Wednesday, 15 October 1986 Madam SPEAKER (Hon. Joan Child) took the chair at 10 a.m., and read prayers. Mr YOUNG(Port Adelaide-Leader of the House)(10.01) —I move: That, unless otherwise ordered- (1) the House shall meet for the remaining sittings this week on: Thursday, 16 October, at 9 a.m. Friday, 17 October, at 9 a.m.; (2) government business shall take precedence over general business for the next sitting, and (3) standing order 48a (adjournment of the House), as amended by sessional order, be suspended for this sitting and the next sitting. Mr Burr —Are we going to sit all night again? Mr YOUNG —No, it is not the intention that the House should sit late into the evening. We are taking the opportunity of providing additional hours as early as we possibly can by sitting from 9 a.m. on Thursday and Friday. I realise that this does put extra pressure on the Clerks and the people involved in the administration of the House. It is necessary for us to give Government Business priority to make sure that the program we have laid down for this three-week sitting is completed. That will give back benchers on both sides of the House the opportunity of debating not only the appropriations that are before us today but also other measures which will come before us today and tomorrow so that we can complete the business that is set down for this week, clearing the way for us again to set a full program for the third week of this sitting. This is not an unusual move; it is a move that is quite often made by government. I think it does give people the opportunity to plan their speakers a lot more efficiently than they would otherwise have done. Sometimes it appears that there are only one or two people on the Opposition benches who are interested in speaking and they want to dominate the whole proceedings of the House and not give their colleagues the opportunity of speaking on some of the important Bills. I think in this way the Government helps all those members on the Opposition back benches who might have been squeezed out of the various debates by virtue of the domination of one or two of their members who seem to want to jump to their feet and speak on every issue that comes before the Parliament. In this way people on both sides of the House can see the timetable set down by the Government and can fit their program into the sitting hours which have been made available. We are making more hours available now for Government Business. This should allow the program we have laid down for the remainder of this week and next week to be completed as we anticipated. Mr SINCLAIR(New England-Manager of Opposition Business)(10.03) —It is quite obvious that the Government is in trouble. We know that the polls are not running too well for it; we know that it cannot comprehend the degree to which it is necessary that there be an adequate opportunity-- Government members interjecting- Mr SINCLAIR —They are a good lot of school kids; they come from Tamworth. Apart from anything else, I think the Government needs to understand that there is a real problem in the community because this Government is not prepared to come into this Parliament and answer to the real concerns in the community about where the economy is going and where the Government's management is going. This motion will do three things: Firstly, it will require us to get up early in the morning. For all of us in the bush that is just a customary habit. Indeed, I think it would be a good idea-- Government members interjecting- Mr SINCLAIR —It is very interesting if one has a look at the attendance in the House at the moment. My colleagues from the National Party of Australia are all here. They are used to getting up early in the morning. All the bush members of our coalition partner are here, but where are the members of the Labor Party? Most of them are still in the cot, and I can understand it. They had a pretty good old night last night. They were in there wining and dining with the Prime Minister of India. It is not often that this Labor Government is prepared to give a feed to the members of this place, and I do not doubt that some members of the Australian Labor Party are feeling pretty poorly today, having seen their behaviour around the Parliament last night. I felt quite ashamed. I have no doubt that after a couple of hours in bed-- Madam SPEAKER —Order! The right honourable member will not cast aspersions on other members of the House. Mr SINCLAIR —I am sorry, Madam Speaker, I thought I was just factually reporting the state of their health. Nonetheless, it is important that we recognise that the first part of this motion provides that there will be an early start, at 9 a.m., on the two final sitting days of this week. We do not fundamentally object to that but the other two parts of the motion are far more consequential. The second part provides that Government Business shall take precedence over General Business for the next sitting. General Business Thursday No. 12 is a motion by the shadow Minister for Health, the honourable member for Barker (Mr Porter), regarding Medicare and the health care system. I do not think that there is any more serious and substantive area of disarray as far as Government policy is concerned. The honourable member's notice urges the House to recall the Government's promise to provide a fair, equitable and efficient health care system. What an appalling state of affairs we have with Medicare in its present state of disarray. We know that every doctor and every patient are concerned; we know that the people are concerned. I think it important that there be a debate on that issue. We do not like the fact that such a debate would take place over the lunch hour as that denies people the proper opportunity to attend parliamentary committee meetings. That is another of the practices that have developed. More and more this Government has designed proceedings so that parliamentary committees meet while the Parliament is in session. We do not agree with that. We think it would be far better if there were reasonable meal breaks so that parliamentary committees could meet then instead of having to sit in the way that the Labor Government has made almost obligatory. This second part of the motion means that the debate on Medicare will be suspended. Government Business is to take precedence over General Business. I do not think that proper. It is necessary that we consider the motion on Medicare. The honourable member for Barker deserves to be given his chance. I should add that this is only General Business Thursday No. 12. We have on the Notice Paper up to General Business Thursday No. 22. We need to debate those motions but that is unlikely to occur before this Parliament ends. Apart from those, there are a number of other General Business motions. There are 104 General Business motions on the Notice Paper, from both sides of the House, covering a wide array of matters, and it is unlikely that any of those motions will be debated. So much for the contention of the Leader of the House (Mr Young) that this motion is intended to give more time for the business of private members. There are matters of concern to members of this House contained in these General Business notices and it is likely that none of them will be debated. What is the Minister doing? He is just going to suspend General Business today. The second part of the motion frankly does not meet with our concurrence. The third part is also very important; that is, that standing order 48a, relating to the adjournment of the House, as amended by sessional order, be suspended. That means that the Minister will again try to take up the adjournment debate. Members of this place have too few opportunities to talk on matters that affect them and the adjournment debate is a sacred part of the rights and opportunities of private members to debate in this chamber. I do not regard it as acceptable that apparently not only for this sitting but also for the next sitting there will be no adjournment debate. Honourable members need to take note that the real nature of this Government's action is to accelerate the consideration of the Appropriation Bills. The Appropriation Bills debate is an important one but it is not the acceleration of consideration that is important; it is the fact that this is a step being taken by the Government to wind up the Parliament prematurely. That is really what that is all about. This Government wants to run to cover again. It is not prepared to give us the normal sitting periods; it is not prepared to allow proper debating opportunities for matters that members wish to raise, be that debate on General Business or on the adjournment. If we are to rise early, one can only conjecture that it is either because the Prime Minister (Mr Hawke) yet again wants to get outside of this Parliament, to where he feels he is not likely to be exposed to all of the traumas that flow from the ridiculous policies that he has implemented or because-- Mr Hunt —It might be an early election. Mr SINCLAIR —Perhaps it is because of an early election, as my colleague suggests. Whatever it is, there is no reason for the sittings to be terminated early. There is every reason for us to sit according to the schedule originally announced by the Leader of the House. It is rather interesting that the Government is taking this step, not because it wants to give honourable members an opportunity to consider issues, not because there is any urgent necessity to consider legislation, but simply because it wants to run for cover. As with the major economic statement in the middle of this year, it is interesting that the Australian Labor Party is not prepared to have its policies exposed to the proper scrutiny of the Parliament. Government members try to make statements during Question Time instead of exposing their policies to debate as they should. The Government is prepared to have the Parliament rise so that its members can hide away in their little coveys somewhere in Canberra instead of exposing their policies in the Parliament and allowing a proper debate. On that basis the Opposition does not accept the motion moved by the Leader of the House. We suggest that it would be far better for the Government to recognise its obligations to the people of Australia and to allow for full and proper debating opportunities in the Parliament on all the serious and significant issues before the people of Australia. At a time when the economy is in a mess, when the Treasurer (Mr Keating) has very nearly received the wooden spoon award from the magazine that gave him an accolade a little while ago, it is more appropriate for this Parliament to sit than for it to accelerate debate on significant issues. I suggest to the Leader of the House that he should think again. The Opposition opposes the motion and suggests to the Minister that the Parliament should sit according to its normal sitting schedule and not be cut short as he suggests in this motion. Mr SHIPTON(Higgins)(10.12) —This motion by the Government is as indicative of the inability of the Government and of the Leader of the House (Mr Young) to run the affairs of this House as it is of the inability of the Government to run the affairs of the nation. It is outrageous that the Government should introduce a motion stating that Government Business should take precedence. It is another attack on the rights of private members, of back benchers on both sides of the House, to participate in debates of the Parliament. Participation in the adjournment debate is one of the most valued rights that private members on both sides of the House have to raise matters on behalf of constituents. Here we see that right being taken away by this Government. Madam Speaker, it is another example of the growth of the power of the Executive which you, as Speaker and as a champion of the rights of all members of this House, ought to be concerned about. This motion is an example of the diminished role of private members in the Parliament. Here we have another example of the Government's riding roughshod not only over its own back bench but also over the Parliament itself. It is an example of the Parliament tragically becoming more and more a rubber stamp of government and of its becoming less relevant. It is another nail in the coffin of parliamentary democracy. Mr Hand —Sit down and stop wasting our time. Mr SHIPTON —Government members, such as the honourable member for Melbourne, who ought to be in his proper seat, ought to support the right of private members to have an opportunity to speak. I repeat that this is another nail in the coffin of parliamentary democracy. Question put: That the motion (Mr Young's) be agreed to. The House divided. (Madam Speaker-Hon. Joan Child) Ayes . . . . . . . . . . . 65 Noes . . . . . . . . . . . 54 —— Majority . . . . . . . . . 11 —— Baldwin, P. J. Hurford, C. J. Beddall, D. P. Jakobsen, C. A. Bilney, G. N. Kent, L. Blanchard, C. A. Keogh, L. J. Blewett, N. Kerin, J. C. Bowen, Lionel Klugman, R. E. Brown, Robert Langmore, J. V. Brumby, J. M. Lee, M. Campbell, G. Lindsay, E. J. Charles, D. E. McHugh, J. Chynoweth, R. L. McLeay, LeoCleeland, P. R. 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. Duffy, M. J. Morris, AllanDuncan, P. Morris, PeterEdwards, Ronald Mountford, J. G. Fatin, W. F. O'Keefe, N. P. Fitzgibbon, E. J. O'Neil, L. R. T. Free, R. V. Punch, G. F. Gayler, J. Saunderson, J. Gear, G. Scott, J. L. Gorman, R. N. J. Simmons, D. W. Grace, E. L. Snow, J. H. Griffiths, A. G. Staples, P. R. Hand, G. L. Theophanous, A. C. Holding, A. C. Tickner, R. E. Hollis, C. Uren, T. Howe, B. L. West, S. J. Humphreys, B. C. (Teller) Wright, K. W. Young, M. J. Adermann, A. E. Jull, D. F. Aldred, K. J. Katter, R. C. Andrew, J. N. (Teller) Lloyd, B. Beale, J. H. McArthur, F. S. Blunt, C. W. McGauran, P. J. Brown, N. A. McVeigh, D. T. Burr, M. A. Macphee, I. M. Cadman, A. G. Miles, C. G. Cameron, Donald Nehl, G. B. Carlton, J. J. Peacock, A. S. Cobb, M. R. Porter, J. R. Coleman, W. P. Reith, P. K. Conquest, B. J. Robinson, IanCowan, D. B. Rocher, A. C. Dobie, J. D. M. Ruddock, P. M. Downer, A. J. G. Shack, P. D. Edwards, Harry Sharp, J. Fife, W. C. Shipton, R. F. Fischer, Tim Sinclair, I. McC. Fisher, Peter Smith, W. Goodluck, B. J. Spender, J. M. Hall, Steele Sullivan, K. J. Halverson, R. G. Tuckey, C. W. Hicks, N. J. (Teller) Watson, D. J. H. Hodges, J. C. Webster, A. P. Hodgman, W. M. White, P. N. D. Hunt, R. J. D. Wilson, I. B. C. Lamb, A. H. Hawker, D. P. M. Dubois, S. G. MacKellar, M. J. R. Brown, John Millar, P. C. Jacobi, R. Cameron, Ewen Question so resolved in the affirmative. Consideration resumed from 10 October. Schedule 3. Department of Community Services Proposed expenditure, $468,642,000. Department of Social Security Proposed expenditure, $573,693,000. Department of Health Proposed expenditure, $526,957,000. Department of Veterans' Affairs Proposed expenditure, $999,200,000. Ms JAKOBSEN(Cowan)(10.21) —I rise to speak on Appropriation Bill (No. 1) in the knowledge that economic decisions depend largely upon value judgments of the alternative outcomes of proposals. In other words, the thrust of a particular economic argument depends upon the political and philosophical perspective of the advocate. Obviously people can draw from this the conclusion that the Opposition and the Government will have different perspectives. In respect of the Appropriation Bills, the above argument recognises that additional spending on Social Security and Community Services and associated departments can be achieved only when expenditure is forgone in another area. While my personal inclination is to consider expenditure in the areas under discussion to be paramount, the Government had other overriding circumstances to take into consideration. With the dramatic collapse in world commodity prices for the things Australia produces, our national income has been slashed by over $6 billion per year. Obviously, this situation demanded urgent action and drastic solutions on the part of the Government, and it is in this context that the framing of the Budget as a whole must be viewed. The decision to float the Australian dollar rendered our currency and our economic and industrial performance as a nation more vulnerable to the judgments of the financiers of the rest of the world. Unfortunately for Australia, until recently at least, their decisions to buy or sell our dollar seem to have had very little to do with economic realities or an objective evaluation of the fundamentals of the Australian economy. Too often they appear to have succumbed to panic and reacted to rumour and gossip, allowing their judgment to be swayed by personal or collective prejudices and penchants for particular areas of economic policy. I refer interested members, if there are any present, to an article in the Business Review Weekly earlier this year in which the practices of local and external economic gurus were outlined. In this article the author, Alan Deans, claims: . . . some gurus rely more on instinct or hunch than information from sources in official circles. So much for economic logic. Most Australians recognise that in the prevailing economic circumstances there is a need to reduce our expenditure as a country. In this context, the call by the Prime Minister (Mr Hawke) for people to `pull in their belts' was understood and reasonably well received across the nation. But we cannot overlook the reality that there are people in Australia who effectively have no belt to pull in and who are relying on government and community assistance for their very survival. That assistance will remain intact in these appropriations, although it will not be extended as far as the Government might wish. I recently attended the launch of a Christmas appeal for poor families in my electorate and bordering areas in the northern suburbs of Perth. The appeal was launched by Bishop Challen and hosted by the local Anglicare organisation. Many churches in Australia, the Anglican Church included, are acutely aware of the poverty which exists in the community, as they have taken on the task of distributing emergency relief and food aid to those in need. Their efforts have supplemented the activities of government and welfare organisations to a large degree and have served to extend the support net available to the needy. The Australian Catholic Social Welfare Commission has used its resources to research issues such as the availability and adequacy of financial support for families and I commend its members on the quality of the paper recently produced on this subject, a copy of which was forwarded to members of parliament for their information. In the context of research into the social security system and the adequacy of current income support provisions as related to the taxation system, I congratulate the Minister for Social Security (Mr Howe) for establishing the social security review in December last year. To date several background papers have been received which provide a further valuable insight into areas such as assistance for families with children. It is proposed that the review will take about two years and at the end of that time some very valuable information will be available. Sadly, despite the Minister's undoubted commitment to assisting the poor and because of the economic difficulties confronting the country, the poverty trap changes have been deferred until July 1987. Also, the normal six-monthly indexation of pensions and benefits has been delayed by six weeks in this Budget. As poverty trap alleviation is crucial to people endeavouring to survive on and supplement a pension, the delay of this measure causes me the greatest concern. These people are already living at the margin and require the stimulus and assistance that the poverty trap proposal promised in terms of their ability to earn additional income without the crushing barrier of marginal tax rates-in excess of 100 per cent in some cases. However, I am certain that the Government will maintain a watchful eye on economic circumstances with a view to improving the position of pensioners, and others in need, as soon as possible. When discussing welfare, social security and community services, it is important to stress that during the term of this Government there have been significant increases in the real value of pensions and benefits, as well as large gains in the assistance provided for children in low income families. For instance, even in this Budget-which is recognised as difficult-some bouquets have been received from groups such as the Australian Council of Social Service which has welcomed `the increased and well-targeted expenditure in the Community Services portfolio'. The measures taken to preserve Medicare in the Health Department appropriations have also been applauded. I note that the Budget strategy is already working to Australia's advantage in key sectors of the economy, even though it was never intended as a `quick fix' measure. The Government has forecast growth through productive investment and reconstruction of the economy to promote exports, and it seems that the export thrust has now begun and that Australian businesses are finally grasping the opportunity which has been presented to them by Australia's improved international competitiveness. Hopefully, the improvement in our trading position and a return to currency stability will soon be reflected in a recommitment by the Government to the provision of the necessary support for the poor and needy in our community. I commend the Minister for Social Security particularly for his sincere endeavours on behalf of his portfolio constituents and regret that the Budget strategy in the welfare area has exposed him at earlier points in this debate to the hollow rhetoric and meaningless posturing of Opposition members, many of whom have no real or lasting commitment to the beneficiaries of welfare in this country and who would prefer to see the abolition of our social security system altogether. I commend the Bill to the Committee. Mrs SULLIVAN(Moncrieff)(10.30) — Because we are in Committee in debate on Appropriation Bill (No. 1) our time is very limited. Therefore, there is very little opportunity to reply to things said by speakers on the other side, but one comment by the honourable member for Cowan (Ms Jakobsen) I cannot allow to pass. I acknowledge that the honourable member has a very sincere interest in pensioners and social security beneficiaries, but bland statements about the Government's progress in this area cannot be allowed to pass when they fly in the face of facts. I am sure that the honourable member for Cowan, along with me, has received a document from the Women's Electoral Lobby headed `Women in the 1986-87 Budget' which shows that the fall in family allowances under the Hawke Government from 1983 to the estimated level in 1987 has been 17 per cent. So I cannot let the honourable member say, without some sort of response, that this Government has been making progress in real terms in areas of need. It has made progress in some areas of need, but certainly not all. I hope I get time to say a little more about this later. I welcomed the statement from the Minister for Social Security (Mr Howe) on the elimination of poverty traps. It contains several really excellent and pertinent proposals. It is not merely regrettable that the proposals are not being introduced; it is a tragedy that they are not being introduced at this stage. When I spoke on the appropriations for the Department of the Prime Minister and Cabinet and paid particular attention to the position of the Office of the Status of Women under those appropriations and the very clear lack of effect that the Office has had on Budget matters affecting women, I made the statement that no document had been circulated this year, in contrast with last year, on the effect of the Budget on women. At the time the honourable member for Lilley (Mrs Darling) was in the chair and she shook her head at me as I said that, so I took the trouble to go and ferret out the document afterwards. The reason I had made the mistake was that the document was not volunteered to members, nor was there the plethora of Press releases that there was last year. The document was contained on a supplementary list of Budget documents and reports, not the main list, so it took a little finding. I want to quote from that report, because it is particularly relevant to the appropriations we are looking at. The appropriation on which I will be concentrating is that for the Department of Social Security. The report gives a good outline of the importance of social security measures to women and, as a corollary, families in this community. The report states: The Department's-- that is, the Department of Social Security- expenditure on women is higher than any other port- folio-roughly $9,900m in 1986-87 or about 61 per cent of total expenditure by the Department on pensions, benefits and allowances. There are a number of reasons for this, including: Special provisions for women based on traditional social expectations, e.g. earlier age pension eligibility age, and a separate payment for widows; the larger representation of women among the aged population due to their longer life expectancy; the larger representation of women among sole parents; the generally lower income levels of women reflecting work-force skills and opportunities; and women's traditional child rearing responsibilities which means, in most cases, it is the mothers of children who receive family allowances. The bulk of the Department's income support payments (77 per cent) are received by women. Women account for 69 per cent of pensioners, 28 per cent of beneficiaries, 98 per cent of family allowance recipients and 99 per cent of family income supplement recipients. That underlines the fact that women receiving social welfare are very much at the poverty level. Women make up 99 per cent of family income supplement recipients. The report continues: Social Security expenditure on income support payments to women will represent about 61 per cent of total income support expenditure in 1986-87. . . . . While family allowances for those under 16 are paid to everyone with children, regardless of their income, pensions and benefits are generally income tested. The majority of women receiving pensions or benefits, however, have little income other than their pension and are not affected by these income tests. The report I have referred to in the women's budget program contains a table headed `Impact of Social Security Income Maintenance Payments on Women 1986-87' which outlines the effect very graphically. I seek leave to have the table incorporated in Hansard. Leave granted. The table read as follows- IMPACT OF SOCIAL SECURITY INCOME MAINTENANCE PAYMENTS ON WOMEN 1986/87 Payment Female Recipients (at 30 June 1986) Number Percentage of Recipients Children Dependent on Female Recipients Number Percentage of Children Dependent on Females Estimated Total Expenditure on Women in 1986/87* $m PENSIONS Age pension 912 227 68.9 3 925 42.9 4 351 Invalid pension 72 912 26.6 14 273 19.2 423 Sheltered employment allowance (SEA) 3 502 34.9 23 5.5 22 Rehabilitation allowance 1 044 32.4 133 8.9 8 Wife's pension 103 378 100.0 3 558 100.0 482 Carer's pension 1 226 24.4 214 16.2 8 Widow's A pension 74 180 100.0 130 991 100.0 525 Widow's B and C pension 81 443 100.0 1 069 100.0 434 Supporting parents benefit 166 660 94.3 291 160 94.6 1 285 TOTAL PENSIONS 1 416 572 69 445 346 84 7 538 BENEFITS Unemployment benefit 156 534 27.5 13 500 6.0 770 Sickness benefit 17 327 26.5 1 400 5.3 91 Special benefit 10 243 55.1 4 200 57.5 55 TOTAL BENEFIT 184 104 28.2 19 100 7.3 916 PAYMENTS FOR CHILDREN Family allowance 2 116 700 e...98.3 4 122 900 e...98.6 e...1 348 Family Income Supplement 28 900 e...99.0 82 400 e...99.1 62 Handicapped child's allowance and double orphan's pension ** ** 35 TOTAL PAYMENTS FOR CHILDREN 2 145 600 e...98.3 4 205 300 e...98.6 1 445 * Any discrepancies between components and totals are due to rounding. ** Almost all recipients of these payments are in receipt of family allowance. e Estimate Note: 1 Additional payments, such as additional pension and benefit, mothers/guardians allowance, rent assistance, etc, are included in expenditure by pension/benefit payment. Note: 2 Expenditure estimates provide an approximate indication of the breakdown of the Department's 1986/87 pension and benefit expenditure for women. These estimates are based on estimated numbers at 30 June 1986. Mrs SULLIVAN —I thank the Committee. One aspect that I referred to in my earlier speech on the Department of the Prime Minister and Cabinet was measures that were to be taken in relation to recipients of widow's pensions and supporting parent's benefits. Budget Paper No. 1 outlines one particular matter which I have referred to already and which has received absolutely no publicity. I strongly suspect that those who will be affected by this are oblivious of the fact that it will have an effect on them. Whilst age pensioners are aware of the effect of this Budget on their pensions and so on, the simple fact is that widows and supporting parents are not people who are organised into groups to take note of the fine print of things such as Budget Paper No. 1. I believe that this statement has passed them by. Budget Paper No. 1 states: The Government has decided to improve the administration of supporting parent's benefit and widow's pension by more regular reporting, to ensure continuing eligibility, and counselling which will assist the recipients to find work and thus reduce outlays. From October 1986 recipients will be required to report to the Department of Social Security on their circumstances each month during their first three months on benefit and quarterly thereafter. I underline those points. Women who have just been bereaved, women who have just gone through the trauma of marital breakup-in all cases with young dependent children or they would not be qualifying for these payments-must be fronting up to bureaucrats and telling them why they are not in employment when they are in a traumatised state. I will have more to say about that in the future, but I think that can only be described as disgusting. The effect of the Budget is also outlined in a document provided by the Parliamentary Library, which would have come into the possession of all honourable members and senators recently, called `Supporting Parent's Benefit' which is a Legislative Research Service background paper. My time is running out but I want to quote from this document because it outlines exactly how women who are on supporting parent's benefits are affected and how this so-called crackdown is likely to work. In a section headed `Effect on Employment of Single Parents', the document states: . . . single parents, as a group, tend to be particularly disadvantaged in terms of access to employment by virtue of the fact that the overwhelming majority are female. In 1982, 39 per cent of female single parents and 84 per cent of male single parents were in paid employment. As women, female