action to implement the recommendations of the Crawford report on the revitalisation of Australian shipping. The introduction of new vessels has been accompanied by crew reductions of 20-30 per cent, which should be recognised as being a very significant first step in improving productivity and shipboard work practices. Indeed, the Department of Transport, has been into looking at work practices and productivity since this Government came to office. I repeat, the Government has not just been looking at work practices in recent weeks, as has been suggested by the Opposition. It has been seeking to revitalise work practices and productivity since coming to office. These initiatives are now showing results in the coastal shipping industry where the cost of shipping coastal iron ore from Western Australia to Newcastle, for instance, has halved since 1982. The emergence of a more efficient and competitive Australian fleet has opened up opportunities for Australian owners to penetrate overseas trade commercially. The entry of BHP's three new bulk carriers to the coal trade of Japan and Korea is significant for a number of reasons. It provides access to cargo on commercial grounds and is particularly significant given record low freight rates obtaining world-wide. It is proof that Australian flag ships can compete. It must be admitted that in the past the industrial record of the industry has been rather poor. Despite this, that the number of working days lost in the seagoing industry is now less than one-third the figure for 1979-82. Similarly, the number of stevedoring days lost has been cut by about three-quarters. These are significant achievements-achieved responsibly by co-operation and consultation between employees and employers rather than by the confrontationist approach of the previous Government. Last year the Government sponsored an industry and union study mission to examine shipping development overseas. That provided great incentive and indeed a great appreciation on the part of people in the industry here of ways of ensuring that the industry will become even more co-operative. Coastal shipping is a domestic industry which, in the same way as our road and rail transport or indeed our farms, is rightly the province of all Australians. Shipping efficiency is only one element of the transport chain that impacts on the efficiency of the transport services provided to Australian exporters. Without corresponding improvements in the efficiency of shore-based activities the benefits of shipping improvements are not likely to be fully utilised. Shore-based shipping activities account for around 50 per cent of the door to door costs of general cargo and about 20 per cent of the cost of bulk cargo. In recognition of the significance of shore-based shipping costs the Minister for Transport and Minister for Aviation (Mr Peter Morris) established in September 1984 a task force to examine the problems of shore-based industry and make recommendations for improving efficiency. The report of that task force identified the scope for greater operational efficiency and reducing the costs of the land-based elements in the movement of sea cargo. It confirmed that there was a clear need to raise productivity and improve industrial relations on the waterfront and detailed the opportunities available for improving the efficiency of shore-based shipping operations. However, the real achievement of the task force is that it has brought all parties involved in these industries together for the first time to examine their problems. It represents a milestone in co-operation between all of the parties involved in these industries and is a timely contribution to the debate on Australia's trading opportunities. The Minister for Transport has invited interested parties to submit by the end of December their views on the report. The responsibility is now firmly with the industry to bring forward constructive and realistic proposals that will improve the efficiency and reliability of shore-based activities. Finally, I would like to turn to the Government's initiatives in establishing an industry task force to overview Australia's overseas liner shipping arrangements. The main purpose of this study was to consider the effectiveness of Australia's regulation of liner shipping in the light of changes that had occurred since the 1960s, when the existing legislation framework was developed. It might be worth while recalling that the value of non-bulk shipping, which carries half of our overseas trade, is about $26,000m. Wide-ranging comments on this report are now being considered by the Government. One key thread which runs through all the measures that I have outlined is consultation. As with many of the Hawke Labor Government's initiatives, consultation and co-operation have been shown to be the way to go. This Government has brought about not only revitalisation of the industry, but also has a new environment of confidence. It is pleasing to see that local ship owners have recently joined forces in a new organisation-the Australian National Maritime Association. For the first time it has given the local shipping industry a single voice. The previous conservative Government was quite happy to see overseas shippers rape the Australian industry. This Government has set the shipping industry on the right course. Considerable progress has already been made in improving its efficiency. Significant further improvements are in prospect. Three years of hard work have paid off. Consultation and co-operation have proved effective. This achievement will be a lasting monument to the Hawke Labor Government and its energetic Minister for Transport and Minister for Aviation. Mr DEPUTY SPEAKER —Is the motion seconded? Mr Hollis —I second the motion formally, and reserve my right to speak later. Mr LLOYD(Murray)(1.25) —The business that we are discussing is the Australian shipping industry. A number of aspects of the motion and the industry are worthy of comment. The first is that notice of the motion was given in February 1985, which indicates the percentage of time that is devoted to private members' business in this Parliament. The second concerns the improvements in the ANL operating results and I join the previous speaker in applauding them. The third concerns the suggested success of this Labor Government's policy for improving the efficiency of Australian shipping. As to that the Opposition basically disagrees, because most of the examples given by the honourable member for Grayndler (Mr Leo McLeay) actually resulted from initiatives of the previous coalition Government. The aspect that is of greater importance in relation to having an efficient shipping industry has not been touched upon at all. I refer to the disgraceful situation in our shore-based sector, the waterfront, also to what needs to be done to make Australian shipping, for both coastal and international purposes, genuinely internationally competitive. To that end I will later propose an amendment to the motion which I believe will more accurately reflect the position of the Australian shipping industry and its associated industries. I commend the present management and staff of the Australian National Line upon the improved operating profit and loss statement concerning which we have received preliminary figures. There is no doubt that the ANL is now a more commercially managed and oriented organisation. It has rationalised many of its services, ships and staff. I pay particular tribute to those at the top of that management team, the Chairman of the Australian Shipping Commission, Mr Bill Bolitho, and the Chief Executive, Mr Max Moore-Wilton. In so doing I acknowledge the work of both the previous Minister for Transport and Construction, the honourable member for Gwydir (Mr Hunt) and the present Minister for Transport and Minister for Aviation (Mr Peter Morris), with regard to their efforts to amend the Act so as to allow the ANL to become more efficient. But I must draw attention also to the $160m of taxpayers' money which has been injected into the ANL by the present Government in the last three years. One could argue that if one could not improve operating performance of the profit and loss situation after that sort of injection one should not be in business at all. But it raises the more fundamental question: Is there a need, or is it common sense in 1986 in Australia to maintain a government shipping line? The Opposition's transport policy is still being determined and I would appreciate it if, at the appropriate time, the Minister for Transport and Minister for Aviation would leak the document and provide us with the same very good coverage he provided for us a few months ago in regard to our aviation policy. I believe that our policy will move towards making the ANL more commercial by changing it from a statutory authority to a company, initially with all of the shares being owned by the Commonwealth-similar to the position of Qantas at the present time, and similar to what we would propose when in government as a first stage with regard to Australian Airlines. After that we would determine the most appropriate way to develop a genuinely internationally competitive Australian flag shipping fleet, one that was competitive in its own right for both coastal and international trade, also what appropriate role there would be for an ANL in that final, competitive industry. Australia does need an internationally competitive coastal and international flag shipping industry. The previous speaker made the point that the invisibles that we fail to gain for this country in our overall balance of payments arrangements represent income that the nation desperately needs. Because of the Crawford incentives and initiatives, the percentage of Australian international cargo has increased slightly. I acknowledge that it still is very, very low. However, it happens to be higher than the figure achieved in the United States. The credit for the impetus in the last three years for a more efficient Australian fleet, both domestic and international, rests with the Crawford incentives-initiated by the honourable member for Gwydir when Minister and introduced by the coalition Government of which he was a member. The Crawford incentives recognised that the capital cost of a ship was the single most important factor in total operating costs. Somewhere between 45 per cent and 50 per cent of the total cost is in capital. Therefore, as part of the Crawford initiative or incentive, for the first time a depreciation allowance was given, not just to coastal shipping but also overseas shipping carrying the Australian flag. As well, an investment allowance was allowed and depreciation could begin one year ahead of the actual delivery of the ship. That provided a tremendous boost to re-equipping the Australian fleet with more fuel-efficient, more operator-efficient ships. I understand that between 12 and 15 ships will be or have been built under that particular incentive. With the coming of the new ships, the manning levels also were to be addressed. These constitute about 15 per cent of the total cost of operating a ship. There is no doubt that in those ships that have resulted from the Crawford initiatives the manning level has been reduced to 25-30 per ship. In the meantime, of course, the rest of the world has moved on. I am referring here not to Third World countries, or flags of convenience, but to our competitors in the Organisation for Economic Co-operation and Development countries, which now have manning levels of 15-18. What is more important, those smaller crews are more productive, particularly in regard to maintenance and other onboard work. We are now, if anything, starting to fall behind again. The third significant factor in the cost of a ship, whether it be coastal or international, is the cost of bunker fuel, which represents about 20 per cent of the total. Australian bunker fuel costs twice that of our international competitors. That is a disgrace. The Government is not addressing the issue; it is making it worse by its continual increases, which are completely out of line with the situation in the rest of the world, in the price of bunker fuel. That also raises a further question. What is to happen when the Crawford initiatives, the incentives of the previous coalition Government, finally run out, as they will when these 12-15 ships are built? The BHP Iron Pacific, which the honourable member for Grayndler mentioned, was of course one of those ships that were built under the policy of the previous coalition Government. The present Government did not introduce the Crawford incentives; it terminated them. It took away incentives designed to give our shipping a real chance to be more competitive. What the industry wants-the Minister knows it; I have heard him comment on it-is a three-year depreciation on new shipping, to allow it to continue to replace those ships with more fuel-efficient ones and achieve greater efficiency in manning-try to get lower, more flexible and more productive manning arrangements, so that some work is actually done by the crews. It is not just a matter of efficiency from an economic point of view. There is also the social view point. There is a problem of alcoholism on our ships, our coastal ships in particular. This was highlighted by the TNT Alltrans accident. I do commend the Minister for Transport and Minister for Aviation upon the action that he is taking in this regard. He is also aware of the manning problem, because of the Maritime Industry Development Committee which he has established. But I do question his ability to achieve any further success with manning, more particularly its productivity, without some form of incentive to encourage the building of new ships for Australia. Our coastal shipping fares even worse in this situation. Because of its inefficiency, it has been reduced to carrying bulk cargoes, which cannot be carried in any other way, and to servicing Tasmania. Tasmania is, of course, a very important part of that responsibility. Unless our coastal shipping is made more competitive, it will be a burden to Australia, to all Australian taxpayers. Shore-based costs are a disgrace in the whole transport situation and they have an even greater impact on our coastal shipping than on our international shipping. The Minister has a tremendous opportunity to show his ability to achieve greater efficiency in our shipping, our flag shipping in particular, because the phosphate rock contracts are coming up for renewal. Those contracts, which are terminating, are costing Australian farmers millions and millions in unnecessary expenditure. It costs them $20-$25 a tonne more than it would if we had open, genuine, international shipping arrangements. The farmers are paying over two-thirds more freight for phosphate rock than they should-this is at a time when the Government is calling on all Australians to take the hard decisions, to make our exports more competitive! The Minister has an opportunity to show that he is doing something by opening up the shipping of our phosphate to the genuinely lowest international tenderer. I hope that an Australian company is successful, but it has to be done on a genuinely competitive basis. New Zealand woke up to that years ago and got out of the joint arrangement before 1980. If honourable members do not think that my views on the problem of the shore-based industries are enough to go on, I will quote what has been said by Mr Bolitho, the head of the Australian Shipping Commission, according to an Australian Associated Press report from Melbourne on 21 August: Australian National Line (ANL) Chairman, Bill Bolitho, today warned the company's climb back to an efficient maritime transport operator was still under threat from outmoded and inflexible work practices. Mr Bolitho made his comments while announcing ANL had made a $19m net profit for the year to June 30 against $19.05m previously. He said the company had experienced its worst year on record for industrial disputes at its terminals. Terminals and stevedoring had contributed reduced results for the year with reviews of work practices and rosters at Port Botany and Webb Dock terminals causing major industrial disputes. If ANL is to continue its process of regeneration into an efficient Australian flag maritime transport operator, it is essential that further progress is made in eliminating the outmoded and inflexible work practices while continuing to earn sufficient profits. Once again, the Minister has recognised this by creating a shore-based shipping cost task force, whose report indicates that overall the problem is that there is generally no incentive to be efficient, no penalty against inefficiency. More specifically, there is a lack of co-ordination between the different sectors on the waterfront-for example, truck queuing and restrictive work practices which result, for example, in our container-loading rate being about half that of any of our competitors. There are also industrial disputes. I know that they are not dealt with in the report but they are a reality of the waterfront. Their incidence is four to five times higher on the waterfront than in the general work force. How about that? It is up to 10 times higher on occasion because of political strikes. These are not even industrial strikes. Shore-based costs represent between 50 and 70 per cent of the total door-to-door cost of transporting a product. That is a disgraceful percentage. If honourable members do not wish to take my word for it, I can refer them to a speech given very recently, on 15 September 1986, by Mr Colin Freeland, the Secretary of the Federal Department of Transport, on initiatives and maritime transport. He was addressing the biennial conference of the Association of Australian Port and Marine Authorities. Time does not permit me to enumerate the range of figures that he gave, but he also stated that port and related charges represented 20 per cent of total shore-based costs and that the authorities must develop more commercial attitudes, must accept overall responsibility for planning and, in some cases, must stop making charges on ships as a result of industrial disputes which are within their responsibility. Such practices are disgraceful. I am pleased that the Government is about to establish a royal commission into grain handling. It will include an examination of the part played by state railways and bulk handling terminals. If one wants figures on industrial disputes, one can quote from an answer that the Minister for Transport and Minister for Aviation gave me- Madam DEPUTY SPEAKER (Mrs Darling)-Order! The honourable member's time has elapsed. Mr LLOYD —If I may be permitted, Madam Deputy Speaker, I will move: That all words after `House' be omitted with a view to substituting the following words: (1) commends the Fraser-Anthony Government on the success of its policy of improving the efficiency of the Australian shipping industry by: (a) the introduction of the Crawford Report incentives in relation to the purchase of Australian flag ships, and (b) introducing the Australian Shipping Commission Amendment Bill 1982 to create a more commercially oriented Australian National Line; (2) condemns the Government for: (a) terminating the Crawford incentives; (b) maintaining Australia's unenviable world record in 1985 of 21.54 per cent of all maritime strike insurance claims; (c) failing to improve the loading efficiency for containers, grain and other bulk tonnage beyond the current half to two-thirds per hour rate of Australia's O.E.C.D. competitors, and (d) allowing the plethora of restrictive and inefficient work practices, and union blackmail, to continue in the shore-based sector of the industry, and (3) calls on the Government to initiate (a) a Royal Commission into the efficiency of the shore-based waterfront sector for liner cargoes similar to that about to commence for grain handling and (b) an Industries Assistance Commission inquiry into the future of Australian flag shipping'. Madam DEPUTY SPEAKER —Is the amendment seconded? Mr Everingham —I second the amendment. Mr HOLLIS(Throsby)(1.40) —I am pleased to speak in this debate, seconding the motion moved by my colleague the honourable member for Grayndler (Mr Leo McLeay). Obviously as a seconder I support the motion moved by him and reject the amendment moved by the honourable member for Murray (Mr Lloyd). It was very interesting to listen to the honourable member for Murray talking about shipping. We hear from him that the Opposition transport policy is still being determined. How convenient that is. The Opposition comes in here day after day and we hear about all these policies that are yet being determined. Let me tell the honourable member for Murray that, although the Opposition's policy is still being determined, there are aspects of his speech that will be in that policy. We can all be sure of that. We can be sure that the policy will enable foreign ships to carry Australian cargo around the Australian coast. We can also all be assured that it will be a sell-out to the multi-nationals and that the Australian National Line will be a political instrument once more. The honourable member for Grayndler reminded us of the time when the right honourable member for New England (Mr Sinclair), now the Leader of the National Party, had responsibility for transport. The Opposition talks about what its policy is going to be. It had seven years of occupying the treasury bench to put its policy into effect and what did it leave: It left us with a bankrupt ANL. Since we have been in government we have done what the Opposition could never do. I might say that honourable members opposite are making much of the report of the Crawford Committee on Revitalisation of Australian Shipping and we all agree that it was a step in the right direction; but the Opposition did not legislate for the Crawford report. When we came into government we found that all the problems of the Australian shipping industry are a product of the neglect of that industry during the seven years that the Opposition had control of the treasury bench. It was clear to us on assuming office that if the Government was to succeed in its efforts to improve the efficiency of Australian shipping, the Australian National Line had to be revitalised. By any measure, ANL is an important element of the shipping industry. It is one of the country's largest ship owners, it is one of the largest terminal operators, it is a major Australian operator in overseas liner trades, it operates coastal liner and bulk services, it is engaged in overseas bulk trades. When this Government took office in March 1983 it discovered that ANL, instead of being a driving force in the industry was nearly bankrupt. Years of mismanagement and neglect by successive conservative governments had reduced a once successful shipping operator to the point of near extinction. The Minister for Transport, the Hon. Peter Morris, immediately set to work and produced a four-point package designed to revitalise ANL. This included measures to improve the Line's financial base, ANL's legislative charter was amended to give it commercial freedom and control. A new chairman and managing director were appointed as part of a management shake-up which brought into line executives with successful commercial track records. Greater union involvement and consultation were encouraged to ensure that ANL management and unions worked more as a team. Both ANL management and the unions responded to this initiative in a positive way. Management developed a rationalisation strategy, the first stage of which involved a 20 per cent reduction in head office staff. The sea-going unions agreed to manning reductions to improve ANL's efficiency. By the end of 1983-84 the effects of the measures taken started to flow through into ANL's results. The operating profit in that year was $3.3m, a dramatic turnaround and improvement on the $22m of the previous year. Despite this achievement, ANL's recorded overall losses of $67.8m and this was due mainly to the need to recognise the inadequacy of previous depreciation policies which necessitated abnormal write-offs and the extensive use of off-balance sheet lease funding arrangements of prior years. In June 1985 further measures were taken to give ANL a financial base appropriate to a business of its size. Madam DEPUTY SPEAKER(Mrs Darling) —Order! It is now 1.45 p.m. In accordance with standing order 109 as amended for this session, the debate on the motion is interrupted. Motion (by Mr Peter Morris) agreed to: That the time for discussion of Notice No. 1, General Business, be extended till 2 p.m.. Mr HOLLIS —As I was saying, in June 1985 further measures were taken to give ANL a financial base appropriate to a business of its size. Substantial progress has been made in implementing the revitalisation program. This involved difficult but necessary decisions which included the withdrawal from unprofitable services and the closure of uneconomic terminals. The termination of the Darwin service-I see the honourable member for the Northern Territory (Mr Everingham) is here to respond to that-and the replacement of the Empress of Australia on the Bass Strait ferry service mean that ANL is now not receiving any operating subsidy from government. I make the point that the Federal Government provided $26m as a grant to the Tasmanian Government; that disproves the claim that we are anti-Tasmania. We provided a $26m grant to Tasmania for the purchase of the Abel Tasman, the new Bass Strait ferry. ANL has introduced newer, more efficient tonnage, whenever this has been commercially viable. It introduced the modern cellular container vessel Australian Trader into the trans-Tasman service, and rebuilt the bulk carrier Selwyn Range, now renamed the River Torrens, to improve the efficiencies of ANL's bulk cargo handling. It is now introducing the Australian Advance into the East Asia trades to replace two older fuel-inefficient vessels. Such steps would not have been possible without the co-operation and goodwill shown by the sea-going unions. We should all commend their commitment to ANL and the contribution they have made to ANL turnround in performance that we have witnessed over the last three years. There has been a sizable turnround. In 1982-83 ANL reported an operating loss of $18.8m. By 1983-84 the loss had reversed and a modest operating profit of $3.3m was recorded. By 1984-85 operating profit leapt to $41.4m. By 1985-86 preliminary results indicated that the line has been able to maintain its improved performance, recording an operating profit of $38.2m. This return to profitability has meant that ANL has resumed paying dividends for the first time since 1969. It contributed $5m to the public coffers from its 1984-85 profit. The Commission has recommended that a further $5m dividend be paid on 1985-86 profits. More than that, ANL has resumed paying income tax. An amount of $8m is expected to be paid in income tax on 1985-86 profits, the first time such payments have been made since 1974. All that is happening at a time when its Conference competitors are recording worsening financial positions or even going bankrupt due to world shipping depression and intense competition. In three short years ANL has been turned from a bankrupt enterprise into one making consistent profit, paying dividends and income tax. That ANL result shows that given the right degree of commitment on the part of government, management and employees, public enterprise can be successful despite the views and efforts of the Opposition which attempts to dispose of public enterprise. In spite of the achievements of the last three years ANL still has a long way to go. It has not completely escaped the legacy of the past. It has accumulated losses of some $100m and its fleet is aging. However, we can be confident that the new ANL is well placed to tackle the problems ahead. Let me now turn to the ill-informed criticisms of coastal shipping on which the Opposition has based its proposal to repeal the coastal trade provisions of the Navigation Act and open up the coast to foreigners. This is a recipe for disaster, reversing the bipartisan policy of the past 60 years that recognised coastal shipping as part of the domestic transport task which should be performed by Australians. The Opposition policies seek an easy, quick, slick solution but provide no real answer to an issue which requires hard work, effort and foresight. The Government's policy is to ensure that all coastal trade is carried in Australian-controlled and crewed vessels. However, the Government's policy is also to tackle the real issue of improving the efficiency of Australian shipping by sensible, practical means. The Minister for Transport (Mr Peter Morris) has been actively pursuing this aspect. Australia's policy on coastal shipping is not unique and is followed by many other important trading nations. If we move back this national boundary, what would the Opposition want to do next? It would want to import cheap foreign labour to work on our ports, on our farms, in our mines or factories or run our trains. It should be totally unacceptable even to the Opposition to single out coastal shipping treatment different from that given to other domestic industries and incur further foreign payments for shipping services. Mr EVERINGHAM(Northern Territory)(1.51) —Madam Deputy Speaker, I think the fact that we are about to build a power station in Darwin to be fuelled by coal when we have found that it was cheaper to bring coal from the west coast of the United States of America than to ship it around the coast from Queensland says it all about coastal shipping in Australia. The honourable member for Cowper (Mr Nehl) raised a question in this House earlier in the week concerning certain solitary practices which might be used to relieve tension and pain. The motion before us today seems to have been inspired by advice similar to that handed out by the Leichhardt Women's Health Centre, since it is transparently designed to relieve current Government pain by self-congratulatory manipulation. I shall not use the short word for it since Madam Speaker has advised that that word is not parliamentary, but that is what the first part of this motion is. However, I have no great quarrel with the second part of the motion and I support and second the amendment moved by the honourable member for Murray (Mr Lloyd). Considering the odds, there is no doubt that the Chairman of the Australian National Line, Captain Bill Bolitho, and chief executive Max Moore-Wilton, have achieved a considerable turnaround in the fortunes of ANL. Indeed, Max Moore-Wilton seems to be one of the more effective of the bureaucratic troubleshooters. That has not been without the $160m-plus assistance of the taxpayer and it has been helped by the disentanglement rather than the intervention of government which makes the first part of the motion look a little extraneous. The facts are that this Government did little more than implement some of the recommendations of the Crawford Committee on Revital- isation of Australian Shipping, set up by the former Transport Minister, Ralph Hunt, inject large doses of taxpayers' funds and give the management a freer reign to do what had to be done. That has involved selling off ships, paying off excess managerial staff and withdrawing from shipping routes. Although I sincerely regret that that process involved the loss of the Darwin-east coast shipping service, I was more amused than angry to note my Labor predecessor's words during debate on the Shipping Commission Bill in this House in November 1983, that a return to coalition government would mean the loss to the Northern Territory of both that shipping service and of the north-south rail link. I do not propose to spend time mourning the broken promises of this Government on transport in the Territory. It would take all day. Rather I focus on the inactivity of the great Labor mediators and conciliators of this Government in an area that Opposition members have been raising for years but that the Government seems to have only just discovered. It is an area which is topical and which is vital to the future of ANL, namely, work practices. Of all areas of Australian industry and commerce, national shipping has suffered most from the restrictive work practices both on and off-shore of the various waterside and shipboard unions of this country. Indeed, the history of militancy and blackmail is legend. Australian seamen have priced themselves out of work; Australian waterside workers have driven off trading partners; Australian opportunity has been lost for ever. It will take all the combined skills of Captain Bolitho and Mr Moore-Wilton to recover some ground, or should I say, some sea, for Australian shipping after the saboteur efforts of union bosses. I am conscious that ANL competes in an over-supplied market, must strive against countries that protect and subsidise their shipping lines and must operate in competition with countries that pay much lower wages to crews and operate with lower manning levels. But this should act only as incentive to Australian crews and waterside workers to restrain their avarice and lift their productivity. I am also conscious that shipping companies that operate into Australia relatively and frequently have caved in to union demands at great cost to Australian shipping, which must ply our ports week in and week out. These are realities but there are others such as the 19,000 kilometres of coastline and a billion-plus tonnes of domestic freight to be moved along it. Then there is the reality of 500 ships in the import-export trade and the fact that Australian ships carry just 3 per cent of that trade. The Whitlam Government interference-in particular, the disastrous purchase of two bulk carriers during the stewardship of Labor Transport Minister Jones, irresolute management and poor accounting procedures-has contributed to Australia's lost opportunities, but most damaging and most devastating to Australia's chances as a maritime nation have been the naked opportunism and sheer pig-headedness of union bosses. I will give a few recent examples. We have seen the calculated victimisation of the Columbus Line and other shipping companies by the Seamen's Union. The great irony is that the union wants Columbus to employ Australian crews, when European operators estimate that it would cost a cool $1m a year per ship to meet the manning levels and other demands of the union. We watched in awe the Gilbertian comedy of near mutiny from the Federated Marine Stewards and Pantrymen's Association over the new Tasmanian ferry and the Federated Ship Painters and Dockers action in forcing unnecessary repairs on ships that had passed inspection; it has been detailed in this House and in diplomatic protests. So has the dispute over who should man the anchor and mooring line winch on the River Boyne, which was commissioned to cart bauxite from Weipa to Gladstone. Then there was the Australian Foremen Stevedores Association battle in Sydney and Melbourne with ANL which cost around $1.4m a day and held up 70 ships, and all because the union discovered that ANL had come to an agreement with some electricians on a different roster system. Perhaps on an even pettier level were the months of delay before ANL's new ship River Torrens could get under way while unions demanded, amongst other things, an additional trainee wiper to the already generous 31-man crew-a trainee wiper! It is reported that work practices such as the nick system, employing one man to work while another nicks off, are still widely in use in Australian ports. It sounds like the wattle bag at Robe River. The sizes of gangs and sling loads on the dockside have remained unchanged, despite containerisation and other modern techniques of cargo handling. The bill for loading and unloading a single container is the same as that for sending that container by rail from Sydney to Melbourne. ANL's container rate, Australia to Hong Kong, is $2,200 or more compared with its competitors' $1,500 or less. Dumb barges are vigorously opposed by union leadership. Australian crews cost $100,000 a berth, according to Captain Bolitho. I will divert for a moment to discuss Christmas Island where the Navigation Act affords ANL a monopoly on phosphate shipments to Australia. When Whitlam Minister Jones gave ANL the monopoly, the price climbed immediately by $6 to $10 a tonne. Today it is around $33 while a tonne of phosphate to Malaysia on a rival ship comes out at around $15. It seems that Christmas Island will close down altogether, in part due to the high cost monopoly, and if this Government keeps up its act Australia could share the Christmas Island fate, fulfilling the world champion travel allowance Treasurer's predication of banana republicanism. The subject of my next point has come up three times in three years. The first time, in 1984, the taxpayer was told that this Government had given $90m of his money to ANL. The second time, in 1985, the taxpayer was told a further $70m had gone towards continued subsidisation. Now, the third time, while we are all very relieved not to be coughing up more money, it seems a little premature for self-congratulation after a one in three win, not enough for any sporting trophy. This Government prides itself on its ability to negotiate and reach consensus on industrial relations matters. It would be better employed using these self-declared talents to assist ANL and the Australian shipping industry to teach Australian maritime and waterside unions some realities, rather than wasting our time by publicly indulging in such a distasteful and solitary pastime as is evidenced by this motion. I support the amendment. Mr O'NEIL(Grey)(1.59) —In the very short time left to me I would like to refute completely all the garbage that came from the honourable member for the Northern Territory (Mr Everingham). He has a long history of bashing trade union movements and this is no exception. Mr Scott —He hates workers. Mr O'NEIL —As my colleague said, he hates workers; it is as simple as that. Madam SPEAKER —Order! It is now 2 p.m. In accordance with standing order 104 as amended for this session, the time allotted for precedence to General Business has expired. The honourable member for Grey will have leave to continue his speech when the debate is resumed. The resumption of the debate will be made an order of the day under General Business for the next day of sitting. Mr N.A. Brown —My question is directed to the Prime Minister. I refer him to the combined effects of two of his great achievements-the youth traineeship scheme and the fringe benefits tax. As the Prime Minister knows, the youth traineeship scheme provides a grant of $1,000 to employers if they take on a young trainee under the scheme. Is he also aware that rural employers, on the most conservative calculations possible, will have to pay over $1,100 in fringe benefits tax on board and lodging of the employee and other benefits provided which are taxable? Can the Prime Minister suggest any reason at all why an employer should take up the Government's generous offer of $1,000 when the fringe benefits tax will cost him over $1,100 to do so? Mr HAWKE —I am indebted to the honourable member for raising, at the outset of today's Question Time, the issue of the fringe benefits tax. In regard to his question about the impact of the fringe benefits tax on employers who take on trainees, I will undertake to obtain advice on the potential impact of the tax in that area and to so advise him. I do not pretend to be able to give an off the cuff answer on that technical question. But I assert that I am in a position to further expose the hypocrisy of the Opposition in regard to the whole question of the fringe benefits tax. The reason that I was a little late in getting here was that I have had the great pleasure of watching a tape of the interview of the Leader of the Opposition-who is absent-by Richard Carleton, which took place last night on an Australian Broadcasting Corporation show, regarding the fringe benefits tax and related issues. If ever one has seen a Leader of the Opposition who is on his way out, one saw him in that interview. It is not surprising, because the Leader of the Opposition typifies the position of the Opposition as a whole. It simply does not know where it is on this issue of fringe benefits tax. Let us nail the Leader of the Opposition on this matter. This morning, in repeating what he had said last night, he stated: `We will throw it out lock, stock and barrel'. Mr Hodgman —Hear, hear! Mr HAWKE —The honourable member interjects: `Hear, hear'. That is the current position of the Leader of the Opposition. Perhaps he will explain what particular part of the road to Damascus he was on when he saw the light. Last year he explained his position in light of the still unrecanted position of the re-elected Federal Leader of the Liberal Party. I remind the House-I have brought it to its attention before-so that the House and the people of Australia have it clearly on the record, what the position of the Federal Leader of the Liberal Party, Mr Valder, is on the question of the fringe benefits tax, because the Leader of the Opposition endorsed this position. Mr Valder, in July last year, in referring to the attack by the Treasurer on behalf of this Government on fringe benefits, stated: I think again to reverse the whole disease- that is what he was talking about; the organisational leader of the Liberal Party in this country was talking about the whole disease of the fringe benefits system. He continued: . . . I think Paul Keating is being very foolish and taking a massive risk in attempting to reverse that in one stroke. But if one attempted to reverse that in a series of strokes over three or four years, then I think it could be done and I've got to say- this is the organisational leader of the Liberal Party in this country; he has never recanted from this position- I think that is the fair and just thing in this country- that is, to wipe out the whole disease of fringe benefits. He went on to say: and it is going to take, I imagine, every bit of a decade to reverse the trends of the past decade or two. But the longer we leave it, the harder it is going to be. It was then put to him: `Well, Labor has bitten the bullet'. What did the organisational leader of the Liberal Party say? He said: Well, that is why I would like to see them do the very hard things that they are going to get into trouble about, because electorally that is the fact of the matter. They are not easy to do. So I have said many times- and I ask members of this House and every member of the Australian public to savour the philosophy, the character and the decency of the Liberal Party- you know, let the Labor Party get on implementing the more necessary, but perhaps less popular parts of our policy. In other words, Mr Valder, the Federal President of the Liberal Party, was saying: `It is our policy to wipe out the disease of fringe benefits. Let the Labor Party implement our policies, the Liberal Party policies, and let us hope they get them into place and promptly lose office'. He said: `I think that would be a very good scenario, don't you?'. So the organisational head of the Liberal Party in this country was saying that fringe benefits had become a disease and should be wiped out. He said: `Paul Keating has been foolish to attempt to do it in one bold strike. But let Keating and the Labor Party wipe out the fringe benefits. Let them cop the electoral flak. We will return to office and leave the fringe benefits tax in place'. What did the Leader of the Opposition say about that exposition by the organisational wing of the Liberal Party? He said: There are no easy options on cutting government spending . . . I recognise the realities of how hard it is to cut government spending. This is what he said about Mr Valder's statement: . . . what Mr Valder said on fringe benefits was not all that different from what a number of us have said . . . if you're able to cut the top marginal rate of personal income tax, then it's fair in that context and that context alone, to do something about fringe benefits . . . Let there be no doubt about the hypocrisy of this pack opposite. The organisational head of the Liberal Party has said that fringe benefits are a disease in this country, that they should be wiped out, and that it hoped that this Government would proceed with the legislation to wipe them out. He said that that was the policy of the Liberal Party. Very shortly after that, John Howard said: `I agree with him, and if you have this cut in marginal rates', which we have, `then there should be a fringe benefits tax'. But what does Honest John do now? Madam SPEAKER —Order! The Prime Minister should use the honourable member's correct title. Mr HAWKE —What does the temporary Leader of the Opposition say? Having said that Mr Valder was right, that it was the Liberal Party's policy, to wipe fringe benefits out, under pressure he now says: `We will wipe out the legislation lock, stock and barrel'. If ever there has been revealed a party bereft of principle, reeking of hypocrisy, it is the Liberal Party on the question of the fringe benefits tax. Mr ROBERT BROWN —My question is also directed to the Prime Minister, I ask whether the Prime Minister's attention has been drawn to recent criticisms of the Government's taxation and Budget policies. If so, does the Prime Minister propose to take any action in these areas? Mr HAWKE —It is perfectly clear that this Government's Budget policy-its total macro- economic policy-is appropriate to the circumstances which have been imposed upon this country by the force of external circumstances; a fact which is acknowledged by virtually every commentator in this country, and was certainly acknowledged by Moody's Investor Services Inc. when it made the recent adjustment to our credit rating. So there is absolutely no need for any change in the fiscal policy of this Government, nor will there be. Most of the criticism of the Government's fiscal policy has come from one noisy and increasingly disreputable source, and that is the Leader of the Opposition. This Government is always willing, able and happy to explain its policies to the community. However, the Leader of the Opposition steadfastly refuses to explain where the money would come from to finance his armful of tax and spending promises. Let us remember what the Leader of the Opposition has promised. He has promised to dismantle Labor's tax reforms, to reduce the overall tax burden through flatter taxes and income splitting, and to reform the assets test. Opposition members interjecting- Madam SPEAKER —Order! Mr HAWKE —They do not worry me, Madam Speaker. The Leader of the Opposition has promised also to have a balanced Budget in three years. When we do the simple arithmetic on the hypocrisy of the Leader of the Opposition, he turns out to have a $10 billion-plus credibility gap. He will never be able to overcome that credibility gap. Before the honourable member for Bennelong became Leader of the Opposition, he told others that when they make criticism of government fiscal policies-these are his exact words-they have to `make specific suggestions as to where the cuts might be made'. Those words will come back to haunt him. The trouble ultimately with this Opposition, and particularly with its Leader, is that it crucially and critically underestimates the intelligence and perspicacity of the Australian electorate. It will not be able to get away with this insult to the intelligence of the Australian electorate, and during every day, week and month between now and the next election it will be driven further and further into the ground. It will then come to the realisation that until it adopts a position of principle on matters of economic debate it will perpetually inhabit the opposition benches of this country. Mr SINCLAIR —I ask a question of the Treasurer. In the light of one of the principles enunciated by the Treasurer and the Prime Minister before the Tax Summit, and the Treasurer's awareness, no doubt, that persons living in remote locations, whether on farms or at mines, and even those in the police force, so that they might properly do their jobs, are to be subject to fringe benefits tax, will he explain to the House the difference between that tax responsibility and the tax liability on his own entitlements? Mr KEATING —I should have thought that the differences were obvious. There is a clear division in the law between the tax treatment of living away from home allowances, travelling allowances and employer-provided housing. In the case of members of the Parliament who have residences in Canberra, there is no employer-provided housing. There were some 4 per cent loans at the taxpayers' expense, but beyond that there was and is no employer-provided housing. Members' entitlements, including electorate allowances and Ministers' allowances of office, will now for the first time be taxed under substantiation-not the fringe benefits tax but the related measure of substantiation. That will require a member or a Minister to substantiate what has been expended truly in terms of electorate costs and the electorate allowance, and also in terms of the ministerial allowance of office. Much of the ministerial allowance of office was spent in the past on entertainment, and that is no longer a deduction that is allowable in the tax system. To the extent that that cannot be substantiated, Ministers will need to pay the tax on it. That is why it is reasonable to make the assumption that the after-tax income of most Ministers will probably fall between 15 per cent and 25 per cent-a very great deal indeed. Most members on the back benches will probably see their income diminish somewhat owing to the fact that they may not be in a position to substantiate all expenditures within their electorate allowance. The tax treatment across income groups is entirely the same. In respect of the travelling allowance, there is no requirement of substantiation. This has not generally been seen as an area of abuse and the deduction has been generally extended in the tax system where the travelling allowance has been expended for its purpose. The tax treatment of these three areas across various income groups is entirely consistent with my position or that of any other member. Mr BEDDALL —My question is also addressed to the Treasurer. What would have been the impact on tax avoidance and tax abuse had the taxation laws which existed prior to the introduction of the fringe benefits tax prevailed? Mr KEATING —There would be a dramatic increase in the incidence of cost to the tax system by the failure of the existing provisions, section 26 (e), to deal with the problem of fringe benefits. It is interesting to note what the shadow Treasurer said on Mike Carlton's program on 2GB this very day when asked about fringe benefits. The transcript reads: Reporter: But there will still be some form of taxation on fringe benefits? Jim: Well there was under the old system, it just wasn't well policed. Reporter: But how are you going to police it under this new system that you people are going to introduce? Jim: Well, quite simply. That if you work out, in a proper management sense, exactly how you prevent the gross abuses, you can do it administratively. In other words, the response to the question, `Under this new system, what are you going to do?', is `Well, accepting the new system, quite simply, if you work it out properly to prevent abuses, you can do it administratively.' Another part of the transcript reads: Jim: We don't have a hundred per cent foolproof system of clamping down all abuses. We just believe that by tackling the biggest abuses in a sensible way, and maybe that's five per cent, ten per cent of the total, but what you do not do is do what Keating has done . . . The interview continues: Reporter: What is the policy, how would it be done? Jim: What I've said is, that under the original law, there was a capacity, administratively, if people had wanted to work it out properly in a properly controlled management situation to crack down on the rorts and you had to do that. Reporter: Under that system the payment of tax was very easily avoided. Jim: Well nobody really tried to stop it sufficiently with sufficient force and they didn't look at it in a proper management sense. So he is saying that they will look at it in a proper management sense, they will do it under the old law. A later passage reads: Reporter: How would you ensure that those benefits would be paid, the tax on those benefits would be paid? Jim: Well, I think that's a fairly simple management problem to solve. In other words, we are going to have a fringe benefits tax. It will be under a new system. It will be a management system under the old law, but although the old law was not being policed, it will be under the Opposition if it forms a government. This ties in with what the Leader of the National Party said this morning on the steps of Parliament House. He said: 26 (e) will remain and there has never been any suggestion that it will go. He was asked whether any fringe benefit should be taxed and he replied: Well there is already an application of some fringe benefits tax by the Tax Commissioner under 26 (e). That is the system that has continued and we have not recommended any change to that. So the Leader of the National Party is saying that section 26 (e) stays and the shadow Treasurer is saying they will make it work; it did not work in the past or it was not policed but they will police it and make it work in a management sense. Last night, on the Carleton-WalshReport, the Leader of the Opposition said: Richard, look, my answer to you is that under our Administration tax avoidance rorts will not be permitted. They will be effectively legislated against. The interview continued: Richard Carleton: How? Mr Howard: Well, there are a variety of ways. There were a variety of ways under the law that existed until quite recently. And I was responsible for bringing in a general anti-tax avoidance provision for the Income Tax Act. In other words, rorts will be legislated against. That will be done under the old law, but it will be administratively changed to give it a management complexion and make it administratively feasible. As I indicated in the Parliament yesterday, the only changes that could be made to section 26 (e) to make it available for collection under the income tax system is if it is changed so that the computation and withholding is done weekly on every individual. That is the huge administrative burden that made section 26 (e) not a workable proposition in the Government's view and why it went to a more general across the board fringe benefits tax collected on a quarterly basis. So here we have the shadow Treasurer this very day saying-not repudiating-that the Opposition will not have a new system but quite simply it will be doing it to prevent gross abuses; it will be tackling the biggest abuses in a sensible way, there will be a capacity administratively and it will do it in a controlled management way. Nobody has tried to do that in the past, but it says: `We will do it'. Last night the Leader of the Opposition said: `We will legislate to do it'. When is the Opposition going to come clean on fringe benefits and tell the public the truth? When it says it will not have the Hawke fringe benefits tax or the Keating fringe benefits tax, it really means that it will have the Howard-Carlton fringe benefits tax, which will be an administrative nightmare on employers in this country, a far greater burden than the fringe benefits tax. When will the Opposition end its duplicity and tell the truth and come clean with the Australian public for the first time in three and a half years? Mr HUNT —My question is addressed to the Treasurer and relates to the fringe benefits tax which we are going to throw out lock, stock and barrel; make no mistake about that. Is the Treasurer aware that the Australian Taxation Office has advised the National Farmers Federation that, if a family farm company has claimed the full shire rates as a deduction from income for tax purposes up until 30 June 1986, the family living in the farm house will be subjected to the fringe benefits tax on the assessed rental value of the house? Since this advice conflicts with the assurances that the Treasurer and other Ministers have given, that family members living in company owned farm houses will not be subjected to the FBT, will the Treasurer intervene to resolve the confusion being generated as a result of his statements and the advice from the Taxation Office? Will he also give an assurance, since there is no possible chance of this being abolished until there is a change of government, that he will endeavour to remove the administrative nightmare that is driving employers and employees up the pole? Mr KEATING —If employers were calculating the benefit to each individual employee and withholding weekly and remitting weekly, can honourable members imagine the burden then on employers compared with the administrative efficiency of the current withholding tax? So there is no point in the coalition going on about why section 26(e) is there. It would not allow section 26(e) to work. The shadow Treasurer has admitted today that his Government never let section 26(e) work effectively, and were it to amend section 26(e) to calculate, withhold and remit to the Taxation Office weekly, the burden would be enormous. Let us make that very clear. In respect of the substance of the question, the point I have made to the Deputy Leader of the National Party on a couple of occasions is that there is no fringe benefits tax payable in respect of the family farm house, but if indeed that farm house were the subject of deductions if it had been owned by a company, the fringe benefits tax would apply to it. Let me make this clear: No other person in the economy is entitled to deduct the costs of his or her home in the tax system, and to the extent that a farmer uses a family company to make the deduction, he has to accept the fact that in claiming the business deduction the fringe benefits tax will apply. The honourable member mentioned a Taxation Office ruling. I will inquire about that and certainly furnish him with an answer. But more generally about the issue of fringe benefits I make this point: I think it is important at this point in this debate to be clear what the equitable purpose of fringe benefits taxation is. Let me give this example. This is a quite realistic salary package for an executive in the middle to upper management range with a salary of $45,000; representative allowance, $3,000; superannuation, $6,000; motor vehicle lease for a Toyota Cressida, $5,800; motor vehicle maintenance, running costs, registration and insurance, $1,900; hostess allowance, $4,000; home telephone, $300; low interest loan, $8,850; school fees, $3,000; and holiday travel, $3,000. I repeat that that is for an executive in middle to upper management. While only $45,000 of this package is paid in the form of salary, an employee who received only a salary would have to be paid $115,125 in order to receive the same after tax benefit. Under the former Government's tax system only $17,346 would have to have been collected on this income of $115,000, which is an average tax rate of about 15 per cent. This is the same average tax rate as would have been faced by a taxpayer receiving all of his remuneration in taxable form of only $11,500; that is, the former Government's tax system gave the same average rate to a $115,000 beneficiary of tax avoidance as it did to a taxpayer on a money income of only $11,500. There is no equity in such a system. The example I have cited is typical in this area of middle management. The former Government was well aware of such examples and it deliberately chose to do nothing about them. But we see now that the Leader of the Opposition has been forced, by the honesty and courage of this Government, to admit to the Australian public that as Treasurer in the former Government he presided over such a discriminatory and inequitable tax system. So the fact is that this is the clear inequity which is involved here: The same average rate for someone paying $11,500 as someone with a benefit of $115,000, an average rate of 15 per cent with a benefit of $115,000 while paying a salary of only $45,000. That is why the fringe benefit is there. When the Opposition is asked about how it will handle the tax in respect of the representative allowance, or the motor vehicle lease, or the motor vehicle maintenance allowance, or the hostess allowance, or the home telephone, or the low interest loan, or the school fees or the holiday travel it must have an answer. The Opposition cannot say: `We are going to permit this abuse to continue'. It cannot say: `We are going to throw it out lock, stock and barrel and we will put nothing in its place'. That is why we are saying that we cannot leave these fringe benefits untaxed and that is why the shadow Treasurer this morning said on radio that the Opposition will tax it by an amended section 26 (e). That is why the Leader of the National Party said: `We will keep section 26 (e)'. That is why the Leader of the Opposition has said the Opposition will legislate a change to make the rules effective. If that is not abuse, what is? If the Opposition is to remove these abuses, is it any wonder the shadow Treasurer has had to admit on radio today that the Opposition will make it work administratively under the sections of the old law? However, there can be no equity and no justice when a low income person on $11,500 pays the same average rate of tax as someone with $115,000 of benefits. While this Government is in office it will fight for that equity and it will stand up around this country and say to the average Australian: `You won't have to carry the burden of these people who have urged this upon you for years. You will not have to carry the burden which has been unfairly placed upon you. If there is a coalition government again, remember the burden it saddled you with. Remember the tax changes you received from this Government and weigh the justice of the Labor Party's taxation policies against the unfair, inequitable and unjust policies of the coalition'. Mr BILNEY —My question is addressed to the Minister representing the Acting Minister for Foreign Affairs and relates to reunions of families of whom some members have had to remain in the Union of Soviet Socialist Republics. Madam Speaker, I preface my question by acknowledging what you personally and members of your delegation to the Soviet Union earlier this year have done in bringing the Soviet authorities' attention to some names of persons seeking exit visas. Is the Prime Minister in a position to report to the House on the progress of efforts by various Ministers, including the Minister for Foreign Affairs and himself, to persuade the Soviet authorities to grant exit visas for particular members of divided families? Mr HAWKE —I thank the honourable member for Kingston for his question. I think all members of this House will agree that family reunion remains an important and sensitive issue in bilateral relations between Australia and a number of eastern European countries. With varying degrees of success our missions regularly present lists of outstanding family reunion cases to the foreign ministries of east European countries to which we are accredited. Since coming to power the Government has pursued a policy of regular, high level approaches to the Soviet authorities on this matter. I personally raised this matter with the Soviet Ambassador and a number of other Ministers have assisted in making representations at various levels on appropriate occasions. As the honourable member for Kingston indicated, Madam Speaker, you also raised the question at a high level during your recent visit to the Soviet Union as leader of a parliamentary delegation to that country. In particular, my colleague the Minister for Foreign Affairs has been absolutely tireless in his pursuit of aiming to reunite families concerned. I am pleased to inform the House that Soviet authorities recently notified the Australian Ambassador in Moscow that our various lists of Soviet cases had been reviewed recently and a number had been resolved, including two that I know are of interest to the honourable member for Kingston. Although other cases remain unresolved, the Soviet decision represents some progress and it is to be welcomed on that score. We will, of course, persist in our efforts to resolve remaining cases through quiet diplomacy which we consider has proved to be the most practical means of achieving positive results. Mr BURR —The Prime Minister would be aware that the statement from yesterday's conference between government, business and union organisations that discussed work practices made no reference to techniques of profit sharing and equity participation. Does the Government believe such methods are appropriate mechanisms to distribute wealth to workers? If so, will the Government introduce appropriate amendments to the taxation legislation so as to remove taxation impediments to those companies and workers wishing to include such schemes as part of their remuneration package? Mr HAWKE —I thank the honourable member for Lyons for his question. The honourable member, as distinct from some of his colleagues, has always, in my judgment, taken a very responsible and constructive approach to his consideration of industrial relations. I know that he has more difference with many of his colleagues than he does with me in this area. The meeting yesterday was very positive and constructive. I wish on behalf of the Government, and I would think the people of Australia, to congratulate the Business Council of Australia, the Confederation of Australian Industry and the Australian Council of Trade Unions for facing up to a basic question which must be resolved in this country; that is, how are we on all fronts going to ensure that Australian manufacturing industry becomes more competitive both against imports and in regard to expanding our exports of manufactured goods? When we consider this issue we must understand that these practices have to be addressed in enterprises not only within the manufacturing sector but also economy-wide because the efficiency of firms and enterprises outside of the manufacturing sector will, of themselves, have some influence upon the competitive capacity of manufacturing industry. Those gathered in Melbourne yesterday, in what I think was properly described by the Australian today as an historic outcome, did not pretend that they had addressed themselves exhaustively to every issue which is relevant. I concede directly to the honourable member that the questions he raised have a relevance in this whole matter. I acknowledge that in some enterprises in this country schemes, which are related to the sorts of considerations that he has raised, are operating successfully. I would regard it as appropriate-- Mr Coleman —Oh! Mr HAWKE —The disappearing member for Wentworth. His capacity is so good. Madam SPEAKER —Order! I invite the Prime Minister to continue his answer. Mr HAWKE —He has counted the numbers in Wentworth and he is chickening out before he faces preselection. Mr Tuckey —Madam Speaker, I raise a point of order. The Prime Minister ignored your very proper instruction based on the grounds that you have put down earlier in this House. If he wants to play it personal, we will talk about Bryce and his trips to Japan. Madam SPEAKER —Order! The honourable member for O'Connor will resume his seat. I call the Prime Minister. Mr HAWKE —I would hope that when the detailed discussions flowing from the Melbourne meeting take place-that is, the discussions at the sector, the enterprise and the plant level-if the parties involved want to address those issues in the whole range of matters which are relevant to getting the best sort of working practices, I hope they will do so. Finally, I go to the honourable member's question whether, if the practices which he suggests were to become attractive to both employers and employees, some consideration would be given to them in the tax field. That is a hypothetical question but I say this: If we had approaches from industry in the light of some extension of that practice we would be prepared to consider them, and I say that without prejudice. I conclude by again thanking the honourable member for his question which I regard as a constructive contribution to this important area. Mr HOLLIS —Will the Minister for Arts, Heritage and Environment advise the House of progress on the national rainforest conservation program? Mr COHEN —I thank the honourable member for his question. On 3 October at Minnamurra Falls, near Wollongong, I shall be launching, with Bob Carr the New South Wales Minister for Planning and Environment, the New South Wales section of the national rainforest conservation program. It will take place in the electorate of Throsby the member for which is one of the Parliament's leading environmentalists and a noted rainforest devotee. It will also be near the electorate of the honourable member for Macarthur and that of the Minister for Housing and Construction who is a former shadow Minister for the Environment. As honourable members would know, a few months ago Cabinet approved some $22.5m-- Mr Slipper —Madam Speaker, I raise a point of order. The question asked by the honourable member for Throsby is out of order as it is similar to question No. 4681 on page 8874 of the Notice Paper. Madam SPEAKER —I do not have a copy of the question in front of me. Would the honour- able member repeat his question? Mr HOLLIS —The question was: Can the Minister advise the House of progress on conservation in New South Wales? Madam SPEAKER —The honourable member has asked the question that is on the Notice Paper, but it is his question that is on the Notice Paper; so it is quite in order. Mr COHEN —As the House knows, Cabinet approved some $22.5m over three years, and $7m will be spent this year. The program will be implemented in co-operation with the States and Territories, and includes a survey to identify rainforest areas of high conservation significance, assistance to the States for acquisition of privately owned rainforests, assistance to the States for acquisition for leasing of land for planting purposes, assistance to the States for the planning and management of rainforests, and a study of tourism as a potential for rainforest areas. All honourable members have been invited to come to Wollongong on that date. I take this opportunity to congratulate New South Wales on its initiative in taking up the Commonwealth's offer very quickly so we can get ahead with this program. A few weeks past that date I hope to be able to do the same in Victoria. I am hoping that the Tasmanian and Queensland governments will also take up the offer, because there is some very generous funding available if they take it up quickly. Mr WILSON —I direct my question to the Prime Minister. I noted in the Treasurer's response, where he gave an illustration of a typical pay packet for a middle executive, a substantial amount paid for superannuation. How does the Prime Minister plan to replace the multi-billion dollar tax loss which will occur as a consequence of tax deductible superannuation contributions replacing what would otherwise have been paid as normal wage and salary increases? Mr HAWKE —To the extent that the question from the honourable member goes to how this Government will conduct the total budgetary and fiscal policy of this country, I simply say that if he would like to compare the performance of this Government in this area with those of his predecessors, he will find that we have demonstrated an unrivalled capacity to match the proper expenditure requirements of this country with the necessary revenue-raising measures. In that process we have done two things: We have significantly reduced expenditures in areas where we thought they could no longer be justified, and at the same time, with a review of our revenue base, we have brought down the deficit as a proportion of gross domestic product from something like the 5 per cent that we inherited to less than 2 per cent. In other words, we have an unparalleled record of being able to make the necessary decisions on both the expenditure and the revenue side of the Budget formulation process. I assure the honourable member that in the very many years ahead, when this country continues to give us the responsibility for budgetary formulation, we will continue to show the expertise and the responsibility which has characterised this Government's discharge of budgetary responsibility in its first four years of office. Mr FITZGIBBON —My question is directed to the Prime Minister. Following his launching of the Australian made campaign, what has been the response of the business sector to the campaign to date? Mr HAWKE —I thank the honourable member for his question. It is relevant to a question that was asked of me yesterday by the honourable member for Page. I am pleased to say to the House that the Advance Australia Foundation, which is providing, as I said yesterday, the infrastructure for the campaign, advises that already between 60 and 70 new licensees have signed up. Two major department store retailers have already decided to back the campaign. The first week of advertising has been completed and this has been followed by a pause in the television advertising while logos are being attached to Australian made products. A new round of television advertising aimed at the Christmas shopping period will commence in early November. Yesterday, the honourable member for Page asked me whether the Advance Australia Foundation will moderate its $200 minimum licence fee. I am pleased to say that I am informed that in around 900 phone calls to the Foundation, only about half a dozen expressed concern about the minimum licence fee. Of those, I am informed, most were satisfied once the purpose of the fee was explained to them. The Foundation has arranged, in a couple of cases, for the $200 to be paid by instalments. I will today provide this information and the surrounding details in a letter to the honourable member for Page. Mr HODGES —Did the Minister for Health or his Department issue written or verbal instructions, or both, to the Pharmaceutical Benefits Advisory Committee when submitting a list of drugs for that Committee's June meeting which resulted in the deletion of 45 commonly prescribed items? If so, what was the nature of the instructions? Dr BLEWETT —As I pointed out in the House yesterday during the debate on the Health Legislation Amendment Bill, I wrote to the Pharmaceutical Benefits Advisory Committee requesting it to give consideration on health grounds to certain delistings. I made it quite specific in the letter, which I tabled in the House yesterday, that that request was on health grounds. I will repeat the letter for the benefit of the honourable member. My request to the Chairman of the PBAC was: Firstly, I ask that at your June meeting you review some benefit items with a view to determining, on health grounds, whether their listing is justified. The Department will be preparing a submission to the Committee which will include a list of items for review. Of course, the Department prepared a submission which it forwarded to the PBAC. The remarks that the honourable member made yesterday impugned the integrity of the membership of the PBAC. I, as Minister, asked the PBAC to give consideration to those issues on health grounds. Their response came back to me, in which they justified the deletions on health grounds. Nor, of course, is this an unusual procedure. It is the duty of the Government and of the PBAC to constantly monitor that list of drugs in order to see that we are maintaining a drug list for essential purposes in this country. I quote from another letter: Each of the items . . . was removed from the Schedule of Benefits on the recommendation of the Pharmaceutical Benefits Advisory Committee (PBAC). This Committee was established under the National Health Act to advise the Minister for Health on pharmaceutical benefit matters. That letter, from which I have just quoted, was written by the previous Minister for Health, the honourable member for Warringah. Some years ago, a similar set of deletions was made on the recommendations of the PBAC and was justified on exactly the same grounds as this Government has justified this decision. Indeed, I think it is even more important simply to quote further from that letter from the honourable member for Warringah, because he says: I feel sure that most doctors would appreciate the need for the pharmaceutical benefits list to be reviewed regularly to reflect changes in authoritative medical opinion. Both the Government and the PBAC share the belief that if we are to maintain a list of free essential drugs, that list should be monitored and reviewed regularly. Madam SPEAKER —I present the report of the Auditor-General, dated 24 September 1986, upon an efficiency audit of the Australian Taxation Office: Prescribed Payments System. Motion (by Mr Young)-by leave-agreed to: (1) That this House, in accordance with the provisions of the Parliamentary Papers Act 1908, authorises the publication of the report of the Auditor-General, dated 24 September 1986, upon an efficiency audit of the Australian Taxation Office: Prescribed Payments System, and (2) That the report be printed. Madam SPEAKER —For the information of honourable members I present the annual report of the Department of the Parliamentary Reporting Staff for the year 1985-86. Mr YOUNG(Port Adelaide-Special Minister of State) —On 17 September I tabled the Government's response to the report of the Joint Select Committee on Electoral Reform on determining the entitlement of the Federal Territories and new States to representation in the Commonwealth Parliament. That response contained an error which may have given a misleading impression of the Government's position. I now present a replacement Government response to the report. Motion (by Mr West) proposed: That the House take note of the paper. Debate (on motion by Mr N.A. Brown) adjourned. Mr DUFFY(Holt-Minister for Communications) —On behalf of the Prime Minister, pursuant to section 27 of the Australian Science and Technology Council Act 1978 I present the Australian Science and Technology Council annual report for 1985-86. Mr DUFFY(Holt-Minister for Communications) —On behalf of the Attorney-General, for the information of honourable members I present a report on the activities of the Film Censorship Board for 1985. Madam SPEAKER —I understand that the Leader of the National Party of Australia wishes to make a personal explanation. Mr SINCLAIR(New England-Leader of the National Party of Australia) —Madam Speaker, I claim to have been misrepresented, Madam SPEAKER —Please proceed. Mr SINCLAIR —During Question Time today the Treasurer (Mr Keating) made reference to a statement I made on the steps of Parliament House. He implied that I said that section 26 (e) of the Income Tax Assessment Act required employers to compute and to withhold tax for each employee and to pay that tax each week to the Australian Taxation Office. That is not correct. Section 26 (e) is entirely a matter between the Australian Taxation Office and employees and is not a pay as you earn problem. Nor is there any parallel between his travelling allowance in Canberra, for which no substantiation is required, and fringe benefits tax, for which there is. Mr CARLTON(Mackellar) —Madam Speaker, I seek leave to make a statement. Madam SPEAKER —Does the honourable member claim to have been misrepresented? Mr CARLTON —Indeed. Madam SPEAKER —Please proceed. Mr CARLTON —During Question Time the Treasurer (Mr Keating) quoted remarks that I made on the Macquarie network this morning. So far as I can recall the actual quotes seem to be right, but subsequently in his answer to a question he suggested that I had said that I would want to amend section 26 (e) of the Income Tax Assessment Act in order to clamp down on the kinds of gross abuses he gave as examples in his answer. As far as I can recall, I said no such thing and I do not believe that was in the quotes that he actually read to the House. Mr LEO McLEAY(Grayndler) —Madam Speaker, I seek leave to make a personal explanation. Madam SPEAKER —Does the honourable member claim to have been misrepresented? Mr LEO McLEAY —I do. Madam SPEAKER —Please proceed. Mr LEO McLEAY —Madam Speaker, in the remarks of the Leader of the National Party (Mr Sinclair) in his want of confidence motion yesterday he said in relation to me: Earlier there were occasions when you, as chairman of a parliamentary committee, came into this House and, without any authority of that committee, had given, to people outside the committee, the contents of its report. I assume that in those remarks he was referring to a matter arising out of a report by the House of Representatives Standing Committee on Expenditure on the Aboriginal Development Commission. The facts are that the Committee engaged a Sydney Queen's Counsel to provide legal advice on certain elements of the Committee's inquiry. Prior to the circulation of my draft report to members of the Committee, I asked the legal adviser for his comments on my draft. In my opinion, this action was entirely in conformity with the Standing Orders as the draft had not at that stage been submitted to Committee members. The right honourable gentleman went on to say yesterday: The Privileges Committee should have been required to consider whether you had breached parliamentary privilege. Of course the House will recall that it was the right honourable gentleman himself who did not proceed with his motion to refer the matter to the Privileges Committee. Mr DOWNER(Mayo) —Madam Speaker, I seek leave to make a personal explanation. Madam SPEAKER —Does the honourable member claim to have been misrepresented? Mr DOWNER —I do. Madam SPEAKER —Please proceed. Mr DOWNER —Last night in reply to the adjournment debate the Minister for Transport (Mr Peter Morris) asserted that I had been `dishonest', that I had put forward a `straight falsehood' and that what I said had been `patently untrue' in connection with a contradiction in Government policy in that it had refused to make representations to Qantas Airways Ltd on behalf of a teacher of deaf children to receive an assisted fare to Chicago, yet on the other hand the Government had allowed the Executive Director of the Trade Development Council to make such representations to Qantas to get fares for four members of the Australian Council of Trade Unions. This was not dishonest, it was not a falsehood; it was not patently untrue. The evidence given to me is that the Executive Director of the Trade Development Council did make those representations, and the Minister never refuted that. The Minister went on to say in his statement: When the ACTU put a similar request to Qantas, the honourable member represented that-- Madam SPEAKER —Order! Has the honourable member finished where he has been personally misrepresented? Mr DOWNER —No, Madam Speaker, I have not. He said: When the ACTU put a similar request to Qantas, the honourable member represented that as being a demand by this Government. That is a straight falsehood. That is not a falsehood, simply because I never made the assertion that the ACTU had made those representations and certainly it is not my view that there would be anything wrong with the ACTU making such representations. The Minister went on to say: The honourable member is seeking to make the point that when he makes representations for intervention with a public enterprise on behalf of a constituent, that is a representation, but that if somebody else makes a representation, such as the individuals concerned- and there he is referring to the members of the ACTU- that in some way is presented to this Parliament, and to you, Madam Speaker, as a demand by the Government. I never said anything of the sort. Finally, the Minister asserted: I recall a similar occasion some time ago when the same honourable member sought my intervention in the operations of the Australian National Railways Commission in South Australia, again to suit his constituency. I never made representations at any time to the Minister to intervene to persuade Australian National Railways to do anything in relation to my constituency. I asked him to ensure that the terms of the South Australian-Commonwealth Government railways agreement were properly fulfilled-indeed, subsequently they have been fulfilled-and that a community employment program-- Madam SPEAKER —Order! The honourable member is now debating the issue and he will resume his seat. The honourable member has had a fair go. He will now sit down. Mr KEATING(Blaxland-Treasurer) —Madam Speaker, I claim to have been misrepresented by the shadow Treasurer. In quoting from the 2GB transcript today he said that I misrepresented him. I did not. Let me read the quotations. I said: . . .under the original law, there was a capacity, administratively, if people had wanted to work it out properly in a properly controlled management situation, to crack down on the rorts and you had to do that. He went on to say: Well I think that's a fairly simple management problem to solve. I did not misquote him at all. 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 Andrew,Mr Beale,Mr Bilney,Mr Blunt,Mr Braithwaite,Mr Cadman,Mr Ian Cameron,Mr Cobb,Mr Cunningham,Dr Harry Edwards,Mr Hawker,Mr Katter,Mr Kent,Mr Milton,Mr Nehl,Mr O'Neil,Mr Ian Robinson,Mr Rocher,Mr Ruddock,Mr Tickner and Dr Watson. 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. And your petitioners, as in duty bound, will ever pray. by Mr Hollis,Mr Kent,Mr Milton and Mr Scott. 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- (1) A cessation of the testing of nuclear weapons would break the cycle of research, development and deployment of nuclear weapons and prevent the acquisition of new and ever more lethal weapons of mass destruction. It would thus be a major and significant step towards ending the arms race and beginning the disarmament process; and (2) The Soviet Union has extended its unilateral moratorium on nuclear weapons testing until August 6 this year and has again invited the United States to cease its nuclear testing program. Your petitioners therefore urge the Australian Government to put the strongest pressure on the United States Government to join the Soviet Union's nuclear test ban. And your petitioners, as in duty bound, will ever pray. by Mr Jenkins,Mr Kent,Mr Milton and Mr Saunderson. To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The petition of the undersigned shows: Graduated family allowances are of important assistance to families with more than one child. All family allowances, whether for one, two, three, or more children, have not kept pace with inflation. There are suggestions that all family allowances should be paid at the one flat rate. This would severely disadvantage families with more than one child. There are also suggestions that the dependent spouse rebate be reduced or removed. This would represent another blow to the family unit. Your petitioners therefore pray that the House of Representatives, in Parliament assembled, should: Ask the Federal Government to increase the value of existing family allowance payments, and Reject any moves to change the payments to a flat rate or to tamper with the spouse rebate; And your petitioners as in duty bound will ever pray. by Mr Hawker,Mr Kent and Mr O'Neil. 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. And your petitioners as in duty bound will ever pray. by Mr Blunt. To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. We, the undersigned 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 Rocher. To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The humble petition of the undersigned citizens respectfully showeth that your petitioners are gravely concerned at the failure of the government to honour its election promises to pensioners. In particular those promises relate to the following commitments: 1. That within three years of its election to office, a Hawke Labor Government would raise the level of the standard pension to 25% of Average Weekly Earnings; 2. That the lag time between the announcement of the Consumer Price Index figures and the subsequent adjustment of pensions would be reduced to one month, and 3. That the disproportionate tax burden borne by low income earners would be lifted. None of these promises has been honoured to date. Your petitioners are extremely angry at the failure of the Government to live up to its commitments and as in duty bound will ever pray that these serious omissions will be given the attention they deserve. by Mr McArthur,Mr Nehl and Mr Saunderson. 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 that it properly reflects the immutable characteristics of Australia namely: (a) The Union Jack, itself the creation of three Christian Crosses, represents the nation's historical origin and the source of its language and law; (b) The Southern Cross on an azure blue background signifying its geographical location on this planet Earth; (c) The large star depicting the advent of Federation in 1901. 3. They know the Flag has been a source of inspiration to generations of Australians in peace and war. 4. They recall that millions of native-born Australians and newcomers to these shores from other parts of the world have become united under its proud symbolism. 5. They are certain that any change to the Flag will produce divisions in the Australian community. Your petitioners therefore pray that your honourable House will propose and pass a motion that ``the existing Australian National Flag be changed only with the approval of the National as expressed in a Referendum.'' And your petitioners, as in duty bound, will ever pray. by Dr Harry Edwards and Mr Hawker. To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The petition of certain citizens of Australia draws to the attention of the House of Representatives their concern at any change to the Australian Flag without first holding a Referendum to assess the opinion of the citizens of Australia. Your petitioners therefore pray that no changes be made to the Australian Flag without reference to the citizens of Australian in the form of a Referendum. by Dr Harry Edwards. To the Honourable the Speaker and the 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 its future; That the presence of the Union Jack on the flag represents not a subservience to Britain, but a reminder of our inheritance of the fruits of hundreds of years of struggle for individual liberty against the forces of tyranny and oppression; Nonetheless recognises the rights of Australians should they wish as a people to change the design of their flag. Your petitioners humbly pray that no change be made to the Australian flag except with the consent of the people in a referendum. And your petitioners, as in duty bound, will ever pray. by Mr Ruddock. To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The humble petition of the undersigned citizens of Australia showeth: That 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 Dr Harry Edwards and Dr Watson. 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 United States 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 and Mr Milton. To the Speaker and Honourable Members of the House of Representatives of the Australian 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 humble petition of the undersigned citizens of Australia respectfully showeth: 1. That the Fringe Benefits Tax Assessment Bill 1986 is having a detrimental effect on the car industry generally in South Australia, and more particularly, on employment in that industry. 2. The Fringe Benefits Tax Assessment Bill 1986 contains many anomalies, inconsistencies and mistakes in drafting and its administrative implementation is an unwarranted burden on Australian businesses and the Australian taxpayer. Your petitioners therefore humbly pray that this House repeal as a matter of utmost urgency this regressive legislation which imposes a disincentive to economic and employment growth thereby jeopardising the well-being and living standards of all Australians. And your petitioners, as in duty bound, will ever pray. by Mr Andrew. To the Honourable the Speaker and Members of the House of Representatives. The humble petition of the undersigned citizens of Australia respectfully showeth that the Fringe Benefits Tax is an iniquitous and unjust impost which will further damage the Australian economy and further increase costs to employers. The Tax will: (1) further increase the level of unemployment; (2) increase the administrative costs and overheads for business and Government; (3) particularly disadvantage small businesses and farmers; and (4) act as a disincentive to those who are the most productive and skilled; and we the undersigned call upon the Government to immediately repeal the Fringe Benefits Tax. And your petitioners, as in duty bound, will ever pray. by Mr Cadman. To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The humble petition of the undersigned citizens of Australia respectfully showeth that: The Hawke Government's Fringe Benefit Tax is a vicious, punitive tax that unjustly affects employers, will have a major impact on small business and farm profitability, and will result in increased unemployment. Your petitioners humbly pray that the House of Representatives, in Parliament assembled, urge the Parliament to repeal the legislation establishing the Fringe Benefits Tax. And your petitioners, as in duty bound, will ever pray. by Mr Nehl. To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The humble petition of the undersigned citizens of Australia respectfully 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 lighted the tax burden, not increased it, that encouraged enterprise, not stifled it and stimulated growth, development and jobs, not prevented it. Your petitioners therefore 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 citizens of Australia, believing That Australia should not host nuclear weapons in its territory or in Australian waters; and That the presence of nuclear-armed warships makes a priority nuclear target of ports being visited; and That the safety precautions for handling and deployment of nuclear weapons are inadequate to guarantee safety from accidents; and That the following warships, all capable of launching weapons deployed in the British or United States navies, will be visiting Sydney between 29 September to 13 October-HMS Illustrious, HMS Beaver, HMS Fort Grange, HMS Manchester, HMS Amazon, HMS Olmeda, USS Missouri, USS Paul F. Foster, USS Oldendorf; and That these warships capable of carrying nuclear weapons will be participating in the 75th Anniversary of the Royal Australian Navy We therefore call upon the Australian Government to: Prohibit the entry of nuclear weapons to Australia; and to Deny access to Australian ports of foreign warships unless an assurance is received that they are not carrying nuclear weapons; and to Require that foreign warships participating in the anniversary of the Royal Australian Navy not be carrying nuclear weapons in Australian territorial waters. And your petitioners, as in duty bound, will ever pray. by Mr Baldwin. To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The humble petition of the undersigned citizens of Australia respectfully showeth: That we strenuously object to the proposal that the Post Office Agency at Sydenham be closed by Australia Post. It will be extremely difficult and inconvenient to travel to another centre for our postal requirements including collection of parcels and registered items plus banking and other agency requirements. The Post Office Agency serves a large area with many pensioners who have no direct means of public transport to the nearest offices of Tempe (1.6 km), Marrickville (1.6 km), and St Peters (1.8 km) thus causing them a difficult and unnecessarily expensive journey for the simplest requirements. Your petitioners therefore humbly pray that the House should take all possible steps to prevent the closure of this Post Office. And your petitioners, as in duty bound, will ever pray. by Mr Lionel Bowen. To the Honourable the Speaker and Members of the House of Representatives. The petition of the undersigned respectfully showeth that the Bill of Rights is not supported by the people of Australia, and calls on the Government to: Delay proclamation of the Bill until all matters of contention are settled by national referenda, and that: (1) Matters of States rights, property rights, rights of the newborn, the right not to belong to unions, among other issues, have not been submitted to the people of Australia to decide, and that; (2) No Australian Bill of Rights should depend on any foreign convention for its basis in Australian law. And your petitioners, as in duty bound, will ever pray. by Mr Cadman. To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. This petition of concern to Australian citizens asks that: 1. The Australian Government exert pressure on Moscow to- (a) Allow the International Atomic Energy Commission full expert investigation of the Chernobyl nuclear disaster and its human consequences; (b) Allow Australian Ukrainians to send medical aid to family and friends in Soviet Ukraine; and, (c) Allow free communication between Australian and Soviet Ukrainians. 2. The Australian Government- (a) Launch a public appeal to help Chernobyl victims; (b) Support the removal of Russian nuclear weapons out of Ukraine; (c) Support the decolonization of the USSR so that captive nations like Ukraine and the Baltic states are not exploited for Soviet Russian nuclear purposes. And your petitioners, as in duty bound, will ever pray. by Mr Cadman. To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The Petition of the undersigned shows: That we the citizens of the Illawarra Region condemn the decision to close the Wollongong office of the Department of Immigration and Ethnic Affairs And that we respectfully request that this decision be reversed immediately. And your petitioners, as in duty bound will ever pray. by Mr Cadman. To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The Petition of the undersigned residents of Australia respectfully showeth: That the humble petitioners have grave concern about recent changes in the Extradition (Foreign States) Act of 1966 which deny basic rights which have been a cornerstone of the English and Australian law for over seven hundred years. We are speaking of the right to be presumed innocent until proven guilty and the right of an individual to defend himself against his accusers. This concern has come to light during recent extradition proceedings against Messrs. Hempel and Etheredge in Western Australia. We are concerned that because judicial protection of these basic rights has been excluded from the Act, refugees, migrants, Australian overseas travellers, and visitors are at risk when they have been to (or come from) countries where the norms and practices of human rights and civil liberties are below traditionally accepted Australian standards. We the undersigned petitioners, therefore urge the government to re-examine the Extradition (Foreign States) Act (as 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 into any further extradition treaties or proceedings under the current Act until the process of re-examination and amendment of the Act has occurred. And your Petitioners as in duty bound will ever pray. by Mr Campbell. 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 following the Chernobyl nuclear disaster of 26th April 1986, the Soviet Union has not yet adequately explained to its citizens or those of the Soviet-occupied Baltic States, Ukraine and other areas affected by the radiation fall-out the potential short-term and long-term health hazards and the available modes of prevention or reduction of radiation poisoning. Neither have the appropriate medicines for substitution therapies to minimise bodily accumulation of radioactive elements been adequately provided. 2. That the Soviet Union operates many nuclear power stations without the elementary structural safeguards against radioactive spillage regarded as mandatory in the West. Of particular concern is the safety of the largest Soviet nuclear power station at Ignalina in Soviet occupied Lithuania, of similar design to Chernobyl, which already has a record of operational problems. Radioactive spillage at Ignalina would quickly contaminate the whole of Latvia, Lithuania as well as vast areas of Europe. We request that the Australian Government will: 1. Through the World Health Organisation, provide medical aid and broadcast medical information to the victims of radiation exposure following the Chernobyl disaster. 2. Through the United Nations organisation request the Soviet Union: (a) to close down all nuclear power stations similar to Chernobyl till protective structures are built. (b) permit international inspection of such safety structures. And your petitioners as in duty bound will ever pray. by Dr Charlesworth. 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 provision 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 Cobb. To the Honourable the Speaker and Members of the House of Representatives in Parliament House. The petition of certain citizens of Australia respectfully showeth: That the Bill of Rights is a dangerous piece of legislation which gives us no new legally enforceable rights; That the Bill of rights leaves out vital rights such as the right not to belong to a trade union, the right to own private property, the right to a private education; That the Bill of Rights gives dangerous new powers to a Federal Government Commission to investigate in private, without legal representation and with criminal penalties for refusing to co-operate; That the Bill of Rights deals with our rights; therefore we, the people, should say whether we want it by a referendum. Your petitioners humbly pray that you 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 Dr Harry Edwards. To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The humble petition of the undersigned citizens of Richmond electorate respectfully showeth that: The Hawke Labor Government's Bill of Rights seeks to make changes in the constitutitional 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 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 low 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 Petition of certain citizens of Australia respectfully showeth: That the Bill of Rights is a dangerous piece of legislation which gives us no new legally enforceable rights That the Bill of Rights leaves out vital rights such as the right not to belong to a trade union, the right to own private property, the right to a private education That the Bill of Rights gives dangerous new powers to a Federal Government Commission to investigate in private, without legal representation and with criminal penalties for refusing to co-operate That the Bill of Rights deals with our rights; therefore we, the people, should say whether we want it by a referendum. Your petitioners therefore pray that you will oppose the Bill of Rights, support Liberal amendments to improve it in case it is passed, and pledge to repeal it should it become law. by Mr Hawker. To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The humble petition of the undersigned citizens of Australia respectfully showeth: That in the light of the Labor Government's failure to act to correct the many anomalies in the Assets Test on pensions brought to its notice, the Labor Government's legislation should be repealed before it has an unduly unfair impact on pensioners. Your petitioners therefore humbly pray that the House of Representatives in Parliament assembled should immediately seek the repeal of the Labor Government's iniquitous and unfair Assets Test. And your petitioners, as in duty bound, will ever pray. by Mr Hawker. To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The humble petition of the undersigned citizens of Australia respectfully showeth: 1. That we the undersigned are totally opposed to the closure of the Wollongong Area Office of the Department of Immigration and Ethnic Affairs. 2. That the impact of the closure of the office in Wollongong will be particularly felt by the non-English speaking migrants and community at large from Shoalhaven to Helensburgh and as far as Wingecarribee and Wollondilly. Your petitioners therefore urge the House of Representatives and the Government of the Commonwealth to ensure that the area office of the Department of Immigration and Ethnic Affairs in Wollongong 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 humble petition of the undersigned citizens showeth that we request that the amendments which took effect as at the 1st April 1986 to the Child Care Act re cuts to funding for child care be reconsidered on the following grounds: 1. Subsequent reduction in quality care for children. 2. Subsequent reduction in qualified staff at centres. 3. Greater financial burden on many parents. 