single parents face a sex-segregated and generally low-paying labour market. A recent survey conducted by the Australian Bureau of Statistics showed that female sole parents who worked earned on average only 76 per cent of the income of male sole parents who worked. It has also been observed that female sole parents are less likely to have access to the Commonwealth-assisted training schemes which have been instituted in response to high unemployment rates, since these have tended to concentrate on youth. Another major obstacle faced by potential female sole parent entrants to the paid workforce is the lack of affordable child care. . . . . Hence, it appears that the access of sole parents, particularly females, to paid employment is severely restricted. This reduces the viability of workforce participation as an alternative to welfare support for sole parents. Indeed, it should also be noted that present conditions gravitate against sole parents participating in the workforce even to supplement the SPB. Factors discussed above contribute to this situation, as do two others of particular significance. Firstly, the taxation treatment of extra income earned by SPB recipients is a significant factor. A Treasury paper presented to the Economic Planning Advisory Council (EPAC) in 1984 noted that a supporting parent employed in a job paying $230 a week faced an effective marginal tax rate of 70c in the dollar. Moreover, there is a sharp cut-off for extra concessions such as Rent Assistance. Secondly, by virtue of their classification, SPB beneficiaries tend to be rendered dependent and marginalised in relation to labour force participation. They are not defined officially as unemployed, but as being outside the labour market . . . This has important repercussions in terms of recruitment for training, re-training and job-creation programs. These factors, together with the non-indexation of the additional pension payable for dependent children, the Mother's/Guardian's Allowance, and Family Allowances has caught SPB recipients in a severe poverty trap. The sole parent's long-term dependence upon the SPB or other Department of Social Security pensions and benefits is likely to erode job skills, make job qualifications obsolete and reduce employability. Under these conditions, it is even more likely that the sole parent will be unable to escape the poverty trap. I underline the points made in that document to point out that this measure which the Government has introduced for reporting on employability is likely to be an absolute failure. The CHAIRMAN —Order! The honourable member's time has expired. Mr RONALD EDWARDS(Stirling)(10.40) —The honourable member for Moncrieff (Mrs Sullivan), who spoke for the Opposition on Appropriation Bill (No. 1), had what in our view were some sensible points to make. However, I am afraid that her voice is a rather lone one in the Opposition. Her concern for matters involving women and social equity would not be rejected by many on this side, but unfortunately the voice that tends to ring louder for the Opposition is that of Katharine West. The Opposition has to live with the burden of Katharine West to recognise that she is the one who is talking about reducing the unemployment benefit to a dollar a day. When the honourable member makes such a speech-I think there is some recognition on this side of the chamber that it contained some valid points-she has to recognise that the louder voices, the thumping voices, are from the New Right and Katharine West. Mrs Sullivan —Give me time. Mr RONALD EDWARDS —We would be happy to give the honourable member time and see the Opposition become a more moderate and sensible force in Australian politics; we would welcome that. At this stage the Opposition is being led off to the right by those extremists. Honourable members opposite are the ones who have to account for the role that Katharine West and others play. I remind the honourable member for Moncrieff that Katharine West does talk about reducing the unemployment benefit to a dollar a day. Of course, we on this side reject that as being inhumane and not something we would regard as part of a civilised society. My colleague the honourable member for Cowan (Ms Jakobsen) began very sensibly in setting the focus for discussion on our social policy by talking about the decline in commodity prices. If we look at the commodity price movements, which tend to frame the possibilities in terms of budgetary strategy, we see that they have been quite dramatic and have quite a significant effect on the options in relation to the Budget. I will choose but two or three to give an illustration of what my colleague the honourable member for Cowan said very sensibly. If we look at wheat prices between 1980-81 and 1985-86, we see that they fell from $US181.90 a tonne to $US133 a tonne, which is down 27 per cent. That is one commodity price which has had a quite significant impact. If we look at the price of lead between December 1981 and August 1986, the London Metals Exchange lead price fell-- Mr Rocher —Mr Chairman, I rise on a point of order. We are going through Appropriation Bill (No. 1) department by department. I wonder what commodity prices have to do with the Department of Community Services, the Department of Social Security, the Department of Health or the Department of Veterans' Affairs. The connection escapes me. I wonder whether the honourable member for Stirling should not be asked to make his comments relevant. The CHAIRMAN —My recollection was that the honourable member for Stirling said that he was using that to illustrate the effect the economy has on welfare payments. There is no point of order. Mr RONALD EDWARDS —The honourable member for Curtin (Mr Rocher) is a good bloke; he is a Subiaco supporter. We need to set the scene on this, and the issue is that the decline in commodity prices has left us with much less income to distribute and we have had to make some sensible decisions. In that context, we have a housing policy, a health policy, a wages policy, a youth policy and a social security policy; they all fit together. We have not had from the Opposition the emergence of policies of that kind. I think the Australian community recognises that, and it will recognise in the next year that the Opposition does not have a comprehensive policy. What we have is a lot of shrieking from the New Right, but there are no really substantive propositions coming from the Opposition. I want to say something else about the impact of commodity prices. It has reduced the total income of Australia, which has meant that this Government has had to make some tough decisions. I commend the Minister for Social Security (Mr Howe) because I believe he has fought very well to maintain a sensible and humane social security policy. I know the honourable member for Cowan shares that view. (Quorum formed) I was saying that members of the Opposition did not have any policies. It is a clear indication that they do not that, whenever one gets up in this place and talks about their absence of policies, they call for quorums or run about the place. They really do not have a policy. They do not have a policy on wages, youth, employment, housing or health. At the moment they are being steered by the New Right. That will not lead them anywhere with the electorate because the electorate recognises very accurately that they have to have substantial policies and policies which have been thought through. I will quote a letter from a constituent of mine which I think puts in place the hopeless, selfish nature of the Opposition. It states: When contacted previously I was married to a wonderful man. We have seven children. Our concerns were inflation, education. All that changed 3 weeks ago . . . 3 weeks ago my husband collapsed and died. No cause of death has been found. He was 36 years old. Now I find myself a widow with 7 children. The eldest is 12 years old and the youngest is 20 months. I am 35 years of age. Apart from the shock and grief I find myself trying to cope with the drop in my self esteem. I'm a pensioner! A widow! I feel frightened. When we take that statement and put it alongside the shrieking of the New Right in the Australian community who talk about cutting pensions and reducing unemployment benefit to $1 a day; when we look at the members of the Opposition, shattered as they are, but absolutely hopeless in terms of their consciousness and humanity, and juxtapose that against the case I have just cited of a woman of 35 years of age with seven children who is now a widow; and when we look at the welfare bashing that goes on on behalf of the Opposition, is it any wonder that people in the Australian community feel that the Opposition is a discredited bunch? It is our very clear view that what we ought to be saying in this place is that policies are needed. This Government does have policies and members of the Opposition do not have policies. What they are doing is listening increasingly to the shrieking of the New Right about what they might do in terms of cutting back on welfare in this country. The honourable member for Moncrieff talked about the difficulties of having people work tested. We are sensibly reacting to the fact that there has been abuse of the welfare system. I ask members of the Opposition: Where will they stand on the identity card? Where will members in the National Party seats stand on the question of the ID card? Our view is that we ought to be managing the social security system properly. There ought not to be abuse of the social security system. I think one of the most important things one can do in terms of people's welfare is give them a job. In the first three years of the Hawke Government we created some 670,000 jobs. That was something that members of the Opposition were incapable of doing; they reduced employment when they were in government. We have also given people housing. Our record on public housing and private housing has been outstanding. When the Opposition left office new commencements were at the lowest level for 20 years, at 105,000. In our first year we raised it to 135,000. So we have given people jobs and we have given people housing, but,what is more, we have given them a sense of purpose and they recognise that. I am sure that people on this side of the chamber are pleased to commend the Government's budgetary stategy. Mr ROCHER(Curtin)(10.50) —One of the more imaginative connivances of this Government is to be found at pages 119 and 121 of Budget Paper No. 1. To put it in its proper setting, one has to recall the posturing of the Minister for Health (Dr Blewett) when he set out in 1983-and he has developed it ever since-his grand plan for developing health care in Australia. His so-called successes and outright failures are adequately recorded and, of course, they need not be reiterated today. However, the particular matter I want to canvass is at best consistent in its inconsistency and at worst confirmation that the uncontrolled cost explosion of Medicare knows no bounds. We all know that the Medicare levy has been increased by 25 per cent in this Budget. Equally we know that the increased levy does not cover the additional cost of Medicare despite the Government's repeated promises that it would. Most with an ounce of sense would also realise that future cost containment is necessary by reducing the refunds for the costs of all or some services, by appropriating additional amounts from general revenue, by further increasing the levy or perhaps, as is most likely, by a combination of all three. Let no one overlook the fact that a combination of those three alternatives has already been adopted in successive measures and Budgets to get the Government over some of the hurdles of its Medicare folly. More of the same is assured in the future if the present queue of 100,000 Australians awaiting surgery in public hospitals is to be held at that number, leaving aside any chance that it might one day be reduced while the Hawke Government holds the reins. As I have mentioned, the ultimate incongruity is to be found at pages 119 and 121 of Budget Paper No. 1. Remember the total disregard, bordering on disdain, the Minister for Health reserved for the services of private health funds when he sought to sell the efficacy of Medicare? Remember how Medicare Private was set up to play merry hell with the private funds? It now seems that the Minister has few qualms about saddling the voluntary health funds with the product of his incompetence. In league with the Minister for Veterans' Affairs (Senator Gietzelt), the Minister for Health now has no compunction about assigning the cost of treating veterans and war widows to the voluntary funds. It is now to be required that the cost of war-caused illnesses and disabilities treated in hospitals be met by private funds and their clients if those veterans or war widows have been prudent or self-sufficient enough to have taken out and maintained private cover. This is an unprecedented departure from the long-held commitment of successive governments to meet the perceived obligations of most decent Australians to those servicemen, their widows and service women who suffered from war-caused illnesses or disabilities and who need hospital treatment. Mr Hodgman —They have been betrayed. Mr ROCHER —They have been betrayed indeed. Those ex-service men and women and war widows who have been prudent and conscientious enough to insure against hospital treatment for other than causes arising our of war service are to become a burden-a burden not on all taxpayers, as previously, but on the private health insurers. This is because the cost of hospital treatment for veterans and war widows for war-caused ailments must become the responsibility of the private funds for the first time in living memory. Mr Tim Fischer —The Government is welshing on its obligation. Mr ROCHER —It is welshing in the grand tradition of the socialist Left. That cost is not one built into the subscriptions or rates presently struck by the voluntary funds; it is a cost which must be recovered in both the long term interests of insured veterans and war widows as well as all other private insurers alike. It is a burden which prudent and fair-minded veterans, who undoubtedly have such qualities because they have insured against other than war caused treatment, would not in a million light years have sought to impose on families and individuals who also insure privately. Such motives would be completely out of step with the selflessness of most veterans and war widows. Most of them will readily understand that, given their war service and accepting that they are not all that young any more, they are likely to need more hospital treatment than people in a more representative age group. Veterans and war widows will understand that the extra premium to be paid by all private insurers will be fairly hefty. Some $7m to $9m is involved. The Government must also be aware of that. Despite that, it has set out to get the bad risks out of the public and into the private sector, on the slightest pretext, despite our debt of honour to all veterans and war widows, regardless of their private arrangements. It is a cynical approach; it is typical of the repeated assaults on the entitlements of veterans and other pensioners of a government that continues to indulge itself by financing ratbag and radical groups, the existence of which arguably is possible only because of the contributions made by those who are now being chiselled by this Government. As if to compound the insult to veterans and war widows, the Minister wants the private funds to assume responsibility for costs traditionally part of the debt of honour that we have to all those veterans. That is not all there is to it. Veterans are to be penalised simply because they are privately insured, as all private insurers are to be penalised because premiums must be consequentially increased. Veterans and war widows will not get even the privilege of choice of doctor for hospital treatment of their war-caused illnesses and disabilities. That is available, of course, to private insurers but not to veterans who take out private insurance. Their fellow insureds will of course get that benefit; it will not apply to veterans or war widows. The sad truth is that the provisions on pages 119 and 121 of Budget Paper No. 1 demonstrate the unconscionable removal of an entitlement to receive rehabilitation hospital treatment at a cost to the revenue. It is an increase in the thickness of the wedge the Hawke Government is driving into the entitlements of our older citizens in general and war widows and veterans in particular. The measure slots in very nicely, of course, with the Government's not so long term doctrinaire commitment to nationalising health care in Australia. It penalises subscribers to private health funds, including veterans and war widows who may have only limited repatriation entitlements and have to maintain private cover for non-repatriation services, for non-war caused illnesses and ailments. So it is that we see this Government subcontracting out those responsibilities which it was elected to carry out. We see again further evidence of the mentality which caused the Prime Minister (Mr Hawke) to break his promise not to take money out of pensioners' cheques. It is that sort of mentality which prevails today. The aged and retirees are the target for the cost cutting measures being adopted by this Government. There are more areas which could be tackled with equity than retirees and pensioners, and above all the entitlements of veterans and war widows, which are the areas this Government has set out to attack and is in fact attacking. This is just another example of the policy of this Government and the reasons why we deplore the direction it is taking, particularly in relation to the benefits of veterans and war widows. Mr SHARP(Gilmore)(11.00) —In speaking to Appropriation Bill (No. 1) 1986-87, I wish if I have time to speak on each of the departments being considered. Firstly, I want to talk about the Department of Community Services. In the last few days in the electorate of Gilmore there has been a great deal of concern over certain aspects of the management and administration of the Department. I refer in particular to the increase in nursing home costs, particularly in the coastal area of the electorate of Gilmore. To give an example of the way that nursing home charges have risen, I will use some information I obtained from one of my constituents. It shows that from August 1986 nursing home fees rose from $204 per fortnight to $229.60 per fortnight. In a letter to families and patients dated 2 October 1986, the administrator of the nursing home concerned advised that the Department of Community Services had notified the home of a rise of $5.10 per day effective from 1 October 1986. This brings the fortnightly charge for a bed in a nursing home to about $306.10 per fortnight. The charge has risen from $204 per fortnight in August to $306 per fortnight in October. That represents a 50 per cent increase in just two months. This is causing severe hardship. One of my constituents, who receives a fortnightly pension of $227, will be required as from 3 October to pay $301 per fortnight to be in that nursing home. She has limited savings for her funeral which she will now have to draw upon in order to make up the shortfall between the pension and the nursing home charge. Another of my constituents receives a pension of $217.50 per fortnight. He has savings of $337. Under the new schedule of fees he will have to pay $301 per fortnight. This gentleman is a 64-year-old spastic cerebral palsy victim. That is the sort of hardship and distress being caused, particularly in my electorate, as a result of the Government's authorisation of the increase in nursing home accommodation fees. It is very important that we make clear to the Government, through the Minister for Community Services (Senator Grimes), that it has to increase the subsidy for nursing home accommodation equal to the amount that it costs each patient as a result of these latest increases. There is no way in the world that, with the present rate of fees and charges authorised by the Government, patients can afford to be in nursing homes. It is important and indeed vital that the Government increase the subsidies to nursing homes so that the patients in them can afford to live reasonably. While I am speaking of nursing homes, I mention that the people of Culburra, which is on the coast in the electorate of Gilmore, have recently and very gratefully received funding for hostel accommodation in that area. The reason for that hostel accommodation funding is the tremendous number of aged persons living in the Culburra district. The growth of the district is quite rapid-some 17 per cent per annum-and it generally attracts a lot of older people. Quite obviously, if there is a need for hostel accommodation and retirement unit accommodation today, very shortly there will be a need for nursing home accommodation. I put on record the fact that there is an urgent need for the Government to allocate funding so that nursing home accommodation can be built in Culburra. It is a geographically isolated area and, unless we do something now to accommodate the aged population, we will have a tremendous problem in the future. At Culburra also a very very good community health committee has been operating and has raised hundreds of thousands of dollars to try to build retirement accommodation. It has a wonderful track record and is certainly a worthy recipient of funding for nursing home accommodation. I now want to speak about the Department of Social Security. I am pleased that the Minister for Social Security (Mr Howe) is in the House. A great deal of concern is being expressed by my constituents about the delay of some six weeks in the rise in the pension rate. The rise should have taken place on 1 November, in a couple of weeks time, but it will now be delayed until the middle of December. This may not seem to be a very big thing in the minds of most people, but I assure the House that for those who are dependent on the pension it means a lot. It means $83 to a pensioner couple and $53 to a single pensioner. That is a lot of money if all one has to live on is the pension and one is trying to make one's accounts balance each week, particularly when the cost of many things that pensioners have to pay for is increasing at a rate greater than the consumer price index. One has only to look at the way food prices have increased in supermarkets to understand just how the delay in this rise will affect and indeed upset many of the people in the electorate of Gilmore. At the last election the Prime Minister (Mr Hawke) gave a promise that he would increase the pension rate to 25 per cent of average weekly earnings. The Government has not been able to live up to that promise. In fact, in September 1982 the pension was equivalent to 23.5 per cent of average weekly earnings. In March 1986 the pension was equivalent to 23.2 per cent of average weekly earnings. So, despite the promise of the Government to increase the pension to 25 per cent of average weekly earnings, the pension has actually fallen as a percentage of average weekly earnings. I am afraid that, unless this Government is prepared to live up to that promise, it will pay the price very dearly at the polls. This issue is certainly causing distress among the many pensioner organisations with which I have frequent communication. This is a disgrace. The Government is engaging in a very mean thing. Sure, it will save a few million dollars, but it could save a lot of money by being a bit more diligent about the way it spends its money in other departments. I read in the Budget Papers that the Commission for the Future received an increase of about 50 per cent in funding. I noticed in the media the other day that Charles Perkins from the Department of Aboriginal Affairs will have a biography written about him by the Department, at great expense to the taxpayers. The honourable member for Parkes (Mr Cobb) has pointed out that the Department of the Prime Minister and Cabinet has granted $5,000 to the National Network of Young Lesbians and Homosexual Men. I happened to see on 60 minutes the other night that Australia is the only government that can afford to send a group of people over to Brussels to represent the prostitutes of this country. We are the only country that can afford to pay for a delegation to go there. Yet we seem not to be able to pay the normal indexed pension rises that this Government should be committed to make. I suggest to the Government and to the Minister while he is in the House that, if they want to live up to the expectations of their supporters and of the pensioner community in Australia, the Minister really ought to say to his colleagues: `Let us axe these hare-brained funding schemes for homosexuals, lesbians, prostitutes, biographies of Charles Perkins and the 50 per cent increase in funding for the Commission for the Future; let us keep our priorities right and give the funding to the people who justly deserve it'. In regard to people who justly deserve assistance from the Government, there is no greater need than by those who receive veterans' affairs benefits. Over the last 12 months there has been tremendous concern about the way that this Government is running veterans' affairs. If it had not been for people such as the honourable member for Farrer (Mr Tim Fischer) and people in my electorate such as Fred Goodfellow and Neil Gage, who have been bringing the point home to the Government, to me and to the rest of the community about the way this Government is treating in a very shabby fashion the veteran and ex-service community, the situation would be far worse than it currently is. It is a disgrace that one of the most recent attempts has been to reduce permanently a war widow's benefit if she earns additional income, even after the additional income source dries up. This Government tried to do that. Fortunately, people within the Australian Labor Party, people from outside the Labor Party and members of the Opposition have been able to keep pressure on the Government not to implement that disgraceful act. Another thing that the Government has done recently is to palm off to the private health funds the cost of medical and hospital treatment of veterans who are in private health schemes. That is just dishonest. We have a long-standing commitment to our veterans to provide them with health care. The Government has to be prepared to increase the subsidies for nursing homes, to change the priorities for funding and give our pensioners first priority and to live up to our debt to the veteran community to ensure that they are treated in the way that they ought to be treated; that is, with respect. Mr HODGMAN(Denison)(11.10) —In 1983 the then Leader of the Opposition, the Hon. R. J. L. Hawke, stood in the Sydney Opera House and made a policy speech on behalf of the Australian Labor Party in which, amongst other things, he made this commitment: My Government will not take money out of the pensioners' cheques. That solemn promise now lies in tatters as, 3 1/2 years down the track, the Hawke socialist Government has waged a bitter war against the grandparents of Australia, has acted contrary to the interests of every pensioner and pensioner dependant in the country and has betrayed over 600,000 Australian veterans and their dependants-those persons having been responsible for serving this country in time of war and defending the freedoms upon which our Australian democracy depends. I cannot believe that the Australian Labor Party has so consistently, deliberately and cruelly maltreated the pensioners of Australia. What I do know is that the pensioners of Australia have woken up to a Prime Minister and a Treasurer who have shown that they are quite prepared, whenever the mood takes them, to act to the disadvantage of the pensioners of this country. Almost as soon as this Hawke socialist Government was elected to power it moved to impose an income and assets means test on the pensioners, something which was never mentioned in the election campaign speech of the current Prime Minister (Mr Hawke). The Government failed to raise the tax threshold of pensioners, as indeed it was due to be raised in accordance with the movements of the consumer price index. The Government has since consistently moved step by step to squeeze the last drop of blood out of the pensioners of Australia. So today in 1986 many pensioners who all their lives have voted for the Australian Labor Party are saying: `Never again'. Many of them are telling me that, for the first time in their lives-and some of them are octogenarians-they will be voting for the Liberal Party of Australia at the next Federal election. The mood in the pensioner community is very strong indeed. My colleague the honourable member for Franklin (Mr Goodluck), who is present in the chamber, has recently been appointed chairman of the Opposition's task force on the elderly, and he will be speaking later in this debate. I cannot, with 20 years experience in Parliament, State and Federal, bring to mind an occasion on which a government has become so hated by people who are normally regarded as its traditional supporters. In the short time available to me today I want to speak about the proposed disgraceful, unprincipled and shameful action of the Hawke socialist government in seeking to defer the pension increases which are due to every pensioner and beneficiary in Australia on 1 November this year. I speak about that in general terms and, without pre-empting the debate which will undoubtedly take place, I just want to make some observations about the gross impropriety and, I will contend, illegality of what is being sought to be done to Australia's 1 1/2 million pensioners. I believe that the pensioners of Australia should fight this very unprincipled and disgraceful action by the Prime Minister and his Government to defer their pension increases from 1 November with every possible means at their disposal, including even a challenge in the High Court of Australia. I believe that the pensioners of Australia might well find some assistance for their cause if they take the trouble to have a look at the decision of the then Mr Justice Stephen in the High Court of Australia case of Green v. Daniels, which they will find reported in 51 Australian Law Journal Reports at page 463. That case arose in Tasmania when Karen Christine Green, by her next friend Patricia Ann Truman, brought an action in the High Court of Australia against Mr L. J. Daniels, who was then the Director-General of Social Security. Karen Green was a school leaver. She left school, sought employment and made an application for the unemployment benefit. At that time the Government of the day made a decision that the unemployment benefit would commence to be paid, and the entitlement would arise, only at the end of the school holidays. Karen Green argued that she did not think that was fair because she did not intend just to have school holidays; she was seeking employment in the work force. As I said, she commenced an action by her next friend, Patricia Ann Truman. It was a famous case and, as a matter of interest, His Honour the judge, Mr Justice Stephen, is now, of course, Australia's Governor-General. That case was heard in Melbourne on 4 March, 7 March and 9 March and on 15 April 1977. In the course of the argument, counsel for the Commonwealth argued, amongst other things, that Miss Karen Green had no right to come before the Court seeking relief in the form of declarations which she had sought. I read specifically from the judgment of the Court the passage that appears on page 469. I will read it in full, shortly after which time will unfortunately force me to conclude my remarks. In that judgment reference is made to a then recent High Court case, that of National Insurance Co. of New Zealand Ltd v. Espagne, which was reported in 1961 in 105 Commonwealth Law Reports at page 569. His Honour said: These authorities were said by the defendants to support, and by the plaintiff to deny, the view that unemployment benefit is no more than a gratuity, to payment of which the plaintiff can have no rights enforceable at law. Equally, say the defendants, the plaintiff has no enforceable rights in relation to the manner in which the Director-General dealt with her claim to unemployment benefit under s. 107. His Honour Mr Justice Stephen went on to say: In part, the defendants' submissions were in answer to claims to relief made on behalf of the plaintiff and which went far beyond such declarations as I have foreshadowed. To the extent, however, that they are put as a ground for denying her any right to such declarations they must, I think, be rejected. Her direct personal interest in due compliance by the Director-General with the requirements of s. 107 (c) is clear; upon it depends her eligibility for, and her prospect of obtaining payment of, unemployment benefits. She has what Megarry J. found wanting in Thorne Rural District Council v. Bunting, [1972] Ch. 470, at p. 477, a substantial interest recognized by the law; and if in fact she lacks a cause of action in the strict sense of that term that will not debar her from declaratory relief. The authority of Rediffusion (Hong Kong) Ltd v. Attorney-General (Hong Kong), (1970) Appeal Cases 1136 at page 1167, is then cited. His Honour went on to say: The power to give declaratory relief is, as Viscount Radcliffe observed in Ibeneweka v. Egbuna, [1964] 1 W.L.R. 219, at p. 224, conferred in wide and general terms; it is not excluded by the availability of an alternative remedy by way of certiorari. He then referred to the Pyx case, which I will come back to in a moment, mentioning Lord Goddard's judgment at page 290, saying: No different considerations should apply when mandamus might lie-see generally Zamir. This case is interesting, because in the Karen Green case the present Minister for Community Services (Senator Grimes) argued very strongly that Karen Green had a right to an unemployment benefit-that it was a right, not a gratuity. I say to this Parliament today and to the people of Australia that the 1 1/2 million Australian pensioners have a right to their increase due on 1 November 1986. That right has been accruing for the past six months. It is a vested right; it is a legal entitlement; and, to quote Sir Ninian Stephen, it is `a substantial interest recognised by the law'. These people have been waiting for their increases for the last six months, and I believe that they are being most unjustly treated by a government which is so unprincipled as to take action to force the deferment of their increases due on 1 November. It is a mean, miserable and miserly act in the six weeks leading up to Christmas to take $83 from a married pensioner couple and $53 from a single pensioner. It is the sort of mean and despicable act we have come to expect from this rotten and discredited Government. I invite pensioners to fight this Government tooth and nail, and in particular to look at the Karen Green case to see whether or not there is a similarity, whether there is a locus standi available to the pensioners to drag into the High Court of Australia this discredited Prime Minister, this discredited Treasurer and this discredited Minister for Social Security and make them defend their unprincipled, wicked and thoroughly disgraceful action against pensioners. The DEPUTY CHAIRMAN(Mr Mountford) —Order! The honourable member's time has expired. Mr GOODLUCK(Franklin)(11.21) —I was most interested in the remarks of my learned colleague the honourable member for Denison (Mr Hodgman), who has always shown a genuine desire, both politically and legally, to help pensioners. His remarks about the Karen Green case should be given close scrutiny. For about 11 years now in this Parliament, I have talked about the plight of the elderly. In my small way I have always tried to be apolitical; I have always tried to put forward the views of the elderly in the hope that changes may be made to help them. We are undergoing a revolution and it is happening before our very eyes. Governments of all persuasions have not taken up the challenge. If one looks at the statistics-it is sometimes difficult to determine whether they are right or wrong-it can be seen that Australia is heading for a zero population level. In the next 10 to 12 years I believe that about 10 to 13 per cent of our total population will be over 75 years of age. Those members who are worth their salt and go round their communities and look at the problems of the elderly find that many are experiencing difficulties. There are many things that we should be able to do. Regrettably, some of the most able people in lobby groups for the elderly are dying and lobbying is unable to continue. Sometimes it is the sophisticated lobbies that have all the catch-cries to attract all the goodies, and it is to be regretted that the elderly do not get those goodies. It is up to governments to become more involved. I mentioned to the former Prime Minister, Malcolm Fraser, that Australia should have a ministry for the elderly. This will be a massive problem. I continue to ask for such steps to be taken, but governments are governments and have only a certain amount of manpower and finance to direct to their ministries. We all understand that. I have suggested to our present Leader of the Opposition (Mr Howard) that we as an opposition should set up a committee or task force to examine the problems of the elderly. If we can bring down good recommendations and if we get back into government, as I hope we will, we may be able to initiate some of those programs. If they are good understandings and good programs, the Government of the day may be able to introduce some of those initiatives. I cannot believe some of the things I read of late. I refer, for example, to some of the events in Victoria. I am sure that the Minister for Housing and Construction (Mr West) will agree with me that we are unaware of some things that are happening before our eyes. We know that nursing homes generally are being supervised by the Department of Health and by other Commonwealth departments. We know that such homes have to reach a certain standard but, as to some of the other houses, we found it quite horrific to think that some elderly people could be treated in that way. They were treated worse than animals by some of the people who ran those halfway houses, as they are termed. Mr Hodgman —You went there. Mr GOODLUCK —I had a look, but I will not mention that matter in this debate. There will be plenty of time for me to talk about the problems of the elderly, which I shall be doing in due course. It is regrettable that in our society some people have money and some have none. We talk about the socialist dogma that aims at distributing wealth so that everybody will have X number of dollars, but things just do not work that way. Because of their circumstances and other problems some elderly people who reach the age of retirement do not have very much money. That may occur as a result of a number of circumstances, including breakdown of marriage, sickness or many other causes. When they reach that stage they are vulnerable, and they are the people about whom I am particularly worried. We need to seek out those people and help them to the best of our ability. I refer to lonely people, those who cannot get into nursing homes, those who have no children to look after them, those who are sometimes neglected by their children. Many elderly people who need help and assistance die before they can be aided. Governments of all persuasions need to become involved with the problems of the elderly. They need to make certain that they dip their hands into some of the dirt in the arena and ensure that they can do something to help. We have an army of unemployed people. Opposition members have spoken of these matters many times. We believe that the energies of unemployed people should be harnessed. I am not referring to dole bludgers-indeed I never use that word-but I stress that it would be most rewarding if the unemployed could be harnessed and used to help the elderly. We hear condemnation of single mothers with little babies. Would it not be good if some of those single mothers could be harnessed to help elderly people? People grow old only when they do not have somebody to look after them, when their minds are inactive and when they have nobody to care for them. Sometimes elderly people become old because they are put in places with other old people, but it would be a great step forward if young people could be integrated with the old. For example, it would be wonderful if a single mother with her baby could look after an elderly person. I am sure that some of the energies of unemployed men also could be harnessed-they would have to be the right type, of course-to help elderly people. I get constant calls from elderly people who live in their own houses. Regrettably, most are women, because men die a lot earlier. Many women who are left behind are most vulnerable. Some cannot drive motor cars, some cannot paint, some cannot do anything at all. Would it not be great if we could harness this great pool of unemployed people, who would be only too keen to help the elderly? Would it not be good if this were not such a selfish world and if we could all help in such circumstances? If that were to happen, this would be a better world to live in. There are many things that can be done. Regrettably, I must turn to one political point. Most members will recall the great controversy about the half-yearly indexation of pensions. I heard somebody on the Australian Broadcasting Corporation recently saying that it was the Australian Labor Party which introduced half-yearly indexation. That is not true. We introduced such indexation and said that we would make it quarterly. Unfortunately, because of lack of finance, it was introduced half-yearly. Do honourable members recall the continued bombardment the then Government received when Mr Fraser said that we would discontinue the half-yearly indexation of pensions because we could not afford it? Do honourable members remember the political gibes we had to endure? I endured a great deal of it. I copped a lot of controversy from the Labor side as well as from my own side on that decision. People who are on fixed incomes find it difficult to survive. They see the petrol costs rising, costs in the home increasing and so on. An elderly person who can no longer earn money is often in strife. Honourable members will remember the consternation at the time, but now the Labor Party, because of constraints, has decided to hold back payment of the half-yearly indexation until Christmas. Labor members will cop the blast from Australian pensioners because some can ill afford to hold off that little bit longer to pay their rent, to pay for their food and other items. Labor members, having preached one thing and then changed their minds, will get themselves into a very difficult position. I support the remarks of the honourable member for Denison which, as usual, were put so eloquently. Certainly, at the next election Labor members will feel the wrath of the pensioners, because Labor has not honoured its obligations to pensioners and has not ensured that the pensioners have been supported all the way. It has come up with nothing but baddies instead of goodies for the pensioners of Australia. Mr PETER FISHER(Mallee)(11.30) —In this debate on social security and community services issues, the alarming issue of the increasing number of people, particularly the young, who are seeking emergency accommodation and food vouchers from government and voluntary welfare agencies, should be raised. Time does not allow me to reflect on or to discuss many of the social and economic factors contributing to this alarming situation. My electorate of Mallee has not escaped these problems. I refer particularly to the position in Mildura which, because of its superb climate and the opportunity for seasonal work, has much the same attraction as the Gold Coast in Queensland. Many young people who are unemployed or who have left home make their way to the Sunraysia district and stay, placing intolerable burdens on welfare support groups and limited government and voluntary financial resources. I refer particularly to Emmaus House, an emergency accommodation centre which has assisted 13,259 people in the last 12 months, including the homeless, deserted wives, the unemployed and itinerants. Of those assisted, 68.7 per cent received meals only while 31.3 per cent received both accommodation and meals. While the Government has contributed in part to the establishment of this centre and to the welfare funds, it is only through the dedicated and overworked staff and volunteers and the support of caring and concerned people that the plight of the homeless can be alleviated. Sadly, this agency has now had to take a decision to return welfare funds to the Federal Government and stop providing some of its own aid. This decision has resulted from a decision by the Commonwealth Department of Community Services which issued a letter in which it is stated: The Minister has recently approved guidelines which state that food vouchers should not be endorsed in any way which restricts the client's freedom of choice (eg `No Alcohol' `No Cigarettes', `No Pet Food'). Only in exceptional circumstances and with the express approval of the Commonwealth Department of Community Services will such practices be sanctioned. Individuals in some agencies would doubtless like to take things further and to stipulate what they consider to be suitable food or grocery items. Clients seeking emergency relief are in a difficult financial situation as it is without having further undignified limitations placed upon them. Where agencies feel unable to distribute funds without such limitations, it is open to them to withdraw from the program and allow others to participate. While understanding and respecting a view that welfare clients should have the right to buy their own choice of food items, surely it is an abuse of public and private funds and a contribution to further social problems if alcohol and cigarettes are allowed to be purchased. I have had a large number of letters from my constituency about this issue and I quote from two. The first says: As well as being a taxpayer who supports these less fortunate people in their times of need, I willingly give my time through the Uniting Church, to distribute the food vouchers. I will withdraw my support and time if the Government persists with the view that the food vouchers can be spent however the recipient wishes and not on food alone. The second letter says: If the vouchers can be used for alcohol and tobacco, then that is what they will be used for. Many of these people can't help themselves. They are so addicted to these drugs that they will choose more drugs instead of food. They need food and the community is willing to give them food-not easy access to the drugs that have caused their downfall. This requirement by the Department of Community Services must be removed. We are spending $100m on a drug awareness campaign, millions of dollars on road safety programs and rehabilitation programs for alcohol-related difficulties. It must be the ultimate in double standards that the Commonwealth Department of Community Services is assisting people to buy items that are the two major killers in Australia. In 1983, 3,198 people died as a result of alcohol-related diseases and accidents and 16,620 died from tobacco-related diseases. There are about 500,000 people who are regarded as alcoholics and at least 1.5 million who suffer to some degree from the effects of alcohol. Admissions to the Mildura Base Hospital with a diagnosis specifying alcohol abuse total about 550 people per year-or 6.5 per cent of all admissions for any average year. I have written to the Minister for Community Services (Senator Grimes) on this issue and he has responded by reiterating and confirming the guidelines issued by his Department. Welfare workers and donors to this valuable work are dissatisfied because the physical and financial capacity of the excellent program and institution of Emmaus House is being affected. Of course an individual's dignity should be maintained, but surely a food voucher given by the Government or the public should not be so negotiable that a $20 voucher can be used totally for alcohol or cigarettes or even sold for cash in the street to achieve the same results if a food outlet attempts to restrict purchases to food. I believe that it is necessary for an agency to be able to stipulate that no cigarettes or alcohol may be purchased with the vouchers. That is not putting a person down, but is simply providing a safeguard to ensure that emergency relief is used for what is intended-to give clients assistance in necessitous circumstances. In no way can the provision of cigarettes or alcohol be a necessitous circumstance. Where are the rights of the people who distribute and contribute to emergency relief? Where are the rights of the taxpayer? I believe that such a policy only makes the work so much harder for those who are trying to help and to get people off the destructive welfare roundabout. I simply ask the Minister to look at this issue and consider where an individual's dignity is if he is left to lie in a bus shelter or park at night or to die of malnutrition caused by alcohol. We do have rights, but we also have responsibilities. I believe that the Minister should change the guidelines on this particular issue. Mr WEBSTER(Macquarie)(11.37) —I crave just one minute of the House's time because it concerns me that a Labor Treasurer should come along and have us believe that he and his colleagues have some kind of monopoly on concern for the needy. This Treasurer (Mr Keating) proudly proclaimed in his Budget Speech that a significant part of the $500m in social security cutbacks, achieved in these appropriations, was to be achieved by deferring six-monthly indexation increases for pensioners. These appropriations reflect not just the broken promises of this Government to pensioners about improvements in benefits; they also reveal the moral blindness, or insensitivity even, in times of economic recession, of spreading sacrifices across all sections of the community, irrespective of the capacity to cope. Because the Government has not had the courage to adopt a tougher wages policy, because it has not tackled the Public Service in time and beyond superficialities, and because it will not cut programs already undertaken in the States, it has had to turn to pensioners to make these savings. I believe these appropriations are very unfair and it must embarrass the Minister for Social Security (Mr Howe) to go before meetings such as that with the Committee for Economic Development of Australia in September, as he did, and admit that his success in making savings has been in the area of benefits to pensioners, veterans and families. Mr HOWE(Batman-Minister for Social Security)(11.39) —I thank honourable members who have contributed to the debate. I will be very brief and refer only to one or two comments that were made on a range of issues. I particularly wish to pick up the concern raised by the honourable member for Moncrieff (Mrs Sullivan) about the new procedures for interviews of class A widows and supporting parents. The honourable member made the point that there was something inhumane about widows having to report to the Department of Social Security soon after the deaths of their husbands. I make it clear that de jure widows will not have to make a statement about their circumstances until six months after the grant. Nevertheless, they will be required to come to the Department, or to regional offices of the Department, for an interview after three months. That is necessary so that the Department is sure that people have been made fully aware of their rights with respect to the social security system. It is sometimes the case that people within pension beneficiary populations simply are not aware of what is open and available to them, not only through the Department of Social Security but also through other government departments. The purpose of that interview after three months is to ensure that widows are aware of their rights. It is only after six months that they are required to provide a statement of their circumstances. Generally people on both sides of the chamber would welcome the measures with respect to reporting requirements for supporting parent beneficiaries as a whole. It is important that people have the opportunity to receive from the Department on a regular basis advice and counselling on information that may be relevant to them. It is important also that the Department is in a position to verify the circumstances of a group of people whose circumstances often change. The honourable member for Gilmore (Mr Sharp) referred to veterans and war widows and suggested that they would be denied choice of doctor. There is no compulsion on veterans' affairs beneficiaries to take out private health insurance. However, where they have chosen to take insurance, the benefit may be assigned to the Department where the treatment has been arranged through the Department. The measures that operate within that area are not designed to deny people choice of doctor or to impose additional costs on people. I refer finally to the usual emotional remarks made by the honourable member for Denison (Mr Hodgman) and the honourable member for Franklin (Mr Goodluck), who made various references to the Government's attitude to the aged and pensioner populations. In the 1978-79 Budget the previous Government announced the elimination of biannual indexation and proposed annual indexation, and there was no indexation increase in May 1979. The present Government has made in this Budget a number of savings, one of which is the deferment for six weeks of the indexation increases in November this year and in May next year. That decision involves a significant saving. The Government is aware that that decision will be uncomfortable for a number of people; nevertheless, it is a decision which flowed from the very tight economic circumstances in which the Government found itself in relation to framing this year's Budget. With respect to the level of pensions as compared with average weekly earnings, since we have been in Government there has been a significant increase in the percentage, which was around 23 per cent when we came into government and currently stands at 24 per cent of average weekly earnings. The Government retains its commitment to achieving 25 per cent of average weekly earnings and in the next 12 months we would expect to see some movement towards that objective of 25 per cent. In terms of the debate which has taken place on the appropriations, it is quite clear that this year's Budget is a very tight Budget. Both sides of the House recognise that this Budget had to be tough and that if we were to have a tight, tough Budget, we had to make expenditure restraints, particularly in areas such as social security and health, which take a very high proportion of Commonwealth expenditure. The measures taken in this Budget have been chosen with some sensitivity. For the most part the measures are designed to ensure the integrity of the social security system and are welcomed by people on both sides of the House. Dr BLEWETT(Bonython-Minister for Health)(11.46) —I thank all honourable members who have participated in this debate. I thank my colleagues on the Government benches for their supportive remarks and I welcome the minimal number of critical comments on health from the Opposition benches. Mr Hodgman —On a point of order: It is because the numbers have been cut short. That is not a proper statement. The DEPUTY CHAIRMAN(Mr Mountford) —Order! Does the honourable member have a point of order? Mr Hodgman —The point of order is that that is not a proper statement because the Minister is aware that the speaking list has been cut short and this debate has been curtailed. There were 20 or 30 Opposition members who wanted to speak. The DEPUTY CHAIRMAN —Order! The honourable member will realise that there is no point of order in his remarks. Dr BLEWETT —One specific criticism which I want to take up is the allegation from the honourable member for Petrie (Mr Hodges) that the increase in basic table contribution rates for private health insurance could not be described as moderate. Without wishing to act as an advertising agency for Medibank Private, I must point out that rises which ranged from no rise in Western Australia to a maximum of $1 per week per family in Queensland and averaged only 60c per week per family across Australia can be described only as moderate rises. Proposed expenditures agreed to. Department of the Prime Minister and Cabinet Proposed expenditure, $130,872,000. Department of the Special Minister of State Proposed expenditure, $278,939,000. Mr GRIFFITHS(Maribyrnong)(11.48) —I will address remarks to the appropriations for both the Department of the Prime Minister and Cabinet and the Department of the Special Minister of State. At the outset I wish to make some comments in regard to a controversy, of which honourable members will be aware, in relation to the showing of an anti-drug film-produced by the Department of Foreign Affairs, incidentally-proposed to be shown on Qantas Airways Ltd flights. Some time ago I took the opportunity of travelling from Sydney to Melbourne to view the original film and I was able to make some suggestions in terms of what I believe to be improving the efficacy of that anti-drug film. Honourable members will be aware that the film is designed to warn mainly young Australians travelling abroad of the very great dangers of harsh drug laws in a range of countries, most particularly countries in our immediate neighbourhood. In the past I have had the unfortunate duty to travel to a number of gaols around the world to interview Australian prisoners in them. Of course, this issue is not confined to Australians, because the gaols throughout Asia, for example, have a lot of Australians in them as well as people from all over the world. It is a sad fact that in some of these countries it is possible to be detained for extremely lengthy periods for what in Australia would constitute relatively minor drug offences. For example, I met in Indonesia a young Australian who had been apprehended in possession of two grams of marihuana. That subsequently resulted in him initially being a given a gaol sentence of seven years with hard labour. The Indonesian prosecution had called for that sentence to reviewed and was seeking an increase in the sentence to some 10 years. Of course, this is in sharp contrast to the types of laws applying in most countries similar to our own. It is probably not exaggerating to say that in Australia possession of 2 grams of marihuana would simply not be worth the police proceeding with and there is a general move towards relaxation of laws in this regard. It was with some sadness that I noted the response of Qantas to the suggestion that this film be shown on board its outward bound flights. Its argument is that the film is inconsistent with what its passengers would desire. When we have not only potential gaol sentences of the order that I have indicated but also in some countries, death penalties applying to the possession of a whole range of drugs, including what we would nominate as relatively harmless drugs, I think it is incumbent upon Qantas to address not only the commercial aspects but also the responsibilities it has as Australia's national carrier. One of the surprising things that I found in talking to people who have been incarcerated is that, whilst obviously we will have some real villains in terms of the drug trade, the overwhelming number of people caught up in this environment are people who have been caught in possession of very minor amounts of relatively harmless drugs. By and large, they are simply unaware that these small amounts of drugs can lead to this result. They are certainly aware, particularly since the execution of Barlow and Chambers in Malaysia, that hard drugs such as heroin attract a death penalty. My concern is that they are yet to understand that these minor offences can also lead to very serious results. I place on record my disappointment with Qantas. I will be approaching the Minister for Aviation (Mr Peter Morris) and asking for his intervention in trying to ensure that Qantas adopts the responsible attitude that this Government and, I think most members of this chamber, believe that it should adopt. (Quorum formed) I am disappointed that the Opposition seeks to interrupt a speech, particularly when that speech is related to a very serious drug problem amongst young Australians. Mr Hand —They do not care. Mr GRIFFITHS —I do not think the Opposition cares and I am very disappointed with that. In any event, I will move from that issue and address a few remarks to a more parochial one. I will have to take off my statesmanlike mantle and become a local politician for one or two moments. Honourable members will be aware that, unfortunately, on 3 September 1986 an air ambulance crashed in my electorate with the loss of some six lives. I raise this issue because I have argued for a long time that a disused quarry in my electorate is an appropriate site for an international garden festival. This disused quarry is currently owned by the Boral company. It has a contractual relationship with Whelan the Wrecker Pty Ltd, which wished to use the quarry as a hard refuse dump. I have sought and obtained the intervention of the Department of Aviation in the planning process to ensure that the argument is put that it ought not to be used for this purpose. I have done this because of the demonstrable danger presented by carrion birds attracted to such a tip to the quite intense air traffic emanating from both Tullamarine and