4. These cuts, whilst producing a relatively small gain to the Government, will result in a maximum loss to the children requiring Child Care facilities. We are totally opposed to these cuts. And your petitioners, as in duty bound, will ever pray. by Mr Howe. To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The petition of certain citizens of Australia respectfully shows that: The lack of a Medicare office in Lalor/Thomastown is seriously inconveniencing the residents of the Shire of Whittlesea. Your petitioners therefore request that a Medicare office be established in Lalor/Thomastown as soon as possible. And your petitioners, as in duty bound, will ever pray. by Mr Jenkins. To the Honourable the Speaker and the 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 back-ground 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 concerned Australian citizens respectfully points out: That deterioration of the total global environment is continuing at an increasing rate; that important environmental resources vital to human livelihood such as trees, soil and water are decreasing at an alarming rate; that there is a need for educating all people to assume a greater responsibility for the conservation, sustainable use and maintenance of vital resources; that dynamic and active initiatives are needed to conserve and renew the total environment; and that protecting, conserving and repairing the Earth can unite all people and nations in co-operative action for survival; Your petitioners therefore humbly pray that the Australian Government will propose to the United Nations General Assembly at its 41st Session in September 1986 that 1988 be proclaimed the ``First International Earth Repair Year'' And your petitioners as in duty bound will ever pray. by Mr MacKellar. To the Honourable the Speaker of the House of Representatives in Parliament assembled. The petition of the undersigned, respectfully showeth that we, the people of Victoria would like to remind you of your moral duty in regard to your decision to sell uranium to France, against ALP policy. The French are still nuclear testing in the South Pacific despite world wide protests. We therefore call on you to reverse the decision to sell uranium to France. by Mr Milton. To the Honourable the Speaker and members of the House of Representatives in Parliament assembled. The humble petition of certain electors of Australia respectfully sheweth: That the Bill of Rights Bill, the Human Rights and Equal Opportunity Commission Bill, the Human Rights and Equal Opportunity Commission Amendment Bill and the Human Rights and Equal Opportunity Commission (Transitional Provisions and Consequential Amendments) Bill, if passed by the Parliament, will undermine human and civil rights in Australia; will attack the institution of the family in our country, and will destroy States Rights and the federal nature of our Commonwealth. Your petitioners humbly pray that: The Parliament rejects these Bills; abolishes the Human Rights and Equal Opportunity Commission and moves to withdraw ratification of the International Covenant on Civil and Political Rights. And your petitioners, as in duty bound, will ever pray. by Mr Nehl. To the Honourable the Speaker and members of the House of Representatives in Parliament assembled. The petition of the undersigned citizens of Australia respectfully shows that: (a) The film ``Hail Mary'' (i.e. ``Je Vous salue Marie'') has been registered by the Film Censorship Board for public exhibition with a Restricted Classification; and is due to be screened in the forthcoming Sydney Film Festival; (b) The film is a blasphemous and pornographic attack on Jesus Christ, the Blessed Virgin Mary, Saint Joseph and the Archangel Gabriel, as such it is extremely offensive to the undersigned. (c) The film therefore breaches regulation 13 (1) of the Customs (Cinematograph Films) Regulations. Your petitioners therefore request that the House of Representatives call upon the Attorney-General, as the Minister responsible, to prevent the exhibition of the film in Australia. And your petitioners as in duty bound will ever pray. by Mr Nehl. The Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The petition of concerned people respectfully showeth their desire to have the wild horses of Queensland and the Northern Territory declared a protected species. Your petitioners therefore humbly pray that the Honourable House set aside a National Park for these horses and ensure that killing of feral animals be undertaken in a humane manner with proper legislation and enforcement. And your petitioners, as in duty bound, will ever pray. by Mr Price. To the Honourable the Speaker and Members of the House of Representatives in the Parliament assembled. The petition of concerned people respectfully showeth their desire to have the brumby declared a protected species. Your petitioners therefore humbly pray that your Honourable House follow the example of President Nixon in the U.S.A. by declaring our wild horse protected from industry and indiscriminate slaughter. And your petitioners, as in duty bound, will ever pray. by Mr Price. To the Honourable the Speaker and Members of the House of Representatives in the 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 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 petitioner therefore pray that the Government close down the Lucas Heights reactors immediately and permanently, and that no new Nuclear Reactors be build within Australia. And your petitioners, as in duty bound, will ever pray. by Mr Tickner. 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 Cadman. 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 Price. To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The humble petition of the undersigned citizens of Richmond electorate respectfully showeth that: There is an urgent need to up-grade and extend the facilities at the Northern Rivers College of Advanced Education. Your petitioners humbly pray that the House of Representatives, in Parliament assembled, urge the Government to: Provide the necessary capital funding for the Northern Rivers CAE to ensure North Coast students have access to a tertiary institution capable of providing them with the skills they will need to meet the challenges of the future. And your petitioners as in duty bound will ever pray. by Mr Blunt. To the Honourable the Speaker and Members of the House of Representatives 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 in Parliament assembled. The Petition of certain citizens of Victoria respectfully showeth: That all legitimate business expenses incurred in earning or producing assessable income should be allowable deductions. That the proposed Capital Gains Tax is an unwarranted burden on the rural sector, which will severely affect its long-term viability. That the delay by the Government in introducing the legislation into Parliament is causing confusion and hindering farmers in the organisation of their affairs. Your petitioners humbly pray that the Government introduces the Capital Gains Tax legislation without delay and that the Australian Democrats join with the Opposition to defeat the proposed legislation. by Mr Hawker. To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The humble petition of the undersigned citizens of Cowper Electorate, respectfully showeth that: The Hawke Labor government's productivity- superannuation accord with the ACTU and its support of the superannuation claims of the trade union movement will create an imbalance in industrial power and distort the future development of the Australian economy. Your petitioners humbly pray that the House of Representatives, in Parliament assembled, urge the Government to: Reject the superannuation claim of the trade union movement, and allow superannuation to develop without trade union domination. And your petitioners as in duty bound will every pray. by Mr Nehl. 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 oppose the construction of any additional nuclear reactor at the Australian Atomic energy establishment at Lucas Heights in N.S.W. Your Petitioners therefore pray that the Government of Australia will not construct an additional Nuclear Reactor at Lucas Heights. And your petitioners as in duty bound will every pray. by Mr Tickner. The Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The humble petition of certain citizens of Queensland, Australia, respectfully showeth that we are totally opposed to any change in the Australian National Flag as declared in the Flags Act (1953). Your petitioners humbly pray that Parliament in its wisdom will take no action to change the Australian National Flag. And your petitioners, as in duty bound, will ever pray. by Dr Watson. Petitions received. Mr CARLTON(Mackellar) —Mr Deputy Speaker, I wish to make a personal explanation. Mr DEPUTY SPEAKER(Mr Leo McLeay) —Does the honourable member claim to have been misrepresented? Mr CARLTON —I do. Mr DEPUTY SPEAKER —The honourable member may proceed. Mr CARLTON —I do not want to make a fuss about this matter, but in the response of the Treasurer (Mr Keating) to my earlier personal explanation he made some remarks which missed the point of what I was saying. All I wanted to correct was where he said in his answer to a question that I had said on Macquarie radio this morning that I would seek to amend section 26 (e) of the taxation Act as it originally was. I did not, to my knowledge, refer to that section or to an amendment of it. I do not query the quotations which the Treasurer gave from the interview. As far as I can recall, his quotations were correct. Mr KEATING(Blaxland-Treasurer) —Mr Deputy Speaker, I wish to clear the misrepresentation on my part. I quoted the shadow Treasurer, the honourable member for Mackellar (Mr Carlton). He said that he had said that under the original law there was a capacity administratively if people wanted to crack down properly in a controlled management situation. He said that that should be done. That cannot be done because section 26 (e) cannot now withhold. That is why I have not misquoted him. Mr YOUNG(Port Adelaide-Leader of the House)(3.06) —I move: That leave of absence for one month be given to the honourable member for Hawker on the ground of ill health. I am sure that everybody in this House would join with me in expressing to the honourable member for Hawker (Mr Jacobi) a speedy return to good health. I do not think anybody in this House is held in higher esteem than the honourable member for Hawker. He has served this Parliament and the people of the Hawker electorate in South Australia extremely well since 1969 when he was first elected. He is certainly a character we miss around the place. If he is listening, I can assure him that we are all looking forward to his return to the Parliament. Mr SINCLAIR(New England-Leader of the National Party of Australia)(3.07) —This is not an obituary. I hope that the text of what the Leader of the House (Mr Young) said did not suggest that it was. On behalf of members of the Opposition I wish the honourable member for Hawker (Mr Jacobi) well. He is a very highly regarded member of this House. All of us were very sad to hear of his present fairly grievous illness. We wish him a speedy recovery and a rapid return to this House. I know that he is as much a thorn in the side of the Government as, when we were in government, he was a thorn in our own side. Mr DEPUTY SPEAKER —I am sure that all members of the House support the comments of the two previous speakers, the Leader of the House (Mr Young) and the Leader of the National Party of Australia (Mr Sinclair). We all wish the honourable member for Hawker (Mr Jacobi) a speedy return. Question resolved in the affirmative. Mr HAWKE(Wills-Prime Minister) —by leave-Today I wish to announce a range of decisions taken by the Government to give effect to our commitment to improve the efficiency of the public sector. These decisions are an essential part of the restructuring of the Australian economy which has been made necessary by the decline of international commodity prices and their consequent effects on our economic circumstances. That restructuring must involve all sectors of the Australian economy including the public sector. No modern economy trading in world markets can survive without a strong, integrated Public Service, capable of assisting and facilitating industries to achieve national economic objectives. The Australian Public Service must be able to take its place in the rebuilding of our manufacturing and industrial sectors required by Australia's present economic and social circumstances and our national aspirations. A vital ingredient of this process is that Public Service management must also improve. I have spent a good deal of time in recent months, not infrequently in blunt terms, exhorting Australia's private sector managers to improve, to do better. Government expects the same of its own managers. The Public Service has, in many ways, reflected the easy-going, `she'll-be-right-mate' management and work style of the lucky Australia of the 1960s and 1970s. We can afford this no longer. Through its 1984 reforms, the Government has provided considerable flexibility, independence and professional opportunities to its senior management. It now expects to receive a return on that investment. It expects the powers given to departmental secretaries in respect of non-performing staff to be used. It expects its most senior management to take a tough, hard nosed look at performance at all levels of the Public Service. It looks to senior management to take tough decisions about public servants who are not performing. Yesterday the Government started a process between employers and unions in the private sector to examine management practices and work practices which are constraining Australia's competitiveness. That process, which is now under way in the private sector, must be matched in the public sector. It is a simple fact that, in common with many other industries, the Public Service has traditionally enjoyed work practices that the country can no longer afford. Whilst Government has taken some positive steps already, much more is required to be done. I would ask public servants particularly to understand this. The Government is keenly aware of the cynicism which exists within and without the Public Service about this sort of exercise. The Public Service has been subjected, particularly by our predecessors, to a series of exercises aimed at cheap political advantage by maligning public servants, which has generated a good deal of uncertainty and hardship, and some animus, but which has achieved nothing. I would ask that such cynicism be put aside. This is not a Public Service bashing exercise. It is not a negative exercise. It is about making a good Public Service even better. And that is about building a better Australia. Those who work for government must in turn make government work as efficiently as possible for Australia. Many employment groups around the country are making choices between traditional practices and future economic prosperity. Nearly all are choosing the latter and those who argue for the former do so at great personal cost. Those who work for government now face the same choice; I have faith they will have the wisdom to make the same positive decision. The Government has decided: Firstly, to establish an efficiency scrutiny unit, to be headed by a senior private sector representative, to undertake an extensive program of scrutiny of public sector operations. secondly, departments and agencies will, in future, be required to cut their administrative expenses each year for on-going activities and they will be required to declare the savings so that the government of the day can decide how they can best be utilised; thirdly, there will be major changes in the arrangements for the redeployment or retrenchment of inefficient and surplus staff. Special protection will be retained against political victimisation. But inefficient public servants will be treated the same way as are inefficient workers in the private sector. In short, public servants are no longer immune from dismissal; fourthly, the Government will proceed within a few months to simplify and integrate the complex job classification distinctions which currently exist in the Public Service office structure. New technology has made these distinctions obsolete. The review might well become the largest single restructuring of occupations ever undertaken in the Public Service; fifthly, there will be a number of management changes designed to make Public Service personnel management more efficient and effective; and, sixthly, flextime will be reviewed, with the objective of eliminating abuses but maintaining the advantages of the system for both departments and employees. These changes mean that Government will be making less demand on the public purse, which in turn means that the taxpayers will be saving more. At a time when the Government is being called upon to perform greater services for some sections of the community this means, simply, doing more with less. It means that those working in government now face the same challenge as their colleagues in the private sector-working harder, working smarter, and giving greater value for money. I now turn to explain the changes in detail. Efficiency Scrutiny Unit The Department of Finance and the Public Service Board already administer a number of programs designed to bring about improvements in the management of all departments and agencies. But the Government sees value in a further initiative to encourage improvements in the management and administrative procedures in much of the public sector. It will do this by establishing an efficiency scrutiny unit, similar to that which has existed in the United Kingdom since 1979 initially headed by Sir Derek Rayner. The key elements of its operations will be as follows: A small unit of up to seven people will be established under a senior private sector representative to oversee an extensive program to scrutinise selected areas of public sector administration. There may be additional private sector members of the unit, and the remainder will be drawn from within existing Public Service resources. The unit will operate for a finite period of three years; the head of the unit will report directly to me and, through me, to the Expenditure Review Committee of Cabinet. The unit will have responsibility, in consultation with the relevant departments and agencies, for advising us on the terms of reference and methodology for the scrutinies, for monitoring their conduct, and for advising on subsequent recommendations and their implementation; the scrutinies will be carried out by staff of the relevant departments and agencies, and their Ministers will be involved at all stages of the process. The scrutinies will be co-operative ventures. The detailed procedures, and an initial program, will be settled in consultations between Ministers, senior department officials and the unit. I expect the unit to be fully operational by early 1987; each scrutiny will take place over a maximum of around three months and action to implement their findings will be expected to be completed within 12 months or in many cases less; and in order to provide an incentive for departments and agencies to co-operate fully in the scrutinies, they will be entitled to retain 25 per cent of the savings achieved for staff development, acquisition of improved technology and other means of further enhancing efficiency and improving productivity. I am pleased to announce that the efficiency scrutiny unit will be headed by Mr David Block, AO, who has had a wealth of experience in the financial sector. Mr Block is currently a strategic adviser to Coopers and Lybrand, a member of the Board of CSR Ltd and chairman or director of a number of other public companies. He is the Chairman of the Sydney Opera House Trust and a fellow of the University of Sydney, and was formerly a member of the Mathews Committee of Inquiry into Inflation and Taxation. We would expect the greater efficiency achieved by this innovation to be reflected in savings to the taxpayer. Indeed, in the case of the United Kingdom scrutiny program, it is now estimated that over a seven-year period aggregate savings of approximately #900m have been achieved, with annual running costs in the Civil Service now some #300m, or 2.3 per cent, less than they otherwise would have been. Above all, the decision to establish the efficiency scrutiny unit is a recognition that the present economic climate requires the public sector to review systematically and in a quite fundamental way its management and administrative procedures, having regard to best private sector practice. Other Measures To Enhance Financial Efficiency In addition to the establishment of the Efficiency Scrutiny Unit, the Government is also to adopt a range of other measures to enhance efficiency, building upon previous initiatives in the financial management improvement program, program budgeting and the performance management review programs. First, to encourage more economical and efficient use of funds provided to them, departments and agencies will be permitted, in effect, to carry over unused administrative funds from one year to the next, subject to a limit on the amount of carryover. This will remove the incentive to try to spend all remaining funds at the end of each financial year, and should result in a more rational and efficient allocation of resources. Departments and agencies also will be given greater freedom to move funds between their salaries and administrative expenses votes, where this would lead to greater efficiency. Secondly, a series of studies is under way to determine the scope for extending user-charging between departments, as an incentive to greater economy in the use of goods and services. Thirdly, the Government will in future require efficiency improvements to be reflected substantially in reduced demands on taxpayers' resources. In the past, resources freed by improvements in efficiency have usually been retained by departments and agencies to improve the quality of services, to provide new services, or to improve working conditions. The government of the day has not always been in a position to consider the most appropriate use of the funds. In future, the Government will specify how these freed resources are to be used. As part of this process, departments and agencies will be required to achieve real reductions in the running costs of on-going activities-something like the payment of an efficiency dividend of which the Australian taxpayer will be the ultimate recipient. They will be required to reduce the real level of resources directed to administer existing activities by an average one per cent each year over the next three years, starting in 1987-88. The Government expects the scrutiny process will be a considerable aid to departmental managers in achieving the dividend required, and in identifying opportunities for greater efficiency in terms of their own priorities. The `efficiency dividend' requirement reflects the Government's view that the benefits of previous measures to improve efficiency and productivity can and should lead to lower costs. Particularly in the improved managerial environment being developed, all government agencies should be able to make continuing efficiency gains by improving their administrative procedures, making better use of improvements in technology and in the use of human resources. Account will continue to be taken of changing resource requirements resulting from changed workloads and functions. As well, major investments in new technology will be required to achieve improvements in efficiency over and above the `efficiency dividend'. The Size of the Public Service As an initial step in reaping the benefits of past efficiency improvements, the Government has also acted in this year's Budget to realise a general saving of 0.5 per cent in average staffing levels of departments and agencies. As already announced in the Budget, as a result of these processes and some specific staffing decisions, average staffing levels for 1986-87 will rise by only 0.3 per cent above the average level for 1985-86, excluding the effects of the census and the additional component for youth trainees. This outcome will continue the moderation of the growth in staff numbers which has been reduced steadily from about 4.5 per cent in 1985-86. During the course of 1986-87 there will be a resultant decline of some 2,000 in the number of public servants. As departments and agencies submit staffing plans which indicate how this reduction is to be achieved, the staffing freeze announced on 30 June is being progressively lifted. Agencies, other than those few approved for growth, have been informed that their plans should generally assume a further one per cent reduction in staffing in 1987-88. It is not correct, as some critics have suggested, that Australia has a special problem in relation to the numbers of its public servants. The latest ABS statistics indicate that employment in general government in general activities as a proportion of total employment in Australia is about the Organisation for Economic Co-operation and Development average. The Australian Public Service constitutes only about 15 per cent of general Commonwealth, State and local government employment. Nevertheless, it is essential that its numbers be held to the minimum required to carry out Government programs efficiently and equitably. The measures which I have outlined represent a series of initiatives for ongoing improvements in efficiency. They are intended to slow down and then reverse the previously inexorable growth in the resources used in public administration. Changes in Dealing with Inefficient and Surplus Staff The Government has decided to make important changes to personnel management practices to ensure that public sector managers are not unnecessary constrained, while ensuring proper protection for staff against unfair treatment. Public servants have the right to be protected against arbitrary or unfair dismissal. But they do not have the right to continued employment where there is no real work for them to do, or where they are not performing satisfactorily. The existing arrangements for redeploying and retiring staff for whom there is insufficient work, or who are working well below standard, are complex, slow and ineffective. This state of affairs is unnaceptable to the Government. The measures being announced today will rationalise significantly these arrangements. (i) Legislative Changes The Commonwealth Employees (Redeployment and Retirement) Act has not provided a satisfactory basis for the redeployment and retirement of staff. It is unnecessarily complex; it does not provide for voluntary retrenchment; it provides too many stages of appeal; its potential for providing a Commonwealth employment-wide redeployment system has not been realised; it requires redeployment to be considered in cases where this is manifestly inappropriate, as in some inefficiency cases. There is no good reason for matters of redundancy, inefficiency and invalidity to be dealt with in legislation separate from that covering other aspects of personnel management. We will, therefore, repeal the Commonwealth Employees (Redeployment and Retirement) Act. Streamlined provisions for redeployment and retirement will be included in the Public Service Act, and we will pursue discussions with the Public Service unions on complementary changes in industrial awards. The Public Service Act will be amended to give the Public Service Board a general power to transfer staff within the Public Service in the interests of the efficient management of the Service. The Board will also have power to transfer staff automatically to another Commonwealth body where there is an agreed transfer of functions from the Public Service to that body. (ii) Inefficient Staff The present processes for dealing with inefficient staff are cumbersome and lengthy, and they discourage Public Service managers from acting other than in the most blatant cases. These processes are to be revised so that, while the employee is protected from both arbitrary and politically motivated dismissal, it will be possible for management to move quickly to remove an inefficient employee. The Secretary of a department will be able to retire staff from the Service when, after they have been warned and given an opportunity to improve their performance, the Secretary is satisfied that they have remained inefficient. This will be done after the possibilities of transfer to another job, or of reduction in status, have been considered. The various appeal processes that are now available have been consolidated into a single appeal right, which will protect staff against victimisation. It is essential in the public sector to protect staff against loss of jobs on political grounds if a non-partisan Public Service is to be maintained, and thus it is essential to maintain a formal appeal mechanism. Apart from this, processes to deal with inefficiency will be comparable to the normal personnel practices pursued by better-managed large employers in the private sector. Managers will also have greater powers to defer the payments of annual increments to staff not performing satisfactorily, and discipline practices will also be streamlined. Details will be provided when the legislation is introduced. (iii) Surplus Staff When Public Service units or functions are abolished or reduced in size, this may result in a situation where there are surplus staff for whom no new placements are readily available. The present arrangements for redeploying or retiring such staff are extremely lengthy. They contain a number of appeal points, and they may result in long periods when staff are underemployed. Existing awards provide for a union veto on fast track voluntary retirements. While many of these arrangements were introduced to protect staff from arbitrary dismissal, the Government believes that adequate protection can still be provided, while greatly streamlining and simplifying these processes, and reducing the cost to the taxpayer. Where a staff surplus is likely to arise, discussions will be held between the relevant department secretary and union representatives. After considering possible redeployment to other positions at the same level, staff with poor redeployment prospects will be offered, with Public Service Board approval, a lump sum termination benefit-similar to that recently paid to Department of Defence personnel in defence factories-if they agree to voluntary retrenchment. Thus it is expected that redundancy situations can be resolved within about two months, as compared with a year or more under the present procedures. Efforts will continue to be made to place any surplus staff who do not opt for voluntary retrenchment, but their period of entitlement to income maintenance-either six or twelve months-will begin from the date of the voluntary offer. Staff leaving the Public Service during this period will no longer be entitled, as at present, to such income maintenance. Where efforts to redeploy surplus staff at the same level are unsuccessful, they will be redeployed to a lower level or retrenched. Unlike the present system of multiple appeals, this will be the only point at which an appeal can be lodged on the grounds that the decision was unreasonable. (iv) Invalidity The Government is concerned about the incidence of invalidity retirement under the Commonwealth superannuation scheme. The processes applying to invalidity retirement need to ensure that hardships are not created for incapacitated staff, who have urgent need for income support. But they should at the same time encourage the development of good occupational health practices, which could avert some of the invalidity retirements that now occur, and discourage both management and staff from accepting too readily an invalidity retirement rather than continued employment. On 17 April this year the Minister for Finance (Senator Walsh) foreshadowed the adoption of a number of measures designed to contain the rate of invalidity retirements and related costs to the Commonwealth. The Government has decided to introduce a number of these measures. Secretaries of departments, with the Public Service Board, will retain powers to retire staff on invalidity grounds and Secretaries will also have the power to transfer them to other duties, including at a lower classification. The Board may also use its powers to transfer such staff to another department. Furthermore, in future, invalidity pensioners under the Commonwealth superannuation scheme are to be required to report any employment, and pensions will be adjusted where annual earnings exceed limits to be prescribed. The extensive processes related to invalidity retirement will also be simplified. Provisions for invalidity retirement for statutory authorities will be considered for amendment to make them consistent with Public Service Act provisions. In the meantime, Ministers will require authorities within their portfolio responsibilities to take rigorous steps to contain invalidity retirements. Other Changes in Personnel Management (1) Promotions Promotions in the Public Service are based on merit, and there is no longer any reference to seniority in the Public Service Act. The promotions system is designed to select the best person for a vacancy, and to ensure that decisions made are patently fair. It is important that merit and fairness remain paramount considerations but, within these parameters, the Government has decided that the promotion and associated appeal systems are unnecessarily lengthy, costly and restrictive. The Government has decided that measures must be taken to reduce the costs and time involved in awarding promotions. In the 1984 reforms selection criteria were altered, and promotion appeals were abolished for the Senior Executive Service on the grounds that these were managerial positions where a right of appeal was considered inappropriate. Appeals will now be abolished against promotions to positions above Clerical Administrative Class 8, and equivalent grades in other occupations. The Government considers that these positions are also largely managerial and thus appeal rights are also inappropriate. This fits in with current practices such as the overtime barrier which distinguish these positions from lower level positions. Instead there will be access to a grievance review under the Merit Protection and Review Agency, which will have the power to recommend the annulment of the promotion by the Secretary if it finds that proper procedures have not been followed, or the decision has been discriminatory or one of patronage. The relevant provisions defining these circumstances will be strengthened. For grades below this level appeals processes will be significantly streamlined. Promotion appeal committees will be able to disregard frivolous or vexatious appeals, to undertake a level of inquiry appropriate to each case and to require parties to submit documentation by a specified time. The appeal period will be reduced, and the right of appeal will be limited to those who had originally applied for the job. Currently the appeal system acts more as a dual selection system, with appeals available to all lower ranked officers whether or not they applied for the position involved. Greater use, at first for a trial period of 12 months, will be made of joint selection committees chaired by nominees of the Merit Protection and Review Agency for bulk promotions. There will be no appeals against promotions where decisions are unanimous and where the Secretary accepts the advice of these committees. The definition of efficiency in the Public Service Act will be broadened to allow managers to take into account the potential of staff for future development, and their capability to perform a variety of jobs at the same level when deciding on promotions. This will enable more realistic promotion decisions, and greater management flexibility in the deployment of staff. Other elements of the selection process will also be streamlined, and selection decisions will be excluded from the requirement to formally state reasons under section 13 of the Administrative Decisions (Judicial Review) Act. At the request of the Government, the Chairman of the Public Service Board has written to all Secretaries of department and heads of statutory authorities indicating the Government's grave concern at the inefficiencies resulting from delays currently occurring in the appointment process, and that departments and agencies are expected to improve significantly their performance in this area, to reduce within six months the average time for appointments by half. (ii) Higher Duties The Government recognises that departments and agencies need to fill positions on a temporary basis. But it believes that many of the current provisions for selecting and paying staff to perform higher duties are unwarranted, unnecessarily complex, and costly. Section procedures for temporary higher duties will be simplified by allowing departments to select the most suitable officer available, having regard to operational requirements. Appeals against such selections will be abolished, unless the period of acting extends beyond three months. Departments and agencies will be required to keep long-term acting arrangements to a minimum, and this will be closely monitored. Existing remuneration provisions for temporary performance have encouraged staff to expect additional payment for performance of any higher functions beyond their normal duties. Higher duties allowance is too often paid automatically where the payment is not justified. The Government will, therefore, examine options for limiting the incidence and extent of payment of higher duties allowance, including possible financial disciplines which would encourage departments to limit the extent of payments of higher duties allowances. (iii) Delegation of Central Personnel Functions The Public Service Board has delegated progressively many of its powers and functions to departments. However, in response to the Government's commitment to achieve a more streamlined Public Service, the Board will now initiate further delegation of its activities, particularly in areas of personnel management and employment conditions. Clear guidance will be given to departments and agencies to encourage efficiency and desirable personnel and management practices. The Government believes it should continue to set examples in areas of equality of opportunity in employment and participation in decision-making practices. Experience shows that effective equal employment opportunity legislation, particularly at an early stage, needs effective monitoring, but this can be done without generating excessive paperwork. Changes will be made to reporting requirements for both industrial democracy and equal employment opportunity programs. The obligations on those departments performing well are reduced, while monitoring will concentrate on departments which are not adequately fulfilling their statutory obligations. The Board will retain responsibility for ensuring that all departments fulfil these obligations. (iv) Jurisdiction of the Conciliation and Arbitration Commission The Government does not propose to limit the jurisdiction of the Conciliation and Arbitration Commission in relation to public sector employees. It believes, however, that areas of personnel management decision making which are already governed by a code of personnel practice legislated by Parliament, and overall resource allocation for Government employment subject to Budget decisions, should not be the subject of detailed consideration in awards of the Commission. It will, should the need arise, argue this view vigorously before the Commission. (v) Flextime The Public Service Board will conduct a review of flextime. The review, which the Government hopes to conduct with the full participation of the ACTU, will be charged with eliminating abuses, while maintaining as far as possible the advantages of the system to both departments and staff. Implementation Many of the measures I have referred to will require legislation, and others will require detailed guidelines and procedures. In those cases requiring only administrative action, I have asked the Public Service Board to proceed as a matter of urgency. Application to Statutory Bodies These changes to staffing processes apply only to staff employed under the Public Service Act. Those statutory bodies not staffed under the Public Service Act will be given separate consideration, reflecting the diverse circumstances in which they operate. I have now written to all Ministers asking them to undertake consultations with relevant statutory authorities. We will be looking to making early progress towards achieving reforms to staffing processes similar to those covered in this statement. These reviews will also encompass work practices which stand in the way of greater efficiency. Review of Changes The Government will review the various changes within personnel management practices in 12 months, and make any further adjustments that are necessary in the light of experience with the new provisions. The Government has consulted as fully as possible with the public sector unions in the development of the initiatives announced today, and will continue to do so in the implementation phase, on the basis that the participation of the unions continues to be constructive. The Government is aware that not all of what it has decided has met with union agreement of consent. It expects the unions and their members to join with the Government in its determination to make the reforms effective and enduring in their impact, for the greater good of this country. Conclusion The changes that I have announced today will lead to a leaner, more efficient public sector. The changes in the administration of the tenure provisions, and other changes in personnel practices, constitute a major and radical overhaul of the personnel management system of the Public Service of the sort that previous governments have not been prepared to undertake. Some of the benefits to the taxpayer will be immediate, in terms of the reduction in the size of the Public Service and savings in administrative costs. Others will be achieved in the medium-term, as the `efficiency dividend' requirement and the work of the Efficiency Scrutiny Unit take effect, as well as the service-wide reforms to which I have just referred. I am confident that public sector employees will accept that, at a time when all sections of the Australian community are being asked to make adjustment to a harsher economic environment, the way in which they function should have maximum regard for efficiency and cost effectiveness. For its part, the Government is firmly committed to such an outcome. Mr HOWARD(Bennelong-Leader of the Opposition) —by leave-The Opposition welcomes the Government's statement on the Public Service. Although for reasons that I shall explain in a moment we believe that the statement falls well short of the brave new world of Public Service reform and efficiency promised in the address to the nation by the Prime Minister (Mr Hawke) in July, there are a number of features in the Prime Minister's statement that will draw support from the Opposition. Having said that, I should make it clear at the outset that the Prime Minister's statement does not attack any of the fundamental problems that we see in the balance between the public and private sectors. The Prime Minister's statement does not announce the abolition of one single function of the Commonwealth Public Service, yet in his address to the nation the Prime Minister said that he would announce a blueprint for a leaner and more efficient Public Service. The House should be reminded also that in the three years that the Hawke Government has been in office, 15,000 people have been added to the Commonwealth Public Service payroll, and today's statement promises to reduce the number of public servants by a paltry 2,000. Mr Wright —You have not got many people listening to you, John. Mr HOWARD —If the honourable member for Capricornia (Mr Wright) wants to interject in support of a large public sector, I will be only too glad to stimulate him. Mr Wright —You have no Liberals behind you. Mr DEPUTY SPEAKER(Mr Leo McLeay) —Order! The honourable member for Capricornia will cease interjecting. Mr HOWARD —I do not need any protection from any member from Queensland. (Quorum formed) As I was saying, in the 3 1/2 years that the Hawke Government has been in office, the size of the Public Service has increased by no less than 15,000 employees. When the Government proclaims that it will reduce the Public Service over the next little while by 2,000 people, it should be remembered that that will still leave a net increase in the total number of public servants of 13,000. When we go through the Prime Minister's statement, we can be well assured that Sir Humphrey's ratings are not only very good on Australian Broadcasting Corporation television but very good within the Commonwealth Public Service and within the Government led by the present Prime Minister. Perhaps the most amazing and ironic feature about the statement was the Prime Minister's reference early on about the `she'll be all right' mentality in the Commonwealth Public Service in the 1960s and 1970s. The Prime Minister went on to lecture the Public Service, and through the Public Service the entire Australian community, about the need to change our attitude to work and to drop the `she'll be all right' attitude towards work, and the need to get rid of entrenched work practices in the Public Service and in the private sector. The Australian public will not forget that the man who now lectures them about their errant attitude towards work is the man who did more than any other living Australian to entrench those attitudes in the Australian community. I know that honourable members opposite do not like to be reminded of the contribution that the Prime Minister made when he was the leader of the Australian Council of Trade Unions to those sorts of attitudes. We should remind ourselves that this is the week when the Prime Minister has not only lectured the Public Service about the `she'll be all right' attitude but has lectured the entire Australian community about the work practices that he did so much to entrench. I note in passing that quite a number of the initiatives that are contained in the statement are either direct steals from Opposition policies on the Public Service or the results of initiatives and pressures instigated by the Opposition. I instance the proposals made by the Prime Minister on invalidity provisions. I turn to some of the more detailed sections contained in the Prime Minister's statement. It is good, might I say, to see the Prime Minister lifting none other than a British Conservative Government initiative to establish his Efficiency Scrutiny Unit, which is modelled on the Rayner Efficiency Unit established in 1979. Lord Rayner, then the Managing Director of Marks and Spencer, was to advise the British Prime Minister and other Ministers on efficiency and effectiveness in the civil service. Whilst we support the establishment of this unit we ought to point out that it is a direct analogy to the Opposition's proposal to establish a private sector body modelled on the Grace Commission. We are concerned that the proposed terms of reference do not require that the unit report directly to individual Ministers on matters under their responsibility. This is directly contrary to well established principles of good management and could undermine much of the work which it is hoped the unit will carry out. The Prime Minister should have learnt from his experience with the Australian Bicentennial Authority last year that if he wishes to take direct responsibility for the day to day management of policy within departments, as the Opposition we will be happy to see that he carries the full blame when errors are made. I also say on behalf of the Opposition that we particularly welcome the appointment of Mr David Block, who is currently a director of CSR Ltd, as Chairman of this particular unit. Mr Block has had a very distinguished career in the business community and the Opposition very warmly welcomes his appointment. I am sure that he will do the job in his customary intelligent, zealous and very energetic fashion. The Prime Minister's statement does not contain one word about the need to reduce the excessive level of regulation administered by the Public Service. His own regulatory review unit has already substantiated in two reports that the total cost to the economy of business regulation could be between 9 and 19 per cent of gross domestic product. In addition, unnecessary regulation is obviously a major impediment to efficiency within the Public Service. In view of this overwhelming evidence of the need for change it is amazing that the Prime Minister has not taken this opportunity of initiating significant policy changes in this area. But the greatest shortcoming in this statement is the total absence of any awareness by the Prime Minister of the need for the Government to control its own employees. One of the first actions of the Hawke Government in 1983 was to remove from the Public Service Act the `no work as directed, no pay' provisions, which have enabled Public Service unions to initiate industrial action totally free of any government reaction or intervention. In our view it is essential that this provision be reinstated in the Public Service Act to ensure that essential government services to the public can be guaranteed. The Government's failure to take this action demonstrates yet again that in this particular area it is still the creature of the Public Service unions of this country. This statement must be seen against the Prime Minister's extravagant commitment to streamline and rationalise the Public Service, which he made in his address to the nation on 11 June. As usual reality has not lived up to his rhetoric. He has roared a lot but he has brought forth a Public Service mouse. Despite his commitment to produce a leaner Public Service it has continued to grow even in the 1986 Budget by a further 0.3 per cent or 607.5 staff years at an increased salary cost of almost $300m. In the last four Budgets the Hawke Government has increased the size of the Public Service by 3.5 per cent, or nearly 15,000 people. Yet he has the gall to talk about the inexorable expansion of the Public Service when it has all been as a result of his Government's own policies. In contrast, be it remembered, the Fraser Government, over the period of eight years, reduced the size of the Public Service by 0.12 per cent per annum. The second great omission from the statement was any evidence of the Government's intention to streamline and rationalise existing functions and agencies. Despite the Prime Minister's promise, his statement totally ignores the fact that significant reductions in both the size and cost of the Public Service can be achieved only by a major reduction in the functions of government. Some of the proposals announced by the Prime Minister, as I mentioned earlier, are based upon coalition initiatives. For example, we have consistently been saying that the Public Service cannot enjoy work practices and conditions that are beyond the capacity of the community to pay. Consequently many things beyond what the Government has announced are clearly necessary. The Government has failed to set a lead to the private sector by heeding the call of the Opposition and the Minister for Industry, Technology and Commerce, Senator Button, to remove the 17 1/2 per cent leave loading which cannot be justified under current economic circumstances. There is also a conspicuous absence of any proposal to negotiate with the States on the transfer of functions which can be better managed at that level of government. Nor has the Government apparently considered the need radically to restructure departments to minimise duplication between programs. The Government's proposals to reform the existing arrangements for the redeployment and retirement of excess staff have our support. However, the earlier reforms introduced in 1983 significantly contributed to the delays and ineffectiveness of the existing system. The Labor Government's insistence in involving trade unions through industrial democracy and by its focusing on employee rights while virtually ignoring their responsibilities created an atmosphere where effective management was virtually impossible. The Government has already amended on a previous occasion the Commonwealth Employees (Redeployment and Retirement) Act. We warned the Government then of the need to take a stronger position in these matters and our advice has now been shown to have been fully justified. We are pleased that the Government has at last bowed to our repeated demands that the system of flexitime be reviewed, but we are suspicious that all the Government proposes is a review and that at the end of the day most of the abuses and excesses of that system will remain in place. The Government has failed to initiate the necessary reforms in the area of Commonwealth compensation. It is obvious that the current compensation arrangements are being misused. In 1984 Commonwealth employees received $121m in compensation which was paid to 45,000 employees, which represents no less than one in 12 of the entire Commonwealth work force. This is considerably higher than compensation claims in the private sector. I turn to statutory authorities. In the four years that the Government has been in power it has still not met the objectives it set for itself in the Public Service policy paper `Labor and the Quality of Government', especially in the area of statutory authorities. Quite apart from not meeting the reporting standards laid out in that policy, the Government has failed completely in curtailing the growth of the large number of statutory authorities. In the time this Government has been in power it has created no less than another 45 additional statutory authorities excluding such obviously unnecessary bodies as the Commission for the Future. In conclusion, I say on behalf of the Opposition that this statement by the Prime Minister in no way represents a serious assault on the size of the Public Service. It in no way fulfils the expectations that he raised when he addressed the nation on 11 June. It in no way will contribute to the reduction of the level of the taxation burden in the Australian community. Whilst there are a number of individual measures in the statement that the Opposition agrees with, in no way can the Prime Minister be said to have delivered on the rhetoric of his statement of 11 June. It very clearly represents a triumph for the forces of Sir Humphrey within the Government of this country to the detriment of the parliamentary authority of this country and to the detriment of the drive towards a smaller, leaner Public Service, which was the stated goal of the Prime Minister on 11 June. Bill returned from the Senate without amendment. Mr DEPUTY SPEAKER(Mr Leo McLeay) —Madam Speaker has received advice from the Deputy Leader of the Opposition that he has nominated Mr Smith to be a member of the Committee of Privileges in its consideration of the matter referred to it on 23 September 1986. Mr PRICE(Chifley) —On behalf of the Joint Committee of Public Accounts I present the 254th report of the Committee relating to the proposed computer acquisition by the Department of Defence and I ask leave of the House to make a short statement in connection with the report. Leave granted. Mr PRICE —This report presents the findings of the Committee's examination