Essendon airports. Mr Cohen —It is one of the best tips I have ever seen. Mr GRIFFITHS —I agree with the Minister. He has taken a great interest in this issue and we are hoping to work together to achieve the results that I have referred to. In the context of the aircraft crash, one of my constituents advised me that, because the wind was blowing in a particular direction, the air ambulance took off from Essendon Airport consistent with that weather pattern. Had that air ambulance taken off from any one of the other three options available to it, and having regard to the distance that the aircraft covered before crashing, it is likely that it would have landed on the Pascoe Vale State Primary School, the Essendon High School or the Essendon Grammar School. Mr Hand —Or my house. Mr GRIFFITHS —Yes. Obviously, living in my electorate right under the flight paths, this is a matter of some concern to me also. I do not treat this matter lightly. It is a very important issue. The Essendon Airport role review study by the Department of Aviation is approaching finalisation, and a number of other issues have been addressed by members of this chamber in terms of noise pollution and so on. I simply place on record my view that, unless the Essendon Airport role review study seriously addresses as a possible option the closure of the Essendon Airport, I will be seeking intervention to ensure that that is properly investigated. The DEPUTY CHAIRMAN(Mr Mountford) —Order! The honourable member's time has expired. Mr DOWNER(Mayo)(11.58) —Inevitably in this debate, I am concerned about the efficient expenditure of government funds, or taxpayers' funds, as they should be more appropriately termed. In relation to the Department of the Prime Minister and Cabinet there are three areas where I fear that that expenditure is being conducted in a manner which is not in the best interests of the Australian taxpayer but which perhaps in some respects is in the best interests of the present Government. Those three areas relate to youth affairs, women's affairs and official establishments, which are inhabited primarily by the Prime Minister. This year there is an appropriation of $5.7m for youth affairs. There is no doubt that youth issues in Australia need to be addressed by the community and there is probably some role for the Government in addressing them. In the towns of Mount Barker and Murray Bridge in my electorate there are very real problems for young people and I, as local member of parliament for that district, would like to feel that, at the very least, I was able to do something to address those problems. Unfortunately, when it comes to the Federal Government's youth programs, under its so-called Priority One plan, we can see little more than a substantial wastage of taxpayers money on what is little more than a cynical, vote-grabbing, attention-seeking promotion. Until 23 April this year-these are the latest figures I have available-the Federal Government spent $2.2m not on helping young people, not on developing programs to help those people get access to work or build their confidence or improve their training, but on nothing more than promotion of the fact that the Government apparently had a Priority One program. When one looks at the way that money was spent it really is extremely unattractive, bearing in mind that it is taxpayers' money. Nearly $600,000 was spent on Press advertisements; nearly $12,000 on television commercials; $160,000 on cinema commercials; $243,000 on billboard posters; $85,000 on pamphlets; $3,000 on T-shirts and sweatshirts; $24,000 on yet other promotional material; $1m on something called a phone-in; $46,000 plus $815 in expenses on the salary of Mr Steedman, who is a former member of this House and who is supposed to be drawing up this empty Priority One program; $55,000 on an address to the nation by the Prime Minister (Mr Hawke) to tell everybody he had a Priority One program; and $32,000 on advertisements which said that the Prime Minister would speak on local radio stations hither and thither to tell people that Priority One existed. I would have thought everybody in Australia would be disgusted to learn that over $2m had been wasted on all that promotion, yet practically nothing had been done in a constructive sense for young people under Priority One. After all, we were told that under Priority One 10,000 new traineeships would be created by June 1986. The reality is that by that time only 2,000 had been created, of which only 58 were in the private sector. So the youth affairs vote has already proved to be a very substantial waste of money and a deliberate effort by the Government to promote its own political programs and nothing more. That also applies to a number of other programs coming under the appropriations of the Prime Minister's Department. Let us take the Office of the Status of Women. I do not have any objection to having some sort of office within the bureaucracy to look at women's issues, although it has to be said that the existence of this office is really little more than a symbolic gesture. It is interesting to note how totally unco-ordinated the Government's so-called women's programs are. There is the Office of the Status of Women in the Prime Minister's Department; recently it set up some sort of affirmative action agency; and it has in the Department of Employment and Industrial Relations a women's bureau. I would have again thought that it would be sensible if the Government were to co-ordinate its women's policies under one agency rather than spread them amongst three and therefore run the risk of having not only an unco-ordinated program but also an expensive one. Some of the programs of the Office of the Status of Women, I must say, have been particularly unscientific and I suspect once more that they are directed towards vote winning rather than very much else. The Government said it wanted to find out the attitudes and concerns of women in Australia. It should have followed the lead of its `what women think' opinion poll survey, which was carried out by Australian Nationwide Opinion Polls Pty Ltd, of course-the firm that does the polling for the Australian Labor Party. It received $70,000 for that poll. Lo and behold, soon after that poll the Government came out with something called the National Agenda for Women, which involves printing hundreds of thousands of pamphlets and sending them all over Australia in order to assess the attitudes of women. If the Government were serious about finding out what women in Australia think-there is nothing wrong with finding that out-it would use its mates at the ANOP to do it. That is the way the Labor Party finds out information in general for its own advantage and that of the Government as well. It did not do that; it chose instead some wasteful national agenda program, the advantage being that it would gain much more publicity throughout the community so that the Government would be seen to be doing more in the community to help women, and not genuinely trying to get information on women's attitudes. In other words, that program is little more than a waste of money. I point to one other waste of money or inappropriate expenditure of money by the Office of the Status of Women. That is the $5,000 grant it gave to the Movement for the Ordination of Women in the Anglican Church. I would most certainly not involve myself as a member of parliament in that extremely delicate doctrinal and theological debate within one of the major churches of Australia. The Government, however, is in breach of the spirit, if not the letter, of the Australian Constitution. If one read the constitutional debates-I can clearly establish that some members opposite have not-one would see that the spirit of the Constitution is to separate the church from the state. The Government has done the reverse through this grant to the movement for the ordination of women. A government has involved itself for the first time in Australia's history in a doctrinal and theological issue which should ultimately be a matter of conscience, not a matter for the long-suffering taxpayers' pockets. In the last two or three minutes left to me I want to refer to expenditure on official establishments, which particularly relates to expenditure on the Lodge and Kirribilli House. The appropriation this year is for one and a quarter million dollars which, I note, represents an increase of 12 per cent. Any pensioner or any other social security beneficiary in the community who has been hit hard by so-called cuts will note, I suspect, that there has been a 12 per cent increase in spending on the Lodge and Kirribilli House. Much of that expenditure has, at the very least, been entirely inappropriate at a time when we are told by the Prime Minister that we are in a virtual state of war. A quarter of a million dollars was spent just last year on redecorating the Lodge so that it looks as though it was decorated in 1927-two years before the great crash. About $50,000 a room was spent on redecorating the Lodge, which is about as much as the average Australian would pay for a family home. Between $80,000 and $90,000 was spent just on soft furnishings. The total renovations bill, for soft furnishings, curtains and so on, was about $103,000. All I am saying about that is that it is in pretty bad taste when the Government is calling for restraint. As far as the Lodge is concerned, I ask just one question which I am sure the Special Minister of State (Mr Young) will be able to answer easily. This matter came up before the Senate Estimates Committee. Why is it that the expenditure on the Lodge's telephone account this financial year will be double that of last year? I note that half a million dollars is being spent on renovations at Kirribilli House as well. This never seems to end. Kirribilli House is supposed to be a residence not of the Prime Minister but for guests of the Commonwealth. The Prime Minister has not only taken it over but also, according to an officer of his Department before the Senate Estimates Committee, had instructed, as urgent and essential, the expenditure of half a million dollars on renovations to Kirribilli House-renovations which were first recommended in 1979 by the Official Establishments Trust. The Prime Minister instructed that these were urgent and essential when he was telling Australians that they should be tightening their belts as this was a time of great economic restraint. The DEPUTY CHAIRMAN(Mr Keogh) — Order! The honourable member's time has expired. I call the Special Minister of State. Mr Hodgman —Moscow Mick. Mr YOUNG(Port Adelaide-Special Minister of State)(12.09) —The poor old Tasmanian tiger has to wait again. Mr Hodgman —That is all right. We are still surviving despite rigged boundaries. Mr YOUNG —I know; the honourable member is doing very well. I thought I should answer some of the things that have been raised in the debate on Appropriation Bill (No. 1) 1986 relating to the Department of Prime Minister and Cabinet and the Department of the Special Minister of State. Firstly, I do not think any substantive answer is required to the question posed by the honourable member for Mayo (Mr Downer). Unfortunately, he lacks a little understanding of what official establishments are about. I take it from the contribution he made that he thinks they ought to be demolished, that we really should not have them, and that we should not spend the money keeping them in order so that they can be used, as they are used extensively by anybody who is in government, to entertain people who visit us as official guests, whether it be at the Lodge or at Kirribilli House. Compared with official establishments in most other countries that the honourable member or I or any other member of parliament has visited, in many ways they are quite modest; they are not built to any grand scheme and they do not provide the facilities which one would expect of a nation such as Australia. That may be a problem for us in the years to come. We had an open day at the new Parliament House on Sunday. Over 20,000 people from around New South Wales came by bus to have a look at it. I am sure many would have been critics before they arrived, but not many were critics after they left. I think most people in Australia will be very proud of the new national Parliament and what it represents. It will be there for a long time. Many generations of Australians will serve in it. It is the same with the Lodge and Kirribilli. Each administration has a duty to make sure they are kept in proper order. The longer these things are put off, the more they cost. I suspect the honourable member for Mayo thinks we should cut all our grants to the Literature Board and the Arts Council of Australia, that when times are tough we should not have ballet or opera, or books being written-we should save all that money-and then numbskulls such as the honourable member for Mayo could have all their mates, such as Andrew Hay, putting their policies forward. That is not the way this Government operates. Even at a time of restraint we are still servicing a nation and we still have a responsibility to see that these things are done. When this debate started some attention was paid to the responsibilities of the Special Minister of State regarding the National Crime Authority and the Australian Federal Police. I would like to respond to some of the comments that were made. The honourable member for North Sydney (Mr Spender) suggested in his contribution that perhaps I was politicising the National Crime Authority. I do not think that there is any evidence at all that would suggest or give any basis to a claim that, since the National Crime Authority has been established, I or anybody else associated with the National Crime Authority have been attempting to politicise its operations. It has been an extremely successful unit which has been established to combat organised crime in this country. It involves the participation of the national Government and all State governments on the intergovernmental committee. I am continually asked about whether matters will be raised with the National Crime Authority or whether they are under investigation by the National Crime Authority. The answers that I give always come from the National Crime Authority. I do not personally pass on matters that I think ought to be investigated; it is always a question of matters being raised by other agencies. So there was no substantive point in the contribution made by the honourable member for North Sydney. The other thing that ought to be said about the National Crime Authority-this is of enormous importance when one talks about the resources that have been given over by this Government in the fight against organised crime in this country-is that approximately $13m will be spent on it. When that is added to the other moneys which have been made available to the Australian Federal Police, honourable members can see our contribution in just over three years has been vastly superior to the contribution in terms of views and resources that was given by the former Fraser Government. The National Crime Authority plays an important role in the fight against organised crime. People observing the success it is having and the organisational co-operation we are getting from all the law enforcement agencies and from government all around Australia can see that the impact of the National Crime Authority is really going to be worth while. The honourable member for Gilmore (Mr Sharp) raised a question he has raised in the House before about overtime worked by the Australian Federal Police and about a very small amount of crack, as it is termed-a new drug-that has been found in Australia. He suggested that the police did not work all the overtime required to detect this drug and therefore the drug was lost. I take it that he was suggesting that the seizure was not concluded. That is not true; the seizure was concluded. It was not a large shipment; it was a very small amount that came through the mail. In terms of overtime of the Australian Federal Police, as I have said in the Parliament before, it is true that, because of a number of events that have taken place in the eastern region, on a pro rata basis it was, and is still, as I understand it, ahead of its spending on overtime this year. That is not true of the total AFP force which, on a pro rata basis, is slightly behind in its spending allocation for 1986-87; nevertheless, it is true of the eastern region. The honourable member also suggested that perhaps the fact that some of the AFP cars interstate did not have blue lights indicated an inadequacy. I do not know whether he was suggesting that cars being used by the police for surveillance purposes should have blue lights on top so that everyone can see them. I can assure him that I am not a court of appeal for decisions made by the Commissioner of Police. They are decisions quite properly and rightly made by the Commissioner of Police. People do not appeal to me on the decisions he is making. That is not a relationship that could be sustained at all. If the Commissioner of Police and his senior officers have decided on a certain policy in these areas the police force will have to abide by it until the people who are held responsible for making these decisions decide otherwise. A lot of other issues have been raised about the powers of the police and the way they should be operating in Australia. The honourable member for Gilmore seemed to think that a simple method available to the Parliament to improve the situation would be to allow admission of illegally obtained evidence and to grant all sorts of extra powers to the police. I am not too sure that people trained in the law would agree with all the views he expressed about how simple it is to do these things. Nevertheless, they are matters that can be discussed and debated in the Parliament and by people outside the Parliament who have a very strong view on some of these questions. In terms of the administration of our law enforcement agencies at a Federal level, I would say without any hesitation at all that they are in better shape now than possibly they have ever been. This is not all due to this Government, but is certainly due in very large measure to the resources we have put in and to the recognition of and exposure given to organised crime in this country by a series of royal commissions which have laid the scenario for deciding the areas to which our Federal Police ought to be giving top priority. We set down new objectives for the police in 1985. We have given them resources within the context of the total expenditure of this Government. Funding for the police can never be unlimited, just as it can never be unlimited for any area of government activity. In the three years since we have been in office there has been a 21 per cent increase in the manpower of the Australian Federal Police. We have now established and consolidated the role of the National Crime Authority. We are getting complete co-operation from all the State law enforcement agencies. We have in place a very strong, very good and certainly very beneficial number of intelligence liaison officers from the Australian Federal Police spread in a number of countries around the world. We are giving a great deal of assistance, through both expertise and money, to the Narcotics Board in Thailand to assist it in its fight against drugs. I think the things we are doing in a positive sense far outstrip some of the minor criticisms that have been made during this debate. As I said, the honourable member for Mayo did not raise anything in my area, but what he did raise in terms of the Department of the Prime Minister and Cabinet was very minor. He was critical of the fact that we are trying to attack the problems that affect youth affairs and the Office of the Status of Women from the Prime Minister's Department. These are areas of considerable concern to this Government. I do not think that any previous government has given such enormous consideration and thought to the problems of women in this country. Our legislation on affirmative action and the statements on the impact on women of Budgets from year to year are considerable documents and ones which are sought eagerly by people who are active in women's affairs around this country. We do not apologise in any way for the role we have played in those matters. Also, we have tackled some of the massive problems that we have been confronted with on youth affairs in this country. As honourable members would know, they are not easily solved problems. One does not have to be a parliamentarian to understand the massive problems confronting young people in this country. One of the great inadequacies of the system of payments to youth we inherited was that no doubt young people were leaving school before they had completed their education because there was a certain attraction to the economic advantage that came from being eligible for the unemployment benefits if they were not entitled to any allowance in the education system. This Government has tried to tackle that problem by making young people focus on the importance of completing their education. We all know that one of the reasons our youth unemployment figures stand in contrast with the figures of many other countries is the dropout rate from our educational institutions-a rate of which we should all be ashamed. Turning that around in the short term is a massive task but attacking it by making allowances available through secondary schools and colleges will make more young people focus on the necessity, and give them the financial ability, to complete their education. That is an important role for Australia as we go into the twenty-first century. If we had continued with the old policies all we would have seen is more and more young people drop out of school, we would have had a totally inadequate work force to deal with the problems we will be confronted with, we would have had a massive number of unemployed and we would have had a disillusioned army of young people for generations to come, and once that situation had become consolidated it would have been almost impossible to do anything about it. So, yes, we have placed great emphasis on women and on youth. They are two areas about which the Australian community expects us to be concerned. The Prime Minister's Department has played a primary role; it has been in the vanguard of the promotion of these policies. We still have a long way to go. During Parliament's week off a fortnight ago I visited nine high schools in Port Adelaide and spoke to 1,400 students. They had a lot of questions about the way they have been served by parliamentarians in this country, and they did not necessarily mean just Labor parliamentarians. They do not think they have been well served by governments over the first few years and they have a lot of questions they want answered. In some ways we are trying to give them the answers, particularly answers which will keep them in education. As the Minister for Science (Mr Barry Jones) has pointed out over the years, that is one of the ways in which we can enable them to fulfil some of the ambitions they have for when they enter the work force or give them entry into the work force, at least, because they will have extra educational skills. In those areas this Government makes no apology at all. I do say, of course, that we have a long way to go in Australia to fulfil some of the ambitions young people have. Mr HOWARD(Bennelong-Leader of the Opposition)(12.23) —I want for a few moments to address some remarks to the estimates of the Department of the Prime Minister and Cabinet. I do so in the context of the answer of the Prime Minister (Mr Hawke) to a question I asked of him in Question Time yesterday relating to the abortive summit meeting between President Reagan and Mr Gorbachev. Perhaps I could commence my contribution by referring to a comment made on the strategic defence initiative a little over two years ago. Mr Hand —Are you trying to square off for last night? You blew it last night. You botched it last night and you know it. Mr HOWARD —The comment was as follows: President Reagan has asked that research be undertaken on the possibility of developing a U.S. capability to intercept all incoming ballistic missiles. The purpose behind this is a highly moral one. It is to seek to replace the doctrine of assured destruction, based on attack with a morally much more acceptable concept of assured defence. I assure the honourable member for Melbourne (Mr Hand), as I assure other honourable members of the house who take an interest in matters relating to peace and disarmament around the world, that that statement offered in high praise of the strategic defence initiative did not come from me, did not come from the right wing of the Republican Party in the United States and did not come from any section of academia which is supportive of the strategic defence initiative. It in fact came from Labor's own Foreign Minister, the honourable member for Oxley (Mr Hayden), when he was making a speech on uranium, the joint facilities and peace on 29 May 1984. On that occasion the Foreign Minister could not have put it better. I am very happy to invoke the words of the Foreign Minister in the Hawke Government in praise of the moral purpose behind the strategic defence initiative, to express my very great disappointment- Mr Hand —The trouble is that you blew it last night at dinner and you are trying to get yourself off the hook. You are a third-rate performer. The DEPUTY CHAIRMAN(Mr Keogh) —Order! The honourable member for Melbourne knows that interjections are out of order, and he is not in his correct place in the chamber, to start with. Mr HOWARD —The point I make is a serious one because it touches on something that is of concern to all of us. I asked the Prime Minister yesterday whether, in light of the enormous importance that the Soviet Union obviously places on the strategic defence initiative and the fact that, had it not been for the insistence of the Reagan Administration on pursuing the strategic defence initiative, there would never have been any arms talks between Reagan and Gorbachev at Geneva in the first place, he might be willing to reconsider the absurd attitude that his Government has taken towards President Reagan's strategic defence initiative. So far has the Hawke Government retreated from the eminently balanced and sensible statement made by the Foreign Minister in May 1984 that we now have the ridiculous position of the Hawke Government taking a more hostile attitude towards the strategic defence initiative than just about any of the major Western powers. I think that is a position which is against the interests of the Australian people. It is certainly a position which is against the interests of the Western alliance and it is a position which has been exposed as quite ridiculous by the outcome of the meeting between Mr Gorbachev and President Reagan. I would warmly exhort the Prime Minister to read what the honourable member for Oxley, the Foreign Minister, had to say about the strategic defence initiative on 29 May 1984. He cannot escape it. There is nothing quite like the ringing declaration being quoted back at one. In another context we remember ringing declarations about there not being a capital gains tax and about not changing this or that, but we are not talking about that at the moment. We are talking about the fact that in May of last year the Foreign Minister was willing to say that the strategic defence initiative had a highly moral purpose. I think he was right then; he is still right and the present stance being taken by the Prime Minister and the Government is completely wrong. It is very important that the people who oppose President Reagan's strategic defence initiative not be allowed to fix the blame for the breakdown of the Reykjavik summit on the support of that program by the Reagan Administration. The reality is that the Soviet Union and its leader went to the negotiating table in Geneva partly because of the insistence of President Reagan on developing the strategic defence initiative. I put it to the Committee, first, that, if the Reagan Administration had not taken that attitude, there would not have been any super-power talks in the first place, let alone the discussion that took place in Iceland last week. Secondly, I put it to the Committee that the Soviet Union went to that meeting in Reykjavik fully aware that the strategic defence initiative was non-negotiable. It was made perfectly clear by the Reagan Administration from the very word go that, if the Soviet Union imagined that in response to the offers put on the table the United States would be prepared to bargain away the strategic defence initiative, that simply was not on. All along, the President and his Administration have made it perfectly clear that they will not deviate from that position. There is a strange paradox from those who oppose the concept of a strategic defence initiative. On the one hand, they argue that the basis for their opposition is that it is scientifically implausible; in other words they say that they are against it because it can never be made to work and therefore it should not be contemplated. That is one leg of their argument. But, on the other hand, they argue that the conduct of the research is immensely destabilising. Mr Rocher —It is not consistent. Mr HOWARD —Of course they are not consistent. The very fact that the Soviet Union chose to invoke the strategic defence initiative as a reason for not consumating an arms agreement at the Iceland summit underlines the inconsistency of those who oppose the initiative. On the one hand, they say that it is scientifically implausible and therefore a totally ridiculous proposition and, on the other hand, the Soviets and others invoke it as a reason for not going ahead with an arms limitation agreement. The reality is that strategic research has been taken very seriously by the Soviet Union. It has been conducting strategic research for a period of up to 20 years. It is very strange that people in governments around the world argue that there is something wrong or something immoral about the United States conducting strategic research when over the last 15 to 20 years the Soviet Union has been conducting the same amount of research. The Minister for Foreign Affairs was right when he said in May 1984 that the concept behind the strategic defence initiative is a highly moral one. Ultimately, if the strategic defence initiative proved plausible and successful, it would provide a defensive non-nuclear alternative to the existing balance of terror based on offensive nuclear weapons. I quote the words of the Minister for Foreign Affairs in May 1984 when he said that the goal of the strategic defence initiative is: . . . to seek to replace the doctrine of assured destruction, based on attack with a morally much more acceptable concept of assured defence. The words of the Foreign Minister on that occasion were right. They are still right. I could