of several proposed computing acquisitions, including those for Project DESINE, by the Department of Defence. This set of proposals from the Department of Defence is the third, and by far the largest, acquisition proposal received by the Committee to date under its standing reference to examine and report on proposed acquisitions of automatic data processing facilities by Commonwealth departments and authorities staffed under the Public Service Act 1922. The Defence submission to the Committee resulted from a Cabinet decision in December 1985 which gave in principle approval to the proposals. However Cabinet did not give approval for any procurement action or expenditure of funds, pending a favourable report from the Committee. The Defence proposals are both large and complex. The largest of these proposals, Project DESINE, will involve the expenditure of more than $300m including the costs of 3,300 man-years of development effort over the next 10 years. The Department of Defence proposes to do three things under Project DESINE: To decentralise its administrative computing systems and to establish a standard computing environment for those systems; to implement two major redevelopment projects, called the Supply and the Manpower Systems Redevelopment Projects, under the DESINE Strategy; and to establish a five-year period contract with a prime contractor to establish a standard computing environment and to supply equipment and software for these major redevelopment projects. The Committee's examination of the Project DESINE proposals has focused on five major issues: Project cost-benefit justification; technical risks; Australian industry participation; proposed method of acquisition; and staff resources required. The Committee's examination of these issues has led it to recommend that a phased implementation and procurement strategy be adopted for Project DESINE. The Committee concludes that, given the size, complexity and duration of the DESINE redevelopment projects, the only satisfactory approach is to plan, cost-benefit justify, obtain funding approval and implement each sub- project of the DESINE projects in turn. The initiation of each sub-project should be considered in the light of a review of the preceding sub-projects. This should allow the effective monitoring of both the expenditure on, and the benefits resulting from, these projects. The Committee therefore recommends that: The Department of Defence not procure implementation quantities of equipment for each major sub-project of the Supply and Manpower Systems Redevelopment Projects or any other projects to be implemented under Project DESINE until; the planning, systems definitions and cost-benefit studies necessary to define and justify these sub-projects, have been completed; the Secretary of the Department of Defence has endorsed each of these sub-projects in turn and the funds necessary to implement them; and a submission dealing with these sub-projects has been made to the Committee under its standing reference to examine and report on ADP acquisition proposals over $5m. The first of these sub-projects is likely to be the depot-base sub-project of the supply systems redevelopment project which will involve approximately $30m capital expenditure. The Committee also recommends that the Department of Defence provides an annual progress report to the Department of Finance and this Committee which summarises progress to date on Project DESINE and its component projects against agreed plans. This report will detail the benefits achieved in comparison with those initially asserted at the time of project approval; the costs incurred to date in comparison with those initially asserted; the degree of Australian industry participation achieved; and the proposed expenditure for DESINE projects for the following financial year. The Department of Defence also intends to let a single, five-year period contract as part of Project DESINE, for the supply of two things: A network architecture which will provide the basis for its computing standards; and subsequently, implementation quantities of equipment and software conforming with those standards. The Committee is recommending a two-stage tendering process be employed to ensure the supply of a satisfactory network architecture and the establishment of satisfactory standards, before large quantities of equipment are purchased. This will minimise the risk of major cost overruns should difficulties be experienced in proving the network architecture and establishing satisfactory computing standards. A two-stage tendering arrangement will also increase competition in the tendering for these separate supply requirements and will increase the opportunities for Australian firms to participate. Although a two-stage tendering process may involve some additional administrative costs, it need not cause any delay to the main implementation phase of the supply and manpower systems redevelopment projects. The Committee believes that any additional costs and small delays in the early stages of Project DESINE will be more than justified by the reduced risk, greater competition and greater opportunities for Australian industry participation which will result. The Committee believes that Project DESINE offers a major opportunity for government purchasing to contribute to the development of a technologically advanced, innovative and competitive computing industry in Australia. It has therefore recommended that special measures be taken, above and beyond the application of Australian purchasing preference and offsets policies, to ensure that this opportunity is not missed and that a satisfactory level of Australian industry participation is achieved in the DESINE contracts. The Committee therefore recommends that: Part tendering arrangements be adopted in the major implementation phase of Project DESINE to increase the prospects for Australian industry participation in the supply of specific categories of equipment and software; in addition to the enforcement of the Australian purchasing preference and offsets policies, the level of Australian industry participation be a specific criterion in the evaluation of tenders for the DESINE contracts; the Department of Industry, Technology and Commerce and the Department of Local Government and Administrative Services participate in the weighing of this evaluation criterion and review the level of Australian industry participation in the recommended tenders before contracts are let; and if a satisfactory level of Australian industry participation cannot be agreed at departmental level, the matter be referred to the responsible Ministers for decisions. The Committee has also reviewed the two other, and quite separate, proposals contained in the Department of Defence's submission to purchase computing equipment for the Office of Defence Production and to establish a period contract for the purchase of small, stand-alone computing systems. The Committee has given qualified support to the proposed procurements for the Office of Defence Production. It is recommending that the tendering for new equipment for the Office of Defence Production be expedited as quickly as possible. However the Committee is not convinced of the justification for the proposed purchase of a $1.85m secondhand computer to provide interim computing capacity until such time as new equipment is purchased. The requirement for this interim capcacity has arisen because of a 2 1/2 year delay in the provision of suitable accommodation for a warehoused computer already owned by the Office and capable of meeting all its interim requirements. The Committee will be investigating further the reasons for this extended delay, in its current inquiry into the administration of Commonwealth property functions. The Committee believes that the small, stand-alone systems proposal was included in the Defence submission as something of a sop, to compensate for the very limited opportunities offered to Australian firms in the DESINE and Office of Defence Production contracts initially proposed by Defence. However the level of use proposed for this stand-alone, systems contract has not been specified by Defence, and hence the level of benefits to a successful Australian tenderer is also unspecified and uncertain. The Committee is convinced that the alternative arrangements which it has proposed for the DESINE procurements will provide far better prospects for Australian industry participation in the supply of equipment and software to the Department of Defence. The Committee also notes that there are adequate, alternative means available to the Department to procure small, stand-alone computing systems and that the establishment of a new period contract for the supply of such equipment to the Department of Defence is not justified. The Committee issued guidelines for submissions under its standing reference, and invited comments from departments on these in May 1985. It has to date received no comments and can only assume that departments and the Public Service Board consider these guidelines to be satisfactory. The Committee has identified some areas of deficiency and of potential improvement in the guidelines. It now intends, with the benefit of its experience of the three inquiries it has now completed under the reference, to issue revised guidelines which will, it hopes, assist departments to prepare better submissions and therefore expedite the process of the Committee's inquiry and report. The Committee continues to welcome any comments that interested departments and agencies may wish to make on the guidelines. I commend the report to the House. Mr MILLAR(Wide Bay) —On behalf of the Parliamentary Standing Committee on Public Works, I present the ninth report for 1986 of the Committee, relating to Warehouse development (Stage 1) for 21st Supply Battalion, Moorebank, New South Wales. I seek leave of the House to make a short statement in connection with the report. Leave granted. Mr MILLAR —The main warehousing complex of 21st Supply Battalion is located at Moorebank, near Liverpool, New South Wales. The proposal examined by the Public Works Committee is for the construction of a new warehouse building designed to house a number of activities which are at present dispersed throughout the complex in sub-standard buildings constructed during the Second World War. The estimated cost of the new facility is $17.9m and it will have a gross floor area of 22,000 square metres. The Committee found that there is a need to improve existing warehouses and to integrate stores processing, materials handling and stores functions. The Committee satisfied itself that the proposed building, which provides integrated high-use storage space and areas for stores processing, will result in improvements to productivity, response times and inventory control. The Committee is sensitive to security requirements for establishments of this nature and recommends close attention to that aspect. I thank the House. Mr DEPUTY SPEAKER(Mr Drummond) —Order! Madam Speaker has received a letter from the Deputy Leader of the National Party of Australia (Mr Hunt) proposing that a definite matter of public importance be submitted to the House for discussion, namely: The failure of the Government to ease domestic cost pressures on farmers. 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 HUNT(Gwydir)(4.11) —As farmers and their families well know, the cost-price squeeze has accelerated since the Budget was brought down. In spite of the three weeks of hard sell by the Prime Minister (Mr Hawke), there are very few people in the community, let alone the country areas, who believe that they are better off. Since the Budget interest rates have soared, fuel costs have escalated, and there has been no attempt to reduce the costs on direct inputs of our export industries, let alone our embattled farm industries. This year's Budget will worsen the declining returns on capital investment for farmers-a decline which has accelerated under the Australian Labor Party Government. To give the House some idea of the seriousness of this decline, I will give some figures. Under the Liberal-National Party Government, the Fraser Government, and despite the three-year drought, farm terms of trade declined by an average of 1.3 percentage points a year. Under Labor it has gone up to 2.7 per cent. In other words, it has more than doubled and the rate of decline is accelerating. Under this Government, an average of 125 farmers and farm employees are walking off farms each week. Yet when the Fraser Government lost office, there were more Australians on farms than there were at the end of the disastrous Whitlam Government in 1975. The two factors causing the negative and low incomes among farming families are the world commodity price problem and the escalating domestic cost problem. Before dealing with the domestic cost problem-I want to say a lot about that-I want to comment on the recent outcome of the ministerial discussions at Punta del Este in Uruguay. It was an achievement of some considerable note with the support of the United States, that the 14 fairer trading nations which were brought together at Cairns, succeeded in having agricultural trade placed on the agenda for the forthcoming multilateral trade negotiations. I give credit where credit is due-credit for that. I give credit to the Prime Minister for adopting the suggestion I made to him in May-to send an all-party delegation to Washington to present a bipartisan case to congressmen over the growing predatory agricultural trading actions of the United States. In four days we persuaded key congressmen to abandon the Daschle wheat subsidy Bill in the House and the Dole Bill passed by the Senate, both of which were designed to apply subsidies across the board to all wheat markets. Both sets of legislation had the potential to blow the Australian wheatgrowers out of the water. There have been attempts to resurrect similar legislation in the Congress in the last week or two; but counter-moves have also been made, and I am confident that the impact we made in Washington will prevent that from occurring before the Congress rises on 3 October. Our attack on world subsidies has been a team effort-the Government, the Liberal and National parties, the National Farmers Federation and, of course, the excellent academic work of the Bureau of Agricultural Economics in exposing the high cost and economic lunacy of the common agricultural policy to the Europeans themselves. Yet having focused so much attention on corrupted world commodity prices and the sins of other nations, the Hawke Labor Government now runs the risk of losing sight of its own failure to come to grips with domestic costs. Australia's greatest challenge as a major agricultural exporting nation will be to maintain its share of world markets over the next three or four years and to maintain the viability of farmers generally. Let it be understood that the average age of farmers is 58, and so many of our young people are being persuaded to leave the farm because of the problems they are experiencing. With our record balance of trade deficit predicted to rise even further this year, and our gross overseas debt expected to exceed $100 billion by the middle of next year, no nation has needed its efficient farmers more. There was never a greater need to regain our competiveness and become more export-oriented, outward- oriented as a nation. Let nobody go on with all this stupid drivel that the manufacturing industries, the sunrise industries, the high tech industries, will be our saviour. They might be of great help next century, but for the foreseeable future it will be the farmers of Riverina-Darling at Griffith, of Gippsland, Gwydir, Mallee, and New England, the farmers of Australia, who will again be asked to pull their share and to continue to make their contribution. Mr Blunt —What about Richmond farmers? Mr HUNT —Yes, and the Richmond farmers. I reject the overworked excuse of honourable members opposite that the rate of farm costs increases will be cut to 3 per cent for this financial year. Does the Government stand by this figure, after slugging farmers with interest rates up to three times higher than those of our competitors, inflation up to six times higher, the highest taxing system in post-war years, wage increases outstripping those in our competing nations, as the Leader of the Opposition has so clearly demonstrated, the failure to make a real effort to cut tariff protection on a program predictable basis in spite of the record devaluation of the Australian dollar? Let us have none of this nonsense that the Government is restructuring. It is avoiding the issue like the plague. In contrast, overseas there has been a dramatic slow-down of inflation, an easing of interest rates and relatively buoyant economic conditions. Our own farmers are experiencing declining competitiveness on corrupted world markets due to the monetary, budgetary and wages policies of the Hawke Labor Government, a new array of tax slugs and Budget rip-offs in three years totalling more than $500m from primary industry. I turn to three specific examples of this outrageous, unfair and discriminatory manner in which the fringe benefits tax is applied to farmers. Make no mistake: It will be abolished when we get back into government-lock, bloody stock and barrel! Let no one have any doubt about what we think of this outrageous tax. First, this Government has made great play of its Priority One: Young Australia campaign, yet it says nothing about the impact of its hard-taxing, anti-investment policies. A farm employer who takes on a Priority One trainee becomes eligible for a grant of $1,000. That same farmer will lose more than the value of the grant in the fringe benefits tax alone in most cases where the trainee is housed on the farm. It will cost the farmer about $1,150. What a ridiculous system. This youth trainee system becomes a net liability to the farmer even before wages are taken into account. So the fringe benefits tax has blown Priority One out of the water. Secondly, I turn to the situation, not uncommon amongst family farmers, where the farm is incorporated into a company structure and the maintenance of the home has been charged for tax purposes. Where full shire rates have been claimed as a business expense for tax purposes, the family farm house will automatically become liable for the fringe benefits tax. This was disclosed yesterday to the National Farmers Federation. But Labor has again laid its trap for the family farm. The Australian Tax Office will use past rate claims to set the eligibility test for the FBT. There is no way out for such farmers. What an outrageous, sneaky trap for farming families earning about one third of average weekly earnings in this country. Thirdly, I turn to the example of day labour shearers travelling to a property from the nearest township-suburban shearers, as they are called. The Australian Taxation Office has now circulated to group employers a document relating to the FBT which states: The value of board and quarters provided to `found' employees and the allowance paid to `not found' employees are subject to FBT. A `not found' employee is one who is designated as not remaining on a property overnight after a day's shearing. It should be made perfectly clear that there is no provision in the pastoral industry award for allowances to be paid to `not found' employees. So the Taxation Office has got that wrong. Despite this, the Taxation Office guidelines force employers to pay fringe benefits tax on the value of board and lodging, even though the shearer goes to his own home at night. The FBT is payable on an allowance which does not exist. This gross confusion and inequity is an unacceptable way to administer the tax laws of this nation. If the Treasurer refuses to abandon his fringe benefits tax, he should at the very least defer implementation of the tax until 1 July 1987 to give the Taxation Office, employers and employees some time to establish how this tax will operate and to iron out such totally unacceptable anomalies. The ministerial statement on 15 April was a rational economic document but lacked real teeth in redressing earlier Labor policies. A glance through the Minister's recent progress report reveals little of substance in relation to easing the terms of trade slump. It was long on words and short on action. We learnt that consideration of cutting tariffs on imported agricultural chemicals will now be delayed until the end of the year, despite agreement in principle by the Treasurer more than 12 months ago. The Treasurer had said that he was awaiting the Industries Assistance Commission report. That report was delivered in July. The Minister now says that the Government needs to think about it for `the next couple of months'. This action could save farmers up to $20m in a full year. From last week on-farm diesel costs are up a massive 5.8c a litre, increasing costs by at least $50m a year, while non-rebatable petrol costs are up 2.1c a litre. Then there is the effect of the high fuel prices for transport to and from the farm gate. For country people with long travelling distances, that bites hard. Since July, interest rates have leapt more than 2 per cent, costing farmers $200m in a full year. With the recent changes to fuel pricing and the 2 per cent increase in interest rates, these increases alone have slugged farmers a further $250m a year. That represents about one quarter of the net farm profit this year. Mr McGauran —It is disgraceful. Mr HUNT —It is disgraceful. I recall the promise of the Minister for Primary Industry (Mr Kerin) last year that the Budget would bring interest rates down. That is another broken promise-I suppose we could call it a forecast-by Labor. The prime rate in Australia is far above that of our competitors, which is one factor in the loss of our gilt-edged credit rating. Against our 19 per cent prime rate, it is 11 per cent in Britain, 7 per cent in the United States of America and West Germany, and 4 per cent in Japan. Our interest rates on a record farm debt, totalling $8 billion, from the major institutional lenders are crippling farmers. Every percentage point increase in interest rates adds $100m to farm costs. If our prime rate were the same as Britain's-one of the highest, at 11 per cent-this would save farmers nearly $4,000 per annum on average, doubling the estimated net farm income this year. So let it not be said that Labor can escape the blame for the problems facing the farm sector. With better management of our economy, world confidence would improve so that stiff Reserve Bank and monetary policy intervention would not be necessary to attract speculative capital to save our dollar from falling further. The Treasurer (Mr Keating) and the Government could restore confidence in rural Australia by, with a stroke of the pen, immediately abolishing the capital gains and the fringe benefits taxes. The Government is not yet dependent on this revenue, but these taxes are imposing a nightmare of bureaucratic red tape and will impose heavy costs on the embattled farm sector. The sales tax on wine has been doubled. The Government promised that it would not impose a sales tax on wine; yet it is up to 20 per cent. A new 10 per cent sales tax has been imposed on fruit juice products and flavoured milk. Wine grapes and citrus growers, on average, will have a negative income this year; yet they are going to be bled to death by a further tax regime. The government promised wine producers it would not impose those taxes, but it has. The Opposition has set up a committee to investigate thoroughly the problems affecting the wine industry and to examine ways of rehabilitating that industry when we get back to government. The decision to withhold the IAC dumping inquiry into Brazilian orange juice concentrate until the week after the Budget was a cynical attempt to cover bad news with good news. Export inspection charges remain at treble their levels in 1983. We have the most efficient farmers in the world and, given a fair go, they will mix it with the best. But we have farmers in this country who are battling not only against the treasuries of Europe and the United States but also against a Labor Government that could not care less. If it did care less, it would relieve the burden of so many of these costs that are really strangling the farm sector. Australian living standards will continue to depend very heavily upon our farming and mining industries. Mr DEPUTY SPEAKER(Mr Drummond) —Order! The honourable member's time has expired. Mr KERIN(Werriwa-Minister for Primary Industry)(4.28) —It seems that the Opposition's tactics committee has met and has decided to run the same matter of public importance that it raised yesterday. I was not taken by surprise when the Deputy Leader of the National Party, the honourable member for Gwydir (Mr Hunt), came up with the urgency motion today. I guess the arguments were also just as expected as the motion. Yesterday, of course, the Leader of the Opposition (Mr Howard) decided to get himself thrown out of the House on the fringe benefits tax. The Treasurer (Mr Keating) has totally exposed the hypocrisy in the Opposition's case on the fringe benefits tax. Anyone who saw Richard Carleton interview the Leader of the Opposition last night would understand fully the problems that the Opposition has with respect to the fringe benefits tax. The Treasurer today again pointed out exactly the situation and the rorts that have gone on in this country. He showed that an individual with an effective salary package of $115,000 under the old system-the system that existed under the leadership of the former Liberal-National Party Government-would pay the same tax rate as some poor wage bloke on $11,500 a year. They were the rorts that that Government would have perpetuated, and they are the rorts that the Opposition wants to go back to. If there is no fringe benefits tax, it really means more tax for the farmers. Let us be quite clear about that. What we would go back to would be the rorts, the evasion and the tax avoidance, and honest people paying tax would have to pay more. The Leader of the Opposition has already said that all election promises made in the immediate past are off except one-the assets test-so we have to ask the question: Where is the money coming from? If one wipes out the fringe benefits tax and the capital gains tax, farmers will pay more tax. There are no two ways about that. Farmers already pay less than the average national tax rate. Another thing that the National Party of Australia is running around the bush with is this whole idea of the flat tax policy, or a flatter tax policy. Mr Beddall —Flat earth policy. Mr KERIN —The flat earth policy. As the Prime Minister (Mr Hawke) pointed out the other day, a flat tax of 25 per cent-the policy that is being canvassed by the National Party in Queensland-would really mean that the average tax paying farmer would pay $1,675 more per farm. One can look at other figures. Even with a tax rate of 18 per cent or 20 per cent, taking Bureau of Agricultural Economics figures, the average farmer would pay more on a flat tax. So where would the Opposition get the money from? Let us consider the whole question of the fringe benefits tax. The Treasurer showed to the House today very clearly that city managers who get private school education for their children for nothing, at the expense of the tax paying public in general, are effectively being subsidised by farmers who, in many areas, have to send their children to boarding schools. That is what the National Party is saying. It is saying that it is all right for city managers to get free education for their children as part of a salary package, subsidised by wage and salary earners throughout the community and honest farmers, yet farmers have to pay for the boarding school education of their children. The fringe benefits tax gives remote area concessions. It gives a 40 per cent concession to farmers. If one looks at the number of farmers who will be affected by the measure in the long run-despite all the hype-one finds that it will be very few. It is against the interests of the farmers to campaign for the abolition of the fringe benefits tax and particularly to bring back the rorts which the Opposition dignified when it was in government. The Deputy Leader of the National Party gave the capital gains tax as an example of another measure a future coalition government may remove. The farmers got what they wanted with the capital gains tax because there is effective exemption for the family farm in perpetuity. Therefore, we have not created any tax shelter. We have an effective tax exemption. Where would the money come from? Would the Opposition remove the diesel rebate, which is now worth about $300m? Would it savage all the other spending programs in primary industry? Or would it attack the wage and salary earners, the great mass of the population, even more? That is what the Opposition has to face up to. The other thing the Opposition has to face up to-the Deputy Leader of the National Party referred to this-is the whole question of our terms of trade. The Leader of the Opposition, in none of his comments, has ever focused on the question of our balance of payments, our balance of trade and the terms of trade problems we face in this country today. The BAE just brought out its June quarter figures. So now we finally have the figures for the farm sector as a whole for the financial year that has just ended. The annual rate of increase in farm costs during 1985-86 was 4.2 per cent and compares very favourably with a rate of increase of 11 per cent which occurred under the previous Government. If the previous 11 per cent rate of increase had continued, farm incomes would be some 85 per cent lower than is currently anticipated. The annual rate of increase in that period also compares favourably with the consumer price increases during the same period. There has been a substantial slowing down in the rate of increase in farm costs, culminating in the fall recorded in the latest June quarter. This reflects the full rebating of the diesel fuel excise announced in the 1985 Budget in conjunction with the fall in world oil prices and lower interest rates. This slowing is expected to be maintained as the Government's budgetary and wages policies succeed in reducing inflation and interest rates. Already-one can look at the Australian Financial Review this morning-we have stability in the dollar and the rates are coming down again. Once again, these indices show that low commodity prices are the major cause of farmers' difficulties. About 80 per cent of the cause of the farmers' problems in terms of their income is derived from overseas. The 2.1 per cent fall in prices received over the year to June was despite the currency appreciation of 8 per cent against the trade weighted index for the same period. That is the big problem. Even with a substantial devaluation Australia's farmers, and the Australian community and economy are not getting the benefit of that. That is due to the corruption of world markets. That is why the efforts by all people-Australian governments and overseas-and, in particular, those of our Minister for Trade (Mr Dawkins), have finally been rewarded. There is no difference of opinion amongst members on both sides of the House in respect of our international trade and negotiations. We are all in there fighting for Australians and our farmers. The efforts of the Minister for Trade were particularly valiant and praiseworthy because now, for the first time, we have a turn- around, a turning point. It was a magnificent achievement. For the first time in 40 years agriculture will be on the agenda of the General Agreement on Tariffs and Trade. That cannot be underestimated. I have been pointing out, as has the honourable member for Gwydir, that the hard work is ahead. However, we have a four-year time scale in which we can negotiate. The presence of agriculture on the GATT agenda will mean, surely, that people in Europe, the United States and Japan with a long term approach, with statesmanship, will start looking at their policies of subsidisation and protection. We have to end the subsidies of agricultural production in the non-efficient countries. We have to end export subsidisation. The Minister for Trade achieved an enormous amount. When the French Trade Minister on Wednesday during the week of the meeting at Punta del Este put forward the French position, the Minister for Trade did not walk away like Mr Anthony, the former Leader of the National Party, did in 1977. He stayed and negotiated through the night. It is Australia's achievement that in the end the United States, the European Economic Community and Australia were in there negotiating on the words of the text. The group of 14 held together. This reflects particularly favourably on the earlier Bangkok initiative of the Prime Minister and his trade meetings all over the world. So this has been a great achievement, and is where a lot of the answer lies. The Deputy Leader of the National Party raised quite a few other points. I do not have time to respond to them. However, all governments are very much up against it with respect to budgetary restraints at present. We do not have to look to the past coalition Government to see the failures of the Opposition's approach and the success of this Government's approach, which fundamentally centres on the fact that we have all but deregulated the financial market, that we have a floating dollar and an incomes policy, that unit labour costs have dropped by 7 per cent and that industrial disputation has stopped. Without confrontation as a government strategy we are getting the benefits and a sensible approach to Australia's overall economic situation. It is only the confrontationists, the Frasers of this world, and the people outside whom some call the New Right who are likely to sabotage the magnificent progress that has been made in the last three and a half years. Let us consider the one State where the National Party is in control-the banana state of Queensland. Queensland has a National Party Government which does not even believe in democracy. Not only does Queensland have the highest unemployment rate of any State-I guess that says it all for National Party policies-but also it has imposed the highest rate of tax increases on its farmers. Between 1982-83 and 1985, rates and taxes on Queensland farmers increased by 41 per cent as opposed to a national average of 38 per cent. At the same time, the Queensland National Party Government-a minority government-syphoned off $33.5m from rural assistance funds and ran up hollow logs totalling around $75m in money that should have been going to assist Queensland farmers. This Government has taken measures to reduce farm costs which the Opposition would not even contemplate. One measure has been the replacement of tariffs on harvesters and cultivation machinery with bounties. The Deputy Leader of the National Party has claimed that the tariff burden on agricultural machinery should be cut. What is he talking about? We have already done it. We have before us at present the foreshadowed reduction in tariff-imposed costs on agricultural chemicals. I met with chemical people this morning. There are many problems in this area. The various components of agricultural chemicals have tariffs applied to them. The present system which we inherited works in reverse. There is a higher rate of tariff on the components of chemicals than there is on the final product. Another instance is vice versa. We have a rather crazy situation. My colleague, the Minister for Industry, Technology and Commerce (Senator Button), is trying to sort it out so that we can get some rational system of tariff protection for the chemical industry and bring down the costs to farmers. It is not an easy task. It is highly detailed. The cost of chemicals to farmers in real terms has been coming down quite strongly. We have already abolished the Opposition's 2 per cent revenue duty on agricultural chemicals. We have set up a royal commission on grain handling and transport. We have instituted the full rebate to primary producers of the diesel oil excise, which is worth about $330m. Farmers are getting distillate, even with the recent 5.8 per cent increase, at about 29c a litre, whereas other people are paying about 48.5c a litre. The Government is also spending a lot of money on roads. The Deputy Leader of the National Party knows that 75 per cent of the record expenditure on roads is spent on rural roads. The Brisbane-Cairns road is 100 per cent Commonwealth funded. The Brisbane-Mount Isa-Darwin road is 100 per cent directly funded by the Commonwealth. One will not see too many signs up there in Queensland illustrating that, but that is where all the money comes from for the Bruce Highway and those basic roads that are so important to farmers in Queensland. This Government has helped with costs in many other areas, but quite frankly some of those areas are a little hidden. The previous Government halved the interest subsidy on the Reserve Bank's Rural Credits Department borrowings for the Australian Wheat Board. We wiped out that subsidy and allowed the Australian Wheat Board to borrow overseas. It is now borrowing $2 1/2 billion a year overseas and is getting an interest rate of about 8 or 10 per cent. It has a physical good to trade-or something like that-and it is able to engage in hedging. We have given wheat growers a great deal of flexibility. We have saved them tens if not hundreds of millions of dollars on their borrowings so far. We are doing similar things with all statutory marketing authorities by allowing them to have commercial flexibility with respect to their borrowings. Let me talk about fuel, because that is one of the big issues. Last year, when we fully rebated the diesel fuel excise, we thought that it would cost some $35m. By the time the falls in world oil prices occurred earlier this year, the figure was over $300m. The Deputy Leader of the National Party tried to mislead farmers the other week, in a very carefully framed Press release, by suggesting that the fuel excise exemption had been varied in some way. They have not. All that has happened is that the distillate prices have moved up and down according to import parity changes, which is the Opposition's own policy. As the Opposition knows, this whole issue of fuel pricing is again before the Industries Assistance Commission. It is apparent to me why the Opposition has resurrected farm costs as an issue today. It used to be the flavour of the month in agro-political circles, but the reality- Mr DEPUTY SPEAKER(Mr Drummond) —Order! The Minister's time has expired. The discussion is concluded. Bill returned from the Senate with amendments. Ordered that the amendments be taken into consideration in Committee of the Whole House forthwith. Consideration of Senate's amendments. Senate's amendments- No. 1-Page 1, clause 1, line 5, leave out ``Loans'', insert ``Loan''. No. 2-Page 1, clause 3, definition of ``defence service'', line 11, leave out ``a financial year'', insert ``the financial year''. No. 3-Page 2, clause 3, definition of ``financial year'', paragraphs (a) and (b), lines 2 and 3, leave out the paragraphs, insert ``the year ending on 30 June 1987;''. No. 4-Page 2, clause 3, definition of ``relevant appropriation Act'', lines 4 to 15, leave out the definition, insert the following definition: `` `relevant appropriation Act', in relation to the financial years, means- (a) the Supply Act (No. 1) 1986-87; or (b) an Act, whether passed before or after the commencement of this Act, appropriating the Consolidated Revenue Fund for the service of the financial year ending on 30 June 1987, being an Act that is expressed to have effect subject to this Act.''. No. 5-Page 2, clause 4, line 19, leave out ``a financial year'', insert ``the financial year''. No. 6-Page 2, clause 4, lines 19 to 27, leave out ``that financial year'' (thrice occurring), insert ``the financial year''. No. 7-Page 2, clause 5, line 29, leave out ``a financial year'', insert ``the financial year''. No. 8-Page 2, paragraph 5 (a), line 31, leave out ``that financial year'', insert ``the financial year''. No. 9-Page 2, clause 6, line 37, leave out ``a financial year'', insert ``the financial year''. No. 10-Pages 2 and 3, clause 6, line 37 (page 2) to line 10 (page 3), leave out ``that financial year'' (thrice occurring), insert ``the financial year''. No. 11-Page 3, sub-clause 9 (1), lines 22 and 23, leave out ``a financial year'', insert ``the financial year''. No. 12-Page 3, sub-clause 9 (1), lines 22 to 28, leave out ``that financial year'' (thrice occurring), insert ``the financial year''. No. 13-Page 3, sub-clause 9 (2), line 31, leave out ``a financial year'', insert ``the financial year''. No. 14-Page 3, after sub-clause 9 (2), add the following new sub-clause: ``(3) Nothing in this Act shall be taken to authorise expenditure (otherwise than for the expenses of borrowing) after 30 June 1987.''. Mr HURFORD(Adelaide-Minister for Immigration and Ethnic Affairs)(4.44) —I move: That the amendments be agreed to. The purpose of the Loans Bill is to make provision for the financing of the prospective Budget deficit in 1986-87 and subsequent years, together with the associated prospective deficit in the Consolidated Revenue Fund. The Senate has again this year returned the Bill to the House of Representatives with amendments moved by the Opposition and the Australian Democrats which effectively remove the provisions of the Bill which would establish it as standing legislation. As I indicated in my second reading speech, when the Bill was introduced, the Government proposed standing legislation so as to obviate the need each year for what is in effect a machinery financing measure. The Bill merely enables the charging to Loan Fund of moneys which must, in all circumstances, first be appropriated by the Parliament from the Consolidated Revenue Fund. Conversion to standing legislation would, however, improve the efficiency of Parliament by allowing a more effective allocation of business during the crowded Budget sittings. Indeed, in support of this view one has to look only at the contribution of the shadow Treasurer, the honourable member for Mackellar (Mr Carlton)-I am glad that he is present this afternoon-to the debate on the Loans Bill last year. I shall quote what he said because he was in one of his more sensible moods: This Bill makes arrangements for the Government to borrow. Previously there used to be an annual Loan Bill to handle this situation for all circumstances arising during a financial year. This Bill has been drafted as standing legislation rather than annual legislation to remove the necessity to pass legislation annually. As the Bill does not itself authorise expenditure but merely creates a mechanism whereby expenditures authorised by other legislation can be made, the Opposition does not object to the concept of standing legislation. It merely improves the efficiency of the Parliament. We therefore support the Bill. I hope that I will not sound too pretentious in saying that I could not have said it better myself. Those words sum up the position perfectly. As I have said, he was in one of his more sensible moods. It is unfortunate that the contribution to this year's debate by some of the less enlightened members of the Opposition could not have been as responsible. Instead, Opposition speakers attempted again to suggest, falsely, that standing legislation of the type proposed was underhand or could in some way detract from the Parliament's ability to debate the Budget, the deficit, or the Government's deficit financing measures. I have not noticed, this year, any lack of opportunity to debate those matters. All such assertions are, of course, patently wrong, as a reading of the Loans Bill and its associated explanatory memorandum clearly demonstrates. I refer to the contribution of the honourable member for Curtin (Mr Rocher) when the Bill was considered on a previous occasion. He suffered from a misunderstanding about the Bill. He doubted that it was a machinery measure and assumed that, if it were, it would not be proclaimed until after the Budget had been passed. I promised him that I would make some further comments on that later, and I do so now. The annual Loan Bills have always received royal assent prior to the passage of the annual Appropriation Bills. Interim appropriations are available by virtue of the Supply Act (No. 1), which enables borrowings to be undertaken pursuant to the Loan Act to finance defence expenditures incurred during the Supply period but prior to passage of the Appropriation Bills. Clauses 4 and 5 of the Bill specifically limit the ability to borrow moneys to situations where moneys are lawfully available, or are authorised to be expended. Moneys do not become lawfully available for expenditure under the Appropriation Bills until those Bills are passed by the Parliament and assented to. Thus moneys cannot be lawfully borrowed under a Loans Act in respect of the amounts, additional to Supply, included in the Appropriation Bills unless and until those Bills receive royal assent. It is therefore not necessary that assent to the Appropriation Bills be obtained prior to that for a Loans Bill. I gave that as an example of the misunderstandings on the part of those who did not believe that this was a machinery measure. It is clearly a machinery measure. All the paranoia on the part of those who rolled the better informed in the coalition party room is unfounded. The fact that the Bill is merely a machinery measure-there is nothing underhand in the Bill-was acknowledged, as I said earlier, by the shadow Treasurer in his contribution to the debate both this year and last year. The Bill would not detract from Parliament's ability to debate the Budget or the associated deficit financing measures. The deficit and the borrowing requirements are announced in the Budget Speech and Papers, which are debated at length in this Parliament. Indeed, in speaking to the Bill this year, the shadow Treasurer said that he did not wish to take the opportunity afforded in the debate on the Loans Bill to debate the Commonwealth borrowing program, but preferred to leave that matter for debates on Appropriation Bills and, indeed, matters of public importance and the many other occasions when he has had an opportunity to debate these matters. He was very sensible. He recognised that, this being a machinery measure, he did not need this Bill to debate those matters. It is a pity that some of the more sensible elements of the Liberal Party and the National Party got rolled in their attempts to have the Opposition support this Bill. Nevertheless, it is not a matter of crucial importance to the Government. The Opposition's amendments will not add one jot to the power or authority of the Parliament. Regrettably, however, they will hinder its efficiency, because next year we could have had the time that we have taken on this Loans Bill as extra time to debate the other important matters of government. However, as I say, it is not a major matter. We have no alternative but to bow to the non-Government majority in the Senate. This manifests again the fact that our Hawke Labor Government is not in power in this country; it is in office. It is not in power because it does not have that majority in the Senate. The ill-informed, non-Government majority in the Senate must prevail; it has the numbers. The Government will not oppose the amendments. Mr CARLTON(Mackellar)(4.51) —In the process of being kind to me, the Minister for Immigration and Ethnic Affairs and Minister Assisting the Treasurer (Mr Hurford) was making a political point that he thought was to his advantage. Since I have heard him cantering around the paddock about four or five times on this measure, he rather destroys his argument that it is a waste of time for the Opposition in the Senate to combine with the Australian Democrats to pass these amendments, which the Government has accepted. The real waste of time is in the Government fronting up with a Loans Bill year after year, trying to change it from an annual Bill into a standing Bill, when it knows jolly well that the ladies and gentlemen in the Senate-the House of review, which has every right to decide on these matters-have decided that they want to have a look at the Bill every year. Therefore, the simplest and most efficient way of dealing with this matter would be for the Government-if it is still in office at the same time next year-to front up with a single annual Bill. No doubt the matter will be dealt with speedily, unless there are some questions about what is going on-in which case there will be a lengthier debate-and that will be it. Therefore, my advice to the Government, in order to avoid any undue delay in the processes of the House or of the Parliament, is to desist next year from trying yet again what it has tried this year, having failed last year-to turn this into a different sort of Bill. The other comment that I wish to make in passing is that it was useful to have confirmation from the Minister Assisting the Treasurer that the Opposition has taken up a very large number of opportunities to debate economic issues-in Appropriation Bill debates and in debates on matters of public importance-because it is the constant theme of the Prime Minister (Mr Hawke) and the Treasurer (Mr Keating) that the Opposition does not debate the key economic issues in this chamber. Every day, at Question Time, when the Press gallery is full, the Prime Minister and the Treasurer say: `You are not debating the great economic issues'. However, if one goes to Hansard, as the Minister correctly pointed out-in this case, he is being most sensible and very fair-one can see that we have had ample opportunity to debate the key economic issues and that we have done so. If we look at the matters of public importance that we have debated this year and last year, we can see that an enormous number were on key economic issues. Throughout the economic crisis that has clearly been developing over the last 12 months, we have been giving advice to the Government on what it should do in debate after debate after debate. What the Prime Minister and the Treasurer have been saying day after day is absolute nonsense. It is good to have confirmation from the Minister Assisting the Treasurer that the Opposition has certainly not been derelict in its duty in raising these matters. We welcome the fact that the Government is being sensible once again in accepting these amendments that have been passed in the upper House, and we will delay this measure no longer in Committee. Question resolved in the affirmative. Resolution reported; report adopted. Debate resumed from 19 August, on motion by Mr Hurford: That the Bill be now read a second time. Mr DEPUTY SPEAKER(Mr Drummond) —I understand that it is the wish of the House to debate order of the day No. 2 concurrently with orders of the day Nos 3 and 4. There being no objection, the Chair will allow that course to be followed. Mr HOWARD(Bennelong-Leader of the Opposition)(4.55) —The Income Tax Rates Bill, the Income Tax Bill and the Taxation Laws (Miscellaneous Provisions) Bill are the principal legislative proposals to give effect to the taxation measures announced in the Budget. Therefore, it is a good opportunity for the Opposition and for the House generally to say something about the subject of taxation. Over the last 24 hours, we have witnessed a very deliberate and, at times, quite desperate attempt by the Government, particularly the Treasurer (Mr Keating), to divert attention from the embarrassment that the Government is experiencing, not only over community hostility to the fringe benefits tax but over community hostility to the travel allowance claims of the Treasurer. Therefore, it is a good opportunity to remind ourselves of a few basic facts about taxation in Australia. The first statement that should be made in any taxation debate in this Parliament is that this Government is the largest-taxing and highest-taxing government that this country has seen since Federation. In this current financial year, 25.5 per cent of gross domestic product will be consumed in taxation collections. Without any argument, contest or doubt, that is the highest level of tax collection that this country has ever seen. The Prime Minister (Mr Hawke) and the Treasurer can engage in all the conjuring tricks under the sun, but nothing can defy the black- and-white print of the Budget Papers that were delivered by the Treasurer when he presented his last Budget. Not only is this the highest-taxing Government in peacetime, but, on top of that, it is a Government which has deliberately and cold-bloodedly broken all of the tax commitments that it made during the last election campaign. We all remember that the centrepiece of the Government's economic policy during the last election campaign was the much-vaunted trilogy. We all remember the Prime Minister going around the country during the 1984 election campaign saying that he could be trusted and his Government should be re-elected because he was prepared to commit his Government and his Party to an economic trilogy. One element of that economic trilogy was that there would be no increase in the level of taxation as a proportion of GDP either over the lifetime of the Parliament or during the first year that a Budget was brought down under a re-elected Hawke Government. Yet in the two Budgets that have been brought down since that election-the Budgets of 1985 and 1986-there have been increases in the percentage of tax collected as a proportion of GDP. So that leg of the trilogy has also been completely broken. In 1986-87, the Treasurer will collect $1,400m more in additional tax collections over the trilogy ceiling, which shows the extent to which the Government's trilogy commitment was broken by the Government in the two Budgets brought down since the 1984 election. But it gets worse and it goes much further than that. We have heard a great deal about the taxation reforms of the present Government. We are told a great deal about the reductions in personal tax rates. We are told how, after July next year, there will be a top marginal rate of tax of 49c in the dollar. While the possibility of a mini-Budget in May next year remains-there is a very clear possibility of that-there is no guarantee that, at the last moment, the personal tax cuts will not be taken away by this Treasurer. They were promised for September of this year. They have already been deferred until December of this year. While the prospect of a mini-Budget hangs over the head of this Parliament, there is every prospect and every likelihood that the personal tax cuts will be taken away at the last minute. The Minister for Immigration and Ethnic Affairs and Minister Assisting the Treasurer (Mr Hurford) can shake his head and say that there is no likelihood that that will happen, but the reality is that that is a very distinct possibility. The intriguing thing is that, even if those taxation cuts do go ahead, we will not have the promised reductions in taxation that the Government has talked about so much. It may surprise many honourable members to know that, even after those taxation reductions have been put in place, the average and marginal rates of tax paid by a person, whether he is a single person or a person supporting a spouse and two dependent children, will both be higher than they were when this Government came to power in March 1983. That is a fact that the Government finds very embarrassing. It is a fact that the Prime Minister did not even acknowledge when I asked him about it in the Parliament last week. It is a fact that this House and the Australian community will hear a great deal about over the next 18 months. The average tax rate for that person in March 1983 was 22.9 per cent. The marginal rate was 30 per cent. Even after the so-called great initiative, even if all of the promises of the Government on personal taxation are delivered in the middle of next year, those rates will then be 24.5 per cent and 40 per cent. That is the measure of the Government's duplicity so far as the taxation reforms and the taxation initiatives are concerned. In the last Budget this Government introduced $1.4 billion worth of new taxes. It increased the Medicare levy from one per cent to 1.25 per cent; it increased sales tax on flavoured milk and fruit juices; it increased the petrol excise by 3c a litre. I have compiled a list which shows that no fewer than 14 new taxes have been introduced, or initiatives taken, by the Hawke Government since it came to office that have resulted in increases in tax levels. We have had a fringe benefits tax; we have had a capital gains tax; we have had an entertainment tax; we have had the removal of negative gearing; we have a foreign tax credit system; we have had the lump sum superannuation tax; we have had an increased company tax rate; we have had new and increased wholesale taxes; we have had petrol excise increased from 6c to 20c a litre; we have had the automatic biannual indexation of excise rates; we have had the abolition of concessional expenditure rebates; we have had a wine tax; we have had an excise tax on intermediate and new oil; and we have had a bureaucratic substantiation of employment expenses. That is the measure of all of the new taxes. No wonder this Government is so sensitive about the issue of taxation. No wonder the Opposition welcomes the fact that the Government wants to fight the next election on the issue of taxation. Over the last 48 hours the Government has displayed its extraordinary sensitivity on the issue of the fringe benefits tax. The circumstances that led to my suspension yesterday demonstrated very dramatically to the Opposition, the Parliament and the Australian public how sensitive this Government and this Treasurer are about the issue of the fringe benefits tax. The Treasurer has a double reason to be sensitive. The first reason is that this fringe benefits tax is widely resented and despised throughout the length and breadth of the rural community and the small business community. That is the first area of sensitivity. The second area of sensitivity for the Treasurer is that he has displayed over the last 48 hours, on that issue and on the issue of his travel allowance, that he has monumental double standards. We in the Opposition make no apology for raising that matter; nor will the many people in the small business community feel very deeply aggrieved that we have raised it. I take the opportunity to say again, as I have said on many occasions, that the Opposition is unqualifiedly committed to the abolition of the fringe benefits tax. The attempts by the Government to suggest that in some way that commitment is qualified, that in some way, because we restate our well-known opposition to tax avoidance practices, that waters down that commitment, is a total misrepresentation of the situation. It has absolutely no substance. For that argument to have any substance the Government would have to establish that the practices against which the fringe benefits tax is levied are substantially practices of tax avoidance. Yet in reality-and this is our complaint, and the complaint of many people in the community-this tax reaches into a large number of areas and catches a large number of practices in which there is absolutely no evidence of tax avoidance. Do people call a football club prize an exercise in tax avoidance? Do they call a safety award an exercise in tax avoidance? Do they call a retirement present an exercise in tax avoidance? Do they call a tax on religious institutions and some charities a tax directed against tax avoidance practices? Do they regard the provision of farm workers' accommodation and food, which is compulsory under the pastoral award, as a legitimate target for anti-tax avoidance legislation? Of course, they do not. That is the difficulty of this tax, that is why it is so resented, and that is why, in the words of my colleague the Deputy Leader of the National Party of Australia, the honourable member for Gwydir (Mr Hunt), it will be thrown out lock, stock and barrel by the next coalition Government-because it attacks those kinds of practices. I want to make perfectly clear again, the Opposition's commitment to get rid of tax avoidance practices. I will refer to tax avoidance practices in a moment, because this Government has a very miserable record on taking action against tax avoidance practices. It said a great deal about it before it came to office, but it has done precious little since it came to power. So our commitment to get rid of that fringe benefits tax is an unqualified commitment, and is in no way diluted, qualified or modified by our continuing opposition to tax avoidance practices in the community. Any attempt by the Government to establish otherwise is nothing other than a desperate attempt by the Treasurer and the Prime Minister to divert the public's attention from the embarrassment suffered by the Treasurer when he was caught fiddling his travel allowance. The Opposition makes no apology for continuing to refer to that matter. What has happened over the last 48 hours is the classic diversionary tactic. Whenever the heat is put on the Government over something, it creates a diversion. Two or three weeks ago, it started saying that anybody who wanted to reform the industrial relations system was an extremist. Over the last 48 hours, the Treasurer has been caught out. He is the man who has gone throughout the length and breadth of Australia and has abused and insulted ordinary, honest small business people and farmers. He has called anybody who has had some of the arrangements to which I have referred a tax cheat or a tax rorter and has used the most insulting language against people who have ordinary, legitimate taxation arrangements. Because that man has used that kind of invective and that kind of abuse-and he has now been caught out as having the most deplorable double standards that many members of this Parliament have seen for many years-and because he has been caught out, he reverts to the great Labor tactic of a diversionary device. He throws up his arms and, in a loud voice, says: `The Opposition really intends to introduce an alternative fringe benefits tax because it is against tax avoidance'. What a lot of humbug. What a pathetic attempt by the Treasurer to divert attention from his own embarrassment and the predicament in which he finds himself, not only in terms of his taxation measures, but also in terms of his personal credibility. The reality is that this Government is the highest taxing Government in Australia's peacetime history. Its taxation measures are widely rejected and widely resented by the Australian community. I can only say again, on behalf of the Opposition, that we warmly welcome the fact that the Prime Minister has declared that taxation will be the major issue of the next election campaign. We welcome that fact because we believe that throughout the length and breadth of this country the taxation record and taxation measures of this Government are widely despised and widely rejected. It is all summed up by what I said at the beginning of my remarks: By any measure this Government is the highest taxing government that we have seen since Federation. It has broken all its promises on the trilogy. Even after the so-called great reforms have been brought in next year, the average and marginal rates of taxation for a person on average weekly earnings will be much higher than they were when the Hawke Government came to power. The Government has introduced no fewer than 14 ad- ditional taxation measures and it has not done anything substantial to counter tax avoidance practices, despite all of its noise to the contrary. Most insulting and humiliating of all, the person who has carried the flag on behalf of the Government, the person who has said more than anybody else on behalf of the Government against the alleged rorts and avoidance fiddles of the rest of the community, has himself been caught fiddling by manipulating the travel allowance system of this Parliament. To his great embarrassment and shame, he has been revealed as a person with monumental and deplorable double standards. Mr WRIGHT(Capricornia)(5.11) —It seems that the National Party and the Liberal Party in Opposition have the greatest of political gall. There is no end to their efforts to cover up what they have done in the past. I assure them, however, that the people of Australia will not forget the record of the Howard-Fraser Government. No matter what Opposition members say here, and no matter how they rant and rave, the Australian people have not forgotten that the present Leader of the Opposition (Mr Howard) as Treasurer in the Fraser Government did not have the courage to tackle the problems of the Australian tax system. He can rant and rave about it now, but for the eight years that he had power he did nothing. Instead, he left the country with a top marginal tax rate of 60c in the dollar. It is no wonder that small business, business generally and workers who are earning over $36,000 a year cry out for us to do something about marginal tax rates, and certainly the top tax rate. The Fraser-Howard Government-I stress Howard-did nothing during its term of office. Instead, it encouraged massive tax avoidance and evasion. We know what was lost to the community. We know also that when this Government tried to recoup the money it was the Liberal and National parties which refused in the Senate to support legislation that would have brought back hundreds of millions of dollars into the nation's tax coffers. That money would have released some of the pressure on the ordinary pay as you earn employee, the individual who pays his tax as he earns it. We have an Opposition that tries to cover its having been part of evasion and avoidance through condoning it. (Quorum formed) Prior to the quorum being called, Mr Deputy Speaker, I was saying how the Opposition, while it was in government, was responsible for the disillusionment that grew in the minds of electors and taxpayers and for the contempt for the tax system that developed. I heard the Leader of the Opposition talk about double standards and, although it did not relate particularly to these income tax Bills, he talked about the fringe benefits tax and travelling allowances. I am pleased that he raised the issue of travelling allowances because I believe that the people of Australia have a right to know, in view of the attack that he has been mounted on the Treasurer (Mr Keating), whether it is correct that the Deputy Leader of the National Party, the honourable member for Gwydir (Mr Hunt), has been claiming the travelling allowance while he has been living in Canberra with his family. The honourable member for Gwydir has a house in Forrest; yet he lists his principal place of residence as a place called Dunumbral, which is his family property in the north-west of New South Wales. A few minutes ago we heard the Leader of the Opposition talk about double standards and how he would reduce them. Mr Hicks —On a point of order, Mr Deputy Speaker: I ask that you require the honourable member for Capricornia to get back to the Bill before the House. Mr DEPUTY SPEAKER(Mr Blanchard) —I call on the honourable member for Capricornia to continue. Mr WRIGHT —Thank you, Mr Deputy Speaker. Under the Standing Orders it is quite all right to respond to remarks made by those on the other side of the House. The honourable member for Riverina-Darling (Mr Hicks) has been here a few years and he should know them. Let us get to some truth about these matters. The Opposition has been attacking the Treasurer for days and going on about how he is supposed to be rorting some sort of system. We have had statements from the Leader of the Opposition and undertakings from his shadow Ministry that no one on that side has been doing anything wrong. In a release from the Australian Associated Press the Leader of the Opposition says he has obtained statements from all his shadow ministers that everyone is behaving properly. The honourable member for Gwydir is in the chamber and I ask whether it is correct that he claims the travelling allowance while living with his family in Canberra. Does he declare that his principal residence is his family property in the north-west of New South Wales? If that is the position, I can understand it and I take no exception to it. If the Treasurer, for example, is called upon to carry out duties in the capital, surely we should not expect him to pay for his rented house out of his normal salary. The editors of the newspapers which have attacked the Treasurer no doubt travel to Melbourne or Sydney to meet as editors or chiefs of staff. Who pays for their board, their units and their motels? Do the individual editors pay for them? Of course not. These expenses are paid for by the employer, and it is only right that the Treasurer should have his costs met too. I think that all the members of the Government agree with the principle, but that is not the issue. We are talking about double standards. The Opposition is accusing one of our Ministers of doing something wrong. As I have said, the honourable member for Gwydir is in the House, and I hope that he speaks in this debate. Mr Tim Fischer —On a point of order, Mr Deputy Speaker: Standing order 76 states: All imputations of improper motives and all personal reflections on Members shall be considered highly disorderly. I point out to you, Mr Deputy Speaker, that the position of the Deputy Leader of the National Party has nothing to do with the situation relating to the Treasurer. Mr DEPUTY SPEAKER —The Chair is very much aware of standing order 76. I do not think that the honourable member for Capricornia has contravened it but he should watch the comments that he makes in relation to the matter he is raising. Mr WRIGHT —I certainly shall, Mr Deputy Speaker. You will note that I have raised this matter by way of a question, Mr Deputy Speaker, and I have not heard a denial from the other side. There have been many attempts to shut me up. I have had the honourable member for Farrer (Mr Tim Fischer) trying to shut me up by raising a point of order. We had the National Party Whip trying to shut us up but we have not heard the honourable member for Gwydir deny it. Why will he not deny it? Let us find out because that has been the attack. That is what we have heard in the rantings and ravings for the last three days against our Treasurer, the honourable member for Blaxland (Mr Keating). So let us really see who has double standards. Let us go further because the Leader of the Opposition talked about the fringe benefits tax. He talked about how he cannot support it. We know what he has said in the past. I know he is castigating everybody for the stand taken on the fringe benefits tax but not once has he mentioned that during the National Taxation Summit which was held in Canberra from 1 July 1985 to 4 July 1985, the Hon. Sir Joh Bjelke-Petersen, Premier and Treasurer of Queensland, produced this document. Honourable members will notice that there is the crest of the Queensland Parliament and the Government on it. This document is very interesting because in summary the recommendations refer to a single tax rate of 25 per cent. I will mention that later as that has become part of the Income Tax Rates Bill. His third recommendation, as Premier of the conservative State of Queensland is-listen to this-a fringe benefits tax. That is what he says. It is here in black and white. But have honourable members heard the Leader of the Opposition discount it? That is said by the Leader of the Government in Queensland, the Hon. Sir Joh Bjelke-Petersen; not only that but he goes on and says-this is in black and white in a government document, produced by that Government and presented to the conference-there will be `a fringe benefits tax on the beneficiary . . .'. The document goes on: (but with employers to be required to record such benefits on group certificates). Can honourable members imagine that? We talk about section 26 (e). We talk about the rorts and the rigging that goes on, and here is the Premier of Queensland saying this. I might say that I have tried to raise this issue before. It has been put in many Press releases by the Leader of the Opposition in Queensland, Neville Warburton, and by me in Queensland, but for some reason the newspapers have not run it. They have left this passage out of all the releases we have put out. Let the Leader of the Opposition in this House explain his attitude to this. Does he now disagree with the Premier of Queensland? Does he disagree with the idea put forward by the National Party Government in that State? Does the Leader of the National Party agree with this, because we have heard him talk about his attitude to the fringe benefits tax? Do we have some conflict here? Do we have a State National Party Government promoting one thing and the Federal National Party promoting something else? Let us hear about the double standards and the conflict and the two types of views, because we have it here in black and white. I have said before that this Opposition, when in government, was a government of double standards. This is the Opposition which, when in government, placed an intolerable tax burden on the majority of honest Australians. I notice when the Leader of the Opposition was speaking he made some comparisons of what it was like under the Liberal-National Party Government and what it has been like under the Hawke Government. Let us put the facts on the record. Back under the Howard Government an employee earning $16,380 paid an average tax of 21.6 per cent. So that meant that if he was earning that sort of money he would pay $67.99 in tax per week. Under the Hawke Government, with its proposals, as honourable members will appreciate, in stages 2 and 3 which are now being implemented by this legislation, a person earning $16,380 will pay 17.7 per cent average tax. That is a drop of $12.30 a week. Let us look at an employee earning $18,221. Under the Howard Government the average tax was 22.5c in the dollar. So that person paid $78.61 every week. Under the Hawke Government that would be 18.8 per cent, a drop of $12.67 a week. We must appreciate that this is what happened under the Howard-Fraser Government, but let us keep calling it the Howard Government so people will remember. A nurse was paying 22.8 per cent average tax under that Government. Under the Hawke Government that is down to 19.2 per cent, a saving of $12.81. A teacher on $23,000 a year under the Howard Government paid an average tax of 27.4 per cent. Under the Hawke Government that person pays 23.8 per cent. Managers on $30,000, whom the Opposition say they represent, under the Howard Government paid 31 per cent or 31c for every dollar they earned. Under the Hawke Government they would pay 26.7c in the dollar. It is important that people start to appreciate just what we are doing. Yet we find that this is the Opposition that says that it does not want any of the changes we are putting forward. In fact it will cast them out lock, stock and barrel. But what is it putting in instead? It is talking about bringing in a flat tax system. It talks about double standards. We heard the Leader of the National Party say that he wanted to introduce a flat tax of 20 per cent. But what did Mr Howard say? I will quote from a report on him in the Canberra Times. Mr DEPUTY SPEAKER(Mr Blanchard) —Order! I remind the honourable member that he should refer to the Leader of the Opposition by his title of Leader of the Opposition. Mr WRIGHT —I refer to the comments made by the Leader of the Opposition, on 5 February 1981 in the Canberra Times. He referred to this whole concept of a flat tax and said: Eighty per cent of Australian workers would be forced on to a higher tax scale if the National Party's flat tax proposal was introduced. He went on to say that the 20 per cent flat tax rate suggested by the Nationals would cause a shortfall of $7 billion in government revenue in the first year. Now we find that the Leader of the Opposition is supporting the concept of a flat tax. We wonder from day to day what the Opposition is going to come forward with next. We also note that it does not understand what is really taking place here. In Rockhampton on the weekend the New Right talked about changes in the tax rate. Its members were arguing about the changes, quite unaware of what this Government is already doing in that area. They are totally unaware that in 1984 we had already changed the 30 per cent marginal tax rate and brought it down to 25 per cent. We are also now changing the total tax system. Why are we doing this? We are doing it to give that incentive, to give people the reason to work harder, to increase productivity. That is what we are about, yet the likes of Prue Acton and Paul Terry standing up and calling for changes in the tax system do not know what is going on. I ask the Treasurer please to put together a package and send it to Prue Acton, to Paul Terry, to Maurice Binsted and to a few of these others so that they can start to understand what we are about. Let the people understand too because there is some confusion, I tell honourable members and Mr Deputy Speaker, as to what really takes place. I was at a place called Moranbah recently and a teacher came up to me and said that she was paying 60c in the dollar in tax. She presented me with her group certificate, which showed that she had earned $24,700 for the year. I looked at the group certificate and saw that the tax she had paid was $6,300. I said `What is the percentage?' and she said `25 per cent' and swallowed it. She did not really understand that there is an average tax system. People do not understand today what the Hawke Labor Government is doing. They do not understand the tax system. There has been confusion amongst the people as they do not understand the difference between an average tax and a marginal tax rate. But let them appreciate just what we are doing. The marginal tax rate of 30 per cent will drop to 29 per cent; the marginal tax rates of 46 per cent and 43 per cent will, by July next year, go down to 40 per cent; those on 48 per cent will go right down to 40 per cent also in July next year; and the top marginal tax rate, the one that hurts a lot of people in my own area, such as the coal miners and others, will drop from 60 per cent to 49 per cent. We are addressing the problems and we do not have the double standard that the Opposition has. Let me conclude, because my time is going. Let the Opposition tell us about the double standards which we have heard today. Let the honourable member for Gwydir now come out and tell us about his travel allowance. Let him respond to this Parliament as to what he has really been doing in claiming for his travel allowance when he has a principal place of residence in the northern part of New South Wales. Mr HUNT(Gwydir) —Mr Deputy Speaker, I claim to have been misrepresented. The honourable member who has just resumed his seat, the honourable member for Capricornia (Mr Wright), said that I was in the same situation as the Treasurer (Mr Keating). That does misrepresent the position. My place of residence is my property, Dunumbral. It is my home at Collarenebri, 130 miles west of Moree. It is served by daily air services on weekdays. I represent one of the largest electorates in New South Wales. I spend as much time there as my parliamentary duties allow, including holidays and weekends when not on electoral or parliamentary business. I might say that during parliamentary sittings and official business in this place I need to be in Canberra, like most parliamentary members, and I claim an entitlement for overnight allowances, as I am entitled to do. I think that the honourable member ought to recognise that all the honourable members do it. I am at my home base, my place of residence, from time to time as duties permit. I maintain an active and close involvement in the running of my property. I am not there as much as I would like but I am there as much as my duties permit. Mr HICKS(Riverina-Darling)(5.30) —After 20 minutes of huff and bluff by the honourable member for Capricornia (Mr Wright) we still have the heaviest taxing government in our history. The Income Tax Rates Bill, the Income Tax Bill and the Taxation Laws (Miscellaneous Provisions) Bill bring major changes to the way in which Australians are slugged by income tax. The Government is claiming kudos for being a great reformer of the taxation system in this country. Let us have a quick look at these great reforms. We have had the introduction of a capital gains tax, a fringe benefits tax, massive hikes in sales tax and taxes on fuel. These taxes separately, and combined, have the effect of stifling investment, killing incentive, reducing employment opportunities and strangling the ability of major industries to compete in the market-place at a time when conditions are already most difficult, particularly in the rural areas of Australia. The Government has searched for new items to tax. We now even have a tax on the kitchen sink and, worse still, on the septic tank. The result of all these tax reforms is that Australians are now more heavily taxed than at any other time since World War II. One of the Bills before us today is the sweetener designed to help us forget the incredible new tax burdens elsewhere. This Bill will give taxpayers earning less than $19,500 in 1986-87 the tax saving of less than one lousy cent in the dollar. I have seen people walk past a cent and not even bend over to pick it up because of the way inflation is going in this country. The majority of Australians on the average wage will receive a tax reduction of less than 2c. Mr Braithwaite —About the same value as a Halfpenny. Mr HICKS —About the same value as a Halfpenny. Those taxpayers on the top marginal rate will save less than 3c in the dollar in the 1986-87 financial year. One of the other Bills before us today-the Medicare Levy Bill-increases the Medicare levy by 25 per cent, thus reducing markedly the already minute cuts in personal income tax rates. That is another broken promise. The long awaited personal tax cuts have been effectively wiped out by the new tax increases announced in the Budget. The increase in the Medicare levy, sales taxes and fuel excises alone will raise $1.4 billion in 1986-87. So much for the statements by the honourable member for Capricornia. It is ordinary Australians who will provide this tax money. The inescapable fact is that the Hawke Labor Government is a big spending, big taxing government. We see examples of this every day as we move around our electorates and Australia. The Treasurer (Mr Keating) is the greatest tax gatherer this country has ever known. His latest Budget will collect 25.5 per cent of gross domestic product in tax. Mr Hunt —How much? Mr HICKS —Some 25 per cent of GDP will be collected in tax. Mr McVeigh —There is not much left for the rest of us. Mr HICKS —There is not much left to get this country on the road again. This is an all time record high level. The real problem is the Government's continued refusal to attack expenditure. It is prepared only to nibble around the edges like mice around a wheat stack. Government expenditure under the Hawke Government has increased by 3.9 per cent per year in real terms. This is almost double the seven-year average of the previous Liberal-National Party Government. The Government's latest Budget has the fourth highest expenditure level in post-war Australia. The three highest were the previous Budgets of the Hawke Government. It is little wonder ordinary Australians are staggering under the tax burden imposed by this Government. It is the ordinary pay as you earn and income taxpayers who are bearing the greatest load. The Minister for Employment and Industrial Relations (Mr Willis) said earlier this week that we could learn from countries overseas. Instead of looking to countries such as Sweden, the highest taxing nation in the Western world, we should be following the example of countries such as the United States of America which are significantly reducing personal income tax levels. We must move towards a much lower and flatter personal income tax system in order to restore incentive to the ordinary Australian worker. People in Australia who rely on transport over long distances for the supply of goods and services-people such as those living in the electorate of Riverina-Darling, Gwydir and other electorates-- Mr Tim Fischer —Farrer. Mr HICKS —Richmond and Farrer-- Mr Braithwaite —They are the salt of the earth. Mr HICKS —They are the salt of the earth-and those who use fuel in producing their incomes are being particularly savaged by the Hawke Government through its indecent levels of taxation on fuel. The amount of excise on petroleum products has risen from $1,293m in 1982-83 to an estimated staggering $5,644m in 1986-87. If that were in the pockets of the everyday Australian, imagine what he could do with it. This represents an increase of 336 per cent. The Government must, as a matter of priority, reduce the dependence on fuel as a source of revenue. The heavy taxation of fuel is a significant drain on the income of many Australians, especially those living in rural areas who must travel large distances. A classic example of the Government's greed is the recent decision on fuel prices which will result in an effective increase of 6.5c per litre in the actual cost of distillate used on farms in the space of one month. This represents an increase of 24 per cent. Imagine an increase of 24 per cent in one month. The Government has done a neat fiddle. Instead of the change in the tax on fuel being revenue neutral, as the Government claims, the Treasury has actually gained, as less tax will rebated to farmers. Fuel costs represent an average of 8 per cent on total input costs in agricultural industries. With most of our primary industries facing long hauls to the coast for markets and export the high level of tax on fuel represents a tax on our export industries. The only taxes on fuel should be those to support road programs such as the Australian land transport program and the bicentennial road development program introduced by the honourable member for Gwydir (Mr Hunt). The present Government will long be remembered for the record level of taxation it has imposed on all Australians. Not content with excessively taxing the Australian people, the Government is now responsible for the situation where ordinary law abiding citizens are being harassed by the Australian Taxation Office and forced to pay massive fees to challenge a Taxation Office decision. I refer, of course, to reports of tax officials harassing small businesses in order to obtain information for the ill-founded fringe benefits tax and the Budget decision to charge a $200 filing fee to refer an objection to a Taxation Office decision to the Administrative Appeals Tribunal. Going on the reports I have had of the fringe benefits tax, it could be that another 2,000 public servants will have to be put on. Obviously the Prime Minister (Mr Hawke) and the Treasurer are not satisfied with being the greatest tax gatherers this country has known. They are determined to bludgeon every possible tax dollar out of Australians and they will make it as difficult as possible for anyone to have returned to him any moneys wrongly collected. In the last few days I have contacted many primary producers, small business people and salary and wage earners in my electorate. Their common cry is: `Get off our backs with your high taxing policy so we, in turn, can get on with trying to produce some wealth for our nation'. The Australian people will not be fooled by the largely illusory tax cuts embodied in these Bills. They all know that this Government is gathering tax at record levels. Mr LAMB(Streeton)(5.38) —I will make two points about the speech of the honourable member for Riverina-Darling (Mr Hicks). First, it is a typical example of what we have heard repeatedly from speakers on the other side and that is it misrepresents the level of the tax cuts which are being brought in by this Government. He mentioned a 1c cut on the marginal tax rate, a tax reduction from 26c to 25c in the dollar. What he failed to say was that this Government had already introduced a 4c cut in the marginal rate of tax from 30 per cent which is what we had when the Opposition was in government. Let us look at the matter. This Government has brought in a 5c in the dollar reduction on the marginal rate of tax, a reduction of 16 per cent. That is something of which we are proud but it is something about which the Opposition does not want to talk. Before the honourable member for Riverina-Darling leaves the chamber he may be interested to learn the important thing he did not say. Not once did we hear any defence to the claims by the honourable member for Capricornia (Mr Wright) that the Deputy Leader of the National Party, the honourable member for Gwydir (Mr Hunt), has drawn very healthy travelling allowances while he has his principal home in Canberra. We have no quibble with that because the Remuneration Tribunal set the standards and the rates relating to that and we accept them. I return to the major part of my contribution. I remind the Parliament that the Income Tax Bill and the Taxation Laws (Miscellaneous Provisions) Bill introduce another portion of the Government's tax reform package which has brought greater equity and fairness to a tax system which had earned the disrespect and disaffection of the Australian people. This is no wonder, because of the rorts that had gone on and the inequitable load placed on lower wage and salary earners through the tax scales that we inherited from the Opposition. I remind the House that that package was revenue neutral. It took not one cent, not one dollar more from the people than it was giving. It was a redistribution of the load of taxation that is the hallmark of that tax package. For far too long the pay as you earn taxpayers, partnerships, small unincorporated businesses, have had to pay more than their fair share of tax in a system which worked against them. The reductions in personal income tax scales which will restore to taxpayers some $4.5 billion on 1 December this year and 1 July next year are a big move to redress the imbalance and to spread taxes more fairly across the economy. These reductions are possible only because of the Government's moves to eliminate the inequities and abuses in our tax system and the demonstrated ability of this Government to equitably and responsibly restrain expenditures. Far from what the honourable member for Riverina-Darling had to say, this Government has shown that it can reduce Forward Estimates, forward outlays, Budget spending, by a huge $4 billion and so come into this House with a Budget deficit of $3.5 billion, which stands in stark contrast to the $9 billion that the present Leader of the Opposition, the then Treasurer, gave to this House as his legacy as the world's worst Treasurer. Despite the bleatings from some sections of business that they are overtaxed, a glance at the Budget receipts indicates that PAYE taxpayers will still carry the major burden. Unfortunately, it is still over half of the total revenue. When we add the sales tax and the import duties that are usually passed on to the purchaser-with, incidentally, margins added to them by business-we find another 15 per cent. But the company tax contribution is still less than 10 per cent. The fringe benefits tax-I will talk more about that later-of which we have heard so much contributes only one-fifth of one per cent to government revenue. PAYE taxpayers will receive $4.5 billion in tax cuts, not only through cuts in the marginal rates of tax but also through an increase in the tax-free threshold from $4,595 to $5,100. This will have immediate and direct benefit to the lowest income earners, the pensioners and those on small superannuations, and it will ease the poverty traps for pensioners earning a little to help themselves. The cuts in the marginal rates of tax are such that by 1 July no one, no PAYE taxpayer-in fact, no tax levels-will pay more than 50 per cent of salary as tax. No portion, no extra dollar that they earn will carry more than 50 per cent tax. The average rate of tax is substantially lower. The Opposition has been less than honest to the public in the big tax debate. It has attempted to confuse people, as the honourable member for Capricornia so adequately said, by obscuring the difference between marginal rates of tax and average rates of tax. The Opposition's obvious love affair with the flat rate of tax set at, according to the Leader of the National Party of Australia (Mr Sinclair), 20 per cent and, according to the Premier of Queensland, at 25 per cent, without a tax-free threshold has superficial attraction. Even the most cursory glance, the most casual examination, will show that only the highest paid people would benefit from a flat rate because for the vast majority of people it would mean a huge increase in tax; for example, average weekly wage earners on some $18,000 would be paying under that proposal some 8 per cent more-$8 more in every $100 that they earn. The Opposition's proposal would hit hardest those who are protected now by the tax-free threshold, the pensioners, the small superannuitants, and those in poverty traps. The Opposition talks about how high taxes dull incentive, but it never did anything about the high rates of marginal tax while it was in office. I repeat, no one will pay more than 49c on any extra dollar earned. That will be a boost to incentive. Actually, it has never been proved that high tax rates remove incentive or create incentive to work harder. A higher income is not the only thing that turns people on and drives people; there are other rewards in life, such as job satisfaction, achievement and pride. But they are not the sort of values we hear praised and inculcated by the Opposition. No, it is the mighty dollar that drives it, and it is the mighty dollar tax cheats who drive its policies. (Quorum formed) This Government's reasons for the tax cuts are based more on restoring equity and justice to the tax system so that the public will regain their confidence in the tax system itself. Furthermore, it removes another incentive-the incentive to cheat, the incentive to devise tax schemes to avoid paying a fair share of tax and ultimately to cheat the community. If I could borrow from the former Leader of the Opposition, the honourable member for Kooyong (Mr Peacock), his now infamous phrase about fringe benefits tax, I could parody the current Leader of the Opposition. He says he wants to make the tax issue an issue for the next 18 months-a challenge we are more than ready to accept. He would be going around the country saying: `Vote for me if you want tax cheats. Vote for me if you want tax evasion, and vote for Labor if you want a tax system with equity and fairness'. Anyone who has any doubts about the equity and proper nature of the fringe benefits tax should read the editorial in the Australian Financial Review of Tuesday, 12 August this year. That editorial is a fine exposition of why that tax is essential, why it will work and why it will bring equity to the tax system. It is unfortunate that time does not allow me to quote it. One thing that is clear in this debate is that the Opposition must come clean on its approach to the fringe benefits tax. It must explain how it will reduce income tax rates if at the same time it also repeals the measures we have introduced to reduce or banish tax evasion. If it allows tax evasion again to prosper through the removal of capital gains legislation and if it reintroduces untaxed perks through negative gearing on property, the only conclusion is that ordinary wage and salary earners-PAYE taxpayers-will bear a higher burden of tax and tax rates will rise. The other alternative is to cut important Government programs such as child care, health, education, road funding, defence and social security pensions. It cannot have it both ways. It has become clear that the Opposition cannot keep its promises because they are false promises. It has attempted to whip up a campaign against the fringe benefits tax in order to appease the new far Right, but in fact it has realised that the ordinary public has accepted the justice of the fringe benefits tax. Where does the Opposition stand on the question of the fringe benefits tax? The facts are that the pretenders opposite have indicated on more than one occasion that they would have a fringe benefits tax of their own. On 30 July the Leader of the Opposition (Mr Howard) said that the fringe benefits tax `would be dealt with in another fashion'. On 20 August the shadow Treasurer, the honourable member for Mackellar (Mr Carlton), said that the coalition would `feel justified in being tougher on taxing those sorts of (fringe) benefits'. On 27 August he again said that the coalition would remove the fringe benefits tax and `then we would be back with the old law which, in fact, imposed a tax on the employee for a benefit received'. So where does the Opposition stand? It will not clarify the situation because it thinks it is on a winner, but I tell the Opposition that it is not. The people are not naive enough to accept the hypocrisy of the Opposition and will treat it as irrelevant until it comes clean. My belief is that the Opposition will stick to Labor's fringe benefits tax, should it ever unfortunately gain government, because it is administratively simpler and easier for the employer to calculate. These tax cuts and the new lower marginal rates of tax will provide a big stimulus to the economy. Increased spending power means increased demand which, when coupled with improved local competitiveness through devaluation, efficiency and the Government's Buy Australia campaign, will mean a greater demand for Australian produced goods. In turn, this means higher employment, as predicted so properly by the recent Organisation for Economic Co-operation and Development statement, and less call on the unemployment benefit. The tax cuts are part of the Government's recipe for the Australian revival and I commend them to the House. Dr HARRY EDWARDS(Berowra)(5.53) —I can assure the honourable member for Stretton that this Opposition will be pleased to take the Government on over the next 18 months on the fringe benefits tax. It is an absurdly complex tax; it is an anti-business and anti-employment tax. It is a tax which impinges on football club prizes, safety awards, retirement benefits, compulsory accommodation and food for farm workers under awards, religious institutions and some charities. Mr Hodgman —Shame! Dr HARRY EDWARDS —Of course it impinges on such things, as the honourable member for Denison recognises. I can assure the honourable member for Stretton that the Australian people will not have a bar of this tax. Mr Lamb —Mr Deputy Speaker, I rise on a point of order. This is becoming increasingly unbearable. My electorate is Streeton, not Stretton. Dr HARRY EDWARDS —I am pleased to correctly call the honourable gentleman the honourable member for Streeton. The principal aspect of the Income Tax Rates Bill 1986, the Income Tax Bill 1986 and the Taxation Laws (Miscellaneous Provisions) Bill 1986 is to set out the tax scales that the Government is proposing to implement as part of its `reform package'. There is to be one instalment on 1 December and a second instalment on 1 July next year. As I have said before, I have the gravest doubts that the second instalment will ever see the light of day, for the reasons that I recently set out in my speech on the Budget. I will come back to that, but let me make the point that even if it is introduced, we will still have a tax scale where the top marginal rate of 50.25c in the dollar comes in at $35,000. So 50.25c of every extra dollar earned or increase in income above that level will go in tax. I say 50.25 deliberately; it is made up by the 49c in the proposed formal tax scale and the 1.25 per cent Medicare levy. Anyone who has completed a tax form since Labor assumed office knows how real that additional one percentage point, or now 1.25 percentage points, of tax on the whole of a taxable income is. So we are talking about a situation where over half of any additional income or increase in income will still go in tax. That rate is certainly better than the 61.25 per cent that prevails at present. I concede that the 60 per cent rate was bequeathed from the previous Government. Its efforts to reduce that rate were thwarted when it sought to change the mix between the direct and the indirect tax package. However, that is in the past and nothing changes the fact that either 61.25 per cent or 50.25 per cent-the great reform rate that we may get next year-is too high. It is exploitative and immoral. It is-- Mr Hodgman —It is robbery. Dr HARRY EDWARDS —It is robbery and it elicits an immoral response. When a government appropriates 61 per cent or 50 per cent plus of earnings in this way it is strongly resisted and taxpayers in this range inevitably get into avoidance or evasion in one form or another, including fringe benefits. If we reformed the tax scale, the need to do something about fringe benefits, but never this Government's fringe benefits tax, would be greatly reduced. I will recount the way in which this tax scale has changed over the years. In 1954-55, as I am sure the honourable member for Streeton would know, the maximum rate came in at something like 18 times average earnings. That would be equivalent today to an income of the order of $400,000 per annum. As recently as 1972 the maximum rate came in at the equivalent of an income of $100,000, but today the maximum rate comes in at $35,000. I say without equivocation that the Liberal and National parties' pledge is to do better than this Keating scale. It is not for me in this debate to second guess the Opposition's tax policy in this respect, but I would say that if we could not implement a tax rate in this range of income at significantly less than half of every additional dollar going to the Government, which will create incentive effects of a significant order, we would certainly be failing the aspirations of so many Australians out there who want to see this country go ahead, who are ready and willing to put in the effort and to take additional risks, and to increase productivity, provided that the Government does not make off with half or more of the additional rewards. I have been focusing on that top end of the proposed rate scale but the honourable member for Streeton also made reference to the other end of the scale-the no tax threshold. In the proposed new scale, the no tax threshold-the first point on the tax scale, the level of income up to which no tax is paid-is increased from $4,595 to $5,100. I believe that is a retrograde step. Whilst the existence of the no-tax threshold has certain administrative and other advantages, it is subject to a major criticism. I quote from the Government's draft White Paper, `Reform of the Australian Taxation System', published last year. Section 11.4 on page 110 states: As a means of providing that low income earners do not bear tax . . . the tax-free threshold is a very expensive concession in terms of taxation revenue forgone since all taxpayers enjoy the threshold regardless of size of income. It is, moreover, a generous concession in that many taxpayers with a low taxable income (e.g. second income earners in a family, students working part time, part-year workers, large wealth holders) are not genuinely needy in the sense of having to rely solely on that income for support. I believe that is a very important point. I draw the attention of the House to the Monash University Centre for Policy Studies, which took up this line of thought and came up, last year, at the time of the National Taxation Summit, with its option D. Option D abolishes the no-tax threshold except for the genuinely low income needy, and imposes on everybody else tax on `first dollars' thereby enabling reduced rates of tax on `last dollars'. In this way it could provide for a tax rate scale of 20c in the dollar for incomes up to $20,000 per annum; 30c in the dollar for incomes from $20,000 to $35,000; and a maximum rate of 40c in the dollar for incomes of $35,000 and above. It achieves this while at the same time yielding much the same total revenue, but without the necessity for the fringe benefits tax or any of the other so-called `reform' measures of the Hawke Government. I am not suggesting that there are not bugs in attempting to proceed along those lines, but it is certainly a proposal worth considering. I come back to a point I mentioned earlier. The Government, in putting before us this legislation providing for tax scales to be implemented, hopefully on 1 December and again on 1 July next year, is engaging in little short of an act of bravado. The probability that the Government will actually implement these cuts in the light of the deficit situation likely to prevail next year is very low. The honourable member for Streeton referred to the hoary old charge that the former Government passed on to this Government a large deficit. I will not take the time to refute that charge at this stage. Mr Braithwaite —It is not true. Dr HARRY EDWARDS —It is definitely not true. The honourable member then referred to the current Budget deficit of $3.5 billion. That deficit is undoubtedly a phoney. As I have previously argued in this House, the $3.5 billion deficit is due to the significant increase in indirect taxes but also to a number of one-off items such as the deferral of the very tax changes before the House, which involves a saving of $650 million which will not be available next year. Also a major component of the one-off profit of the Reserve Bank of Australia, about $600 million, will not recur if the Government's policy is successful. Further the Government's expenditure cuts add up to some $500m less in 1987-88 than this year because of changes in timing this year. So if one takes those factors into consideration, and there are others, the underlying deficit this year is in excess of $5 billion. The Government is telling us that on top of that it will implement tax changes at a cost of an additional $3 billion. This will mean that the Government will enter next year with an underlying or implied deficit of the order of $8 billion. I say this to underline the very high probability that, given this situation, the likelihood of the Government going ahead with these tax changes is very slight. Mr Braithwaite —It is not the first time they have broken promises. Dr HARRY EDWARDS —The Government has a history of broken promises, as my colleague says. Even with these changes, the average wage earner will still be paying tax at a higher marginal and average tax rate than he was when the Hawke Government came to power. That is the impact on the individual of the fact that this Government is the biggest taxing government ever. In March 1983, the single person had an average tax rate of 22.9 per cent and a marginal tax rate of 30 per cent. In July 1987, even if these changes have been implemented, the average taxpayer will be on an average tax rate of 24.5 per cent and a marginal tax rate of 40 per cent. Mr Braithwaite —It has gone up. Dr HARRY EDWARDS —It is going up. It has gone up continuously from the time the Government acceded to office. Even if the Government implements these changes, a significant increase will still prevail. As the Leader of the Opposition (Mr Howard) pointed out, this is the biggest taxing government ever. Fourteen new taxes have been introduced: The fringe benefits tax, the capital gains tax, the entertainment tax, the removal of negative gearing provisions, the lump sum superannuation tax, the increased company tax rate, new wholesale taxes, increased petrol excise, the automatic biannual indexation of product excise rates, the wine tax, and so on. I will not continue the list. Mr Braithwaite —What a record. Dr HARRY EDWARDS —As my colleague says, what a record. This is the biggest taxing government, imposing the biggest variety of taxes, one could possibly imagine. We have the proposed new tax scales. While they are some improvement on what is available now, it is imperative for the future productive development of the country that marginal tax rates really be reduced. Under the policies of this Government, that is not going to happen. Dr CHARLESWORTH(Perth)(6.08) —The honourable member for Berowra (Dr Harry Edwards), the honourable member for Riverina-Darling (Mr Hicks) and the honourable member for Bennelong (Mr Howard) have again suggested that the Hawke Government is the biggest taxing government in the history of this country. However, we need to remember two important things about the figures they cite. The first is that if one extracts the Medicare payments, which are only a substitute for private health payments, and one looks at the figures then, the biggest taxing Treasurer in the history of this country is the honourable member for Bennelong, who taxed at a rate of 24.5 per cent of gross domestic product. The other important factor one must remember is that there are now half a million more taxpayers in this country than there were then. So significantly more people are paying tax now than were previously as a result of the success of this Government in the area of unemployment. I suppose that the honourable member for Kooyong (Mr Peacock) would be annoyed that the honourable member for Bennelong was setting the agenda for the next election in his speech. It seems to us on this side of the House that, by the time of the next election, the honourable member for Kooyong most likely will have hold of the reins of Opposition. Currently, a taxpayer who earns $35,000 pays tax at a rate of 60c in the dollar. Thirty-five years ago, in 1985 dollar terms, the 60c rate did not cut in until one earned $400,000, which I am sure all would agree would apply to only very wealthy persons. Thirty years ago, a person on average weekly earnings paid tax at 19c in the dollar. He now pays tax at 46c in the dollar. Thirty years ago, one per cent of the population paid tax at 46c in the dollar. Nowadays, more than 40 per cent of the population pay tax at that rate. That is the legacy that was left to the Government by the Opposition. The tax structure was limping. The tax system had become unfair. Oppressive marginal rates encouraged dishonesty and produced cheats and rorters. Tax avoidance and tax evasion was a national pastime. Indeed, it was a scandal in this country. The Opposition had its chance. The honourable member for Berowra said that when the Opposition is in government-God forbid that should ever happen-it will do better; it will decrease the marginal rates by more than this Government intends in the legislation. However, the Opposition had the best chance ever to restructure the tax system in this country and it did not take it. I have in front of me a set of tables prepared by the Statistics Group of the Parliamentary Library which sets out Commonwealth taxation collections-pay as you earn taxation collections, prescribed payments, company tax, sales tax, crude oil excise duty, other excise duty, customs duty, other taxes, and total taxes. The tables set out taxation collections from the year 1970-71 to 1986-87. If one looks at the figures in all of those categories, one finds that only one new tax came into evidence during the Fraser Government's term in office. There were others, of course, but the significant one was the crude oil excise duty. Between the time that the Fraser Government came into office and 1980-81, that duty went from zero per cent of total tax collections to 9.6 per cent of tax collections. It brought the former Government a $3 billion windfall taxation collection. During that time, it had the best chance that any government ever had in this country to reform the taxation system. It did not take the chance; it spent the money. Unfortunately, I suppose the system became addicted to the money. I seek leave to have the tables incorporated in Hansard. Leave granted. The tables read as follows- COMMONWEALTH TAXATION COLLECTIONS STATISTICS GROUP Department of the Parliamentary Library (Per cent) PAYE (a) Other Income Tax (b) Company Tax (c) Sales Tax Crude Oil Excise Duty Other Excise Duty Customs Duty Other Taxes Total Taxes 1970-71... 