not put it better. I just repeat the request that I made to the Prime Minister on behalf of the Opposition that, particularly in light of the circumstances of the breakdown of the summit at Iceland, the Government reconsider its absurd position of hostility and opposition to the development of the strategic defence initiative. Mr HODGMAN(Denison)(12.33) —The Prime Minister (Mr Hawke) should resign. To quote the words of history: `Go, you have sat here too long. In the name of God, go'. This Prime Minister and this Government should go. The Prime Minister now has the choice of resigning with honour or clinging Eisenhower-like to his remaining months in office after which he will be dragged screaming from the Lodge, because at the next Federal election this discredited Hawke socialist Government will be thrown out lock, stock and barrel. No Prime Minister in the history of this country has seen himself more as a president of some imaginary Australian socialist republic than has this Prime Minister. It is about the emoluments and the treats and the trappings of his office and the facilities to which he has access, which come jointly through the Departments of the Prime Minister and Cabinet and, conveniently, the Special Minister of State, that I wish to address some remarks today. I do not believe that any Australian will forget the action of this Prime Minister in desecrating this chamber of the Parliament by holding in it the first Hawke talkfest, the National Economic Summit Conference, in April 1983. It was a very wrong thing to do. It desecrated the chamber of this Parliament which is the province-- Mr Goodluck —Of elected members. Mr HODGMAN —As my colleague the honourable member for Franklin interjects, this chamber belongs to the elected representatives of the Parliament of the Commonwealth and should not be used for other purposes. Again, sadly, in July 1985, with the Hawke taxation talkfest, we saw this chamber wrongly used by a Prime Minister who thinks that it is his personal presidential property. But what has happened with the Lodge, which he occupies as a tenant? For the benefit of those who have not seen it, the Lodge is a beautiful National Trust building here in Canberra. It is a magnificent building. The history of this nation is enshrined within its walls. There are mementos, photographs and furnishings going back to that great Prime Minister, the Hon. J. A. Lyons. Every Prime Minister and his lady who have occupied the Lodge as a privilege in the intervening 50 years or so have left a mark, a memento. The Lodge is a national shrine, but it has been desecrated by a Prime Minister who thinks it is his personal property-a Prime Minister who leads a government which taxes the housekeepers of paraplegics and, on the other hand, gives funds to gays and lesbians and to prostitutes to go to conferences in Brussels. This Prime Minister uses the Lodge in a way that I have to say is desecration. I advised his office that I intended to make some remarks about him. The DEPUTY CHAIRMAN(Mr Keogh) —I remind the honourable member for Denison that he needs to be very careful that he is not getting too close to a matter that should be the basis of a substantive motion in the House. The Committee is considering the estimates of the Department of the Prime Minister and Cabinet and the Department of the Special Minister of State. Mr HODGMAN —Thank you, Mr Deputy Chairman. It is appropriate that I remind the chamber that the taxpayers of Australia have just seen half a million dollars of their hard-earned money spent on the Lodge in Canberra. This was adverted to by the honourable member for Mayo (Mr Downer). Half of that money went on renovations, and major ones at that, to almost all of the rooms in the Lodge. A very small amount was spent on the part to which the public has access. The other half went to maintenance. No doubt that is because of the parties and one thing and another that cause all the wear and tear in the Lodge. But would you, Mr Deputy Chairman, not feel as I felt when I picked up the Melbourne Sun News-Pictorial last week? I was staggered to see the headline: `Cabinet switch talks at Lodge'. It was an exclusive article by Niki Savva, the chief political reporter. It stated: Canberra-The Prime Minister, Mr Hawke, is considering a reshuffle of his ministry in preparation for the expected departure of a senior Cabinet minister. Mr Hawke discussed the reshuffle and a possible cut in the number of federal departments yesterday at a breakfast at the Lodge with his faction chiefs and key back benchers. We remember-the Iraqi breakfast during the Whitlam Government. The DEPUTY CHAIRMAN —Order! I hope the honourable member for Denison will be very quickly able to indicate to the Committee how this matter relates to the expenditure of the departments that we are considering. Mr HODGMAN —Half a million dollars of taxpayers' money has been spent this financial year under the estimates of the Department of the Prime Minister and Cabinet, and the Lodge has been desecrated. Talk about our Lord sweeping the money changers out of the temple! Here we had the faction leaders of the Hawke socialist Government meeting at a breakfast in the Lodge-- Mr Blunt —A free breakfast. Mr HODGMAN —It was a free breakfast on which fringe benefits tax should probably have been payable. Who was there? You, Mr Deputy Chairman, were not invited. The article states: Present were the NSW Right numbers man, Senator Graham Richardson, the Victorian Right numbers man, Senator Robert Ray, the Left's convenor from Victoria, Mr Gerry Hand, the NSW Left's chief, Senator Bruce Childs, the Centre Left's convenor, Senator Peter Cook of WA, and Senator Rosemary Crowley, of South Australia, also representing the Centre Left. I take it no further. I say that that is a scandalous headline. This Prime Minister is using the Lodge for covert political meetings. He is using a national shrine, the property of the people of Australia and a National Trust building, for the most scungy double dealing, conniving and internecine wrangling to decide who will be the power-mongers in the last few months of the Prime Minister's term in office. It is not just the Lodge that is being used by a man who treats it as his personal property; it is Kirribilli House as well. The honourable member for Mayo has raised this matter, but I point out that at a Senate Estimates committee hearing two very vital pieces of evidence came from an officer of the Department of the Prime Minister and Cabinet. That evidence came from Mr P. A. Selth. He said that $540,000 of taxpayers' money is being spent on improvements to Kirribilli House, which will take a period of some five months, and that the work is already under way. The important part is that the work was determined to be `urgent and essential' and that he said that his Department was under instruction from the Prime Minister personally that it be in that category. The point I have to make is that if the Prime Minister personally tells the Official Establishments Trust that these works are urgent and essential, he must accept personal responsibility for that in this Parliament. Before I come to the second matter I have one little question for the Special Minister of State (Mr Young) about the security for the Prime Minister, provided, as I understand it, by the Minister's Department, and comprising Australian Federal Police and also security officers who protect him. Will the Minister be able to make available, if I ask later in this session, details of security coverage for the Prime Minister when he was at sea, off-shore, cruising in the northern Queensland area in close proximity to Lizard Island? I just want to foreshadow that I will be raising this matter. I think the Minister has the records because it is a matter within his Department's responsibility. I just tell him that at some stage I would like to know the cost of security protection for the Prime Minister when he was cruising on an unknown vessel last year with unknown company in the area of north Queensland around about Lizard Island. In my last minute I come back to the second part of the evidence of Mr Selth. This matter has made me bring out a very old file. It is a bit dusty, but I will tell you what, Mr Chairman; it is a good thing that we keep our files intact. It is the Boulevard Hotel file. It was said that while the work is going on at Kirribilli House the Prime Minister will use as his official establishment in Sydney the Regent Hotel. I have not been there, but I am told that it is a very nice, new, modern hotel, that the suites cost approximately $350 each and that the Prime Minister has been there four or five times this year. Why has he changed from the Boulevard Hotel and how did the Regent Hotel get the contract? The CHAIRMAN —Order! The honourable member for Denison is still pursuing a subject to which I called his attention earlier. Mr HODGMAN —It is in the Estimates. The CHAIRMAN —I remind him that he should be very careful about these remarks. Mr HODGMAN —How much money is to be spent this year at the Regent Hotel? Why has the Boulevard Hotel been given the axe? Does it relate to the unsolved robbery in the Lady Nelson suite at the Boulevard Hotel on the night of 21-22 February 1982? Is it because the Prime Minister and his people are not satisfied with the internal security at the Boulevard Hotel? The CHAIRMAN —Order! The honourable member's time has expired. Mr HODGMAN —More will come on this matter. Mr YOUNG(Port Adelaide-Special Minister of State)(12.45) —I hope to be able to finish in a couple of minutes so that we do not hold up the Committee from its normal break, but a couple of things ought to be said. Firstly, there is no doubt about the honourable member for Denison (Mr Hodgman); he is an outstanding contributor to the Parliament. He is not always correct, but he is very vocal and very consistent-and he was also sacked. I cannot understand how both things can be true. How could the honourable member for Bennelong (Mr Howard), the Leader of the Opposition, sack such an outstanding Tasmanian representative as the honourable member for Denison? Mr Hodgman —You ought to know; it happened to you, you were sacked twice. Mr YOUNG —Yes, but I am here. Mr Hodgman —I raise a point of order. In the spirit of goodwill, I say that I have been sacked once; the Minister has been sacked twice. The CHAIRMAN —There is no point of order. Mr YOUNG —But as the honourable member can see, I am standing here at the dispatch box representing the Government as a very senior Minister and the honourable member for Denison, who is the most vocal representative that Tasmania has, has been dispatched to the back benches. Mr Goodluck —Whoa, whoa! Mr YOUNG —The most vocal representative except for the honourable member for Franklin (Mr Goodluck). So one has to take the contribution of the honourable member for Denison, of course, with a pinch of salt. It is like the time when Clyde Cameron passed Billy McMahon in changing sides of the chamber for a vote one day. Billy McMahon had been very unfair to Clyde and said some very unkind things to him. Clyde then said to Billy: `Billy, why did you say that about me?'. Billy replied: `Clyde, you always hurt the ones you love'. I think that the honourable member for Denison really does like the Prime Minister of Australia, as do most people in this country. The honourable member really just gets up to put on a display for some of the people who sit alongside him in the hope that they can put sufficient influence on the honourable member for Bennelong to have him reinstated on the front bench. If I were the honourable member for Bennelong, I would put him back on the front bench, because there are so many dills sitting there at the moment that he would obviously have to get a guernsey. The honourable member is dead right in that list of people he gave me of people who should be taken off the front bench. I would add a couple of names to that list, actually. Did the honourable member not send to me that note which included the 10 people he thought should be taken off the front bench? It looked like his hand writing. The honourable member for Denison started off his contribution, as did the honourable member for Mayo (Mr Downer), by saying how important the Lodge and Kirribilli House are to Australia-not to this present Government, not to the last Government and not to the next government, but to the people of Australia. When the Government received advice, as it did, to the effect that the Official Establishments Trust has long recognised that Kirribilli House is in urgent need of repairs to remedy the severe structural deficiencies caused in the main by problems associated with rising and falling damp, the Prime Minister's instruction, according to the information given to me, was that we should do only what was declared urgent and essential. Apparently the Trust wanted to do a lot more work on the establishments but the Prime Minister said that he would agree to the work that was essential and urgent being done. The honourable member for Mayo raised the matter of telephones. I understand that there was an upgrading of all the secure telephone facilities in the establishments and that was also a reason for a great deal of the additional cost in those areas. I think both honourable members should take this point into account: I do not think this will happen for a long time, but if the Liberal Party of Australia ever became the Government in Australia again, with someone such as Malcolm Fraser living in the Lodge and staying at Kirribilli House, and the honourable members had the audacity to talk in such terms about the official establishments and were to say `You should not be spending that money', one could imagine what would happen. I can tell the honourable member for Denison and the honourable member for Mayo that they would not be having breakfast at the Lodge very often with someone like Big Mal. He would not be entertaining the honourable members very often. It is important that on these issues at least there be some bipartisanship on looking after those establishments so that people in Australia can on occasions have a look at them and be proud of them. Mr Downer —Why weren't you bipartisan about it in opposition? Mr YOUNG —I do not recall ever having spoken about them. Mr Downer —No, but your Party did. Mr YOUNG —The honourable member asked me, and I am telling him what I think about them. I think they are important establishments. They should be restored; they should be looked after. I think we have an obligation to do it. It is a paltry amount of money, as both honourable members know. Mr Hodgman —We have not been in there for three and a half years. Mr YOUNG —And I can tell honourable members opposite that they will not be in there for a lot longer, either. I do not think anybody takes seriously the view that the honourable members have expressed. As for the way in which the Prime Minister uses the facilities and the honourable members' comments about him having some members of the Parliament there to breakfast, I make the point that on any day one picks up the paper one can see that President Reagan has had people from the Congress at breakfast, hoping to persuade them to do what he thinks is correct in the Congress. He is forever using the facilities that are made available to him at the White House. If one visits France or England one might be invited by the various Ministers to have breakfast with them in the official establishments. It is not unusual. I do not know whether the honourable members opposite have ever been invited. In fact, the honourable member for Denison's own very good Governor of Tasmania invites people to breakfast at Government House in Hobart. He is a lovely gentleman; he is very popular. He does not, however, have the work commitment of the Prime Minister of Australia. So I do not think that point should be taken very seriously either. Mr Hodgman —I rise on a point of order. The Standing Orders expressly prohibit a reference to the representative of Her Majesty the Queen and I ask the Minister to withdraw it. I am not being technical; this is in Standing Orders. The DEPUTY CHAIRMAN(Mr Mountford) —Order! I am sure that the Minister was making a lighthearted reference, but no doubt he will withdraw it if it is regarded as offensive. Mr YOUNG —I did not reflect on the man at all. Mr Hodgman —You compared him with the Prime Minister. It is like comparing arsenic with fine wine. Mr YOUNG —They are very good friends. The other matter raised by the Leader of the Opposition was the outcome of the talks between Mr Gorbachev and President Reagan. I am not too sure how they affect the appropriation for the Prime Minister's Department. Nevertheless, many people around the world share the views expressed by the Australian Government. In fact, the first poll taken in the United States of America after the meeting showed that 50 per cent of those polled shared the views of this Government and that they were not altogether pleased with the outcome. They were hoping that the leaders would be able to resolve their differences. It is to be hoped, as the Prime Minister said, that they can get round the table as quickly as possible to solve these problems, because people throughout the world are hoping for a solution. Proposed expenditures agreed to. Sitting suspended from 12.52 to 2 p.m. Department of the Treasury Proposed expenditure, $723,995,000. Department of Finance Proposed expenditure, $110,747,000. Advance to the Minister for Finance Proposed expenditure, $160,000,000. Mr CARLTON(Mackellar)(2.00) —In looking at the estimates for the Department of the Treasury, I take the opportunity to draw attention to the extraordinary reversion, in the behaviour of the Treasurer (Mr Keating), to his pre-banana republic mode. Honourable members will recall when it first appeared that the economy was running into trouble and when the Treasurer's economic strategy was beginning to show some signs of wear and tear. This became evident more than a year ago and indeed was mentioned in part of the Budget Papers of last year but was somewhat hidden. It became very evident with the September balance of payments figures and then the really dreadful October figures. When the inflation figures for the September quarter were very bad-more than 7 per cent-and when a 3.8 per cent wage increase was announced in October and there was a big plunge in the dollar, it was very clear to everyone except the Treasurer that the Australian economy was running into substantial trouble. However, the Treasurer continued to tell the Australian people and the financial markets of the world that everything in the Australian garden was lovely. He said that the economy was right on track. I have dozens of quotations from the Treasurer, and also the Prime Minister (Mr Hawke), who was limping along behind him with his statements over that period, which show that he was misleading the Australian public and the world financial markets about the true state of the Australian economy. This continued right up to 9 May this year, when the Treasurer made a statement to the Economic Planning Advisory Council, which is the key economic advisory body to this Government, saying that everything was all right and the domestic economy was so strong that it would be able to deal with some acknowledged external difficulties. That was a very confident statement made by the Treasurer on 9 May this year. Then, on 13 May, only a few days later, the balance of payments figures for April came out and they showed a deficit on the current account of $1.5 billion. It was the biggest deficit since the previous October, when the figure reached $1.6 billion. It hit the Treasurer between the eyes. On the following day, he went on the John Laws radio program and, in a state of panic, informed the Australian public for the first time that the country was heading towards the status of a banana republic. Right up to this time the Hawke Government and all its Ministers were telling everyone that everything was perfectly all right, that the economic strategy laid down at the National Economic Summit in April 1983 was perfectly correct and that there was no need to worry about anything. Then suddenly, on 14 May, there was total panic and a total change of message. All sorts of things started to happen. The Prime Minister decided that there would be an address to the nation. He asked for supreme sacrifices, declaring that the state of the economy was akin to the country being in a state of war. Unfortunately, that call did not fall on very receptive ears in the Waterside Workers Federation because it closed down the docks for a week about a week after the Prime Minister had called for effort and sacrifice. I merely give this example to show that, from exhibiting total confidence in the face of a deteriorating economic situation, which had been known for months and months, the Government went to a state of total panic. It rang all the alarm bells, but it did not do anything. It did not stop the wage case or have a mini-Budget to cut expenditures or anything like that, but it created a great sense of alarm. The DEPUTY CHAIRMAN(Mr Mountford) —Order! I remind the honourable member that we are on the Estimates and we are now dealing with estimates for three departments. It would appear from the honourable member's comments that he is regurgitating the debate on the Appropriation Bill, rather than restricting himself to these three departments. Mr CARLTON —With respect, Mr Deputy Chairman, the matters I have mentioned are directly within the Treasurer's portfolio responsibilities. Also, I might point out that the Leader of the House (Mr Young), in telling us that the debate on the Appropriation Bill had been truncated, said he would give honourable members adequate time during consideration of the Estimates to continue with general debate. That has always been the case. The DEPUTY CHAIRMAN —I am not privy to the arrangements that may have been made between the Leader of the House and Opposition members, but strictly speaking the debate should be restricted to the estimates of those three departments. To date the honourable member has been speaking about the economy generally and not really about those three departments. I ask him to try to bring himself back to the estimates of those departments. Mr CARLTON —I am speaking specifically about the estimate for $7 billion-odd to be paid in interest on the Federal Government's debt. That is central to all the remarks I have been making about the state of the economy. We are talking about the balance of payments and the balance of payments is related to the extent of the debt. A critical element of the balance of payments is the $7 billion which must be paid out-part of it to overseas lenders-from the estimates of the Department of the Treasury. That is quite central to my remarks. I suggest that over a period the Treasurer misled the Australian public about the true state of our indebtedness and the difficulties of our external debt. Dr Harry Edwards —And misled his colleagues. Mr CARLTON —As the honourable member for Berowra says, he also misled his own colleagues. We got through this period with a further devaluation in July because of the inadequacies in the Government and its failure to do anything about the underlying situation. Then we found that, after the Budget-which was inadequate in dealing with this situation, with the deficit being reduced only to $3.5 billion, in the main by increasing taxes-our debt problem was still there. There was an increase of about half a billion dollars in the estimates for the repayment of interest. After that had happened and no fundamental changes had occurred in the economy, the Treasurer suddenly discovered that everything was all right. Yesterday he said that everything was falling into place `like apples in a slot machine'. In other words, everything is apples in the banana republic. That seems to be what the Treasurer is telling us. Not everyone agrees with that. Indeed, after yesterday's balance of payments figures, which were quite dreadful, the Australian Financial Review said: In short, the massive depreciation of the past 18 months has had no discernible impact on the composition of our trade. That was what the Australian Financial Review said this morning in response to yesterday's dreadful figures which the Prime Minister said were `in line with expectations'. The Treasurer said that everything was wonderful. Once again he was trying to mislead the Australian public, just as he has been misleading financial markets around the world- Mr Hand —What expenditure would you have cut? Mr CARLTON —The honourable member for Melbourne is not even sitting in his proper seat. Mr Hand —Stop whingeing and tell us what cuts you would have made. The DEPUTY CHAIRMAN —Order! The honourable member for Melbourne will stop interrupting. Mr CARLTON —As I said, the Treasurer has been misleading financial markets overseas. Or has he? There was a little report in the Australian this morning which was very interesting. It says: Only two years after Euromoney magazine voted him Finance Minister of the Year, Mr Keating was narrowly beaten for the wooden-spoon award to the man who has done the most harm to his economy. In an article entitled `First Among The Worst', Euromoney names Egypt's Finance Minister Sultan Abu Ali as this year's reluctant winner. However, the magazine added: `The men responsible for economic policy in Yugoslavia, Morocco, Australia, even Malaysia, were all strong contenders. The award was published as Mr Keating was lecturing in the United States on the shortcomings of its economic policy at the International Monetary Fund Conference in Washington. If we want the true state of the economy we have only to look at the figures. The current account deficit for the September quarter was up 19 per cent on last year and, worse still, the merchandise trade deficit for the quarter was up by 79 per cent. Total overseas debt will reach $100 billion by the end of the financial year, absorbing 40c of each export dollar in debt servicing costs. Inflation, at 8.4 per cent, is over four times that of our major trading partners. Interest rates of 19 per cent or more are still being charged to businesses and farms. The accord has collapsed and no new wages policy is in sight. Investment is at a standstill because of the loss of confidence arising from high taxes, high inflation and high interest rates. The Treasurer's gambling analogy of the slot machine is singularly appropriate. He began his treasurership gambling Australia's future on world commodity markets and he lost. Now he reverts to his earlier mode of excessive optimism and he will not get away with it. Mr BEDDALL(Rankin)(2.11) —In debating the estimates of the Department of Finance and the Department of the Treasury I wish to address my remarks to the Budget strategy that these departments have helped to formulate. This Budget, more than any other, sets the parameters for a new direction in the Australian economy. Australia has experienced a dramatic decline in both its terms of trade and its balance of payments. The most important aspect of this Budget is the responsible way in which the Treasurer (Mr Keating) has been able to reduce the Budget deficit. This reduction has been brought about by sharing the burden equitably. The reaction within my electorate has been the most positive since our election in March 1983. Nothing illustrates this more than the fact that the Opposition in the days and weeks following the Budget has abandoned any pretext of an alternative economic strategy. For the first time in Australian political history we have an Opposition with no alternative economic, wages or fiscal policies. Its only panacea for economic recovery is some vague reference to freeing up the labour market. As has been outlined in the Treasurer's Budget Speech, Australia's industrial system is now the most flexible in its history. Under the accord, the trade union movement has shown unprecedented wage restraint. The Government, the unions and business are working together and it is only the Opposition and the lunatics of the New Right who are advocating confrontation. Even that most strident critic of all things federal, the Premier of Queensland, Sir Johannes Bjelke-Petersen, has been noticeable for his silence on the Budget brought down by the Treasurer. Perhaps he is the most disappointed political leader in Australia, since he was to base his re-election strategy on attacking the Federal Budget. It is now appropriate that the people of Queensland will be able to show all Australia that they expect State governments to adopt rational economic policies. I certainly hope that they will do this when the election is held on 1 November. The problems facing us in redressing the balance of payments are not without their difficulties. It is to the Government's credit that it has tackled these problems in the Budget. Australian industry must become more competitive if it is to survive in today's world trading environment. The devaluation associated with the floating of the Australian dollar has given Australian industry its most competitive environment for decades. There are now new markets available for Australian companies prepared to have a go. As a member of the country task force of the Prime Minister (Mr Hawke), it is with pleasure that I report to the chamber that the task force has seen at first hand Australia gearing up. The difficulty is to do this quickly after the disastrous policies of the Fraser-Howard Government destroyed much of the manufacturing base in the induced recession of 1982. Australia's traditional export industries have suffered massive downturns in the price that the world is prepared to pay for its products. Examples were outlined by the Treasurer in his Budget Speech, but it is worth reiterating some of those once more: The price of wheat has fallen from $US181.90 a tonne in 1980-81 to $US103 per tonne. The price of sugar has fallen from $US390 a tonne in 1981 to $US122 per tonne. The price of barley has fallen from $US148.27 a tonne in 1982 to $US71.77 per tonne. The price of coal has fallen from $US54.85 a tonne in 1981-82 to $US38.72 per tonne. The price of iron ore has fallen from $US21.90 a tonne in 1982 to $US16.10 per tonne. So the story goes on across a whole range of exports. (Quorum formed) I thank my colleagues for their undivided attention. I am sure that they will stay in the chamber now and listen to a fine speech. I was saying, before I was interrupted by the unnecessary calling of a quorum, that the coalition while in government, with the honourable member for Bennelong (Mr Howard) as its Treasurer, refused to float the Australian dollar on the advice of that well-known member of the New Right, Mr John Stone, the former head of the Treasury. It is no wonder that his term as head of the Federal Treasury is now referred to as the stone age. The Government could have adopted easier options in this Budget and increased taxation across the board as well as