33.7 10.3 20.0 8.8 .. 14.6 6.5 6.2 100.0 1971-72... 36.4 11.1 19.3 8.6 .. 15.3 5.9 3.4 100.0 1972-73... 37.4 11.0 19.3 9.1 .. 15.0 6.1 2.2 100.0 1973-74... 39.0 11.5 18.7 8.9 .. 14.3 5.6 2.0 100.0 1974-75... 43.1 11.7 17.4 8.2 .. 12.3 6.0 1.4 100.0 1975-76... 41.8 13.1 15.6 8.4 1.6 12.3 6.2 1.1 100.0 1976-77... 43.5 12.9 14.9 8.4 1.8 10.9 6.5 1.1 100.0 1977-78... 45.3 11.7 15.1 8.3 2.2 10.6 5.8 1.1 100.0 1978-79... 44.8 10.4 13.6 7.6 5.3 11.3 6.3 0.9 100.0 1979-80... 44.6 10.6 13.0 6.8 8.3 9.9 6.0 0.7 100.0 1980-81... 43.6 10.6 15.0 6.5 9.6 8.4 5.8 0.6 100.0 1981-82... 46.2 10.1 13.9 7.6 8.4 7.5 5.7 0.6 100.0 1982-83... 46.2 10.1 12.5 8.6 8.6 8.1 5.2 0.6 100.0 1983-84... 45.0 10.6 11.1 9.4 8.2 9.2 5.4 0.7 100.0 1984-85... 44.9 11.0 11.5 9.5 8.0 8.3 5.7 1.1 100.0 1985-86... 45.4 10.6 11.5 9.8 6.9 8.9 5.7 1.2 100.0 1986-87(d)... 45.4 11.2 12.4 9.9 2.0 12.7 5.1 1.2 100.0 (a) Includes Medicare Levy. (b) Includes Prescribed Payments System. (c) Includes Withholding Tax, Recoupment Tax and Fringe Benefits Tax. (d) Budget Estimate. Source: Budget Paper No. 1 Budget Statements. Compiled at request by the Statistics Group of the Legislative Research Service. COMMONWEALTH TAXATION COLLECTIONS STATISTICS GROUP Department of the Parliamentary Library ($m) PAYE (a) Other Income Tax (b) Company Tax (c) Sales Tax Crude Oil Excise Duty Other Excise Duty Customs Duty Other Taxes Total Taxes 1970-71... 2,432 746 1,443 633 .. 1,053 466 446 7,221 1971-72... 2,889 880 1,535 683 .. 1,212 468 268 7,934 1972-73... 3,161 929 1,634 765 .. 1,268 513 182 8,453 1973-74... 4,238 1,252 2,033 969 .. 1,555 604 222 10,873 1974-75... 6,071 1,643 2,447 1,154 .. 1,729 841 200 14,085 1975-76... 7,020 2,200 2,618 1,408 264 2,068 1,044 186 16,807 1976-77... 8,529 2,525 2,920 1,650 344 2,141 1,273 211 19,596 1977-78... 9,639 2,490 3,213 1,758 476 2,258 1,232 227 21,293 1978-79... 10,398 2,406 3,151 1,770 1,227 2,168 1,457 209 23,235 1979-80... 12,160 2,880 3,547 1,865 2,270 2,695 1,629 204 27,249 1980-81... 14,121 3,423 4,856 2,102 2,108 2,725 1,885 187 32,407 1981-82... 17,417 3,807 5,258 2,854 3,163 2,830 2,157 225 37,711 1982-83... 18,840 4,126 5,107 3,490 3,486 3,320 2,102 261 40,764 1983-84... 19,985 4,725 4,940 4,165 3,651 4,083 2,395 312 44,438 1984-85... 23,554 5,746 6,034 4,966 4,202 4,352 2,987 580 52,421 1985-86... 26,524 6,209 6,702 5,728 4,019 5,187 3,339 691 58,399 1986-87(d)... 29,460 7,280 8,065 6,434 1,316 8,210 3,336 784 64,885 (a) Includes Medicare Levy. (b) Includes Prescribed Payments System. (c) Includes Withholding Tax, Recoupment Tax and Fringe Benefits Tax. (d) Budget Estimate. Source: Budget Paper No. 1 Budget Statements. Compiled at request by the Statistics Group of the Legislative Research Service. STATISTICS GROUP Department of Parliamentary Library COMMONWEALTH TAXATION COLLECTIONS Taxation collections Tax collections as % of G.D.P. $m % 1970-71... 7,221 21.1 1971-72... 7,934 20.7 1972-73... 8,453 19.3 1973-74... 10,873 20.7 1974-75... 14,085 22.3 1975-76... 16.807 22.5 1976-77... 19,596 23.0 1977-78... 21,293 22.9 1978-79... 23,235 22.1 1979-80... 27,249 22.9 1980-81... 32,407 24.0 1981-82... 37,711 24.7 1982-83... 40,765 24.4 1983-84... 44,438 23.5 1984-85... 52,421 25.0 1985-86... 58,399 25.2 1986-87(a)... 64,885 25.5 (a) Budget estimate. Source: Budget Paper No. 1 Budget Statements. Compiled at request by the Statistics Group of the Legislative Research Service. Dr CHARLESWORTH —I thank the House. The package of measures that the Hawke Government has introduced is an attempt to share the load in tax, to provide some fairness, and to prevent and remove perks for the privileged. It is an opportunity to allow for a more effective allocation of the nation's resources. Expensive goods and services, not necessarily of good quality but for which employers did not have to pay the full value, which were subsidised by taxpayers, were the norm. That was a way in which resources could be allocated very ineffectively. The package is an opportunity for the Government to restore incentive by lowering the marginal tax rates. Significant cuts in personal taxation, which were announced in September 1985, are the thrust of the legislation. There is an increase in the tax-free threshold from $4,595 to $5,100. There are significant tax rate reductions to be implemented on 1 December 1986 and further marginal taxation rate reductions on 1 July 1987. The top rate, as of that date, will be 49c in the dollar. The changes will have the effect of reducing, by about 5 per cent, the tax paid by most workers in this country. Why is that important? It is important because it provides incentive. The coalition has said that it is happy to attach its wagon to the engine of incentive to pull it into the station. Where does incentive start and greed and avarice take over when one considers the Opposition's policies? It wants to bring back all the rorts. The Government wants a fair system, a progressive system, without oppressive marginal rates. It wants a system which encourages enterprise, and capital investment and which has a functional economic purpose; not money that is misdirected to a tax haven. It wants business to make a profit but pay its fair share of tax. It does not want business to direct its efforts to the avoidance of taxation. The fundamentals have been put in place by the Government. We have provided an environment of wage stability and responsible wage outcomes. Organisation for Economic Co-operation and Development figures show that in the years 1983 to 1985 Australia had significantly better results in terms of real annual wage changes than a number of other countries. The real annual wage change in Australia was minus 5.3 per cent in that time. In the United States of America, it was minus 0.6 per cent; in Japan, it was plus 5.8 per cent; in Germany, it was plus 3.8 per cent; in France, it was plus 3.1 per cent; and in the United Kingdom, it was plus 10.9 per cent. Australia has a competitive and a responsible wage structure. The devaluation, perhaps the boldest policy move the Government has made, has provided us with a 40 per cent improvement in our pricing structure. These reduced marginal rates-the thrust of the Bill-will provide more incentive to be productive and to earn profits. We have removed the double taxation on dividends. We have removed the Division 7 profits retention tax on small business. We are providing incentive for business. We want to reward business with profit. We do not want to reward it with a tax haven. It is important to quote an article in yesterday's Australian Financial Review, which is not, it is fair to say, a purveyor of socialist views or philosophies. It stated: The pity is that, helped by some persistent politically motivated misinformation, the anomalies and unresolved questions about the tax have obscured its essentially equitable nature in eliminating privileged tax lurks. No just argument can be advanced for allowing executives, self-employed businessmen or professionals to receive a significant proportion of their remuneration as a tax-free fiddle, when the vast bulk of PAYE taxpayers are taxed at the source and have no way of fiddling their tax to any extent. The argument that small businessmen and executives are the most productive sector of the community and are therefore entitled to special tax treatment and incentives is just so much self-interested hogwash. One wonders just how productive an executive might be after a boozy and previously tax-deductible lunch. The reward for capitalist enterprise is profit, not a tax swindle. That is the Government's view. That is the thrust of our moves on tax and the legislation. We hope to provide an environment in which business will be productive and will have the incentive to work hard and earn profits rather than rely on some sort of tax dodge. Members of the Opposition have complained and whinged about the moves the Government has made in taxation areas. I shall consider one area, and that is the restaurant industry. With the implementation of the entertainment tax, there was much guffawing on the other side of the House. The honourable member for Denison (Mr Hodgman) said that 80,000 jobs would be lost. All sorts of figures were thrown around. The honourable member revised the figure and said that 10,000 or 20,000 jobs would be lost. What are the figures? I consulted the Statistics Group of the Parliamentary Library and came up with the following figures. In the year prior to the introduction of the entertainment tax, there was 3.4 per cent growth in employment in the restaurant industry. Subsequent to the introduction of the tax on entertainment, there has been 6.5 per cent growth in the hotel and restaurant industry. Clearly, since then, 11,500 new jobs have been created in that area. The suggestion by Opposition members that the restaurant industry should be underpinned by some sort of a tax rort, that the motor vehicle industry should be underpinned by some sort of a tax swindle and that the building industry needs negative gearing to survive is absurd. It is one of the problems that, for many years, have been part of the malaise in this country. Scarce investment capital has been directed towards unproductive means of expenditure. As a result, many rorts have become institutionalised and there is a belief in the community that perhaps they should remain forever. This Government wants to provide incentive. The Opposition had the chance, in the race to provide incentives, to provide a better and fairer system of taxation. However, it came stone cold motherless last. We want to reward effort with profit and not with a tax fiddle. We have put in place an environment which provides a far fairer system. We have restored Australia's competitive edge. We have put in place marginal tax rates which are much superior to those that existed previously. We have a full imputation system coming along for business. On the expenditure side, we have provided a leaner and more efficient economy. The Opposition had the opportunity to reform the taxation system. It did not take the chance. If it does not like this legislation, let it tell the people that it wants to replace all the rorts and put the marginal rates back to where they were. But I think the Opposition supports this legislation. It does not want to be responsible for putting up marginal rates as high as they were when we took office, and I have great pride in urging that this legislation be accepted. Mr BRAITHWAITE(Dawson)(6.21) —The Income Tax Rates Bill, the Income Tax Bill and the Taxation Laws (Miscellaneous Provisions) Bill are being treated as part of the package of tax reform legislation, and I shall give my assessment of it as a total package. If the policies reflect anything, they reflect the policies of envy, greed and hate of this Labor Government, policies against the productive sector. If it is productive, the Government taxes it. If someone shows initiative, the Government taxes him. Certainly, if someone is wealthy, that is the final straw; he is taxed out of existence. Only a few months ago, the Prime Minister (Mr Hawke) condemned the people in this society whom he deemed to be wealthy as being an infringement against the conditions which he thought should apply at present. That is a sign that profit has become a dirty word. Initiative is to be taxed, and if someone wants to do something in this life, as an Australian, he has to fall out of the initiative and growth sector and into the web of social security. This tax package tries to pull everyone down to a common denominator, but what Australia needs at present is lifting so that we can provide the initiative and growth that it so desperately wants. It is all reflected by the falling Australian dollar. This Labor Government will not be happy until the dollar is worth a halfpenny-and he is likely to be here within a couple of months, depending on when the election occurs. The legislation deals with rates of tax-with what is left to a taxpayer after he has earned his income, bought his goods and carried out the normal weekly activities of work and expenditure. I must say that there is less money in the pocket of the taxpayer now than there was three, six, 10 or 20 years ago, as this Government goes on its crazy path of expenditure on this, that and the other, without taking into consideration what is required to assist the economy's growth. In 1970, someone earning 14 times average weekly earnings was likely to be caught in the high marginal rate, whereas today I understand that about one-tenth of that, or 1.5 times average weekly earnings, will take one into the top bracket. Where is the encouragement? Where is the initiative? Where will the growth come from in a tax system like that? Mr Nehl —There is no incentive. Mr BRAITHWAITE —There is no incentive in a high taxation regime such as this. Let us look at what high taxation does to an economy. Quite apart from the disincentives and the nil growth that I have mentioned, it is an encouragement to tax avoidance, a positive encouragement to tax evasion and an encouragement to those systems through which people try to take, as part of a package, a benefit instead of something in the hand. What the Government claims its package is designed to avoid will still exist. It is just not on. It is just not economics, and it is a sign that the Treasurer (Mr Keating), the Prime Minister and the Government as a whole have no real idea of where they are going or where this package will end up. At the beginning of his presentation of this tax package, the Treasurer said that the Government was aiming for simplicity, fairness and equity. I recall that, in January 1985, the Treasurer announced that there would be a fringe benefits tax on employees. The next day, Cliff Dolan said `No, you will not tax the employee', and the day after that the Treasurer came out and said: `We will tax the employer as per the New Zealand scheme'. Incidentally, the New Zealand fringe benefits scheme is collecting only about 15 to 20 per cent of the tax that it was expected to collect. Obviously, the Treasurer's position is flexible. He is prepared to change from one end to the other. In his presentation of the tax package, he said that the Government would pull down the marginal rate of taxation to 49c, and then it will be everyone's obligation to pay the tax on what he earns because of the reduced rate. I thought he meant that an employee with a tax package with fringe benefits would be the person called upon to pay the tax on the benefits he received. But what happened? He put the tax on the employers. That shows the Government's desire to penalise business and the growth sector of the economy. The policies of hate and of envy are more evident in this fringe benefits tax than in anything else. At the moment, the Government is running scared. It comes in here day after day trying to justify its fringe benefits tax. I am afraid that the task is not to persuade its own back bench members about where it stands on fringe benefits tax. The task is to go out in the community and understand how those people will suffer from compliance with the fringe benefits taxation as from the collection date of 1 November. I would be surprised if the Treasurer could not get an engagement every hour of the day and every day of the week throughout the country addressing those people, hearing what their requirements are and hearing how they are suffering. But, no; he is prepared to stay at home with his travelling allowance in Canberra. Even the Minister for Industry, Technology and Commerce (Senator Button) has said that the whole strategy is wrong in the area over which he has jurisdiction. I suggest to the Prime Minister and the Treasurer that they should not lecture us across the table about something that we know is patently dishonest and wrong. They should get out into the community and tell the people out there. That is where the argument will be lost at the next election, because one thing is clear: The Government will be put out. I ask only one question on taxation, and I have some references here to living away from home. Under the substantiation law-of course, this is something new-and under section 51 of the Income Tax Assessment Act, the major thing about the living away from home allowance is defining the place of abode. Section 51 states that the usual place of abode of an employee is the place where he has his family. As I understand it, the substantiation rule suggests that the travelling allowance relates to travel away from an employee's ordinary place of residence. It goes on in relation to board of review decisions to suggest that under section 51 a man's residence where he lives with his family and sleeps at night is always his place of abode. My question is this: If a living away from home allowance or a travel allowance is paid to a person who is not living away from his residence but is in his normal abode, is that not a living at home allowance? The question that I ask the Government is whether, under those circumstances, that allowance is taxable. The professionalism of the taxation officers would suggest that, under the definition of section 51 in the Treasurer's own legislation, the travelling allowance should be taxed because it is not a living away from home allowance. Despite the legislation brought in by the Treasurer and despite the precedents in the Act, I would certainly like to know the answer to that. This tax package is anything but simple, equitable and fair. When we have 140 pages of legislation of just one tax, it cannot be simple. I appeal to the Australian Taxation Office to realise the costs involved and the imposition on the tax-collecting sector-that is, business people and tax agents, who are being pressed to the limit while trying to comply with these Acts. The Government has paid little regard to their requirements. I am asking for a bit more professionalism from the Taxation Office so that the tax agents can be helped to do their jobs. Debate interrupted. Sitting suspended from 6.30 to 8 p.m. Mr SLIPPER(Fisher) —Madam Speaker, I seek your indulgence to refer to a point of order taken by me during Question Time today, when the honourable member for Throsby (Mr Hollis) asked a question of the Minister for Arts, Heritage and Environment (Mr Cohen). The question was similar to question No. 4681, which is listed on the Notice Paper at page 8874. Madam Speaker, you effectively ruled that it was in order for the honourable member to ask the question of the Minister without notice, notwithstanding the fact that a similar question was already on the Notice Paper. I realise, of course, that if dissent from your ruling were to be moved, it would have been necessary for this to have been attended to immediately. But, for the assistance of honourable members I believe that it would be advantageous if the matter were clarified. Madam Speaker, contrary to your ruling, at page 496 of Pettifer's House of Representatives Practice there is a section dealing with repetition of questions. On page 497 the following words appear: Questions without notice which are substantially the same as questions already on the Notice Paper are not permissible. In view of the contents of Pettifer and in view of my discussions with you, I believe that it would be desirable for members of this place to receive clarification on what rules and practices are to be followed and are to apply in the future. Madam SPEAKER —I thank the honourable member for giving me an opportunity to expand on my ruling. Members will appreciate that the main purpose of the practice of not permitting a question without notice to be asked which is substantially the same as one on the Notice Paper is to prevent the member who placed the question on the Notice Paper being disadvantaged and his question being pre-empted. A secondary consideration is that, if the Minister is able to answer the question without notice, obviously he should have answered the question on notice; but I do not think this consideration is of importance in this particular case. The point of order raised by the honourable member was essentially correct. But it seems to me that common sense and logic dictate that the practice is not intended to apply to a member in respect of his own question because the questions of disadvantage and of pre-empting do not arise. This is the reason I ruled as I did. I should advise members that the practice grew up in a period when there were next to no questions on the Notice Paper and when, perhaps, the practice had more meaning and was easier to apply than it is now. There are doubts in my mind whether the practice has anything to commend it in today's House, when there are so many questions on the Notice Paper and when most questions without notice could well be out of order based on this practice. I feel that members today would not wish to restrict themselves in this way, particularly as some questions may remain on the Notice Paper from one year to the next. I hope that this ruling will be of assistance to honourable members. Mr CARLTON(Mackellar) —Madam Speaker, I seek your indulgence. Would it be possible for this to be taken as an indication of your views on the matter at this stage? Obviously, if the ruling you have given tonight were to alter Pettifer's view, I am not sure that all members of the House would necessarily be satisfied with that. On behalf of the Opposition, I say that we note what you have said, but may we possibly reserve a view on this matter? It should, perhaps, be taken up at some length in another forum. A change to the Standing Orders may be considered-- Madam SPEAKER —That, of course, would go before the Procedure Committee. All members of the House are advised and encouraged to put such matters before the Procedure Committee. Mr CARLTON —Thank you, Madam Speaker. That is what I had in mind. But it struck me that a particular ruling on a particular day to alter what might have been suggested-- Madam SPEAKER —Order! There is no standing order in relation to this matter. It is more a matter of custom and usage than a standing order. But, if the honourable member for Mackellar feels that a standing order is required by the House, I advise and encourage him to put such a matter before the Procedure Committee. Mr CARLTON —Thank you, Madam Speaker. If something is contained in Pettifer-and may- be in Erskine May; I have not checked whether it is-one does not alter it on the run, by way of-- Madam SPEAKER —It is a matter of usage, I think, and common sense and logic come into it. If a member has not received an answer from a Minister to a question on notice, and he asks that question of the Minister again, he is not disadvantaging anyone. That is the reason for the ruling. I suggest that the honourable member takes up the matter further with the Procedure Committee. Mr CARLTON —Thank you, Madam Speaker. Debate resumed. Mr SIMMONS(Calare)(8.06) —I rise to speak tonight in the debate on the Income Tax Rates Bill 1986, the Income Tax Bill 1986 and the Taxation Laws (Miscellaneous Provisions) Bill 1986. The Income Tax Rates Bill is one of a number of quite significant Bills which set the tax regimen for 1986-87 and, most significantly, for 1987-88. This completes a most historic and significant series of tax reform measures-perhaps the most significant tax reform in this nation for decades. In recent times, of course, the tax debate in Australia has occurred on the basis of a number of quite distinct problems that have been part of the taxation system. I will refer briefly to a number of those problems in the context of the rather wide-ranging debate that has occurred today. Taxpayers on relatively moderate incomes lately have been exposed to unprecedentedly high marginal rates of personal income tax. It is not uncommon these days for people who consider themselves to be on relatively modest incomes to be paying what they would consider to be quite high rates of taxation. It is worth while for honourable members to remember that the maximum tax rate from 1 July 1987, which will be the second stage of the Government's tax reform package-the first will commence on 1 December this year-will reduce the maximum tax rate that this Government inherited from the previous Government from 60 per cent to 49 per cent. It is significant, of course, that the 49 per cent rate, which will apply from 1 July next year, will commence at $35,000, which is about one-and-a-half times average weekly earnings. While it is no great boast for any nation to say that no one will pay more than half of his or her additional income in taxation, it is certainly much better, I suggest, to pay a rate of 49 per cent than 60 per cent, as was the case until now and as is certainly the case until 1 December this year. I think it is worth while also to analyse some of the pay as you earn tax instalment liabilities of people on various income ranges. For example, someone who is at present on average weekly earnings has a taxation liability of $4,872. As from 1 December, this will be reduced to $4,680. But from 1 July next year the tax liability will be $4,495. It is worth while to recall that many taxpayers are in receipt of incomes which are well below average weekly earnings. So, for a person who is in receipt of, say, 75 per cent of average weekly earnings, the present taxation liability is $3,003, from 1 December it will be $2,861 and from 1 July next year it will be $2,764. These reductions are possible because of a number of measures incorporated into the Bill, including the Government's decision to increase the tax free threshold from $4,595 to $5,100. There are also reductions in the marginal rate of taxation. In summary, this represents a reduction of about 12 per cent in the taxation liability of most people throughout Australia. I seek the leave of the House to incorporate in Hansard a table which indicates the tax paid on certain levels of income in the financial years 1985-86 through to 1987-88. Leave granted. The table read as follows- INCOME TAX CUTS The tax paid on these incomes in the financial years 1985-86, 1986-87 and 1987-88 is as follows: Income Tax 1985-86 Tax 1986-87 Tax 1987-88 Tax reductions 1986-87- 1985-86 1987-88- 1985-86 $ $ $ $ $ $ 22,443... 5,429 5,216 4,978 213 451 18,502... 3,776 3,620 3,511 156 265 21,232... 4,872 4,680 4,493 192 379 16,832... 3,275 3,129 3,027 146 248 13,876... 2,389 2,259 2,170 130 219 15,924... 3,003 2,861 2,764 142 239 22,157... 5,298 5,089 4,863 209 435 14,461... 2,564 2,431 2,339 133 225 19,068... 3,946 3,787 3,704 159 242 16,618... 3,211 3,065 2,965 146 246 10,846... 1,562 1,454 1,379 108 183 14,301... 2,516 2,384 2,293 132 223 Economics and Commerce Group 25 September 1986...LEGISLATIVE RESEARCH SERVICE Mr SIMMONS —I think that these rates show the generous nature of the tax reductions which are a significant part of the Bill. As from 1 December, bearing in mind that that will be when the first part of the two-stage reduction in taxation will be implemented, someone on 75 per cent of average weekly earnings will receive a weekly tax reduction of $3.90, or 5.8 per cent. Someone on average weekly earnings will have his weekly tax reduced from 1 December by $5.65, or 5.3 per cent. Given the nature of the times in which we live-we are all aware of the difficult terms of trade that have been thrust upon us-it is to the Government's credit that it has still been able to proceed with its taxation reform package. It is significant that we have received quite an amount of criticism about the reforms. Earlier in this debate honourable members said that they had serious reservations about whether the Government would proceed to the second stage of its taxation reduction on 1 July 1987. The Government's decision to introduce these Bills, as it did on Budget night, is a great indication of its sincerity in wishing to introduce genuine tax reductions. An interesting feature of the great tax debate is that our political opponents on the other side of the House, and others within the community, tend to focus on some of the small sections of the overall tax package. They forget-I suppose quite conveniently-that it is a total tax package. References have been made today to the fringe benefits taxation, as well as a number of other matters. We have all seen some of the double standards of Opposition members in respect of fringe benefits taxation. They have conveniently ignored the Government's worthwhile decision to proceed as from 1 July 1987 with the full imputation system of company taxation. It will be a fundamental and long overdue reform of the company tax system. Effectively, it will eliminate the double tax on dividends that are paid to resident shareholders. Tax will be collected from companies and credits will ensure that individual resident shareholders will pay no further tax on them. Indeed, they may have tax on other income offset by the excess credits. (Quorum formed) Before the quorum was called, Madam Speaker, I was saying that to some extent our political opponents opposite, and others within the community, have conveniently forgotten that we are talking about a taxation package and have conveniently focused at times on a narrow section of that package. I refer to the Government's decision to levy a tax on fringe benefits, an area of tax deductions which have been ballooning. In the White Paper last year, which was released for discussion by the Treasurer (Mr Keating), it was revealed that the number of employees receiving goods and services as fringe benefits had risen by 26 per cent in just 12 months from August 1984. The Government had good reason to proceed with fringe benefits taxation. I feel compelled in such a wide-ranging debate to say that there has been a certain amount of double standards in respect of taxation. Some of those double standards have lead to unwarranted attacks by the Opposition on the Treasurer over the past few days. It is most unfortunate that the Opposition has indulged in double standards. How many times have we heard Opposition members ask reasonable questions on the state of the economy? Have we ever heard them make any reasonable comment upon the Government's fiscal strategy? Having no fiscal strategy, wages policy or monetary policy of their own, they are inclined to resort once again to gutter tactics. It is significant that the honourable member for Gwydir (Mr Hunt) owns a house in the exclusive Canberra suburb of Forrest, and that for the purpose of obtaining the travel allowance he lists his family property near Collarenebri in the north-west of New South Wales as his principal place of residence. This is most unfortunate and it is clear that double standards have been applied to the travelling allowance. I ask whether the Leader of the Opposition (Mr Howard) will ask the honourable member to resign on the basis of his own standards, bearing in mind that the Leader of the Opposition has said today that he has obtained an assurance `from all my front benchers that they were observing the rules'. Perhaps `were' is significant. He continued: If I find that some of them aren't, I won't be very amused. Just how fair dinkum is the Leader of the Opposition? Will he be fair dinkum enough to ask for the resignation of the honourable member for Gwydir? As the honourable member for Capricornia (Mr Wright) said earlier today, we are not really attacking the payment of the travelling allowance to senior Ministers and senior shadow Ministers. But what we are saying is that under the Remuneration Tribunal there is an avenue whereby this allowance can be claimed if these people are going to responsibly carry out their duties. How can anyone expect the Treasurer of this nation reasonably to carry out his duties and be expected to travel back and forth from Canberra to Sydney all the time? The honourable member for Gwydir, being the Deputy Leader of the National Party, could also be reasonably expected to claim an accommodation allowance. perhaps the title `travel allowance' is inappropriate. Perhaps we should be referring to it as a ministerial or a shadow ministerial accommodation allowance, because no one in this House surely is denying that all these people-the Treasurer, the honourable member for Gwydir and others-are entitled to claim that? I ask members of the Opposition not to insult our intelligence by getting up and moralising about what the Treasurer is doing when they have their own snouts in the trough as well, because that is total hypocrisy. We are saying that the members of the Opposition cannot have it both ways. They are inferring that there is something wrong with what the Treasurer is doing. I put it to them that if there is something wrong with what the Treasurer is doing-I do not think anyone on our side suggests that there is-then the honourable member for Gwydir is also doing something wrong. I do not believe he is. What about the Leader of the National Party, the right honourable member for New England (Mr Sinclair)? How long has he retained a house in Canberra? How long has he been claiming this allowance? Yet he has also got up and moralised about the standards of this Government. I, and I am sure my colleagues also, find the whole thing totally reprehensible. As I have said, we are not seeking to say that the honourable member for Gwydir is doing anything that he is not entitled to, but please do not get up in this House and suggest that some- how the Treasurer is claiming a travel allowance, just as the honourable member for Gwydir is, but that the Treasurer is somehow doing something wrong but the honourable member for Gwydir is not. I find that a totally nonsense argument. Will the honourable member for Gwydir get up in this House, as he was asked to by the honourable member for Capricornia (Mr Wright) earlier today, and deny the fact that for most of his life his family has lived in Canberra and his children have gone to school in Canberra? Does he stay here on weekends? Does he claim a travelling allowance for the weekends? I say that he cannot have it both ways. I think this has been a most unfortunate debate over the last few days. It has demonstrated the present level of double standards on the part of the Howard fascist Opposition. I find this a regrettable situation. Mr DEPUTY SPEAKER(Mr Leo Mcleay) —Order! The honourable member for Calare will withdraw that remark. Mr SIMMONS —Mr Deputy Speaker, I will certainly withdraw it, but I find it offensive when the honourable member for Denison (Mr Hodgman) consistently refers to us as the Hawke socialist Government. Mr DEPUTY SPEAKER —Order! The honourable member for Calare will withdraw that remark. Mr SIMMONS —I withdraw, Mr Deputy Speaker. I will get back to the point I was making, that the Leader of the Opposition cannot have it both ways. He cannot attack the Treasurer and at the same time get up and make no comment at all about the members of his Party. Yesterday the Leader of the Opposition told a news conference that he believed the travel allowance system should be observed by all those who had an obligation to uphold it. He said that he wanted an assurance, and had gained an assurance, that none of his front benchers were abusing the system. I want to make it quite clear that if in fact the Leader of the Opposition is making those claims, he cannot get up and say that it is wrong for the Treasurer somehow to be doing wrong when the honourable member for Gwydir, a senior member of the Opposition, the Deputy Leader of the National Party, is in fact doing something that is presumably in accordance with the provisions of the Remuneration Tribunal. We are not saying that the honourable member for Gwydir is necessarily doing anything wrong. What we are saying is that he cannot get up in this House and moralise and attack the Treasurer. The Leader of the Opposition cannot sit by idly and defend this position and then say: `It does not really apply to us'. The Leader of the Opposition must come clean. He cannot have this double standard. If he is fair dinkum he will ask the honourable member for Gwydir to resign because, by his own test, the honourable member for Gwydir has in fact breached the standards that he has set. Mr CARLTON(Mackellar)(8.25) —It is most interesting, Mr Deputy Speaker, that the honourable member for Calare (Mr Simmons) should take up this matter of travelling allowance in this taxation debate. What he was drawing attention to was the fact that the honourable member for Blaxland (Mr Keating), the Treasurer of this country, is the person who has been lecturing everybody about the rorts and ramps on expenses; the person who has been talking about brown paper bags being held by workers on trains going down to Granville and looking at the Mercedes-Benz cars going along Parramatta Road; the person who has accused businessmen, small and large, and farmers and the entrepreneurs of this country of ripping off the system. In conjunction with other government Ministers, particularly the Minister for Finance, Senator Walsh, he has lectured them mercilessly. The honourable member for Calare has drawn attention to the fact that the Treasurer has claimed a travelling allowance for staying in his principal residence in Canberra. That is the point that the honourable member for Calare has drawn attention to. The honourable member for Calare who represents the most important regional centres of Orange and Bathurst in New South Wales-represents temporarily those areas-has drawn attention to the fact that the Treasurer of this country, the person responsible for keeping the national books, the person responsible for setting standards of integrity in financial affairs, has put down on a piece of paper that his principal residence is in Sydney when he has no principal residence in Sydney, and as a result has claimed no less than $17,400 tax free from the taxpayer on the basis of a false claim. The honourable member for Calare is sufficiently ill-advised to raise this matter in this House again. Mr Cunningham —Mr Deputy Speaker, I raise a point of order. If the honourable member wishes to raise a substantive motion against the Treasurer, he should do so. He has claimed that the Minister has made a false claim. I ask for that to be withdrawn. If he wishes to make that allegation he should do it by substantive motion and not by this back door, back-stabbing act which the Opposition is carrying out. Mr DEPUTY SPEAKER(Mr Leo McLeay) —Order! There was so much disruption in the chamber that the Chair did not hear precisely what the honourable member for Mackellar was saying. If the honourable member for Mackellar did impute a motive by saying that there was a false claim, he might withdraw that remark. Mr CARLTON —Mr Deputy Speaker, if you require me to withdraw, I withdraw unreservedly. I was drawing attention to the fact that the honourable member for Calare had made accusations against members of the Opposition, and he used the following words: `You have got your snout in the trough as well'. As well as who? As well as the Treasurer? I need say no more than that the honourable member for Calare, a member of the same Party as the Treasurer, has used the words, accusing the Opposition: `You have got your snout in the trough as well'. The clear implication of that is that the Treasurer of this country has his snout in the trough. I would not have used those words: They were used by a member of the Australian Labor Party, the same party as the Treasurer, and they were used in the House of Representatives accusing members of the Opposition, as the honourable member says, of behaving as badly-by extension of the words-as the Treasurer of this country. All I can say is that if a member of the Australian Labor Party, representing such an important regional area as the cities of Orange and Bathurst, is prepared to say that in this House- Mr Tim Fischer —And Lithgow. Mr CARLTON —And also Lithgow, I am prepared to treat the matter seriously and on its merits. All I can say is this: If I were the Treasurer of this country and came from a Sydney constituency-I represent a Sydney constituency, I happen to live in my electorate-- Mr Gayler —So you should too. Mr DEPUTY SPEAKER(Mr Leo McLeay) —Order! The honourable member for Leichhardt will cease interjecting and he will particularly cease interjecting from out of his seat. Mr CARLTON —I understand fully the situation of the Treasurer. I am not in any way decrying what the Treasurer has said about his need to be with his family during the period he works in Canberra. But we have certain rules and people ought to understand what these rules are. They are that most members live in their electorates. They do not have to; it is not required. They are asked to state on the forms they fill in their principal place of residence and that should be the place where they ordinarily reside or where their family lives. Does the Treasurer live in his electorate of Blaxland at Bankstown? He does not. Does he live in Sydney, the city he claims is his principal residence? He most clearly does not. Mr Hand —Do you want us to go into where we all spend our nights? Mr DEPUTY SPEAKER —Order! The honourable member for Melbourne will cease interjecting. Mr CARLTON —Therefore, the Treasurer is perfectly entitled to claim-- Mr Hand —You are talking about-- Mr DEPUTY SPEAKER —Order! I warn the honourable member for Melbourne. Mr CARLTON —This is clearly an organised campaign amongst the Labor Party-- Mr Gayler —Goodness! Mr DEPUTY SPEAKER —Order! I warn the honourable member for Leichhardt. Mr CARLTON —To prevent me from saying what I have to say on this matter. It is quite clear that members in this House have certain views about where they live. When they come to Canberra and leave their families they have to make provision as to where they will live in Canberra, be it in a motel or a hotel, be it renting a place for the whole year and only occupying it for sitting nights, or purchasing a place, which is obviously an expense, and it is perfectly reasonable-- Mr Hollis —Mr Deputy Speaker, I raise a point of order. I am aware that this has been a very wide-ranging debate, but I suggest that the honourable member for Mackellar is taking it a little beyond the bounds of wide-ranging. I understand that we are debating income tax Bills and yet the honourable member is talking about something else. I suggest that he return to the Bills that are on the Notice Paper. Mr DEPUTY SPEAKER —Order! The debate on the legislation has been rather wide-ranging and that was not started by the honourable member for Mackellar. I am sure that sooner or later he will come back to the Income Tax Rates Bill and the associated Bills. He is probably getting to that point now. Mr CARLTON —Thank you, Mr Deputy Speaker. I assure you that I will deal with this unsavoury matter very quickly. The rule is that if members have to make arrangements for temporary accommodation in Canberra they claim travelling allowance for those nights, and that is perfectly reasonable. What has happened is that the Treasurer of this country, who has been lecturing everybody up hill and down dale about tax rorting, has put down on a piece of paper that his principal residence is in Sydney where he clearly does not live and has claimed $17,400 tax free for travelling allowance to Canberra which is his principal residence. I did not raise this matter and I was not going to raise it but for the disgraceful contribution of the honourable member for Calare who accused his Treasurer of having his snout in the trough. As members on both sides of the House know jolly well, I am not accustomed to this sort of stock-in-trade that was used by the honourable member for Calare. He raised the matter; it was the Treasurer who lectured us and it is the Treasurer who is guilty of this offence, and I say no more about it tonight. We are talking about the Income Tax Rates Bill, the Income Tax Bill and the Taxation Laws (Miscellaneous Provisions) Bill and what has happened as a result of the so-called tax reform of the Labor Party. The Opposition is not opposing these three Bills. In respect of the Income Tax Rates Bill, I move: That all words after `That' be omitted with a view to substituting the following words: `whilst not declining to give the Bill a second reading, the House is of the opinion that- (1) the Government's taxation policy, in particular its fringe benefits and capital gains taxes, is causing damage and confusion to business and farmers; (2) the Government's failure to deliver tax cuts on 1 September 1986 as promised in 1985 has caused additional hardship to families, and (3) this Government is the highest taxing Government in history with tax receipts estimated to reach 25.5% of GDP'. What has happened is that the Government, in its 1983 policy speech and its 1984 policy speech, in the National Taxation Summit and preceding that the National Economic Summit Conference, has promised the people of Australia a thorough tax reform which will have the effect of reducing the ordinary rates of tax for lower and middle income earners. That is what this Government has put forward as what it wants to do: Those are the objectives which have been stated by the Prime Minister (Mr Hawke) and the Treasurer in presenting the Government's taxation policy. In the 1984 election campaign and in his policy speech, the Prime Minister said: And unlike any previous tax cuts for more than a decade, their real value to the taxpayers of Australia will not be filched by the theft of double-digit inflation. The tax cuts are the first element in our undertaking to achieve genuine tax reform, and to provide tax relief for the taxpayers, but particularly the middle and low income earners-of Australia-the ordinary hard-working Australians who pay as they earn. Those were the words of the Prime Minister in his 1984 policy speech; that was the commitment of the Australian Labor Party to the Australian people. What do we see? We have had an economic summit, a tax summit and a major tax statement in September last year; since then we have had 625 additional pages of taxation legislation of immense complication, including the fringe benefits tax and the capital gains tax. All this is supposed to deliver practical benefits for ordinary Australians. What do we find as a result of all this activity? We find that the average Australian family will still be $23.50 a week worse off after tax cuts take effect on 1 December this year. I remind the House that these tax cuts were promised by 1 September this year. So $650m has been filched from people against the promises of the Government. As a result, since the election and since those brave election promises of 1984, the average Australian family is $23.50 a week worse off. Since the last election, a one income family with two dependent children with average weekly earnings of $466 has suffered a loss in real disposable income of $27 a week. The weekly tax saving for the 1986-87 financial year for someone on average weekly earnings of $466 will be only $3.50. Because of the effects of inflation and as a result of the so-called wonderful tax reforms of the Hawke Government this means that the average family is still $23.50 worse off since the last election. In addition, since this Government came to power the excise on petrol has gone up by no less than 14c a litre, which means for the average user of a motor vehicle an extra $6.30 a week since the Hawke Government came to power. On 17 September, last week, the Leader of the Opposition (Mr Howard) tested the Prime Minister on these taxation reforms. He asked him quite simply in Question Time whether he was aware that a person on average weekly earnings will face on the completion of the two rounds of foreshadowed income tax cuts both a higher marginal rate of tax and a higher average income tax rate than at the end of the Fraser Government. The Prime Minister did not answer that question-because it goes to the heart of this whole farce of the so-called tax reform. We have moved the whole mountain and what have we produced? Let us look at what has happened to the marginal rates of tax, that is, the rates one pays on the top end of one's income, which affects overtime, any extra work one may do, or a second job. In March 1983 a person on average weekly earnings paid a top marginal rate of 30c in the dollar. By December 1984, under the Hawke Government, it went up to 46c in the dollar. It remained there until June 1986, when it was 46c in the dollar. Under the so-called reforms, it drops progressively to 43c and 40c. It is still 10c higher than when the Hawke Government came to office. That is the top marginal rate for somebody on average weekly earnings. The Treasurer put out a