abandoning the promised tax cuts. It rejected these approaches outright. It has cut real spending growth to zero and the deficit has been dramatically brought back to the levels of the late 1950s and early 1960s. This Budget is therefore anti-inflationary as it will not be calling on the nation's savings to fund its programs. These measures should ensure that, in the medium to long term, interest rates will be reduced. This will be achieved whilst maintaining stable currency so that Australia can plan for the future. There has been a body of opinion about that there are alternatives to the current economic strategy. I totally reject these alternatives. The first option proposed is that the Government should do nothing but, unfortunately, that would fix nothing. The consequences of this option would be that our export income would stay low, the value of the Australian dollar would steadily fall and inflation would rise. The economy would collapse into deep recession, forcing many more Australians on to dole queues. This would mean obviously that Australians would import less and our trade problems would be solved. This method was used to a large degree by the Fraser-Howard Government in 1982, but it was compounded by artificially maintaining a high level for the Australian dollar. The worst problem of this option is that it would do nothing to reorganise our economy so that in future we would be less of a hostage to world commodity prices. The second option is to unfloat the Australian dollar and introduce further barriers against imports. The problem with this option is that our export prices would still be low and the trade imbalance would still exist because we could not expect our trading partners to continue to import Australian goods whilst we excluded their products. Furthermore, instead of our exchange rate moving to make allowances for this problem, the adjustment would show up either in massive government borrowings overseas or in a massive outflow of capital inducing a credit squeeze. Such a credit squeeze would bring about crippling high interest rates and a collapse of the economy, with no end in sight of the fundamental problems of our trade imbalance. None of these options present Australia with any fundamental changes that will bring about long term prosperity. If this nation is to have steady economic growth, as opposed to the booms and busts during the long dark years of Liberal rule, the integrity of the Treasurer's Budget must be maintained. The Federal Budget, however, is only one part of the economic management of Australia. Each of the State governments also needs to play a role in the economic development of our nation. Unfortunately, in my State of Queensland, we have an incompetent Government, increasingly scandal-ridden, led by an aging Premier who is out of touch with reality. It is important in this debate to indicate how much mismanagement of the Queensland economy is dragging down economic growth nationwide. Queensland has the highest unemployment rate of any State in Australia at 9.4 per cent. It has the lowest average weekly male earnings at $396-some 7 per cent below the Australian average. It has the lowest rate of job vacancies of any State at 0.5 per cent. Queensland has the second highest rate of industrial disputation of any State. It has the second lowest number of overtime hours per employee. I cite these facts to illustrate that the National Party Government of Queensland is seriously hindering the economic development of this nation. Economic surveys have shown that the financial sector in Queensland has been unable to grow because of its low education standard, particularly relating to computer technology. Contrary to the Queensland Government's constant argument-- The DEPUTY CHAIRMAN (Mr Mountford)-Order! The honourable member's time has expired. Mr CONQUEST(Hinkler)(2.23) —The estimates for the Department of the Treasury and the Department of Finance and the Advance to the Minister for Finance are merely Budget strategies in their figuring and in their appropriations. The problem is that those targets have to be met. Looking back at the history of the Treasurer (Mr Keating) in office, everybody should be concerned. Last year the Treasurer created an expectation of a tough Budget. He actually leaked to the Press that there would be a $5,500m deficit. Whilst the Press had gone into raptures about the fact that there might be a $5,500m deficit, the Treasurer announced in his Budget Speech that there would be a $4,900m deficit. The Press was overly enraptured because that target had been met or that expectation had been given to the people of Australia. The media have been known to be gullible before and they are not very quick to correct a situation later. Whilst they said that the reduction of the Budget deficit to $4,900m was a marvellous achievement and a tremendous result, we found at the end of that financial year that what turned out to be merely a guesstimate ended up as a deficit of close to $6,500m if we took into account the extra money that came from the Reserve Bank of Australia. So the Treasurer is not a great Treasurer. He might be considered a brilliant fiction writer. He is certainly not an economic guru but perhaps he could be classed as a disciple of deception. Where was the media criticism? Where was the closer analysis from the Press? The DEPUTY CHAIRMAN —Order! I ask the honourable member to withdraw that statement. Mr CONQUEST —Which one? The DEPUTY CHAIRMAN —`A disciple of deception'. Mr CONQUEST —`A disciple of deception'? I withdraw. Where was the media criticism when the Budget overran to such a degree? Surely a closer analysis was justified at that time. This year we have had dreamtime revisited. We had the leak to the Press that this Budget was going to be tough and that the Treasurer was going to achieve a $4,000m deficit. Then we had the Budget announcement that the deficit would be $3,500m and the Press once more went into raptures. All I can say is that if the Treasurer could not reach his target last year I do not think he has reset his sights this year and the target will be missed again. I might say to the Treasurer that that is not a furphy either. I noticed that there was mention in the Budget Papers of the fringe benefits tax and an item dealing with the payment of the tax. We find that the Government, has mentioned these figures in the Budget Papers in an attempt to demonstrate that it is paying a fringe benefits tax, which, of course, is farcical and makes a bad joke of trying to demonstrate to the private sector that there is an equitable approach. The Budget Papers state that this revenue comes from `on-Budget, Budget dependent authorities'. This farce is continued when we read the last sentence, which is the important one, of item 8E1 on page 248 of Budget Paper No. 1. It states: Thus some additions to administrative expenditure appropriations have been allowed where the amounts of FBT involved are substantial or where the FBT relates to the performance of essential activities of Government which are demonstrably non-discretionary to the agencies concerned such as certain costs associated with overseas service (including the Antarctic). This means that the fringe benefits tax which the Government cannot collect from itself and which does not exist, except on paper, will not even be pretended to be collected in the Antarctic. I wish to deal further with the fringe benefits tax because it is an item which is referred to in the Budget Papers. When the honourable member for Rankin (Mr Beddall) was speaking he broached a number of matters regarding the Queensland Government. He tried, in his debate, to find something for which he could praise his own Government but he nearly ran out of time and utilised his remaining moments to attack his home State of Queensland. At least I will give him praise in one area. He and Senator Black, the honourable member for Capricornia (Mr Wright) and the honourable member for Herbert (Mr Lindsay), were all reported in an article in the Sunday Mail of 5 October as having criticised the fringe benefits tax. They criticised the fringe benefits tax because of the pressure that was being placed on their candidates in the Queensland election campaign and they decided that they must try to win some points for their State colleagues. The honourable member for Capricornia was not able to handle the question of the fringe benefits tax. He was asked by Herbert Grover, the Financial Services Manager for the Queensland Graingrowers Association: `What is the reason for imposing the tax on the employer?' The honourable member for Capricornia's answer was recorded verbatim by the Press reporter at that stage because the reporter was quite aware that the honourable member is the type of person who tries to justify a statement or to say that he did not say exactly what was reported. This is what Mr Wright said in answer to that question. What the Government decided for political reasons, and I will not 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 have 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. At least the honourable member for Capricornia was prepared to admit that the fringe benefits tax was being imposed on employers for political reasons. I turn now to other items in the Budget about which most people should be concerned. Because of the Treasurer's history of announcing targets that are difficult to reach, everybody in Australia should be concerned, as we are discussing expenditures which may have to be altered in a mini-Budget early next year if the current directions continue. The economic growth forecasts for 1985-86 are significantly lower than they have been. The figures for December 1985 and March and June 1986 show that for those three successive quarters there has been a negative real gross domestic product growth. It is accepted world wide that if a country has three successive periods such as these it has a recession. If we have a recession we will have problems with this Budget, as we did last year. As I said, the Treasurer will be off target. He should align his sights a little better because he is always way off target. Also we notice that there are expected wage rises, higher government charges and added consumption taxes. They will all contribute to maintaining our inflation rate at an uncomfortably high level of around 8 per cent. I say to you, Mr Deputy Chairman, that there are more losers than winners as a result of this Budget. I believe the Treasurer will have great difficulty in meeting the targets he has tried to set in these appropriations in the Budget. The DEPUTY CHAIRMAN(Mr Mountford) —Before calling the honourable member for Bowman, I remind honourable members taking part in this debate that we are dealing with the estimates for three departments. The debate therefore should not range into a Budget debate, which unfortunately the last three speakers have tended to do. Mr KEOGH(Bowman)(2.32) —Mr Deputy Chairman, I acknowledge your comments that in the debate on Appropriation Bill (No. 1) 1986 we have reached the stage where we are considering the estimates of the Department of the Prime Minister and Cabinet and the Department of the Special Minister of State. The DEPUTY CHAIRMAN —Order! We have gone through them. We are now discussing the Department of the Treasury, the Department of Finance and the Advance to the Minister for Finance. Mr KEOGH —That is correct. We have finished debating the estimates for those other departments. I referred to those two departments, Mr Deputy Chairman, because I took note of what you said about honourable members straying slightly from the appropriations of the departments that are currently before the Committee. I was reminded of the speech that was made shortly before the luncheon adjournment by the Leader of the Opposition (Mr Howard), who at that stage should have been addressing his remarks to the appropriations of the Department of Prime Minister and Cabinet and the Department of the Special Minister of State. His office must somehow have given him the wrong timetable and told him that he was to be speaking to the estimates of the Department of Foreign Affairs. I know the Chairman of Committees at the time was very tolerant and understanding towards him and gave him a fair amount of latitude. I recognise the fact that you, Mr Deputy Chairman, likewise are probably doing that with honourable members who are discussing these estimates. I want to refer briefly to the remarks made by the honourable member for Hinkler (Mr Conquest) in criticism of the very fine contribution that was made by my colleague the honourable member for Rankin (Mr Beddall). He criticised the honourable member for Rankin for spending part of his speech criticising his own State of Queensland. I do not know whether the honourable member for Hinkler did not hear my colleague correctly or whether he wished to misinterpret what the honourable member for Rankin said. I remind him and other members that the words of criticism from the honourable member for Rankin were directed at the National Party Government in Queensland. It was in sympathy for those unfortunate people in Queensland that he made the remarks. It certainly was not in criticism of the people of Queensland or the State. I feel compelled to refer to some of those things briefly, as they certainly would come under the area of the estimates we are currently considering. Queensland has fared very well from this Government. It has received the second highest increase, some 7.5 per cent, of all States in the general purpose assistance payments that have come from this Government. Because of Queensland's commodity base, it has felt particularly hard the impact of Australian's terms of trade decline. That increase in the payment to the State certainly was warranted. In that way the Budget took into account the problems of Queensland and gave it that level of special assistance. An amount of $5.8m was allocated to Queensland from Commonwealth payments to the States for rural adjustment in the 1986-87 Budget. This represents an increase in real terms of some 25.7 per cent on the 1984-85 payment. The sugar industry in Queensland again fared remarkably well from the payments to the States in this Budget. It will receive some $21.9m as part of a three-year State-Federal government program for assisting the sugar industry. Under that program, which commences with the 1986-87 Budget, the Commonwealth is committed to provide up to $100m to the sugar industry, and the majority of those involved in the sugar industry are in Queensland. Honourable members, including I am sure even those in the National Party of Australia, will recognise that after many months of reluctance the Queensland Government was dragged almost screaming to the barriers as far as the provision of assistance to the sugar industry was concerned. My colleague the honourable member for Rankin made another remark about the strange silence that befell the Queensland Premier after this Budget was announced. No doubt he was expecting that the Treasurer (Mr Keating) would deal very harshly with Queensland in the Budget and that he would ensure that the Queensland National Party Government would be given that long-awaited base on which to mount its State election campaign, directed mainly at the criticism of this Government and this Budget. Sadly, the opportunity was not to be given to the Queensland Premier. That is perhaps the reason for his grave concern about this Budget and his silence following it. One of the other reasons that one well may suggest for the Queensland Premier's strange silence in relation to the Budget is the fact that he has his hands fairly full at the moment. That is not because he is dealing with this Government; it is not because he is dealing with this Treasurer in his joint responsibility as Treasurer and Premier of Queensland; it is because he is forced by the media attention that has been given to it to face up to the widespread corruption problem with which he has had to cope for a long time and which he has kept somewhat under wraps. I refer to the corruption problem that exists in the ranks of his own State ministry. (Quorum formed) As was suggested by one of my colleagues, the raw nerve of members of the Opposition was touched and it was necessary for them to call for a quorum. Unfortunately, I will not have the time to detail the corruption that exists in the Queensland Government that I had just very briefly mentioned. I can promise honourable members that I will allow that matter to wait for another occasion. I give them the assurance that I think there will be every chance that I will have that opportunity before the end of next week. The Queensland Premier, in his joint responsibilities as Premier and Treasurer, has an appalling record-- The DEPUTY CHAIRMAN(Mr Mountford) —Order! The honourable member's time has expired. I call the honourable member for Higgins. Government members-Oh, no! Mr SHIPTON(Higgins)(2.43) —I am delighted at the reception that I have received from Government members opposite. I point out to them that the estimates in Appropriation Bill (No. 1) 1986-87 that we are discussing-the estimates for the Department of the Treasury and the Department of Finance-should be, but are not, reflecting policies that are setting a proper climate for investment in Australia today. It is only through investment and profits from investment that we get growth and jobs. The appropriations should be creating a climate of confidence for investment. They should be reflecting policies of low inflation and they should bring about low interest rates and low taxation. But, of course, they are doing the exact opposite-they are lacking in confidence. Instead of a climate for business investment we have a climate of uncertainty. At a time of change in world trading and financial patterns it was never more important that we have in place in Australia today economic, financial and monetary policies that create the climate of confidence for investment to which I have referred. Why are Australian entrepreneurs and investors investing overseas? This is a vote of no confidence by those people in the investment climate created by the estimates that we are discussing under Appropriation Bill (No. 1) at the moment. Why do the Brierleys, the Bonds, the Elliotts and the Holmes a Courts invest overseas? It is because there is no incentive for them to invest in Australia, as a result of the policies of this Government. It is more profitable to invest overseas. The more the Australian financial and business scene is screwed the less investment there will be. Honourable members opposite do not understand that. I welcome Australian companies investing overseas. I know Sir Peter Abeles's companies are doing it and Mr Rupert Murdoch's companies are doing it. I welcome this because ultimately the rewards of those investments will come home to Australia if we have policies in place which reward risk taking. It is all very well for those opposite and the trade union movement, which is their parent-they are prisoners-to call for investment. Trade union leaders today are calling for investment. They seem to think that one gets investment by government order or government decree. What those on the other side of this House do not understand is that it is only by creating a climate of confidence for investment and ensuring a profit and a reasonable return on that investment after that profit that we will get jobs and growth. Then the Brierleys and the Bonds will invest in Australia and overseas investors will bring money to Australia. A senior banker said to me in Hong Kong last week that Australian firms are flocking to Hong Kong to invest because of the unfavourable investment climate in Australia. Why is that so? It is because we have increases in company tax in Australia to record high levels when the rest of the free world-for example, the United States of America-is going the other way. This Government brings in a capital gains tax that taxes wealth and the creation of capital rather than the other way around, rather than encouraging its creation. Then we have the fringe benefits tax. All of these measures are a discouragement and a disincentive to investment in Australia today. We need a climate for investment. We need an investment-first strategy. Honourable members opposite ought to realise that if we have an investment first strategy there will be growth and jobs and we will have a prosperous and dynamic economy. But they do not understand that. While the country is in economic crisis they bring in a Budget-the Appropriation Bills reflect this-that will make the matter worse, and Australia will go further and further down the economic drain. We need an investment-first strategy which realises that greatly increased productive and profitable investment is essential for growth in jobs and to reduce unemployment in this country. To do this we need to increase investment, because by doing that we create jobs and raise employment levels. I would like to educate honourable members opposite and refer them to a booklet that ought to be compulsory reading for them. It is an Organisation for Economic Co-operation and Development publication called `Profits for employment'. I would like to refer to some of the factors in it. The DEPUTY CHAIRMAN(Mr Mountford) —Order! I remind the honourable member that we are dealing with the estimates of two departments and the Advance to the Minister for Finance. I ask him to return to those estimates. Mr SHIPTON —I am glad that you have done so, Mr Deputy Chairman, because we are discussing the estimates for the Department of the Treasury, the Department of Finance and the Advance to the Minister for Finance under Appropriation Bill (No. 1), which includes appropriations for all departments. I submit that this debate, as opposed to other debates on Appropriation Bill (No. 1), can be the widest possible, equivalent to the major Budget debate. I submit that that is, in fact, the position and that the situation is different from other estimates debates. Mr Keogh —Mr Deputy Chairman, I raise a point of order. I sat here and very carefully listened to the honourable member for Higgins. He interrupted himself in a way that the former member, Clyde Cameron, often did. In interrupting himself to take a point of order, the honourable member very clearly reflected on the instructions that were given by you, Mr Deputy Chairman, as the Deputy Chairman of Committees. In that respect, I suggest that he be brought to order for making those remarks and be asked to withdraw the remarks that reflected on the Deputy Chairman of Committees. The DEPUTY CHAIRMAN —The Chair is quite aware of the comments made by the honourable member for Higgins. I do not think a withdrawal is in order, but I again ask the honourable member for Higgins to come back to debating the estimates for the two departments and the Advance to the Minister for Finance. This is not a Budget debate. Mr SHIPTON —Thank you, Mr Deputy Chairman. I am sorry that the honourable member opposite had to take a point of order and that he did not want to learn something from what I had to say to him. I point out that I listened as he conducted his speech on the Queensland election campaign and did not take any point of order on him, and his comments were totally irrelevant. I have studied Appropriation Bill (No. 1). I know what the points of order are. I have got the estimates in front of me. They ought to reflect policies that are an investment-first strategy for Australia. Surely I am permitted to speak about taxation. What we need is less personal taxation and business taxation. What do we do? In the measures in the Appropriation Bill we have ever higher taxation. I will quote from his little book entitled `Profits for Employment' because it does relate to the debate and to the Appropriation Bill. Honourable members opposite might learn something from this. It states: Tax reduction decreases immediately and significantly the cost of capital, stimulating investment. In other words, tax reductions decrease costs. But these Appropriation Bills involve tax increases. The booklet continues: Furthermore, demand is increased as investment rises. Increased demand will in turn stimulate more investment. In this way, a tax reduction starts a self-sustaining growth process whose final effect is several times the original impulse. That is what the Estimates, the Appropriation Bills and the Government's tax measures ought to reflect in relation to expenditure, but they do not. They do the exact opposite. The other matter that I draw to the attention of honourable members opposite in relation to profits, and hence taxes, is interest rates. Interest rates, which are a direct result of the policies and expenditures espoused in this legislation, affect the cost of capital and therefore of investment. Lower interest rates stimulate spending. As a result of these measures before the Committee, Australia has very high interest rates. If one can buy a bank bill for 17 or 20 per cent, who will undertake productive capital investment in Australia? Nobody. That is why Australian investors are flocking overseas at present. That is why we have a climate of uncertainty and a climate of instability, and that is why we have a dollar that is worth US64c today and will be worth US60c tomorrow. There needs to be a climate of certainty. Who will invest when the dollar's value is unstable? The unstable value of the dollar is a result of the failure of Government policies and is a vote of the international investment community on the ability of the Government to manage the economy. The DEPUTY CHAIRMAN(Mr Mountford) —Order! The honourable member's time has expired. Mr LEO McLEAY(Grayndler)(2.52) —I rise to speak on the Treasury appropriations, particularly as they relate to the Australian Taxation Office. The focus of my remarks, however, will be allocations of Government funds which do not appear in the Budget Papers but which nevertheless represent a significant call on the public purse on the expenditure of taxpayers' money. I refer, of course, to taxation expenditures. Governments provide assistance, encouragement or relief to industry and individuals through various special provisions in the tax system. These indirect expenditures generally take the form of special exemptions, deductions, rebates, credits, exclusions, preferential rates or deferrals. They could be called business welfare measures. In offering these forms of tax relief to industry or individuals, governments forgo tax revenue and are thus making an indirect expenditure through the tax system. I wish to stress that these concessions have the effect of reducing or delaying collection of taxation revenue and are thus as much a call on the tax system as are the direct outlays that appear in the Budget Papers. There are, however, two striking differences between the direct outlays that appear in the Budget Papers and taxation expenditures. Firstly, taxation expenditures are rarely calculated and, secondly, direct expenditure is, by and large, directed to those who have an established and identifiable need for the things governments provide such as children needing education, sick people needing hospitals, pensioners needing financial support, migrants needing to learn English and the like. Taxation expenditures have, in recent years, become more oriented towards assistance to industries and producers of goods. They include investment allowances, depreciation allowances and concessions on superannuation or petroleum exploration. Of course, in some wages I have oversimplified the divisions between the two types of government expenditure and there are examples of both types of assistance to be found in both types of government expenditure. Nevertheless, the bulk of tax expenditures are those which are designed to aid industry and they do not appear in the Budget Papers. The bulk of payments in the Budget Papers are for education or social welfare and these are oriented towards individuals rather than business. Non-reporting of taxation expenditures is not something that I have just become aware of. Indeed, in 1982 the House of Representatives Standing Committee on Expenditure, of which I was then Deputy Chairman, produced a report entitled `Taxation Expenditures', which contained information on this matter. The results of the Committee's report indicated that in 1981-82 the indicative cost of taxation expenditures was over $6 billion or more than 15 per cent of direct Budget outlays in 1981-82. If the same proportion holds for 1986-87, that is, 15 per cent of direct Budget outlays-I have no indication that that will not be the case-the indicative cost of taxation expenditure in this Budget would be over $11 billion. It is interesting to note that this is more than the total paid by the Department of Social Security for all age, sick, widows' and supporting parents' benefits; it is twice the expenditure of the Department of Health; it is more than twice the outlays of the Education portfolio; and it is 12 times the outlays of the Primary Industry portfolio. Changes in taxation deductions allowed since 1981-82 would also ensure that less individual deductions would appear among tax concessions. The major allowances are now those of business. I should add that the Committee's calculations were not significantly affected by those items now the subject of so much anxiety in the Opposition as fringe benefits taxation is implemented. These items, compared to other benefits received by business, accounted for approximately 5 per cent of the indicative cost of tax expenditures for 1986-87. The Expenditure Committee recommended in its 1982 report that comprehensive information should be provided on taxation expenditures by the Government within three years of the tabling of the report. Well, unfortunately it is now four years and I wonder whether we are any closer to finding out the level of assistance provided by government through taxation expenditures and, just as importantly, who gets this assistance-this business welfare. The Expenditure Committee recommended that information on taxation expenditures be provided as part of the Budget process, as a separate statement of the Budget Papers, and that the Government incorporate an explanation as to why the taxation system was preferred to direct outlays as a method of providing assistance. The Committee was advised that hopefully this information would be available with the 1986-87 Budget. Unfortunately the information has not been provided. I am advised by the Tax Office that no consolidated list of business concession is available and that the list of organisations which have tax exemptions covers over 1,000 pages. Taking the Australian Elizabethan Theatre Trust as an example of a body on this list of tax exempt bodies some interesting issues arise. The annual report of the Elizabethan Theatre Trust indicates that through the tax-exempt status of the Trust such diverse organisations as the New Theatre and Quadrant magazine have received tax-exempt donations via the Australian Elizabethan Theatre Trust, from the Tax Office. These allocations are open-ended. For every dollar contributed the Government gives a dollar deduction. For instance, the Australian Elizabethan Theatre Trust received $2.9m in donations in 1985. The corporations who made those donations could claim a 49c in the dollar deduction from their taxable profit, and individuals who made donations could claim a deduction of up to 60c in the dollar. Rather than the publicity saying that the Australian Opera, for instance, is sponsored by the Benson and Hedges Company it should say `proudly brought to you by Benson and Hedges and the Australian taxpayer'. As another example, the publicity should say that Quadrant magazine is sponsored by the New Right and the Australian taxpayer. It is interesting to note that this right wing magazine is laundering tax deductible funds through the Australian Elizabethan Theatre Trust. It is not just the Right that is up to this. The Australian Conservation Foundation is also laundering funds to political organisations by way of its tax exempt capacity. They are just two examples. The expenditures are also inequitable in the way the deductibility is assessed. Taking the Australian Elizabethan Theatre Trust and the Australian Conservation Foundation as examples, if a pensioner, a tradesman, a company or a public servant on $36,000 per annum gave a $100 donation to either of these organisations, it is interesting to note how much they personally would have contributed after making their tax claim. Of his $100 the public servant would claim $60 back, thus contributing $40 of his own money; the company would claim $49 as a tax deduction, thus contributing $51 of company funds; the tradesman would claim $46 as a tax deduction, thus contributing $54 of his own money; but the pensioner would contribute $100 of his own money as he has no deductions. That is not very equitable. I therefore argue that the Australian taxpayer is being unjustly treated. He or she does not know how a substantial proportion of the funds available to the Government is spent because those funds become taxation expenditures. (Quorum formed) Mr HODGES(Petrie)(3.02) —The matter I raise concerns a desperate Government whose desperation is reflected in the stand-over, outrageous and desperate actions of the Australian Taxation Office. It is obvious that this desperate Prime Minister (Mr Hawke) and his equally desperate and rattled Treasurer (Mr Keating), having mismanaged the economy for more than three years, have issued directions to the Treasury and to the Taxation Office to apply pressure tactics to taxpayers and tax agents with the express purpose of reaping in revenue as quickly as possible. For more than 18 months prior to the `banana republic' and `the party's over' revelations, the Prime Minister, the Treasurer and other senior Ministers indulged in misleading the people of Australia by telling them that the economy was great and strong. Their indulgence in reassuring rhetoric was continuing while our balance of payments was worsening and our domestic deficit was blowing out. Finally, the bubble burst and now we are facing a crisis equivalent to war time, to use the Prime Minister's words, or, as Mr Keating so fruitfully put it, we are heading towards being a banana republic. From the personal complaints that I have received from constituents about the actions and attitudes of the Australian Taxation Office, one can only conclude that the message has been delivered loudly and clearly. That message is: `Get out there and get in as much revenue as you can and do it as quickly as you can'. The get-tough tactics range from caution notes and late payment penalties to the hard line on the issuance of summonses for the late lodgment of income tax returns. I have even had a recent case in which the Taxation Office, having accepted a procedure and circumstances as being exempt from sales tax, reversed its position and demanded back tax for three years, saying that the business involved was avoiding tax. The businessman who received this letter on 1 October was naturally very distressed. He immediately discussed the matter with me over the telephone and subsequently provided me with copies of the correspondence. Before I received his written response to the Taxation Office's demand, I had a further call from him to say that the Taxation Office in Brisbane had phoned, advising him to ignore its letter of demand. That was on Monday morning, 6 October. This was a letter from the Taxation Office dated 30 September demanding that a further return be lodged within 21 days as sales tax had been avoided over the previous three years. Incidentally, the figure involved was about a mere $600,000 and carried a penalty of a further $600,000-a cool $1.2 million all up. However, the letter did state that the penalty could be waived in the light of a satisfactory explanation from the taxpayer. In effect, the bill ranged from a minimum of $600,000 to a maximum of $1.2m. I am advised that the taxpayer, whom I designate Mr X, received a visit from an officer of the Taxation Office on 8 October to confirm that he should ignore the contents of the letter. I seek leave to table the letter from the Australian Taxation Office. The DEPUTY CHAIRMAN —Is leave granted? Mr Young —I will have a look at it first. Mr HODGES —I will quote one or two para- graphs from the letter. It states: Dear Sir SALES TAX Reference is made to the recent examination of your sales tax records by an officer of this department. You are hereby required to review your transactions and furnish further and fuller returns for the months of September 1983 to August 1986 inclusive bringing to account all goods manufactured by you and sold by you in taxable circumstances. You are required to pay tax on the correct sale value of all such goods. * * * * The letter goes on to state: It is pointed out that as a result of your failure to account for and pay tax on the sale value of all goods at the proper time, additional tax is imposable . . . The DEPUTY CHAIRMAN —The Minister has given approval for the tabling of the letter. Mr HODGES —I thank the Committee. Three working days after receipt of the letter by the taxpayer, the taxpayer was the subject of a phone call from the Taxation Office to say: `Ignore its contents'. One can imagine the emotional stress suffered by the taxpayer over the five days from receipt of the letter to being told to ignore its contents. Let us remember that this was claimed avoidance amounting to about $600,000 with a maximum penalty of a further $600,000. Such worry and stress could easily have induced a heart attack or a mental breakdown. Mr X advised me that in the 14 years in his business he has never attempted to avoid sales tax and in fact in the three-year period under consideration he had paid about $2m in sales tax. Mr X says that he has had a good and close relationship with the Taxation Office and has always complied with its requests. I will quote a few words from Mr X. He said: Back in the days when you could reason with the tax department we were told by an officer that we had the highest possible honesty rating. It seems that those days have gone and that the Taxation Office has lost its reasonableness, its compassion and its helpful approach. Those once present qualities have given way to tough, jackboot, gestapo-like methods. The irony of this case is that Mr X, who occasionally does work for the Commonwealth, has to wait up to 90 days before he receives his payment. That is just another case of the Government saying: `Don't do as I do, but do as I say'. My next examples of the unreasonableness of the Taxation Office are coupled with what I believe is its stupidity and wastefulness of government revenue. Simply, the Taxation Office is squandering the commodity it so desperately wants; that is, money. Taxpayers A, B and C are all in breach of the tax Act in that they have failed, through their tax agent, to lodge their tax returns on time. Their problems were caused by their accountant tax agent in that information was in his hands but he, through office and staff problems, was unable to lodge them on time. I recognise that the taxpayer is ultimately responsible for lodgment and that excuses for non-lodgment on time are generally not acceptable. Summonses were served on all three taxpayers. I will deal with taxpayers A and B for their cases are very similar and were set down for summons hearing on the same day. On hearing of the cases, I first telegrammed the Deputy Commissioner of Taxation for Queensland, requesting that the prosecutions be withdrawn. The Deputy Commissioner quite fairly adjourned the hearings for 14 days to allow my representations to be considered. A few days later I wrote to the Deputy Commissioner out- lining in detail that the taxpayers' problems were caused by the agent and that the returns had been submitted subsequent to the issue of the summonses. I requested that the summonses be withdrawn and that the taxpayers be penalised for their late lodgment under other sections of the Taxation Administration Act. I pointed out that they were honest people and were in no way involved in any form of devious tax evasion. Additionally, I should point out that I spoke personally on the telephone with the Deputy Commissioner, Mr Scanlan, regarding these cases. I might add that I know him personally and he is always reasonable and helpful. It is interesting to note that at the time of the late lodgment of both of these returns taxpayer A was due for a refund of nearly $1,000 and taxpayer B had already paid the estimated tax of about $6,500. I was subsequently notified by the Deputy Commissioner that he could not agree to the withdrawal of the summonses. The cases proceeded to the Brisbane Magistrates Court and both A and B were fined $500 and costs of court. In raising this criticism of the Australian Taxation Office I recognise the difficult task it has and the need on occasions for firmness. Both taxpayers A and B had good track records of on-time lodgment of returns and payment of tax. In my view, where taxpayers have an unblemished record the issuance of summonses should be avoided unless the taxpayer stubbornly refuses to co-operate. Additionally, the Taxation Office has the capacity to apply a penalty to the taxpayer without proceeding to court action. Even if a summons has been issued it can be withdrawn and a penalty applied. Two aspects of these cases disturb me. First, the taxpayers had convictions which should, and could, have been avoided. The second is the unnecessary cost of proceeding to summons. There is no way that the Office could be other than out of pocket with these cases. In other words, it is wasting taxpayers' money in the pursuit of prosecutions when it could have, through a penalty, shown a profit. I am advised that in dealing with these cases the magistrate acted as though he were programmed. Taxpayer C, whose circumstances were slightly different, was convicted and fined a few dollars plus court costs. In his case, the Taxation Office would have been well out of pocket as it would have cost hundreds of dollars to prosecute only to receive a few dollars as a fine. This taxpayer's summons was dated 23 April, although it was not received, he says, until 29 April, five days after he had submitted his return together with his estimated tax payment of $3,700. The day he was convicted and fined in the Brisbane Magistrates Court-22 May 1986-was also the date of issue of his notice of assessment, which said that he was due for a refund of $35. Again, in my view, this taxpayer should not have been put through the expensive summons process but penalised under the Taxation Administration Act. To sum up, my main criticism of the Taxation Office is that it is cold, hard, callous and uncompassionate. Even worse than that, it is wasting the precious commodity that it has a duty to collect-that is, money. No doubt there are thousands of unnecessary prosecutions costing the nation millions of dollars in staff and legal costs. Most of these dollars could be saved and more gained by applying a penalty under the Taxation Administration Act. The DEPUTY CHAIRMAN(Mr Mountford) —Order! The honourable member's time has expired. Mr CHARLES(Isaacs)(3.12) —The Estimates before us show quite clearly what a tremendous and excellent Budget this Government has brought down, as I have said in previous debate. The deficit will come down to $3 1/2 billion, which reflects the economic efficiency of this Government. This is particularly the case, considering that in 1983, when we came into government, the projected deficit was $9.6 billion. We have seen since that time a drastic turnaround of the economy from the depression outlook under the Leader of the Opposition (Mr Howard), who was then the Treasurer. He had been Treasurer for five years. We have seen this Government turn the domestic economy around quite dramatically under the guidance of the Prime Minister (Mr Hawke) and the Treasurer (Mr Keating), who is in the chamber at present. As I have said, we have seen the Budget deficit come down to $3.5 billion. We have seen the floating of the dollar, economic growth such as we have never seen in this country before, unemployment coming down and a whole host of other indicators that show that the economy is on the rails. As a result of this Budget and the Estimates that are before us, we will see lower interest rates, a prospect which is reflected in the market at present. Lower interest rates will flow through to the housing sector and other sectors in the coming months as we see lower interest rates generally over the next 12 months. We will also see a downward drift in inflation and a further overall improvement in the domestic economy. Again, this shows the guidance that we have seen from the Prime Minister and the Treasurer, which is in contrast to the three decades during which honourable members opposite occupied the treasury bench. They practically destroyed the economy of this country over three decades. They should not point to what has happened now when they occupied the treasury bench for 31 out of 34 years prior to 1983. The economy has been turned around, with the deficit coming down of $3 1/2 billion. Major decisions, such as the floating of the dollar, have seen the economy pick up and will see lower interest rates and a downward trend in inflation. We will see the economy pick up right through 1987. I would like to say a number of other things but I think perhaps I should seek leave to continue my remarks at a later time. The DEPUTY CHAIRMAN —Order! It being 3.15 p.m., in accordance with the resolution agreed to on 9 October 1986, I shall report progress. Progress reported. Mr HOWARD —I refer the Prime Minister to Australia's historically high real interest rates and to the falling after tax return on business investment. Against the background of those circumstances, will the Prime Minister assure the House that in no circumstances will his Government, first, impose an additional tax of one per cent on imports; secondly, restrict the level of overseas investment undertaken by superannuation funds to a maximum of 15 per cent; or, thirdly, impose a one per cent corporate surcharge on the gross operating surplus of all companies with profits of over $50,000? Mr HAWKE —Honourable members will realise that the specific issues to which the Leader of the Opposition has referred in his question are the suggestions that have been put forward by the Australian Council of Trade Unions in its preliminary observations about a possible basis for a new wage fixing approach in 1987. I simply want to say this about the Government's attitude to wage fixing: We stand proudly on our record since we came to government, a record which demonstrates results of which everyone in this country can be proud. Most obviously, with the restraint that has been shown in respect of wages, we have had actual falls in real wages. That contrasts with the 9 per cent increase in real wages which characterised the last year of the conservative Government under the economic stewardship of the present Leader of the Opposition. There was a 9 per cent rise in real wages in the previous Government's last year as opposed to this Government's achievement of a 4 to 5 per cent reduction in real wages in three years which, of course, has been associated with a tremendous increase in employment of 650,000 new jobs. The record of the Leader of the Opposition, in his last year as Treasurer, was a rise in unemployment of over a quarter of a million. Those are the facts about this Government's approach in the area of wage fixation. An essential part of achieving that economic success in wages has been the preparedness of this Government to talk with the trade union movement and with business to achieve a sensible and rational outcome. It is quite clear that the trade union movement has now accepted that it is inappropriate in current circumstances to talk about a policy of full wage indexation. As part of the ACTU's approach, which sees the necessity of increased investment by Australian industry, it has put up a number of proposals, including those that have been mentioned by the Leader of the Opposition. What this Government will do-it will start later on this afternoon, as a matter of fact-is this: I and a number of my Ministers will meet with the ACTU to discuss these issues, and tomorrow we will be following that with discussions with representatives of the business community. These will not be final discussions. I have no doubt that in the weeks ahead we will have further discussions with the ACTU and with representatives of the business community. I will not in advance say precisely what the position of the Government will be, because to do so would not do justice to either our friends in the business community or our friends in the trade union movement. They have every right to put their proposals before us. I have no doubt, from the discussions that I have already had with representatives of the business community, that they will put a number of proposals and probably they will have some sort of ambit claim, as I have no doubt will the ACTU. In the outcome the result, this country can be sure, will be a wages policy which will be relevant to our economic needs. Once again, it will stand in stark and successful contrast to the absolute chaos that characterised the stewardship of the Leader of the Opposition. Mr FREE —Will the Prime Minister give an outline of the briefing provided to the Government by the President's representative, Kenneth Adelman, Director of the Arms Control and Disarmament Agency, on the recent meeting in Reykjavik between President Reagan and Mr Gorbachev? Mr HAWKE —First, let me put my answer in the context that indeed Mr Adelman put the matter at the outset of the discussions we have just held, in which he spoke with, in addition to myself, my colleagues the Minister for Foreign Affairs, Senator Gareth Evans, and the Minister for Defence. In opening his comments Mr Adelman said that the briefing he was giving constituted another part of a successful and ongoing dialogue on arms control and disarmament questions between this Government and the United States of America. He made the point that the President had specifically asked him to come immediately to Australia. It is some measure of the importance attached by the United States Administration to our relations that Mr Adelman, a key figure in the discussions, flew back from Reykjavik to the United States in the early hours of the morning, appeared on a television program, and a few hours later flew directly to have these discussions with us. Mr Adelman confirmed, as I said yesterday, and I am very pleased to be able to say it again to the House and to the people of Australia, that very significant progress was indeed made in the discussions between the two leaders on a number of important issues; albeit, unfortunately, that those discussions are still at the level of general frameworks and understandings. As Mr Adelman explained, these understandings on the arms control front covered three different areas. They covered testing, START-that is, the strategic arms reduction talks area-and INF, or intermediate nuclear forces. On testing, agreement was reached on the need for work plans covering verification, reduction in the numbers and yields of tests, and agreement that the ultimate objective was a comprehensive test ban treaty. In outlining those features, Mr Adelman referred to Australia's own strong and very well known international position on the need for a comprehensive test ban treaty. The briefing on strategic weapons confirmed the readiness on both sides to achieve quite severe cuts and foreshadowed new elements of flexibility by the Soviet Union in previous areas of difficulty. On INF, clearly there was a real element of negotiation over the two-day period. This was of considerable significance to Australia because it produced a new mutual position of reductions to 100 Soviet warheads in Asia and a corresponding number of United States warheads on United States territory. I note in passing that much detail on this negotiation has also been given by the Soviet delegation to the United Nations General Assembly. Unfortunately, Mr Adelman's briefing confirmed to us that inability to find agreement in the area of the strategic defence initiative was the obstacle to any agreements being registered in those areas that I have outlined as well as in important areas of human rights and regional questions. It is perhaps fortuitous that the rigidity of the differences over SDI was not confirmed until rather late in the proceedings. That therefore allowed the prospects for broad agreements in those other areas to be established. It is a matter of concern to this Government that the difference between the two super-powers on the SDI at this stage remains unbridgeable. The Ministers and I explored in the course of the briefing a number of ways in which the difficulties might be accommodated, while permitting progress towards the complete elimination of offensive weapons over the 10-year period, as proposed by President Reagan, to continue. Obviously the Government's reservations on SDI have in no way been diminished. The United States is aware of our policy on this matter and it will clearly become the focus of considerable international attention in the period immediately ahead. I took the opportunity, as I hope all honourable members would expect me to do, to press strongly on the United States Administration the fact that we want the arms control and disarmament process to continue. I made plain our view that since so much had been achieved to this point it would be a tragedy to see it sacrificed. I expressed the hope, I believe on behalf of all members of the House, that those discussions would proceed at full speed. I also took the opportunity to commend firmly to the United States Administration the protocols of the Treaty of Rarotonga and express our hope that the Administration will see fit to sign them. Mr CARLTON —I refer the Treasurer to the common situation where a person buys any property, including commercial goods or a home, and the value of that property increases between the time the contract is entered into and the time the goods are delivered or the contract is completed-which could be some years when legal disputes arise. Is the Treasurer aware that even for exempt principal places of residence-a concept the Treasurer is well aware of-the increase in the value of the property between exchange of contract and settlement is potentially subject to capital gains tax in the hands of the purchaser on the deemed disposal of the contract on its completion by virtue of its then being satisfied or discharged? Is this an intended or unintended consequence of the capital gains tax? Mr KEATING —Let me get this right. The Opposition is opposed to the capital gains tax and thinks that there should not be one. It says it does not believe in a capital gains tax. It thinks that the accretions of wealth that are taking place in the stock exchanges-income taken as capital-ought to go tax free into people's pockets. The Opposition will throw out the capital gains tax lock, stock and barrel, but Opposition members will try to address questions to the Government to improve its administration, is that right? If it is right, we will answer the questions when the Opposition decides to support the tax. In the meantime let me make it quite clear that the intended consequence of the coalition's policy is for a growing disparity in the level of wealth in the community so that the people in a position to gear up their assets who wish to take their income as capital will pay no tax if they can suggest that they are not trading under section 26, or section 25a now. Anyone on a pay as you earn income-someone on $17,000 a year with three kids-ought to pay John Howard's punitive tax rates of 40 and 46 per cent, but if one takes one's income as capital, that is okay with a coalition government. Opposition members are saying `We are not going to have a capital gains tax, we do not believe in any fairness in the tax system, but we will try to drag into disrepute the Government's capital gains tax or we will try to improve it'. I say to Opposition members that when they decide that there is a place for decent tax law in this country they can ask us all the questions they like, but while they are in the position of buttressing wealth, of seeing massive accretions of wealth and watching ordinary working class people paying their full rates of marginal tax, Opposition members will get no support from us. Mr SAUNDERSON —Can the Treasurer inform the House how the Government's tax reform initiatives will advantage small business? Mr KEATING —In a very advantageous way. Let me take the time to reflect upon and give some details of the beneficial impact on small business of the Government's proposed tax changes, particularly as they relate to imputation-a corporate tax revolution in this country. Let us consider the position that existed under the previous Administration. Let us assume that a company makes a pre-tax profit of $100,000. Under the tax regime of the Leader of the Opposition this company would have paid company tax of $46,000 and the remaining $54,000 would have been taxed at the personal income tax rates of up to 60c in the dollar. Thus the company would have paid $46,000 in company tax and the balance would have then been subject to tax of up to 60c in the dollar. As a result the total tax bill of that business would have been $64,000 out of the $100,000 profit. Even more horrendous was the fact that, for each extra dollar this small business person earned, nearly 80c would have gone in tax to the Leader of the Opposition when he was Treasurer. That is, one extra dollar in profit would have been taxed at 46c in the hands of the company and 60c in the hands of the individual, so that 21.6c in the dollar would have gone to the small business person and 78.4c to the Government under the previous Administration. Let me put it another way: If a small business person worked for 10 hours a day, he would have worked eight of them for the Leader of the Opposition when he was Treasurer. I now contrast that situation with the massive change of full imputation which makes Australia the second country in the world next to West Germany to adopt such a system. Let us take the same example of a company making a pre-tax profit of $100,000. Under the new system the company pays tax of $49,000 and distributes a dividend of $51,000. The difference now is that the $49,000 tax paid by the company is set off against the total tax liability of the shareholder. As the new tax rates take effect from 1 July 1987, the shareholder will be assessed with tax of $41,800, but he or she will be able to offset against that tax bill the $49,000 paid by way of the principal company tax. This will mean that he or she will have no personal income tax to pay at all and the total tax bill will be no more than $49,000, compared with $64,000 under the policies of the Leader of the Opposition. The marginal tax rate will be 49c on each extra dollar, compared with 80c imposed by the so-called supporters of small business sitting opposite. In this particular example the taxpayer will have a tax credit remaining of $7,151 which he or she will be able to use to earn an extra $14,000 from other sources without paying any extra tax. The bottom line is that the marginal tax on small business under Labor will be 49 per cent while under the Liberals it was 80 per cent. When one is a small business person working in the Australia of the Leader of the Opposition one is working eight hours out of 10 for the Leader of the Opposition and the coalition. That tax burden diminishes massively under the imputation proposal of the Hawke Labor Government. Imputation is a corporate tax revolution which is just dawning in corporate Australia. Companies will see this pernicious burden of the double tax on dividends-not only the primary company tax but also the personal tax paid twice-is being removed so that, for the first time ever, small business in this country is having the yoke of taxation lifted from its back. The tax bill will be reduced dramatically. Opposition members may giggle and be embarrassed, as well they might because many people are waking up to the fact that their actions and their rhetoric do not match. The Opposition had 30 years running the tax system of this country and for 30 years it punished business with a double tax on dividends. In three years of this Government's administration we have removed the double tax on business, which will dramatically reduce the burden of income tax on small business from $64,000 out of $100,000 to around $41,000. That is the difference between genuine tax reform and the rhetoric of Opposition members, who have never cared for small business people and never will. Mr TUCKEY —I direct my question to the Treasurer and I have a copy of it here in case he needs to read it to understand what it means. I refer him to the exemption criteria of the capital gains tax. If a house is purchased by a taxpayer as his or her sole residential property, but due to the requirement of extensive renovation to make it habitable the purchaser either occupies it for a token period or not at all, and then disposes of the house on the completion of the renovation for a profit, will the Treasurer confirm that the house would be exempt from capital gains tax under section 160zzq of the Income Tax Act on the ground that it was `the principal residence' of the taxpayer? Is this an intended or unintended consequence of the capital gains tax? Mr KEATING —I wonder who wrote that question for the honourable member because even reading it is difficult for him. I repeat myself in case the honourable member did not hear me the first time. For 30 years the Opposition presided over a tax system which allowed many Australians to accrue wealth and not pay tax on it. The aggregation of