selective Press release to certain journalists who he thought might swallow the bait, based on crook calculations, including references to people on part time employment. All the papers he has used until now and all the figures in his draft White Paper on tax and in his 19 September statement, have been based on full adult weekly earnings for average weekly earnings calculations. The selective Press release he gave to certain journalists was designed to mislead. Some journalists were hooked on that. Let us look at what will happen to average tax rates after these so-called reforms have been introduced. A person on average weekly earnings in March 1983 would have paid an average tax rate-I am not now talking about the top marginal rate-of 22.9c in every dollar. After the Labor Government took over, the average rate rose to 24c in December 1984 and to a peak of 25.9c in June 1986. So people have been paying all this extra tax. It is forecast to drop to 24.7c in December 1986. If there is no mini-Budget next year-there may well be one-it will go to 24.5c in June 1987. Overall, before the Hawke Government came to office somebody on average weekly earnings paid an average tax rate on their whole income of 22.9c in the dollar. As a result of the Keating-Hawke reforms, that average will have risen to 24.5c by the time the reforms have been implemented. What sort of reform is this? By its own set of objectives, laid down by the Government in its 1983 and 1984 policy speeches, by everything it said at the two summits, it said there would be tax relief for ordinary people. The result of the so-called reforms is that taxes have gone up. The reason is that this Government has been profligate in spending. It has spent taxpayers' money as if it were going out of fashion, and it is the highest taxing government in Australia's history. Mr DEPUTY SPEAKER(Mr Leo McLeay) -Is the amendment seconded? The honourable member for Deakin (Mr Beale) indicates that he seconds the amendment. Mr SIMMONS(Calare) —Mr Deputy Speaker, I wish to make a personal explanation. Mr DEPUTY SPEAKER —Does the honourable member claim to have been misrepresented? Mr SIMMONS —Most grievously, Mr Deputy Speaker. Mr DEPUTY SPEAKER —The honourable member may proceed. Mr SIMMONS —The Opposition seems to be implying that by the remarks I made in the course of my contribution to the debate a few minutes ago, I was suggesting improper motives on the part of members of this Government. I said that neither the Treasurer (Mr Keating) nor the Deputy Leader of the National Party (Mr Hunt) was doing anything wrong in terms of the requirements of the Remuneration Tribunal. Rather, I said that it was wrong for the Opposition to suggest improper motives on the part of the Treasurer when the Deputy Leader of the National Party was doing no more and no less in terms of the Remuneration Tribunal provisions. Mr MILDREN(Ballarat)(8.47) —In many respects this debate is a rather sad one, because it has obviously created a great deal of animosity on the part of different honourable members. It has caused a tremendous amount of feeling. It has also caused people to become involved in a great number of irrelevancies. It is a very sad state of affairs. Nevertheless, when we are talking about taxation, and in particular about trying to introduce into the tax system some equity, we must start declaring which side we stand on. The honourable member for Dawson (Mr Braithwaite), a man for whom I normally have considerable regard, said that the position we were taking in our tax reform was based on envy, greed and hate. I find it very remarkable that when we are attempting to introduce some kind of system which will give a fairer distribution of the tax burden, we are charged with envy, greed and hate. The same honourable member and, I suppose, many other honourable members claim that they are on the same side of the family. When one looks at what has happened in the tax system over the last 30-odd years, it seems odd to find out what has actually happened to the family's contribution to tax revenue, especially the pay as you earn taxation. On page 19, the Government's White Paper, under the reference on income tax-I know it will come as a surprise that someone should be talking about income tax in this debate-states: Increased reliance on personal income taxes has meant a significant escalation in both the marginal and average tax rates faced by average income earners in Australia. I am talking primarily about the time of conservative governments. It goes on: In 1954-55, taxpayers with average earnings faced marginal and average tax rates of 19 and 10 per cent respectively. By 1970-71, these rates had risen to 32 and 19 per cent. Today, the marginal tax rates of average earners is 46 per cent . . . while their average tax rate has climbed to 25 per cent. In most instances it is the middle and lower income families of this nation who have had to make the largest contribution. This is quite remarkable when one thinks about it. I will indicate just what has actually happened. Many taxpayers on moderate incomes are now exposed to high marginal rates. In 1954-55 approximately one per cent of full time employed persons faced a marginal rate of 46 per cent or more; in 1983-84 the proportion was 34 per cent. The assumption is that everybody is that much better off, but that is just not true. What has happened is that fiscal drag, mainly through the consumer price index, has taken people through these marginal tax rates. This Government is determined to do what the Opposition, when in government, either did not have the courage to do or was unwilling to do because it might have affected its friends; that is, it is determined to change the marginal rates to ensure that the average Australian actually pays less income tax. What is so wrong with that? Should we be accused of envy, greed and hate? Are we saying that those people in Australia who have been able to manipulate the tax system in such a way that they have minimised the proportion of tax they pay-they should actually pay more-are to be applauded? Is this a system of equity? Are we now to turn around and say that anybody who questions that is motivated by envy, greed or hate? How on earth can anyone talk about motivation by greed? What on earth is the motivation of those people? Is it not just greed? We are trying to introduce some justice into the taxation system and those opposite are saying that we are envious and greedy. What kind of logical contortions do they expect the rest of the people in Australia to go through to understand that? That is absolute nonsense. It is a pity that Opposition members do not go ahead and examine the logic of their own positions instead of trying to defend those people who are the greedy ones-the ones who are opting out of the tax system. It is marvellous that they are defending the fringe benefits system when we know that, if it continues, within a couple of years 25 per cent of Australian income earners will be taking advantage of that. And at whose expense? At the expense of the PAYE tax payers; that is who. Is it so wrong to try to ensure that those people who earn an income in this country make a contribution through taxation to this country's revenue? What is so wrong with that? What is wrong with the principle of it? We have listened to this tax debate on and off now for 18 months and at no stage during that time has anyone on the opposite side of this House declared himself in favour of the principle of equity in the taxation system. It is an utter disgrace and Opposition members ought to be ashamed of themselves. Not one of them is present in the House tonight to hear the condemnation of themselves for their perfidy and their hypocrisy. I think this an absolute disgrace. I am sure that I am not the only one throughout the length and breadth of this country asking why should people not pay their tax contributions. What is wrong with people paying tax contributions? Why should people get a certain amount of their income in cash and be able to convert the rest of it into kind so that they do not have to pay any tax on it? Is that wrong? What is the principle behind that? Those opposite say that this measure will somehow affect incentive and initiative. Are we saying that initiative, incentive and the development of this nation should be based upon some people who are required to pay their taxes and others who do not have to pay their taxes because of the way in which they earn their income? I cannot see the logic of the justice of it. It is something of which Opposition members ought to be ashamed. (Quorum formed) It is a sad reflection upon the standards of fairness amongst Australians, not just Opposition members, that those who have made their own decisions to subvert the tax system by adopting what has been called this fringe benefits package, are now denouncing the Government's reformist measures by claiming that incentive is being destroyed. We have never heard those opposite complain about the inequity which has crept into the tax system and has actually forced the greatest burden upon the PAYE taxpayers of this nation. Not once have we heard those people on the other side of the House declare what their real position is on taxation, but they have constantly made excuses for those people who rip off the system. Not only that, but also there is a deliberate denigration of the PAYE taxpayers by those opposite. That is the purport of their silence on the principle of taxation equity. They wish to portray the PAYE taxpayer as a non-contributor to the nation's wealth. The PAYE taxpayer is portrayed as some sort of second class Australian. By contrast, the Opposition wishes to portray those who are able to divide their income into a part-cash, part-kind package as all being creators of wealth. This is crude and palpably dishonest. Mr Kent —It is misrepresentation. Mr MILDREN —It is a deception. By and large it is a dangerous and unwarranted attack upn the PAYE taxpayer by a group which thrives upon socially divisive policies. The advocacy of the non-tax fringe benefits by the Opposition brands its members as the enemies of most Australians. Opposition members do not care one jot for the welfare of those who pay all their due tax-and more because of the defaulters of the friends of honourable members opposite. They purport to be interested in the welfare of the family, yet they are not prepared to support measures such as the fringe benefits tax which aim to bring some justice into the system, in particular, for honest, taxpaying family income earners. The Opposition disparages equity as though it were to be interpreted as a levelling of society. It is nothing of the kind. It is merely an attempt to sort out the crude distortions of the tax system along the lines of fairness. I see nothing wrong with introducing tax equity. I am sure that most Australians do not see anything wrong with it either. It is not surprising that at no time has anyone, either in the Opposition or among those who will be affected, presented any argument of substance which would cast doubts upon the cogency of the arguments for equity. You may recall, Mr Deputy Speaker, that this Government attempted to recover $250m which had been denied the public purse by those who were guilty of using bottom of the harbour schemes. Four times we went to the Senate to gain its agreement on this matter and on each occasion the Liberal-National Party Opposition, with the connivance of some of the Australian Democrats and Senator Harradine, rejected our efforts. Now these people have helped to continue the suffering of honest Australian families who have to pay their fair share of tax as well as the share avoided by the friends of those opposite. It is all too clear from the recent past just how little the Opposition really thinks of families. It is no good standing up and making pious statements about families when it took action, when in government, which was obviously to the detriment of the families of this nation. During the period of government of those opposite, when the current Leader of the Opposition was Treasurer, we witnessed an example of cynical deception of the Australian public which will not readily be forgotten. Prior to the 1977 election great stress was placed upon the promise of cut taxes. Within a few months of regaining government those cuts were removed. The result was an increase in tax payments by ordinary, decent Australians, while the friends of those opposite at the upper income levels actually paid less tax. Not only that, but also the practice of optional taxation crept in via the payment of fringe benefits. This practice burgeoned because its practitioners realised that the Liberal-National Party coalition not only would do nothing about it but also actually encouraged it by default. In fact, the Opposition is encouraging it now, not by default, but deliberately. Most of them want the practice continued. We have heard that, although I must admit that there is a fair amount of confusion opposite at this stage. Opposition members are beginning to get rattled. The Leader of the Opposition once again wants his public to believe that there would be no fringe benefits tax under his government. At least some back benchers opposite make a feeble sort of noise that perhaps there ought to be. What, however, is the real position of the Leader of the Opposition? We all know that he will continue to tax fringe benefits, or at least he will return to the process of taxing fringe benefits to the unworkable position-advocated by the honourable member for Mackellar (Mr Carlton)-which was in place previously under section 26 (e) of the Income Tax Assessment Act. But it has proven to be unworkable. It is a nice thing to make pious noises about it because one knows one's mates will be let off the hook once again. Honourable members opposite cannot have it both ways. There cannot be a maximum reduction in the marginal rates of income tax without an attempt to stop the haemorrhaging of the tax system via fringe benefits and capital gains taxes. We cannot return the desired amounts to all taxpayers if we leave out of the system the very considerable sums to be gained from that section of income paid out in kind, that is, fringe benefits. The reduction of marginal tax rates in two stages, as outlined in the Budget, will have the effect of putting more money in more people's pockets. I believe that this will have a well needed, stimulatory effect upon consumption and, I might say, upon job creation. It will increase the discretionary power which people will have over their own incomes. But best of all, it will put money into the hands of those who most need it and it will ensure that the people who should be paying their fair share of the tax burden actually do so. I believe that this will be a great boost for families. I have absolutely no difficulty whatsoever in commending this Bill to the House. It has my full support and I am sure that it has the support of the great majority of Australian people, including the people in the gallery tonight. Mr ROCHER(Curtin)(9.07) —In this cognate debate on the Income Tax Rates Bill 1986, the Income Tax Bill 1986 and the Tax- ation Laws (Miscellaneous Provisions) Bill 1986 I begin by saying that earlier in the week it was amusing to hear the warm words of praise by the Minister for Employment and Industrial Relations (Mr Willis) for Sweden. The Minister's comments seemed to confirm speculation that elements in the Australian Council of Trade Unions and its junior coalition partner, which is this Government, are about to intensify their infatuation with the industrial relations and wage settling structures of Sweden, Austria and Norway. However, this is not the occasion to discuss in detail just how stupid such strategies would be for Australia. Of more immediate interest are the disturbing parallels between Sweden's fiscal policies and the approach being adopted by this Government. Sweden, with tax receipts equivalent to 51 per cent of gross domestic product in 1984 and with government spending at 64 per cent of GDP, is the biggest taxing and spending government in the Western world. Anyone examining the Bills before us and recalling other taxation legislation we have seen over the the past 18 months or so could not avoid coming to the conclusion that under the Hawke Government Australia is well on the way to becoming the Sweden of the antipodes. Let us briefly examine the record. Tax revenue in real terms has been increased at an annual rate of 4.9 per cent per year over the four years of the Hawke Government, compared with 3.3 per cent during the full seven years of the Fraser Government. Tax receipts as a percentage of GDP were increased to 25 per cent in 1984-85. That level has been increased even further in each of the subsequent two Budgets, rising to 25.2 per cent in 1985-86 and 25.5 per cent in 1986-87. The four-year average under the Hawke Government has been 24.8 per cent compared with an average 23.4 per cent during the seven Fraser years. These massive overall tax hikes were, of course, necessary because government expenditure in real terms increased by 3.9 per cent per year under this Government. That is almost double the seven-year average of 2.1 per cent under Fraser. Government expenditure as a percentage of GDP is budgeted to be 29.4 per cent this financial year-the fourth highest in post-war history. As the three highest figures were in the previous three years, the average for the four years under this Government is 29.9 per cent, compared with 27.7 per cent under the Fraser Government. We can gain an understanding of the practical effects of the Hawke Government's policies if we make two brief comparisons. Had government expenditure under Labor risen at the same annual rate which it did during the period of the Fraser Government, expenditure would have been a total of $13 billion less than it has been under this Labor Government. Had Labor adopted the coalition's policy of a real freeze on the increase in government expenditure during the first three years of its term of office, government expenditure would have been about $20 billion less. The Income Tax Rates Bill 1986 declares the tax rate for individuals and trustees for 1986-87 and subsequent years to allow for the proportioning of the threshold level and to declare the rate of tax for superannuation funds and certain other groups for this financial year. A key section of the Bill deals with the changes to individual tax rates. It will be recalled that the Prime Minister (Mr Hawke), in his 1984 policy speech, said: I can guarantee you'll keep our tax cuts! In September 1985, he said that the proposed tax changes: represent the fulfilment of the Government's commitment to provide tax cuts from September 1986, equivalent to a 2 per cent wage increase. He repeated something along the same lines in May this year on the Sunday program, but by then he had started to qualify his undertakings. He merely said that the tax cuts would be delivered. He had deleted all reference to the timing. That continued whenever he was questioned. Ultimately, as we have seen in this Budget, the first of the tax cuts was deferred until 1 December and we wait in hope and expectation that the second will be delivered in July next year. The Budget confirmed those facts. The Bills confirm the timing of the proposed tax cuts. The Income Tax Rates Bill formalises that with a saving of $650m through the deferral decision; that is, the decision to defer from 1 September until 1 December. We are told that the reduction in tax rates will cost an estimated $1,435m in 1986-87 and the impressive sounding sum of $4 1/2m in a full year. What will that actually mean to the man in the street? The Prime Minister has already admitted that the much vaunted $9 a week tax cut will, in fact, be only $6 a week after Budget measures such as the increase in the Medicare levy are taken into account. Unfortunately, the facts make the position far worse. Last week, the Leader of the Opposition (Mr Howard) asked the Prime Minister whether he was aware that a person on average weekly earnings will face, on the completion of the two rounds of foreshadowed income tax cuts, both a higher marginal and average income tax rate than that which applied at the end of the Fraser Government's term in office. The Prime Minister, of course, ignored the question. When one examines the facts it is not surprising that he was not prepared to answer. In March 1983, the marginal tax rate applying to a person on average weekly earnings was only 30c in the dollar. Today, it is 46c in the dollar, and in July 1987 it will be 40c in the dollar; that is, if the July cuts are delivered. The average income tax rate-that is, the pay as you earn tax paid as a percentage of average annual earnings for a person on average weekly earnings-will, by June 1987, be around 24.5 per cent-well above the 22.9 per cent level that applied at the end of the Fraser Government's term in office. It would require a further $8 a week income tax cut on top of the promised tax cuts to reduce the tax burden to the same level that applied in the March quarter of 1983. It is very important to remember that. This increase in personal income tax does not include the many other additional tax burdens imposed by the Government, including the abominable fringe benefits tax, the capital gains tax, the abolition of negative gearing and concessional expenditure rebates, as well as numerous increases in indirect taxation. The Leader of the Opposition enumerated those many acts earlier today in his fine speech on these measures. As well as the more immediate deleterious effects of a highly punitive taxation system, there is the crucial issue of the linkage between taxation and economic growth. A fascinating and important study of these links has been made by a staff member of the World Bank. It is known as the World Bank staff working paper No. 605. At this stage, I seek leave to incorporate a table in Hansard. Leave granted. The table read as follows- Country Per capita Income Groups US dollars 1979 Real Average Annual Growth Rates of GDP Malawi (low-tax) Zaire (high-tax) 200-300 6.3 -0.7 Cameroon (low-tax) Liberia (high-tax) 500-600 5.4 1.8 Thailand (low-tax) Zambia (high-tax) 500-600 7.7 1.5 Paraguay (low-tax) Peru (high-tax) 700-1100 8.3 3.1 Mauritius (low-tax) Jamaica (high-tax) 1100-1300 8.2 -0.9 Republic of Korea (low-tax) Chile (high-tax) 1400-1700 10.3 1.9 Brazil (low-tax) Uruguay (high-tax) 1700-2100 8.7 2.5 Singapore (low-tax) New Zealand (high-tax) 3800-5950 8.4 2.4 Spain (low-tax) United Kingdom (high-tax) 4300-6350 4.4 2.1 Japan (low-tax) Sweden (high-tax) 8800-11,850 5.2 2.0 United States 10,630 3.1 Source: World Bank Staff Working Paper No. 605, ``links between the taxes and economic growth-some empirical evidence''. Mr DEPUTY SPEAKER(Mr Drummond) —Having listened closely to the honourable member's argument, I must say that I find it strange that he has presented a table that has no reference to Australia. Mr ROCHER —I thank you for your encouragement, Mr Deputy Speaker, because the next thing I shall do is link it to Australia. The author of the paper, Keith Marsden, found that the general rule was that the lower the tax rate over the period 1970-79 the higher the average economic growth rate for the preceding decade. The clear link that I set out to make has been shown up in the study. If we apply Marsden's research to Australia, we find that a 1 per cent increase in the tax rate results in 0.36 per cent decline in our gross domestic product growth. A separate study by Peter Saunders of the Organisation for Economic Co-operation and Development looked at the inter-relationship between the size and growth of general government expenditures and receipts relative to GDP in OECD countries in the 1960-81 period. Much the same thing is shown. That study is entitled `Public Expenditure and Economic Performance in OECD Countries'. Saunders found that there had been an inverse relationship in the 1960s between the size of government and economic growth. The question of economic growth in the short term is of immediate relevance to the Government's capacity to fund the so-called tax cuts. Very serious questions have been raised about the economic assumptions underlying the Budget strategy. Dr David Clark, senior lecturer in economics at the University of New South Wales, has said: . . . contrary to the impression given by Mr Keating in his Budget speech the forecasts on which the Budget rests are much much more rubbery than he or the Treasury would like us to believe. He continued: The forecasts . . . are a product of extrapolation from an only partially known past, through an unknown present to an unknowable future. Let me illustrate the gravity of that warning by referring to the Budget forecast for 2.25 per cent growth in GDP in this financial year and the fact that that is based on some shaky assumptions, as Dr Clark has mentioned. Most of the projected growth is expected to come from net exports-that is, 1.75 per cent-with only 0.5 per cent from domestic demand. Yet the budgeted expectations of continued economic growth overseas are optimistic and, to the extent that world growth is lower, the demand for Australia's exports will be lessened and hence our economic growth will be lower. As with other areas, a lower growth rate than forecast will have a quite dramatic effect on the Budget deficit. A one per cent lower growth rate will produce a deficit of some $4 1/2 billion. We should remember that the 1985-86 Budget outlays exceeded the Budget estimate by some $825m. We should also remember that the Government's trilogy commitment-the key aspect to its fiscal policy-has been dumped. The taxation side of the trilogy has been broken in each of the first two years of existence with the Government raising $400m in 1985-86 and $1,400m in 1986-87 in tax revenue over and above the trilogy ceiling. There we have just some of the matters that concern us with the legislation and the Government's approach to taxation generally. Mr MILTON(La Trobe)(9.19) —In speaking on the Income Tax Rates Bill, the Income Tax Bill and the Taxation Laws (Miscellaneous Provisions) Bill, let me draw the attention of the House to three myths which have been circulating in the Australian community for the past few years. These myths have been spread by the ill-informed and published in the media as though they are truths, which they are not. The first myth is that unemployment is the fault of the unemployed-that the work is there if they are prepared to go out and look for it. The second myth is that wage and salary levels are too high. The third myth is that Australia is a highly taxed nation. On another occasion, I will no doubt have the opportunity to speak about the first two myths, but today I want to say something about the need for tax reform in Australia. In doing so, I first want to explode the myth that we are a highly taxed nation and a variation of this myth which claims that we are the most highly taxed nation in the world. First of all, it must be noted that making comparisons with the taxation systems of other countries is not easy, because different methods of extracting taxes-which, incidentally, are not always called taxes-make a direct comparison difficult. Australia is the only country in the Organisation for Economic Co-operation and Development which does not impose social security contributions as part of its revenue collection system. Eight European countries raise more revenue from social security contributions than from income taxes. In 1983, revenues from social security contributions were equal to more than 30 per cent of total taxation in Austria, Belgium, France, Germany, Greece, Italy, The Netherlands, Spain and Switzerland, and employers' contributions are greater than employees' contributions in most of those countries. In consequence, Australia has a relatively high dependence on direct income tax, although this slipped significantly during the late 1970s. Now, the highest rate is 49c in the dollar. However, the important overall fact is that despite significant increases in taxation in some areas in recent years, both as a proportion of incomes and as a proportion of gross national product, Australia is still a relatively low-taxed country. For example, we have one of the lowest rates on property, inherited wealth and capital gains. Unfortunately, we have to fall back on statistics to prove my point. Figures supplied by the OECD show that, in 1983, of 23 OECD countries, only three ranked below Australia in terms of the total taxation burden. In 1981, total taxation in Australia was 31.55 per cent of our gross domestic product, compared with the OECD average of 36.16 per cent. Japan, with fairly low tax rates overall, has the highest corporate tax revenues of any Western-type industrial nation, which is about 5 per cent of gross national product, with moderately high taxes on investment income. Both Germany and Japan have more straightforward tax systems which produce less distortion. They also have a monetary system aimed at keeping interest rates low and stable, industrial relations which trade influence for peace, and industrial finance which relies heavily on debt capital. It is not the level of taxation which has adverse effect on economic growth and employment; rather, it is the structure of taxation and factors such as the stability of capital costs, labour force productivity, consumer demand and the efficiency of institutions in channelling savings into productive investment. At this stage, I wish to refer to some letters published in the Australian Financial Review of 24 September. There was one letter from the honourable member for Burke (Mr O'Keefe) and one from Professor J. W. Nevile, of the School of Economics at the University of New South Wales. Both letters referred to an article published in the Australian Financial Review which set out the sort of background to the tax structures of European countries to which I have been referring. However, the headline over that article stated: Australian tax burden among the world's highest. That was a most misleading headline, as was pointed out by the two letters. I am very disappointed that a responsible newspaper such as the Financial Review could provide such misleading headlines, particularly as the article made it very clear that that was not the case. What is the Financial Review trying to prove? I hope that we will see some retraction in the Financial Review. It is not enough that letters to the editor complain about these things. At this stage, I find it tempting to launch into an overview of the Australian economy, because taxation reform is so intimately bound up with the general overall economic strategies of the Government. But debate on the present Bills requires me to refrain from making those general comments about the economy. However, I have to say that no speech about taxation reform could ignore the present distribution of wealth in Australia. A number of wealth analyses has been made, but the most often quoted and reliable survey was that conducted by John Piggott of the Australian National University. This survey reveals that the top one per cent of adult individuals hold around 25 per cent of private wealth, the top 5 per cent hold about 50 per cent, and the top 10 per cent hold more than 60 per cent of the private wealth in Australia. Surprisingly, the figures show a slightly greater concentration than was revealed in similar studies in the United States and substantially less than in the United Kingdom. A few more comments must be made to round off these figures. Although the proportion of wealth held by the top one per cent of adult individuals has decreased sharply since the First World War, the top 2 per cent to 10 per cent have almost the same proportion of wealth and may, indeed, have slightly increased their share since 1915. It would appear that the top one per cent have part of their share transferred to the bottom 90 per cent, who have increased their share from 22 per cent in 1915 to between 35 and 40 per cent. People listening to this debate would have to agree with me, however, that a society which allows 10 per cent of its adult population to own more than 60 per cent of the private wealth, while the other 90 per cent own less than 40 per cent of the private wealth, has built-in problems when it relies heavily on a system of taxing earned income, even though the wealth survey has revealed that there is a strong correlation between the ownership of wealth and income. Unfortunately, little research work has been undertaken in Australia. We are poorly equipped to offer advice on how to reduce wealth in- equality effectively and efficiently. I understand that the Government is undertaking a survey of the wealth in Australia and its distribution, and I hope that the results of this study will be forthcoming very soon, because it is vital for those of us who are concerned about this matter. I do not expect members of the Opposition to be particularly concerned about the unequal distribution of wealth in Australia since they represent those people who have the wealth. As a Federal member of Parliament who has long advocated wealth and inheritance taxes, I am most concerned that little research has been done towards understanding how the process of wealth accumulation occurs as within a generation and wealth transmission patterns between generations. Briefly, we need to know more about savings patterns, retirement provisions, bequests and trusts, fertility patterns and all those sorts of things. I want to make a few comments about tax avoidance, but first I have to say something about the essence of my comments to the House on the tax Bills. In this respect, I am indebted to the Brotherhood of Saint Laurence for its excellent submission to the Economic Planning Advisory Council last year. The Brotherhood claims-I support that claim-that taxation reform is central to any commitment to eliminate poverty in Australia. The Brotherhood stated: We have to ask, `what sort of Australia do the majority of Australians want?' On present trends we are moving towards a harshly divided society, with gross inequalities between those with well paid and secure employment and those unable to find work, those unable to earn much more than minimum wages and those dependent on pensions and benefits. Without a tax system that is able, equitably and efficiently, to stimulate sustained levels of economic growth and to raise the revenue required to finance the achievement of both social and economic goals, no comprehensive strategy to eliminate poverty is realistic. At present there are nearly three million Aust- ralians living on or below the poverty line. I tabled figures during my speech on the Appropriation Bill (No. 1) 1986-87 which indicated present poverty levels, so that honourable members can draw their own conclusions about the relative poverty levels in Australia. Tax reform is a key component of a comprehensive attack on poverty and inequality in Australia. For the tax system to play this role, reform must be based on a set of principles which reflect a commitment to equity. Taxation is necessary and desirable. There is a widespread belief that taxation is a necessary evil. Over a decade of low economic growth and high unemployment, reductions in government spending have often been proposed as a method of stimulating economic activities. Of course, members of the Opposition have often proposed such measures. But these views are not supported by the experience of growth in a range of Western countries. Part of the accepted role of government is the provision of services for all members of the community, funded by taxation levied on all individuals who receive income above the tax threshold. To perform these functions adequately, taxation is necessary and desirable. There is no substantial evidence that economic growth is undermined by the present level of taxation, or that current taxation encourages tax avoidance. Taxation should raise sufficient funds for government to perform its role. Tax reform should lead to a tax system capable of providing sufficient revenue for an adequate social security system, access to housing for all Australians, accessible and low cost child care, better job training and retraining, and improved approaches to job creation. The taxation system should be progressive. Taxpayers with a greater ability to pay should pay a higher proportion of their income in tax. In this way, progressive taxation can be levied fairly, and taxation can help to reduce the great inequality in income and wealth which exists in Australia. Assistance to specific groups should be provided through government expenditure rather than tax concessions and rebates. The progressive impact of income tax would be improved if many tax concessions available through the tax system were abolished. Tax concessions include items such as the concessional rebate, the dependent spouse rebate, the low tax treatment of superannuation income and payments, and investment allowances to industry. Tax reform should provide the best climate for growth in employment. Evidence suggests that the present tax structure does not offer the best climate for general employment growth, and probably also acts to discourage disadvantaged workers from participating in the work force. Employment growth is held back by, for example, speculative, relatively unproductive investments encouraged by the absence of a capital gains tax, and the impact of payroll taxes in combination with investment concessions, which is likely to encourage employers to automate their production. Disadvantaged workers are discouraged from participating in paid employment by poverty traps. (Quorum formed) Members of the Opposition are not interested in tax reform. I was speaking about tax reform. All they can do is call a quorum. I notice that there are two members of the Opposition present-perhaps 2 1/2-and the rest are not interested in what I have to say about tax reform. Tax reform is important because it involves a comprehensive package of proposals. One cannot talk about individual tax proposals in isolation. They must be part of a comprehensive package. I was quite prepared to wind up what I had to say. But the Opposition had to be impatient. It had to try to push me to finish what I was saying because it is embarrassed about what I have to say. It is not interested in tax reform. All that it is interested in is trying to increase the wealth of the people it represents. I am really very ashamed of the way in which Opposition members have performed. They have raised matters which bear no relation to tax reform. All they have done is involve themselves in personal abuse and personal attack. I wanted to make a serious speech-- Mr Scott —They are in the gutter. Mr MILTON —As my friend, the honourable member for Hindmarsh says, they are in the gutter. That is very true. I will not say anything more, Mr Deputy Speaker, because it appears that some arrangement has been made by the Whips. Mr SLIPPER(Fisher)(9.38) —We have been treated tonight to a talk from a person who represents the Socialist Left in the Australian Labor Party. He has outlined for us a chilling prospect, a prospect of a socialist Australia in which there would not be any reward for initiative, enterprise and hard work. I hope that thousands of people are listening to the broadcast of this debate tonight and that they will turn in droves away from the ALP because of the extremist nonsense and claptrap uttered by the honourable member for La Trobe (Mr Milton). Mr Deputy Speaker, there is a simple distinc- tion-- Mr Milton —Mr Deputy Speaker, I raise a point of order. I point out that I represent the Labor Party in this House, not the Socialist Left. Mr DEPUTY SPEAKER(Mr Blanchard) —There is no point of order. Mr SLIPPER —Mr Deputy Speaker, the Labor Party has so many factions and minor groups. There is the left wing, the right wing, the left guard, the right guard, and probably also the mud-guard. But there is a simple, clear and definite distinction between the ALP and the National Party of Australia and our coalition partner. The ALP is a high tax party; the National Party is a low tax party. We believe-and we make absolutely no apology for saying so-that taxpayers should retain as much as possible of their earnings, to spend and use as they wish. Alas, the Government does not agree. Let us look at Labor's record. The Commonwealth Budget which was brought down recently was a taxing, not axing, Budget. No real effort was made to cut spending. Government expenditure has increased in real terms by 3.9 per cent per year under Hawke. As a percentage of gross domestic product, government expenditure is budgeted to total 29.4 per cent in 1986-87-the fourth highest percentage in post-war history. The three previous records were also set by the Treasurer (Mr Keating). Spending will increase by 6.9 per cent this year, to $74.1 billion. Contrast that with the promise of the Opposition to freeze government expenditure during its first three years in office. Australia is now burdened with a fringe benefits tax, a capital gains tax, a higher Medicare levy, despite Labor's promise to the contrary, new and higher sales taxes, an increase in bank debits tax, an assets test on pensions and a continuation of the superannuation tax. Despite the tax cut that is due in December, revenue will increase by 11 per cent in 1986-87. It is a national disgrace and Labor stands condemned for it. Tax revenue in real terms has increased at an annual rate of 4.9 per cent in the four years of the Hawke Government compared with 3.5 per cent during the seven years of the Fraser Government. Moreover, tax revenue as a proportion of GDP will have increased under Labor from 25 per cent to 25.5 per cent, thereby, in effect, scrapping the Government's trilogy commitment for the second year in succession. The Government has treated the trilogy commitment as merely another promise to be broken. But, after all, what is one more addition to its litany of broken promises? In 1984-85, the Government grabbed $400m more than its trilogy ceiling, and in 1986-87 it has snatched another $1.4 billion. Ned Kelly is not dead; he has merely changed his name by deed poll to Paul Keating. Mr Sharp —That is right. Mr SLIPPER —I thank the honourable member for Gilmore for his support. The Government's tax policies are crushing incentive. Even under the Government's proposed tax cuts, the top marginal tax rate in Australia will be over 50 per cent when the Medicare levy is included. In contrast, a recent report indicates that the United States Congress is now almost certain to approve a reduction in the top personal tax rate from 50 per cent to 28 per cent, and a cut in the top company tax rate from 46 per cent to 34 per cent. Compare that with this Government's shameful record. The people of Australia will no doubt do so and will see this Government for the fraud and the sham that it obviously is. In contrast to the positive steps of the United States Congress, Labor is doing too little too late, or is heading in the wrong direction completely. We need low tax rates. Unlike the honourable member for La Trobe, I believe that there must be reward for hard work. There must be some incentive for someone to go out and have a go. There must be some incentive to take a risk, but the Australian Labor Party's solution to everything is tax, tax, tax and more tax. We must give it credit for its stubborn determination. A vast amount of time, thought and discussion has taken place in the Government's ranks on how to devise new and original ways to rob Australians of an ever higher proportion of their income. On the other hand, Queensland, with its majority National Party Government, continues to be a low tax State. Mr Hicks —It is a good Government. Mr SLIPPER —It is, as the honourable member for Riverina-Darling states. The Australian Bureau of Statistics government financial estimates, the ABS publication `Taxation Revenue Australia 1984-85', the Commonwealth Grants Commission and the State Budget papers' statistical data show beyond doubt that Queensland is a low tax State. According to the government financial estimates data, it is clear for everyone to see that Victorians pay State per capita tax of $850 while the figure is $833 in New South Wales, $687 in Western Australia, $650 in South Australia and a mere $554 in Queensland under a National Party government. Victorians pay $296 per head more than Queenslanders, New South Wales people pay $276 more, South Australians pay $96 more and Western Australians pay $133 more. Estimations made by the Commonwealth Grants Commission indicate that Queensland would raise additional revenue of $253m if it increased tax charges to the average rates of the other States. It is clear and unambiguous that the National Party in Queensland presides over a low tax State. Queenslanders pay no liquor taxes, no State petrol taxes, no State tobacco taxes and no State financial institutions duty. It is obvious that Queensland is a highly desirable State in which to live. Mr Braithwaite —Hear, hear! Mr SLIPPER —The honourable member for Dawson (Mr Braithwaite) and I and other Queensland members are proud to represent the State in the House of Representatives. Mr Hodgman —And very well too. Mr SLIPPER —I thank the honourable member from Denison for his perceptive comment. We find that Queensland has benefited from internal migration from other States. In the 12 months ended with the December quarter 1985 23,897 people ran away from the Labor States of New South Wales, Victoria and South Australia. Since June 1980, 125,169 interstate migrants have moved to Queensland. This migration has boosted our unemployment figures; there have been 14,968 unemployment benefit transfers between 1982 and June 1986. This has added 1.24 per cent to the State's unemployment. That shows up once and for all the Australian Labor Party's claim that the unemployment rate in Queensland is in some way the fault of the Queensland Government. I have mentioned migration. The recent statements of the Minister for Trade (Mr Dawkins) have encouraged capital to migrate to safer shores. He was reported in the media as encouraging business to invest overseas. Honourable members will recall that I asked the Prime Minister (Mr Hawke): Does the Minister's recommendation, along with the downgrading by Moody's Investor Services Inc. of Australia's credit rating, prove that under Labor this country is no longer a good investment risk? Was the Minister's advice a suggestion to business that it should get any remaining funds out of the country before the Treasurer's banana republic predictions became a reality? Mr Braithwaite —Which Minister? Mr SLIPPER —The reference to the Minister in that question was a reference to the Minister for Trade. The Prime Minister, in his usual cowardly style, almost completely ignoredthe question in giving his wholly inadequate reply. He should have come clean. He should have admitted that under Labor Australia is no longer a good investment risk. He should have admitted that it was financially sound to move moneys overseas before the Treasurer's dire predictions became a reality. It is sad that this country is in real trouble. Conclusive evidence is provided by the fact that the Minister for Trade is saying in effect: `Get your money out of Australia.' We could be compared with Latin America or Argentina. Does the Budget meet the needs of an embattled Australia? Of course not. Australia is a nation in crisis. The Budget is a weak-kneed and spineless attempt to trick the Australian public. Fuel tax continues to soar and unemployment will increase. Our dollar has virtually collapsed. Foreign debt will increase to about $100 billion this year, which is almost $6,700 for every man, woman and child in this country. The projected Budget deficit is a fraud. Most of the lower forecast deficit has been achieved by raising expenditure rather than by cutting taxes. This is quite wrong and I believe that the Government will be recognised for what it is. The deficit estimate of $3.5 billion has been achieved by a postponement of tax cuts that would be worth $650m and delays in changes to pension arrangements, amounting to $300m. These are one-offs, so the real Budget deficit is likely to be $5 billion or more. The Budget blew out last year and that will happen again. Inflation remains significantly higher than that of our overseas trading partners. It is more than 16 times that of Japan. Where will it all end? Where are we heading? Where is Australia going? There is no doubt that we are fast becoming a Third World country. Australia is in trouble under Labor. On 5 March 1983, the Labor Party was elected to the treasury bench. It came forward with a vision of a bright new Australia. The Prime Minister, prior to the election, said at the Sydney Opera House that there would be no new capital gains tax. What did we see in September 1985? We saw a capital gains tax announced. The Prime Minister said that fuel prices would drop by 3c a litre; not 1c, not 2c, but 3c. What has happened? Fuel excise has increased from 6c a litre to almost 24c a litre. This Government has a string of broken promises. This Government cannot be trusted by the people of Australia. This Government is disreputable. This Government is on the way out. This Government should stand up and admit that it has failed, because failed it has. Every opinion poll shows that Labor is destined to be cast on to the scrap heap of political history where it will join its discredited predecessor, the Whitlam Government. I conclude by making a plea-it might fall on deaf ears, but I plead anyway-to this Government to consider the interests of middle Australia. I ask it to get off its ideological hobby horse and to reject extremism. I ask it to stand up for the ordinary man and woman. I ask it to support people who believe in family life and traditional values. I ask it to back people who want to work, people who have jobs and people who pay their taxes. I ask it to support people who are law abiding and honest, people who are not members of radical minority groups who constantly demand so many handouts that one would imagine they want a private pipeline to the Treasury. I ask it to back those people who risked their lives in times of war to keep us free and to preserve democracy. I ask it to support those people who are the very backbone of Australia, the people who are being rejected, and ignored by Labor. What about a fair go for Australia's forgotten majority? Mr CHARLES(Isaacs)(9.53) —We have heard many speeches from the Opposition tonight but very few of them have addressed the legislation before the House. We have heard all sorts of drivel, such as that which the honourable member for Fisher (Mr Slipper) came forth with, and references by many others to the Treasurer (Mr Keating) and his so-called travel allowance, all of which has nothing to do with the legislation in the three Bills before the House this evening, that is, the Income Tax Rates Bill and cognate Bills. Very few speakers have touched on them. The honourable member for Curtin (Mr Rocher) was one honourable member who at least attempted to address the questions before the House this evening. What are the questions before the House? We are looking at the taxation Bills, the last group of taxation Bills that are part of the overall package of taxation reform that this Government has brought before this Parliament over the last few months. It has been a fairly extensive package and the biggest reform of taxation this country has ever seen; not a wimp, but a major reform of taxation. The legislation before us tonight puts into law the fact that we will see the marginal rates of taxation in this country come down to 24c, 29c, 40c and 49c in the dollar as of 1 December this year and 1 July next year. The two top rates-if I may say them again-are coming down to 40c and 49c, the lowest marginal rates we have seen in this country. The Opposition can pontificate as much as it likes-I see the Leader Opposition (Mr Howard) has come into the House and he was Treasurer for five years-but the fact is that for 30 years successive conservative governments did nothing. In fact they left the top marginal rate at 60c in the dollar. We are the ones who will bring it down to 40c and 49c in the dollar. As the honourable member for Mackellar (Mr Carlton) trotted out a few statistics earlier, let me trot a few statistics back at him relating to the Government in which he was a Minister between 1975 and 1983. The Parliamentary Library statistical service has come forth with the fact that between 1975-76 and 1981-82, a person on average weekly earnings had his net tax as a proportion of income increased by 21.6 per cent. Worse still, the average wage at that time, of around $11,000, had a tax increase of 72.9 per cent. Worse still, someone earning $10,770-today's equivalent would be around $14,000 to $15,000-had a percentage increase in tax of 381 per cent. If we go to the other end of the table, someone earning $64,000 a year with a dependent spouse and two children-all these examples are people with a dependent spouse and two children-had his taxation decreased by 2.9 per cent. So the honourable member should not come into this House and talk about statistics and how things have improved or have not improved. That is what the Opposition did to the average wage and salary earner in its time in office. The average wage earner, earning less than $25,000, was absolutely slugged to high heaven while people earning $1,000 and more actually had a decrease in the percentage of the tax that they paid. That is what happened and that was at a time when the Fraser Government had the easy money. The statistics from this year's Budget show, as they have in previous Budgets, that for example in 1980-81 fuel tax receipts reached 8.9 per cent of total Budget receipts; nearly 9 per cent. What are they estimated to be in this year's Budget? The answer is 1.8 per cent. The Opposition when in government had the easy money and it slugged the average Australian to high heaven. Dr Charlesworth —They had the chance. Mr CHARLES —The Opposition had the chance for 30 years, and for five of those years the Leader of the Opposition was Treasurer in this House. He now comes into this place and pontificates about the tax system. What did he do? Nothing. In fact what is he going to do now? We do not know. The Opposition changes its mind all the time. The only thing that really grew in its time in government was the tax avoidance industry. As Mr Costigan stated, it was the biggest growth industry during the Fraser years. Mr Scholes —That is what it calls an initiative. Mr CHARLES —That is right, an initiative, as the Minister stated. In fact in this year's Budget Papers at page 360 the following is stated: Collections from other (non-PAYE) individuals as a proportion of total receipts fell in the 1970s, reflecting the relative weakness in primary producer incomes and increased recourse to tax avoidance. That is written in the Budget Papers; it is not a statement from a member of the House. Tax avoidance was rife. Opposition members have talked about what a great low taxing party theirs is. None of its mates paid tax at all when it was in government and that is probably why it slugged the workers so much. We have seen honourable members opposite come into this House and pontificate about this legislation, or at least some of them did. The majority have not even talked about the legislation that will bring great benefits to the people of Australia. For the first time we will see the two top marginal rates in Australia come down to 40c and 49c, and the two bottom rates to 24c and 29c in the dollar. The honourable member for Fisher talked about what a low taxing party his is. I suppose he would point to the United States of America, which is in the process of reforming its taxation system also. He could probably point to that country and say that its proposals, which will be brought in shortly, are the sorts of things we should be looking at. The United States is proposing to introduce only two rates of marginal tax of 15c and 28c in the dollar. That sounds excellent; it sounds good; it sounds as though there is a rainbow around every corner. It is marvellous but, of course, the Opposition forgets to tell us that that is not the whole tax package. On top of that are State taxes, which average about 10 per cent and social security levies. The Medicare levy in Australia is 1.25 per cent and in America it is around 7 1/2 per cent. Mr Lee —No family allowances. Mr CHARLES —As the honourable member for Dobell says, there are no family allowances in the United States of America. Most of the tax deductions are being wiped out in this reform package. In the United States there will be a tax shift in virtually exactly the same proportions that this Government has introduced in this country. It is a shift away from the pay as you earn taxpayer to companies which will pay slightly more. That is what is happening; there is no difference. (Quorum formed) The honourable member for Fisher talked about what a great low tax party the Opposition is. I have talked about the Australian tax measures and compared them with those of America-it has a new system-and they are virtually the same. The Opposition talks about capital gains. What is the United States of America doing? It is upgrading its capital gains tax; it is making it much tougher than what it will be in Australia. Those are the facts. Until this Government introduced the rather milder capital gains tax there was only one other country in the Organisation for Economic Co-operation and Development that did not have a capital gains tax or wealth tax. Let us not have this balderdash that members of the Opposition have carried on with. We still do not know where the Opposition stands in regard to taxation. The honourable member for Mackellar would not tell us tonight. He wanted to talk about the travelling allowance of the Treasurer and all sorts of other things. He would not tell us what the Opposition would do. One minute the Opposition says that it will introduce such measures as a fringe benefits tax and the next minute it is not going to do that, as the honourable member for Gwydir (Mr Hunt) said today. Let us look at some of the things that the Leader of the Opposition has mentioned. The Treasurer used this quote recently and I will repeat it. The Leader of the Opposition said in 1980: Fairness demands that employees who are paid solely in cash-and most Australians are-should not be asked to pay more tax and thus effectively subsidise those whose income is obtained partly in cash and partly in the form of valuable benefits of other kinds. That is what the Leader of the Opposition said when he was the Treasurer of this country. As I said on 17 September in this House, the former Treasurer said on the Carleton-Walsh Report on 30 July this year: I said when I made the announcement about the fringe benefits tax that what we were going to do was get rid of Mr Hawke's fringe benefits tax and that abuses in the areas-there were some, are some and would be some in the future-would be dealt with in another fashion. In other words, the Opposition would get rid of the Prime Minister's fringe benefits tax but it would introduce the Leader of the Opposition's fringe benefits tax because the Opposition has still not moved away from taxing fringe benefits in some form or another. It does not matter how it is done. Is the Opposition concerned with taxing fringe benefits or is it not? Where does the Opposition stand on this matter? (Quorum formed) It is fairly obvious that the Opposition does not wish to debate this issue in any substance. This has been demonstrated all day and it is doing it again now. We do not know what the Opposition is doing with the fringe benefits tax; we do not know what it is doing with the taxation system in general. Let me remind honourable members of some of the commitments the Opposition has made that are still on the record. It has said that it will introduce income splitting; that will cost $2.7 billion. The Opposition will have a flatter tax system, not a flat tax system. I do not know what that means. One needs a flat tax system of 33c in the dollar with a threshold of $5,000 to bring in the necessary revenue. The Opposition will not have that; it will have a flatter tax system. The honourable member for Mackellar has not quite decided what that means yet, but so be it. That will cost $1.6 billion. It will abolish the fringe benefits tax at a cost of $325m. It will abolish capital gains tax at a cost of $5m. It will abolish the tax on lump sum superannuation at a cost of $80m. It will reinstitute entertainment expenses at a cost of $310m. It will reinstitute negative gearing at a cost of $50m. It will have a full flow-on of world oil price reductions at a cost of $400m. It will abolish sales tax on oils and lubricants at a cost of $66m. It will abolish the tax on new oil at a cost of $165m. The provision of child care rebates will involve a cost of $108m. It will restore income equalisation deposits in in-out tax averaging at a cost of $23m. It will abolish the wine tax at a cost of $107m. All this totals $5.9 billion. When the Opposition balances the books overnight, as it wants to, it will mean another $3.5 billion. On top of that it will fiddle with Medicare to disadvantage the poor, the underprivileged and the chronically ill, to the advantage of the people who have money, and it will abolish the assets test, so we come to a figure of $11 billion, which means that the entire education and defence budgets put together would be abolished. The Minister for Defence (Mr Beazley) is in the House and he would be glad to hear that. He would be glad to tell everyone connected with defence that the Opposition will abolish the entire defence budget. Where will the Opposition make up this $11 billion? It has not said anything. We have invited the Leader of the Opposition and the honourable member for Mackellar again and again, and again tonight, but not one word has come forth on what they intend to do. This legislation, which the Opposition refuses to speak about, is all about bringing down the marginal rates of tax to 24c and 29c with the two top rates of 40c and 49c in the dollar. It is something that has not been done under three decades of conservative governments in this country. The working people were absolutely demoralised by the Fraser Government, of which those honourable members opposite were members, but the people will be thankful when they receive the money in their pockets over the next six months, when they will see that this Government has brought fairness and equity to the taxation system. Mr TUCKEY(O'Connor)(10.13) —In the few minutes left in this debate, we should look at what the Government is trying to do with the tax cuts. It tells us that it will fund tax cuts with fringe benefits taxes. We know what that means. We know that agricultural societies are now having to work out a tax on every meal they give to a visiting volunteer judge. We know that farm houses will be taxed if they have-- Mr Cunningham —Mr Deputy Speaker, I raise a point of order. I am having difficulty hearing the progress of what is going on. Would you tone the House down a little so we can hear what the honourable member is saying? Mr DEPUTY SPEAKER(Mr Blanchard) —It is within the discretion of the Chair. Mr TUCKEY —It is a frivolous point of order, Mr Deputy Speaker. We have heard a little about fringe benefits this week, have we not? We have been told about that second house at 25 Rosslyn Gardens in Elizabeth Bay. That house is uninhabitable. That house is waiting for Warren Anderson to get another building project so he can do some more work for the Treasurer (Mr Keating). That is what he is on about. Government members interjecting- Mr TUCKEY —Those opposite think they can carry on like this. They have a Treasurer who mixes with a tax dodger. Government members interjecting- Mr TUCKEY —He is a tax dodger. Anderson is a tax dodger, and the Minister for Social Security (Mr Howe), who is at the table, knows it. Anderson is mixing with the Treasurer all the time. Mr DEPUTY SPEAKER —Order! Mr TUCKEY —I did not hear you, Mr Deputy Speaker. What did you say? Mr DEPUTY SPEAKER —I warned the honourable member twice. Mr TUCKEY —I did not hear you warn me, Mr Deputy Speaker. I was being insulted by the Minister at the table. I was arguing with him, sir. Mr DEPUTY SPEAKER —I warned the honourable member. Mr TUCKEY —I did not hear you warn me. I did not hear a word you said. Mr DEPUTY SPEAKER —I have to name the honourable member for O'Connor. Mr TUCKEY —If you want to warn me, Mr Deputy Speaker, please catch my attention. Mr DEPUTY SPEAKER —I tried to warn the honourable member and he failed to listen to me. Mr TUCKEY —I did not hear you warn me. Mr MacKellar —On a point of order, Mr Deputy Speaker: I have to intervene at this stage as I did not hear a word you said. I can understand how any honourable member could not have heard what was said from the Chair. I put the point to you, Mr Deputy Speaker, that I did not hear what you said and I assume that nobody else heard either. Mr TUCKEY —It was because of the noise coming from the other side of the House. Mr DEPUTY SPEAKER —Order! In view of the fact that the honourable member says that he did not hear the Chair, I ask him to apologise to the Chair. Mr TUCKEY —Certainly, sir. I did not intend to ignore the Chair. I apologise. Debate interrupted. Mr DEPUTY SPEAKER(Mr Blanchard) —Order! It being 10.15 p.m., I propose the question: That the House do now adjourn. Mr MacKELLAR(Warringah)(10.15) —Tonight I raise a matter which I believe is of the utmost concern to all members of the House. It is a question which the community is finding both disturbing and unacceptably costly. I refer to the vandalism of Australia's public telephone system. Before I comment further on this matter, I would mention that the staff of Telecom Australia has done a pretty good job this year. I notice in the latest report that a trading profit of $465m has been achieved. Mr Campbell —Madam Speaker, I draw your attention to the state of the House. Madam SPEAKER —A quorum is required. Ring the bells. The bells being rung- Mr Sinclair —Madam Speaker, I raise a point of order. The honourable member for Leichhardt (Mr Gayler) walked into the House and then withdrew from the House. I suggest to you that under our Standing Orders, as he has entered the House there is an obligation for him to stay. I also draw your attention to the fact that there are a number of members standing outside the House, which is contrary to the Standing Orders. Madam SPEAKER —The honourable member for Leichhardt must not leave the House when the bells are ringing. (Quorum formed) Mr MacKELLAR —I was trying to raise the question of vandalism of public phones, which obviously enraged the honourable member for Kalgoorlie (Mr Campbell). I do not know whether he has any particular influence in this area. The fact is that in 1968 Telecom spent $18.9m on the maintenance of its 12,100 public telephones. Approximately $9m of that was directly attributable to damage caused by wanton vandalism. I am sure that all honourable members would agree with me that this is an atrocious state of affairs for the public telephone system in Australia. I believe that urgent attention is needed to correct this. So many people throughout Australia are being grossly disadvantaged by the fact that people are robbing public telephones and public telephones are not available for use by the general public. Obviously, the Government is not interested in this particular matter, because the honourable member for Kalgoorlie has drawn the attention of the House to the fact that there were not sufficient members of the Government present to maintain a quorum. Madam SPEAKER —Order! The honourable member's time has expired. Mr LINDSAY(Herbert)(10.20) —Tourism's contribution to Australia's national income and employment has now eclipsed that of the motor vehicle, footwear and clothing industries combined. This has not all just happened of its own accord. It has happened because the Hawke Government has recognised the enormous value of the tourism industry. A variety of successful measures has been established by the Hawke Government. These include the tourism overseas promotions scheme and the highly acclaimed Hogan advertisements produced for the Australian Tourist Commission which, I might add, has received from the Hawke Government a 160 per cent increase in its funding to a record of $26m over the past three years. Above all, there is the inspired and capable leadership of the Minister for Sport, Recreation and Tourism (Mr John Brown). He has given new life to the tourist industry, long moribund under the Fraser Government. There is no doubt that as a result of the Hawke Government's policies tourism has taken off. The number of international visitor arrivals passed the 100 million mark for the first time in 1984. Receipts were up 16 per cent on the previous year, to $1.4 billion. Australians travelling within Australia made some 58 million trips in 1984-85 and spent an estimated $13.8 billion. As at December 1985, about $5.5 billion had been spent on major tourism projects in Australia under construction or firmly committed. I am confident that industry and government promotional efforts will bring two million visitors to Australia in 1988. The Hawke Government has no illusions about the magnitude of that endeavour. There is tremendous potential for further development of the industry. Whether it is grass-roots training in the kitchen or the bar or in management, training improves the service that customers receive, upgrades management knowledge and techniques, increases an employee's skills and self-esteem and creates a more efficient and responsive environment. Tourism is a service industry. It depends more on the quality of its staff than on bricks and mortar. Without properly trained people, hundreds of millions of dollars worth of investment is at risk. In 1987, the James Cook University of North Queensland at Townsville plans to establish a tourism studies unit which will co-ordinate the university's undergraduates and postgraduates teaching in tourism. The tourism studies unit will conduct both basic and applied research, sponsor a tourism research-based publication series, represent the university on the tourism front locally, nationally and internationally and provide advisory consultancy services to government at all levels and to the tourist industry in planning and management policy matters. There is no doubt that what has been an area of small business is rapidly developing into one with a much wider mix of company sizes. Moreover, there is growing pressure for public regulations, administration, monitoring and planning in the industry. Yet, at present, no specific training at a university level is being given to students who go into the industry in either the private or the public sector. The undergraduate program will aim to produce a graduate with a knowledge of critical factors in the industry and their impact on planning for tourism, and a knowledge of management principles and practices as they relate to the environmental, human resources, service and financial aspects of tourism. The degree would be offered basically as a three-year full time course at the pass level and as a four-year full time course at the honours level. It would be a multi-disciplinary degree program with provision for part-time equivalents embracing theory and practical work and periods of work experience in the tourist industry. Masters and doctoral programs would aim to increase greatly the database on tourism and its activities, and to more accurately understand the industry's character, constraints and impacts within Australia, and more especially in north Queensland. For an industry of such significance it is remarkable how little research effort has been directed towards the study of tourism, especially within Australia. This is a long overdue activity at university level and I believe that James Cook University has a great deal to contribute. Mr HICKS(Riverina-Darling)(10.24) —It is approximately three years since the Army first took an interest in the land around Cobar for an impact and manoeuvres area. During that time the people in that area have been subjected to a great deal of indecision and have been placed in limbo. The Army first looked at land around New South Wales and one of the places it looked at was south of Cobar, where the fight for survival was led by people such as Trish McInerney and Marie Forsythe. They led the battle against acquisition and eventually were fortunate enough to win that battle. The Army decided next to look at an area to the north-west of Cobar, where six families in the impact area would be affected. Those six families would have to leave the area and another 40 families would be affected by the Army moving into their area over a period of time. Of course that would affect the farming of this area. I have been to this area many times and I must admit that I have never seen people who have worked so hard to develop what is a fairly hard and harsh environment. Mr Cobb —Under great mental stress too. Mr HICKS —Under great mental stress. An anti-acquisition group was formed in that area. After a few months the Bathurst-Orange area was dropped from consideration by the Army after a great deal of pressure was put on it and the Government to do so. But the Cobar area is still under doubt. No one knows what is going on. The reason I raise this matter tonight is that in the proceedings of Estimates Committee E on 18 September 1986 a question was asked by Senator Sir John Carrick of a person attending that Estimates Committee. I must pay tribute to the honourable senator for the great work he has done in this regard. He asked, in effect, whether any money was set aside for the acquisition of land in the Cobar area. The following answer was given: There is no money provided in this Budget for land acquisition, as I understand it. In answer to a further question about whether any money was set aside for an environmental impact study, it was stated: . . . I believe that there are some minor moneys in that consultancy segment. I ask the Minister for Defence (Mr Beazley), who is present tonight: If it is the case that no money is set aside for acquisition and there is very little money set aside for an environmental impact study, when will he let these people know exactly what is going on-- Mr Nehl —And let them off the hook. Mr HICKS —And let them off the hook, so that they know where they are going. Because of the drought that occurred a couple of years ago, because of the pressure put on them by the various taxes that are being applied and because of the downturn in the rural economy, these people are facing great hardship and they would like to know from the Minister exactly what the situation is. If it is correct, as was stated in the Estimates Committee, that there is no money for acquisition this year-I believe the situation is that the Government will not be able to find this money for many years to come-could the Minister please relieve the anxiety of these people by making a decision very, very soon? That will enable these people to get on with their lives, develop the area, allow their families to go to school and arrange their loans with the banks, which they are finding very difficult at the moment, and just do all those things that the people out there want to do. They want to work hard, develop their properties and make those applications that would normally be made at this time in that area. Mr CAMPBELL(Kalgoorlie)(10.28) —Tonight I want to talk about tariffs, which is a subject I think exercises the minds of a lot of people, as it did the mind of George Canning. For the benefit of honourable members opposite who lack a knowledge of history, George Canning wrote to the English Ambassador at The Hague, at the time of Queen Elizabeth I, as follows: In matters of commerce the fault of the Dutch Is giving too little and asking too much. The French are with equal advantage content, So we clap on Dutch bottoms just twenty per cent. I think he was referring to the bottoms of Dutch ships, but one just never knows, because that was before the age when sexism became an offence. But it is very important because it is popular these days to harangue and condemn the French. I could say that they are not the flavour of the month. The truth is that the French are an extremely resourceful race, they are an extremely inventive race and in many ways they are a very generous race. I have been asked to declare my interest. I will say that they have some great sheilas. Like every member of this House I receive propaganda from the French Embassy, as we receive it from other embassies. I was very interested, in glancing through it, to find that the company which makes 70 per cent of all teleprinters used in Australia is a French company-Sagem, I think. I was also very interested to read a report by the General Manager of the company. He said that he found Australian workers to be very attentive to detail, very productive and extremely well trained and that there was a very low level of industrial disputation. I thought his was a very noteworthy commendation of Australian workers, particularly given the abuse that is hurled upon them by Opposition members and their friends from the extreme socialist factions which have now started to spring up. By `extreme socialist' I mean the New Right, the national socialists. The national socialists who constitute the New Right are doing an enormous disservice to this nation. They are selling our workers short and are lowering our general national esteem in the eyes of the whole world. That is not a good strategy to adopt, I would have thought, if one is interested in the future of this country. It is my belief that the future of this country lies in reindustrialisation. If we are to have jobs for our kids in the future, we must reindustrialise this country. But we cannot do it in the manner in which it was done in the past by the people who now occupy the Opposition benches. We cannot afford the luxury any more of inefficient industries which require large amounts of protection. In the reindustrialisation process we must rely very much on the intellectual capacity, industry and ingenuity of our people. All those attributes are present in abundance in the work force. They are being kicked to death by the national socialists of the New Right. That is a great disservice to this nation. If we are prepared to give the workers of Australia a go, and if we are prepared to recognise their innate ability, as the French do and as foreign companies do, we will succeed. Talking about foreign companies, I have taken a great interest in the Government Aircraft Factories in Melbourne. The combined unions there have been extraordinarily efficient. They have pinpointed areas of mismanagement. They have overcome many of the problems of demarcation disputes. They have been very concerned about the use of material in the factory. Our reward to those people has been to sack them. The truth is that when representatives of the Westland helicopter company saw the factory they said; `My word, you can do anything in this country. You have the capacity and the ability to do absolutely anything'. It is a great tragedy that that ability is recognised by companies overseas, but that it is totally disregarded by the people who inhabit the Opposition benches. Mr REITH(Flinders)(10.33) —Last Saturday marked the anniversary of the introduction of the capital gains tax. There has been a lot of talk in the last few days about management practices and work practices. I draw to the attention of the House the need to look at some of the legislative practices which have been introduced by the Hawke Government. This is a matter which has not had a lot of public debate. That is for two primary reasons. The first is that assets held before September 1985 are exempt. Many people hold those assets and therefore capital gains tax does not concern them. The second reason why I believe the matter has not had a lot of the public limelight, as the fringe benefits tax has had, is that the legislation is incredibly complex, which is one of the hallmarks of this Government. So complex is it that the Government has no clues as to how much money it will bring in. When it was first mooted in September 1985 in the statement by the Treasurer (Mr Keating) the mention of receipts from the capital gains tax was $25 million in the fifth year. In the explanatory memorandum to the Bill there was talk about receipts of $5 million in 1986-87 and $25 million in the fifth year. In this year's Budget Papers, such is the state of confusion that page 271 of Budget Statement No. 4 states that the Government cannot work out what the tax will bring in in 1986-87 or in future years. So no estimate is given at all. Let us contrast that with a letter from the Treasurer addressed to colleagues to assist them in considering economic issues at the Australian Labor Party National Conference. On page 1 of a document entitled `Taxation Policy Initiatives of the Hawke Labor Government' the Treasurer states that the capital gains tax ultimately will bring in $200m to $300m. That figure is very different from the figure of up to $25 million, which is the highest in the cases I have cited. I have been looking very carefully at the capital gains tax legislation and it is my view that one of the areas where we will see considerably more revenue accruing to government than has otherwise been expected relates to the definition of `principal residence' and to the exemptions available to Australian home owners. When one comes to grips with the complexities of the legislation, tens of thousands of ordinary Australian home owners will be paying capital gains tax under this legislation. Let me give some fairly straightforward examples which will occur in many cases around Australia and certainly in the case of Government members. I am glad that there are some in the House tonight to hear them. For example, the capital gains tax exemption will not apply where the family home is used for income producing purposes. Such a purpose would include a situation where a member of the family pays rent or board or where an office within that house is used for income-producing purposes associated with a business run by the owner of that house. That will certainly happen in many of the farming areas around Australia. Secondly, it is claimed that two hectares is a definition of curtilage, thereby accruing the exemptions. That is not the reality. There are situations where properties of less than two hectares will accrue a capital gains tax. There will also be many circumstances where people own more than two hectares, but not much more than two hectares-for example, the 10-acre blocks which are very popular in outer metropolitan areas. Things such as the garden shed, which one can take off a family home block, will all be subject to capital gains tax and will be taxable at their full value because they represent the creation of an asset at a nil asset cost base. Other examples would include people who have retired to retirement villages and who do not have a title, lease or shares in the titleholding. For those people it is their family home. The reality is that it will be subject to capital gains tax. Madam SPEAKER —Order! The honourable member's time has expired. Mr HOLLIS(Throsby)(10.38) —Late last night I received a letter in my office from the High Commissioner of Sri Lanka in which he accused me of making insinuations against the High Commission. I reject this. The letter then mentioned a speech I made in the adjournment debate of 16 September this year. In the speech I was rejecting claims made by the Leader of the National Party of Australia (Mr Sinclair) about Tamils supplying ammunition from Australia to a cause in Sir Lanka. I quoted the Minister for Defence (Mr Beazley): . . . after the Press Conference last week by the Leader of the National Party to announce his startling revelation, the representative of a Canberra lobby group, Carney, Hocking and Associates, was telephoning journalists advising them to telephone the Sri Lankan High Commission for confirmation of the story. That group is headed by Mr Carney, formerly on the staff of the Leader of the National Party. I also mentioned that the group had an account with Air Lanka. That is on the public record. It was put on the public record not by me, but by the Minister for Defence. In his letter to me, the High Commissioner said: This is totally untrue and is another lie that you have uttered against the Sri Lankan High Commission under the cover of parliamentary privilege. He went on: I regret that you continue to make false statements in Parliament under Parliamentary privilege. What seems at issue here is the date the Sri Lankan High Commission received a copy of the Amnesty International report entitled `Disappearance in Sri Lanka'. In my speech I said that the High Commissioner had received the publication a few days before its official launching. In his letter to me, the Sri Lankan High Commissioner said that he had received it two days before the report was launched. For that he accused me of telling lies. The High Commissioner also accused me of supporting terrorists and said: You continue to side with those who are waging a terrorist war in Sri Lanka and committing terrorist atrocities. Those who have read my speeches know that I will always condemn violence whoever commits it. The High Commissioner also said in his letter that my statements are identical and, on close scrutiny, bear a similarity to publications put out by terrorists. I prepare my own parliamentary speeches. I do not regurgitate other documents. Honourable members on both sides of the House support causes. They do so by getting up and speaking for them. I will not be intimidated by such letters just as, over the past two years, I have not been intimidated by the numerous telephone calls I have received or the flood of anonymous letters that arrive in my office and my home while I remain a voice for the Tamil cause. I reject the accusation that I have lied in this Parliament. I have never lied in this Parliament. I also regret and resent very much that a representative of a country in Australia has accused me of using parliamentary privilege for that purpose. I hope that the High Commissioner for Sri Lanka is not trying to intimidate me. Mr HUNT(Gwydir)(10.42) —There has been a concerted move to put me in the category of the Treasurer (Mr Keating) with respect to travelling allowance and my principal place of residence. I wish to add to the statement that I made today, because there are fundamental differences. At all times I have maintained a habitable home on my property Dunumbral at Collarenebri. This principal place of residence is 200 kilometres west of Moree and is used by my family and me when not obligated by parliamentary duties to be in Canberra or elsewhere. Unlike the Treasurer, I have a residence outside of Canberra in which I actually live. This residence is in my electorate. At no stage have I been a member of a government which introduced a fringe benefits tax. It provides for an iniquitous penalty on accommodation, travel and other benefits associated with employment. The fringe benefits tax imposes a penalty on others' residences which is not justified and which contrasts with the continued tax free entitlement which the Treasurer and others enjoy. Travel allowance in Canberra is claimed by me only on those evenings when I am required to be here because of my parliamentary or deputy leadership duties. As such I understand that my position is no different from that of Senator Walsh, Senator Grimes, and the Minister for Trade (Mr Dawkins)-none of whom have been the subject of this rather unfortunate attack. I hope that that puts an end to this very sad episode. Mr CUNNINGHAM(McMillan)(10.44) —I refer to the matter raised by the Deputy Leader of the National Party of Australia, the honourable member for Gwydir (Mr Hunt), regarding his explanation to the House. There is only one point I wish to make in the short time available to me. It has been alleged, quite clearly in debate, that one of the reasons espoused by the Opposition against the Treasurer (Mr Keating) in its vicious attack on him was the fact that his family lives with him in Canberra. That was the reason and proof that he was living in Canberra. Therefore, the question needs to be asked: Does the family of the Deputy Leader of the National Party live in Canberra and do his children attend school here, in accordance with the criteria established by the Leader of the Opposition (Mr Howard)? They are no one else's criteria. He is on record as saying that, under his criteria, if any of his front bench members are guilty let it be on their heads. That is the standard that has been set by the Leader of the Opposition. We are not arguing the case because we do not believe that the Treasurer has done anything incorrect. We are saying that Opposition members set the rules on which they wished to attack the Treasurer and, when they found out that the rules did not suit them, they ran away from the matter. A further point needs to be raised in this connection. What occurred regarding yesterday evening's 7.30 Report on Australian Broadcasting Corporation television should be of interest to some people around Australia. I was contacted by Pru Goward, the person who was to do an interview for the 7.30 Report last night. She asked me whether, as Government Whip, I would represent the Government on the 7.30 Report program to put balance into the program as the Leader of the National Party (Mr Sinclair) was to be interviewed. She explained to me that the Leader of the House (Mr Young) could not appear on the program because he had other business to attend to. She felt that the program would need balance and it needed someone who was aware of the procedures of the House and was in the chamber when the motion of no confidence was moved in the Deputy Speaker. The position was put to Pru Goward by the Leader of the National Party that he would not be prepared to go on the program if he had to debate the matter with the Government Whip. We know that the Leader of the National Party leads a minority rump, so it does not give him much power as far as the House is concerned. In the circumstances, as it was put to me by Pru Goward, the ABC expressed to me that it felt that to get balance in the program the Government Whip, who holds an important position in the House, should be invited on to the program. My secretary received a call in my office, but before the message was relayed to me I met Pru Goward as she was rushing down the stairs. She said: `The program is off. Sinclair won't debate it with you'. I left the matter at that. I was surprised to hear from some of my colleagues who saw the program that the Leader of the National Party appeared. He was interviewed on that program without any representation at all from the Government side. What had happened after the time that the person doing the program had contacted me and had asked whether I would be prepared to go to the studio in this Parliament where members of the Parliament often do interviews? I discovered today, from reports I had from the 7.30 Report, that the Leader of the National Party had gone on that program and had been interviewed. His threat to the ABC resulted in the fact that the Government and the Whip were denied the right to put their position on that program last night. I ask whether a member of any political party in this House has a right to deny another member's participation in a program. I am rather ashamed to believe that the ABC allowed him to get away with that and that he was able to say: `No, I will not do the program'. I was informed, as the Government Whip, that the program would not go to air but he appeared on the program. That type of threatening position by the Leader of the National Party needs to be investigated, especially as the interview was to take place in Parliament House. Mr CONQUEST(Hinkler)(10.50) —I would like to draw to the attention of the House the hypocritical attitude of Government members in regard to the Government's taxation measures, and in particular the attitude of the honourable member for Capricornia (Mr Wright), who in the House today launched an attack in regard to taxation and supported the Government's measures. The honourable member for Capricornia, who is one of those lions in his electorate and a lamb when he gets down here, attended the annual conference of the Queensland Graingrowers Association in Rockhampton. Because he was representing the Prime Minister (Mr Hawke), the Prime Minister had given him a copy of a speech to deliver at the conference, but he chose not to deliver it. I will not question why he chose not to deliver the speech that the Prime Minister had given to him, but I will question his attitude at the conference in regard to the fringe benefits tax. Robert Grover, the Association's financial services manager, asked Mr Wright: Now that the Government (through the Fringe Benefits Tax Act) has the ability to calculate the tax on fringe benefits, what is its reason for imposing the tax on the employer and not the employee who is receiving the benefit? The reporter who covered this was very careful to take down verbatim what the honourable member for Capricornia had said, and I shall repeat verbatim his statement: What the Government decided, for political reasons, and I won't walk away from that, because we saw what happened when John Howard tried to do it in the mining industry, for political reasons to ensure it would go through it was decided to place it on the employer. For efficiency reasons, when you consider that you've got far less employers to deal with than you have employees, that because of the political aspects of getting it through it was the decision that was made. It is a little different from the way in which the honourable member for Capricornia acts when he comes down here, because apart from trying to make attacks on the Queensland Government-he was defeated in that Parliament and decided to change Houses-he has made the statement that the Government made the decision on fringe benefits tax for political reasons. He is the man who has laid that charge against the Government, yet he comes down here and will not admit it in this House. On taxation, the Government has tried to mislead the people of Australia. It has been around the country trying to sell the fringe benefits tax, and every time that a ruling comes out from the Australian Taxation Office, the anomalies start to appear. They appeared in the car parking spaces issue. If an employer gives to an employee a car parking space in an area where no free parking space is available, the employer has to pay a fringe benefits tax on the car parking space that is provided. Last night in this House, I told honourable members about funeral directors. If a funeral director provides accommodation to an employee who is looking after the mortuary, because that is an adverse situation according to the Taxation Office, he can get 40 per cent discount on the accommodation. But if it is onerous accommodation-if you are on 24-hour call-no discount is allowed. Which is the more adverse? Madam SPEAKER —Order! The honourable member's time has expired. Mr TICKNER(Hughes)(10.55) —The cause that I wish to raise in the House tonight concerns the disappearances that have been reported by Amnesty International in one of our near neighbours-Sri Lanka. I am disappointed that so many honourable members have sought to leave the chamber when a matter is raised that should be of concern to all of us. Mr Peter Fisher —That is not right. That is unfair. Mr TICKNER —I withdraw that. I did not mean to cast any aspersions, but I would hope that all members of parliament from all parties would share my concern on this. I compliment members of the National Party, the Liberal Party and the Australian Labor Party who attended a Press conference on this matter convened by Amnesty International today. There are some people who believe that Federal members of parliament should confine themselves to bread and butter issues, that the cause of human rights is somehow an esoteric or emotive matter and that we should not turn our attention to those questions. As you would be aware, Madam Speaker, this Parliament truly provides a model for parliaments around the world, given its already outstanding contribution to advancing the cause of human rights. The parliamentary group of Amnesty International has almost 100 members and, if those honourable members in the chamber tonight who are not already members of that group were to join, it would certainly top the 100 mark within the week. I encourage all honourable members to do that. Turning my attention to the cause of human rights in Sri Lanka, I would mention that Amnesty International has produced a very comprehensive report on this question which is entitled `Disappearances'. It chronicles a human tragedy of 272 specific cases of disappearances. The evidence is that many of the people who are referred to in this report have been shot or have died after torture and been buried in secret graves or burned. Before I go further, let me say that I do not seek to canvass the merits or otherwise of the internal politics of Sri Lanka. That is not my concern, nor is it the concern of Amnesty International. However, it is a concern of Amnesty to uphold some basic principles of human rights, and whatever differences separate us in this Parliament, I believe that we can rally round the basic principles of Amnesty International. They are, in essence, a concern for prisoners of conscience; that is, people who, for no reason other than their racial or ethnic origins, their religious beliefs or their political beliefs, are detained by a government. Amnesty's charter is strictly confined to circumstances where people have not advocated violence, so let there be no suggestion that Amnesty is some left wing front or some right wing push; it is truly a movement that can unite people of totally different political persuasions. It is also appropriate to place on record the long-standing friendship that exists between our country and the Government of Sri Lanka. Our friendship and co-operation dates back beyond the Colombo Plan and continues to this day. So it should. That places on us a very special responsibility to take a stand, and to express our concerns to the Government of Sri Lanka about these violations of human rights. It has been suggested to me on occasions that it is not a proper concern of Amnesty or of foreign governments to take an interest in what are sometimes called the internal politics or the internal affairs of a country. Madam Speaker, you will be aware that, when you and I and others recently visited the Soviet Union, that view was taken on occasion by Soviet authorities and on other occasions by Polish authorities. But we asserted then, and I can say confidently that all honourable members would agree, that any country that is a signatory to the International Covenant on Civil and Political Rights, as Sri Lanka became in 1980, can no longer, if it ever could, claim that human rights concerns are a matter for its internal consideration alone. It is a world issue and, increasingly, the Government of Sri Lanka must respond to these international concerns. I would call on all members of parliament to read the Amnesty International report, to back its concerns and to apply constructive pressure to the Government of Sri Lanka to ensure that these basic human rights standards are upheld. Mr McGAURAN(Gippsland)(10.59) —Madam Speaker, the contribution by the honourable member for McMillan (Mr Cunningham)-- Mr Cunningham —On a point of order, Madam Speaker: The time is 11 o'clock. Mr McGAURAN —No, it is not. Madam SPEAKER —It is not quite 11 o'clock. Mr McGAURAN —The earlier contribution by the honourable member for McMillan again brought to mind the single most consistent characteristic of the right wing members of the Australian Labor Party, which is that they squeal. They can dish it out, but they cannot take it, as the Victorian Branch of the Labor Party is finding as it accuses the New South Wales right wing of standing over it. For a member of this House to admit publicly his own humiliation seems to me to be rather extraordinary. It seems to be an invitation to be mocked. I find it curious that the Australian Broadcasting Corporation, and particularly the journalists in this place, could be stood over in the manner alleged by the honourable member for McMillan. It is a gross insult to their integrity, to their competence and to their strength of character. Madam SPEAKER —Order! It being 11 p.m., the debate is interrupted. House adjourned at 11 p.m. until Tuesday, 7 October 1986, at 2 p.m., in accordance with the resolution agreed to this day. The following papers were deemed to have been presented on 25 September 1986: Customs Act-Notices-1986-Nos. 8, 9. Excise Act-Notices-1986-Nos. 15, 17. Land Acquisition Act-Statement of lands acquired by agreement authorised under sub-section 7 (1). Public Service Act-Parliamentary Presiding Officers' Determination-1986-No. 1. State Grants (Petroleum Products) Act-Amendments to the schedules to the subsidy schemes in relation to the States, dated 9 September 1986. The following answers to questions were circulated: (Question No. 2229) Mr Staples asked the Minister for Defence, upon notice, on 17 October 1985: (1) Was the Australian Government not informed of a `red alert' applied to the North West Cape installation as reported in the Brisbane Courier Mail on 21 November 1973. (2) Should Australia have been consulted under the ANZUS Treaty and the US Naval Communications Agreement. (3) Did this constitute a breach by the USA of these agreements. (4) Has the USA further breached these agreements by refusing to inform Australia of a command sent to submarines through North West Cape to arm their nuclear missiles. (5) Were bases in Australia alerted as a result of a low-level nuclear attack alert on or about 10.50 a.m. on 9 November 1979, which was later attributed to a computer malfunction. (6) What steps has the Government taken to insist upon international surveillance of arms monitoring in present and future agreements with the USA in particular and what steps are possible and likely, leading up to the expiry of the Pine Gap agreement in 1987. (7) Is Australia bound to support the USA should it become involved in a nuclear conflict. Mr Beazley —The answer to the honourable member's question is as follows: (1) I refer the honourable member to the answer given to Senate question on notice No. 300, Senate Hansard 5 October 1983, page 1181 and confirm that the alert status of US forces at North West Cape was increased in October 1973 without consultation with the Australian Government. This occurred before the Naval Communication Station became, in 1974, a jointly operated facility of the RAN and the US Navy. (2) to (3) No. (4) The Australian Government has no reason to believe that the US has ever breached either the ANZUS or the North West Cape agreements. (5) No. (6) The Government has not insisted upon international surveillance of arms monitoring in its existing agreements with the US on the joint defence facilities and has no intention of doing so in future. Nor is it the case that the agreement with the US relating to the Joint Defence Space Research Facility at Pine Gap will expire in 1987. While nuclear weapons are owned and under the exclusive control of individual countries rather than the international community, it would not be realistic to expect the US and USSR to transfer to international control their existing systems for verifying the other's compliance with arms control agreements. (7) Australia has no binding legal obligation to provide military support to the US in those hypothetical circumstances. However should the situation arise, the Government of the day would naturally give due weight to the broad interests it shares with its US ally as well as to the specific obligations contained in the ANZUS Treaty in determining what support would be appropriate. (Question No. 4214) Mr Blunt asked the Minister for Social Security, upon notice, on 4 June 1986: (1) Is his Department reclassifying income for eligibility of the aged pension; if so, (a) what changes are being made, (b) how many pensioners will be affected and (c) how many persons will have their pensions reduced or cancelled. (2) Is there abuse of the aged pension benefit; if so, to what extent. (3) Will the Government give adequate warning of changes in eligibility criteria so that pensioners can make necessary changes to their financial affairs. (4) Has he directed that all his Department's reductions in benefit payments should affect the aged; if so, why. (5) What action will he take to ensure pensioners will not worry unnecessarily about pension cuts. (6) Does the receipt of communications from his Department often cause its clients undue alarm; if so, what action has he taken to overcome this problem. Mr Howe —The answer to the honourable member's question is as follows: (1) (2) and (3) While considerable numbers of age pensioners are placing funds in a range of relatively sophisticated investments, including forms of investment introduced onto the market in recent times, there is no reason to conclude that the age pension program is being abused. In accordance with standard practice my department is examining the proper application of the existing provisions of the Social Security Act to these new products as well as the consistency and comprehensiveness of existing guidelines dealing with investments in general. Should any legislative change be required to treat in a consistent manner all investments which produce support for the investor, this will be subject to normal parliamentary procedures with associated debate and publicity. (4) and (5) I have given no directions that there should be reductions in benefit payments nor that any reductions in benefit payments should affect the aged. (6) I am aware that official communications always have the capacity to cause concern to clients especially elderly clients. My department has been consciously following a policy of simplifying its communications and of providing its clients with more comprehensive information to minimise this possibility. (Question No. 4286) Mr Coleman asked the Minister for Defence, upon notice, on 5 June 1986: (1) Is he able to say whether the US Department of Defense has discarded the tendering requirement for man-portable anti-armour weapons capable of destroying the main battle tanks of an opposing force. (2) If the US Department of Defense has taken this action is he able to say why. Mr Beazley —The answer to the honourable member's question is as follows: (1) I am advised that the US Army has not discarded the competitive bidding process for the acquisition of man-portable anti-tank weapons systems. The Competition in Contracting Act of 1984, part of the Budget Reduction Act of 1984, requires that the competitive bidding process be carried out.