the great fortunes of this country all have a capital gain underpinning them. This Government has introduced about the fairest capital gains tax in the world and it will not resile from cleaning up this fundamental imbalance in the tax system, where people who choose to take their income as capital need not pay tax on it. I refer to the current highs on the Australian stock exchanges. When this Government came to office the stock exchange indexes were around 600 points. They are now around 1200 points. That massive accretion of wealth, that massive accretion in the capital value of Australian stocks would, unless someone was a recognised trader, have gone straight into the pockets of the owners of those stocks without any capital taxation. But the pay as you earn taxpayer had no such advantage. While the former Treasurer let people escape the tax net by the criminal paper evasion schemes of the 1970s, those same people were loading the tax burden on to the ordinary taxpayers whose marginal tax rates were rising. This Government has put an end to that. We have introduced a capital gains tax which is based on the real gain-not the nominal gain-at full marginal rates of tax so that the choice between investment and placing of scarce capital in this economy can be a tax neutral choice and not one that buttresses only people with established assets. That is the basis of our tax. Opposition members are opposed to that concept. They say: `We want this ramp to exist and to continue'. By asking me some pathetic question about the status of some person in relation to this property and the capital gain they demonstrate that they wish to keep the tax system in some sort of sullied condition in the gutter. But they ask me to do them the favour of answering this question which they claim they have put to me because they are not sure that I have this point covered. When the Opposition comes to the point of tax decency we will answer all its questions. Mrs KELLY —My question is directed to the Minister for Health. In the light of claims that the Medicare benefits budget has been understated by $120m, can the Minister inform the House of the current levels of expenditure on Medicare benefits? Dr BLEWETT —I am most grateful for the question from the honourable member for Canberra. I am sure that the answer will be of interest to the honourable member for Barker who, having no health policy of his own, devotes his life to exaggerating the cost of Medicare. No sooner had this year's Budget been brought down than the honourable member for Barker suggested that the Budget books had been cooked in relation to Medicare; that in fact we had seriously underestimated utilisation; and that on his calculations we would be out by $120m. Well, the runs are now on the board. We have the figures for the first quarter of Medicare benefit payments and the Government is exactly on target. Indeed, we are $4m under budget. We budgeted $746.3m for July to September and the actual expenditure was $742.1m. Rather than having underestimated the utilisation rates, we have overestimated them and the utilisation rates to date are lower than those predicted in the Budget. Even more interesting is that in September, the first clear month after the Budget, more than half of all medical services were direct billed. So that makes nonsense of the Opposition's claims that as direct billing goes up there will be an increase in utilisation rates. What we are getting is an increase in bulk billing and a decline or at least a moderation of the utilisation rates. Moreover, despite this concerted campaign by the Opposition against direct billing, bulk billing is extraordinarily popular among both doctors and patients, particularly in working class areas, and does not lead to overservicing. Indeed, a recent survey of Sydney doctors showed that 94 per cent of doctors direct billed at least some patients; 60 per cent direct billed selectively, that is, card holders and pensioners; and 36 per cent of general practitioners direct billed all consumers. It was interesting that direct billing was most common in the less affluent areas of Sydney; that is, direct billing is being used where it is most needed. As the honourable member for Barker strives to put together some sort of health policy, one of the big questions he will have to answer is why he will deny the direct billing option to hundreds of thousands of working class families. Mr DONALD CAMERON —I refer the Treasurer to the situation where an amateur sportsperson receives a payment to give up his or her amateur status to become a professional. Will the Treasurer confirm that such a payment is fully subject to capital gains tax in the hands of the sportsman or sportswoman? Is that an intended or unintended consequence of the capital gains tax? To mark the Treasurer's new classification by the Euromoney magazine as runner-up to the world's worst Treasurer, will the Treasurer come to the steps of Parliament House after Question Time to receive this compensatory wooden spoon, a traditional award within the sporting world for those who have tried and failed, just as he has tried and failed? Mr KEATING —If the honourable gentleman is concerned about a capital payment in between the status of an amateur person becoming a professional, he might tell us what tax treatment he thought was appropriate on the $300,000 he was paid on his transition from amateur to amateur and the $300,000 that was sitting in between. We might hear from him about that. I am interested in his allusion to wooden spoons and Euromoney. I have just had passed to me the latest sovereign credit report of Moody's Investor Services Inc. on the Commonwealth of Australia, which has some very interesting comments in it. I will read a couple. It states: Given Prime Minister Bob Hawke's high approval rating among the electorate and the middle of the road policies he advocates, the Australian Labor Party will likely win the next general election to be held in late 1987-88. The Opposition Liberal and National parties are likely to be without an issue or a leader to galvanise the public and thus will not make much headway in discrediting or unseating the popular Prime Minister. Bob Hawke could be Prime Minister for another term. The report goes on to talk about certain farming and mining groups, then states: These groups support the Liberal and National (formerly Country) Party and profess to believe in free enterprise and a reduced role for government in the economy. In practice they have enthusiastically endorsed government regulations and protectionist measures. The report goes on to give the Government accolades on its domestic development and structural changes. So if we want to get where it matters, the rating agency responsible for the sovereign debt report on this country in the major capital markets of this world has a very low price on the Opposition, its leader and its policies. So do not worry about the wooden spoon; we will be using that on the Opposition in the next 18 months. Mr CLEELAND —My question is directed to the Minister for Housing and Construction. Will the Government restore full tax write-offs against all income for interest paid on negatively geared investment in the private rental market, as advocated by the Opposition? Mr WEST —No, there will be no return to the tax rorts of the past as tolerated by the previous Government. There will be no return to a situation where no capital gains tax applies on sale of property in the private rental market and where the interest bill on investment in the private rental market is allowed to be written off against all income. Let us examine the situation that would occur in a particular instance if the Opposition were in a position to restore the policies which it tolerated when in government. Let us look at how a full tax write-off against all income, in the absence of a capital gains tax, would apply against a particular situation. Under the position tolerated by the former Government, a borrower could borrow $1m to invest in, say, a block of flats, having an interest bill in the vicinity of $180,000 per year, with an income from that investment of approximately $80,000. That person would be in a position to write off some $100,000 against all other income, from whatever source, at 60c in the dollar probably-thanks very much. If the person were to sell the same property after several years for $1.5m-that is, made a gain of $500,000-under the situation tolerated by the former Government no tax whatsoever would be paid on that gain. There would be a $500,000 tax-free gain, made possible by borrowed finance fully subsidised by the ordinary wage and salary earner who pays tax. That is great for the slick financiers of this world, but it is not good for the ordinary, honest wage and salary earner who pays his or her tax and who would be paying higher taxes as a result of the rorts, ramps, write-offs and avoidance measures which were allowed by the former Government and current Leader of the Opposition. I ask the House to compare that very serious and irresponsible situation with what applies under this Government. That is, there can still be a tax write-off for investment in the private rental market against income from the property, or group of properties, owned by a particular investor. In addition, a depreciation allowance of 4 per cent on new buildings is available. Of course, in the event of a sale after a few years, a capital gains tax applies but it is a fair tax. It does not apply to the family home, it is entirely prospective and it applies only to the real gain, and then only when that real gain is realised. This is a policy that can be supported by investors in the private rental market. It is not a rort. It is a fair policy and it has the added advantage of stimulating investment in new construction rather than stimulating very high prices for existing houses. The way to expand the private rental market and to increase investment in that market is to act precisely as we are acting; that is, getting interest rates down and relying on measures such as the depreciation allowance and not the rorts, write-offs and tax ramps that were the norm under the former Government. Mr BEALE —I refer the Minister for Housing and Construction to his answer to the previous question. Does the Minister share the views of the New South Wales Minister for Housing, Frank Walker, who said today in the New South Wales Parliament that there was a crisis in Australia's private rental market and that the Hawke Government's decision to abolish negative gearing provisions had driven private investors out of the housing market? Does the Minister think that Mr Walker is advocating rorts, ramps and write-offs? Is it also a fact that the Minister has recently been advised by the Government's advisory body on the housing industry, the Indicative Planning Council, that the negative gearing changes and capital gains tax have resulted in the deferral and cancellation of previously planned housing developments, thereby creating a chronic shortage in rental accommodation and a dramatic increase in housing rents around Australia? Mr WEST —All I can say about the comments of my colleague from New South Wales is that I am pleased that we have some opposition, even if it comes only from my mates in New South Wales, because I have had no opposition this session from the Opposition spokesman for housing in this place. I have already explained the reasons why this Government will not return to the tax ramps and rorts of the past which were tolerated by the former Government. Opposition members-You won't return. Mr WEST —There is no doubt in my mind that honourable members opposite will not return to government whilst they advocate the tax rorts that they tolerated when they were in government. I have already explained-and I say this to my colleagues in New South Wales-that we have introduced a depreciation allowance of 4 per cent and that that is a preferable way of stimulating investment in the private rental market rather than allowing the unqualified application of negative gearing against all interest rate bills, as applied in the past. We will not return to a situation where people can invest in the private rental market and receive an income from that investment which is much less than the interest bill and then allow it to be written off against income from all other sources. Our performance in housing is on the record. We have given priority to housing measures and policies in the last Budget. I say to my friends in New South Wales that their public housing allocation has risen from $150m in 1982-83 under the former Government to $380m this financial year. Furthermore, we have protected one million households that are now holding pre-April savings bank loans at 13 1/2 per cent. We have protected them by giving the savings banks a subsidy of $145m. Furthermore, we have kept in operation the first home owners scheme, which entails a present pay-out and a future commitment of up to $1,000m. As far as the state of the industry is concerned we expect a return to an annualised rate of approximately 130,000 commencements by the June quarter of 1987. The future of the housing industry depends upon the future level of interest rates. I point out to the House that over the last few days bank bill rates have been coming down, the 180-day bill and the 90-day bill are now running at 16.4 per cent and the 90-day bill is at 16.8 per cent-the lowest since mid-August. Soon we will see the cash management trust rates come down and, after a lag, we will see less pressure on housing interest rates. I say to the banks that in this situation they should be very much on a watch and hold position regarding the new rate. Overall, the outlook for housing is moderately encouraging in both the home ownership area and the private rental market and most encouraging indeed, as a result of the finances that we have offered to the States, in the area of public housing. Mr RONALD EDWARDS —My question, which is directed to the Prime Minister, concerns taxation. Is the Prime Minister aware of suggestions that the existing Part IVa of the Income Tax Assessment Act be used instead of the Government's fringe benefits tax to combat tax avoidance? Can the Prime Minister inform the House of the effectiveness of the interplay of Part IVa with the old section 26 (e) as an anti-avoidance device? Mr HAWKE —It is the case that on 9 October on the Carleton-Walsh Report the Leader of the Opposition referred to Part IVa as an anti-avoidance device. He boasted in that context that he had introduced the toughest anti-avoidance legislation in memory. My colleague the Treasurer pointed out yesterday that the Leader of the Opposition was blown away in a quite remarkable fashion in a speech by the Commissioner of Taxation in which the Commissioner commented on the effectiveness of the anti-avoidance legislation under the old law which relied on the interplay of Part IVa with section 26 (e). I remind the House again of what the Commissioner of Taxation had to say on this issue yesterday. I quote him: . . . anyone who would say that all that is needed is a return to application of the old law is either ignoring history or has a poor memory, not to speak of a lack of appreciation of the technical inadequacies in that law. There we have the Commissioner of Taxation blowing the Leader of the Opposition out of the water. Speaking of history as he does, it is no wonder that the Leader of the Opposition does not want to look at his history and his record in this area. I have had occasion before to remind the House of the most damning indictment of the former Treasurer and the previous Government which was made by their own Royal Commissioner. Here we have the Commissioner of Taxation blowing the Leader of the Opposition out of the water, but the previous Government's own Royal Commissioner made the most damning indictment. Of course, I refer to chapter 2 of the December 1981 Interim Report No. 3 of the Costigan Royal Commission on the Activities of the Federated Ship Painters and Dockers Union. Madam Speaker, you will remember that in the opening sentence in chapter 2, entitled `Slutzkin rides again', the Royal Commissioner referred to the fact that the tax avoidance industry was the fastest growing industry in Australia and identified the period. His report came down in December 1981 and he said that the tax avoidance industry had been the fastest growing industry in the last five years-in other words, in the period from 1976 to 1981. Let us look at the rest of that paragraph of the Royal Commissioner on these people who are standing here in this House and pretending to be concerned with the interests of the ordinary, poor taxpayer in this country. What was the indictment of their own Royal Commissioner? It was in these terms: Unfortunately this industry carried with it a serious detriment to the interests of government and the Australian community. The detriment was twofold: in the first place it diverted from the Treasury tax which would prima facie be payable on income of taxpayers; in the second place it diverted the tax payable by those engaged in that industry. Mr Costigan went on to say: The amounts involved are very large indeed, amounting to many hundreds of millions of dollars per year or more. This was the concluding part of their Royal Commissioner's statement, their Royal Commissioner's indictment of that Government: The impact on the community has been very serious. It has introduced into the community a class of people almost invariably the highest earners, who pay little or no tax and make no contribution in that way as citizens to their fair share of community costs. He concluded: In addition it has made more difficult for government the task of providing for the community as a whole a more equitable and reduced taxation burden. The clear message of indictment by their Royal Commissioner was that they had deliberately protected the privileged and had ensured that hundreds of millions of dollars per year were not being paid. That had the twofold impact of imposing a greater burden on the ordinary taxpayer in this country and ensuring that there was less revenue available to government to do the sorts of things that this community could reasonably expect. What were the consequences? Let us go to the area of the Minister for Housing and Construction, who has just spoken. We inherited a position where in the last year housing starts were down 102,000 because they had not been giving the stimulus to housing. In the area of education, places in the tertiary system were declining. In the area of social security there was a declining real value of social benefits to the people of this country. Why had that happened? It had happened because of the perverted sense of priority of these people here, who purport to stand up and talk now with some justice about taxation principles. They deliberately decided that those people in this country with the greatest capacity to pay some reasonable share into the revenue of this country should be protected so that they could avoid their liability, and in the process the very people who should have been protected and looked after had a lesser and lesser level of services provided to them. That is why I repeat what I said previously: We will welcome between now and the next election tax being the issue. With each passing month it will become more and more apparent that on the record of those opposite, they were members of the worst, most treacherous Government in the history of this country. It is this Government that is bringing into existence a fair and equitable system which will do two things: It will mean that tax will be fairly distributed and that government will therefore have the capacity to provide the services to the people which they deserve but never got under the previous Government, which was a Government of tax avoidance and protectors of the tax cheats. Mr COWAN —I refer the Prime Minister to reports in yesterday's newspapers concerning a recommendation by the honourable member for McMillan, the chairman of the Prime Minister's country task force, that employers should be given an option under the fringe benefits tax legislation not to claim deductions for benefits provided to employees and therefore to reduce the amount of paper work involved with the fringe benefits tax. Will this recommendation form part of the review of the fringe benefits tax? Mr HAWKE —In the review that is taking place the Treasurer and I and his officials will be listening to representations from the business community and from experts in the tax, accountancy and legal fields. Opportunity will also be provided to members of the Caucus to put their points of view, which will be considered. We have given the opportunity to the purported representative of the farmers of this country, the National Farmers Federation, but it has so much concern with trying to protect the interests of the people whom it purports to represent that it has declined to participate in the review. Mr PRICE —Will the Treasurer inform the House to what extent the tax avoidance activities which were rampant in this country during the 1970s and the 1980s are prevalent today? Mr KEATING —This Government has been vigilant in the areas of tax evasion and avoidance in introducing legislation the moment any such contrived avoidance scheme has come into view. It has also, in the course of the last three years, introduced changes to the tax laws which would have accumulated costs to revenue of about $3 billion, and that is outside the area of tax reform. This is in marked contrast to the performance of our predecessors, and particularly the honourable member for Bennelong during his period as Treasurer. It is perhaps instructive that in the sixty-third report on taxation statistics, for 1983-84, which was presented to this Parliament and printed on 9 October 1984, the Commissioner of Taxation records the outstanding tax collections of individual trusts and companies under the schemes which were allowed to proliferate in the 1970s. It is very instructive. When the former Treasurer was first advised of these practices the outstanding debts relating to scheme taxpayers was $158m. When finally he was forced to legislate against the schemes the outstanding debts were $1.458 billion. They had increased ninefold. This is despite the fact that we heard this plaintive plea from the Leader of the Opposition yesterday making some phoney distinction between Part IVa and the Crimes (Taxation Offences) Act, as if in some way he had been less than tardy in dealing with Part IVa. We find from the massive telephone book of letters presented by the former Commissioner that the former Treasurer was first advised of the weakness of existing section 260 in February 1978, but the Bill to introduce Part IVa of the tax system was not introduced until May 1981-three years and three months later. The honourable member for Bennelong is nodding; well he might. As I indicated yesterday, in the areas of evasion and avoidance the unconscionable three-year delay saw this massive growth in the statistics of income tax debt outstanding over those three years. We are now being presented with the views of the Leader of the Opposition as to how he would deal with fringe benefits and the rutted-in variety of tax minimisation as distinct from the total overt evasion schemes, the criminal schemes, of the 1970s. He asks us to believe that in some way in shining up his tax credentials, his tax reform badge, Part IVa would be used by him, as the Prime Minister indicated, in conjunction with other parts of the tax law to try to deal with fringe benefits, which the Commissioner yesterday said is not possible without a fringe benefits-type tax. The fact is that the obfuscation which went on in this period was the sham defence of the former Treasurer. It is instructive, I think, to repeat that when the then Leader of the Opposition moved a censure motion against him on 25 August 1982 he said: If he- the Leader of the Opposition- recalls that experience he will know the nature of the administrative responsibilities of the Australian Taxation Office under the Income Tax Assessment Act. He will know the nature of the secrecy provisions of the Act. He went on: He will know the great and proper importance attached . . . to the preservation of confidentiality . . . So the principle charge of the Leader of the Opposition-that is, that I either knew or ought to have known-is not just contradicted by me or by the Attorney-General; it is also contradicted by Costigan himself. Of course, Costigan did not know about the telephone book of letters which had been presented to the Leader of the Opposition. The fact that he says that I either knew or should have known is not just contradicted by me; he contradicts it knowing the Parliament did not know of the years of memos and pleas by the Taxation Commissioner to do something about the criminal evasion schemes. But of course the Parliament was unaware of all that until much later. He continues: . . . the Treasurer of the Commonwealth shall be able to gain full access to taxation information . . . as things stand at present that facility is not available. The fact is that it was entirely available. It was being written. There were almost desperate, shrill pleas by the Taxation Commissioner for something to be done about it as the tax statistics kept piling up. That was the defence, the section 16 provision which went to names, not to the variety or the nature of the schemes. One did not need to know the names; one needed to know just the nature of the scheme and the fact that they existed. One also needed the political authority to legislate and to deal with them administratively. That was being denied the Taxation Office by Treasurer Howard in his period of office. Yet he would have us believe that this Government, which is making the only earnest attempt that has been made to deal not only with the evasion and avoidance schemes but also with the rutted-in variety of fringe benefits, should be attacked daily by an Opposition which, as a government, had such an appalling record on tax that it allowed the unconscionable growth in these outstanding debts from these overt paper criminal evasion schemes. It is worth reading the record of the former Treasurer. It is worth reading his defence to Costigan. He said he did not know of the information and months later we got the O'Reilly telephone book which says that he knew everything. The defence was a fraud. That is his record. We will never, ever accept from this man any criticism on tax policy. This is a party which, as a government, allowed such an enormous evasion of the scheme to take place. When this Government is in there trying to make the tax system fair and decent for ordinary Australians we will not accept with any basis of veracity, any basis of morality or any basis of virtue that any view members of the Opposition may have as a group about the Government's tax changes should in any way divert the Government from its course of making the Australian tax system decent and fair for all Australians. Madam SPEAKER —Pursuant to statute, I present the annual reports and financial statements of the Commonwealth Banking Corporation, the Commonwealth Bank of Australia, the Commonwealth Savings Bank of Australia and the Commonwealth Development Bank of Australia, together with the Auditor-General's report thereon, for the year ended 30 June 1986. Mr SCHOLES(Corio-Minister for Territories) —For the information of honourable members, I present the text of a statement on the future administration of the Australian Capital Territory. Mr N.A. Brown(Menzies) —Madam Speaker, with your indulgence, the Opposition did not ask to have this paper noted, but I simply place on the record that we do not accept that it is a proper way of dealing with statements to have them tabled. This is a statement by a Minister who, as I understand it, is a member of this House. There is no reason why he could not ask for leave to make a statement. We would give him that leave. It is not really in the best traditions of the Parliament for the Minister simply to table his written statement. Mr HOWARD(Bennelong-Leader of the Opposition) —Madam Speaker, I seek leave to make a personal explanation. Madam SPEAKER —Does the honourable member claim to have been misrepresented? Mr HOWARD —I do. Madam SPEAKER —Please proceed. Mr HOWARD —I claim to have been misrepresented-it is getting contagious-this time by the Prime Minister (Mr Hawke) as well as by the Treasurer (Mr Keating). When answering a question, I think from his own side-no, I am sorry, it was in answer to a question which I had asked-the Prime Minister-- Mr Chynoweth —Get your facts right. Mr HOWARD —I have got all day. Mr Brumby —We haven't. Mr HOWARD —The honourable member might have to sit here all day if he does not stop interrupting. Madam SPEAKER —Order! The Leader of the Opposition has the call from the Chair. Those on my right will cease interjecting. Mr HOWARD —During his answer the Prime Minister had this to say: . . . Madam Speaker, with the 9 per cent increase in real wages which characterised the last year of the conservative government . . . In other words, the Prime Minister was alleging falsely, and deliberately so, that real wages rose by 9 per cent in real terms during the last year of the Government. The official statistics available to me, and ones-- Madam SPEAKER —Order! This is not a personal explanation. Mr HOWARD —With great respect, Madam Speaker, the figure in the Treasury Round-up is 3.6 per cent and the Prime Minister has been misleading the House-- Madam SPEAKER —Order! The honourable member must show the House how he personally has been misrepresented. Mr HOWARD —You have got to be joking. Madam Speaker, the whole context, directly and indirectly, of the Prime Minister's response was that wages grew by a certain level-- Mr Peter Morris —Where is the personal misrepresentation? Mr HOWARD —With great respect, Madam Speaker, I find it astonishing that a Prime Minister can come in here and falsely allege that I-- Madam SPEAKER —Order! Will the honourable member get on with his personal explanation? Mr HOWARD —I have been misrepresented in that the Prime Minister dishonestly and falsely asserted-- Madam SPEAKER —Order! The honourable member cannot say those things. He will withdraw the comments that he made about the Prime Minister. The honourable member must withdraw the comments. If he wishes to criticise the Prime Minister, he must do so under a substantive motion. Mr HOWARD —Madam Speaker, I seek your guidance. The guidance I seek relates to the fact that the Prime Minister has made a totally inaccurate allegation-- Madam SPEAKER —Order! Will the honourable member first withdraw the comments he made about honesty and dishonesty? Mr HOWARD —With deference to you, Madam Speaker-- Madam SPEAKER —Not with deference, just withdraw. Mr HOWARD —I will be friendly; I will withdraw. Madam SPEAKER —Will the honourable member please finish his personal explanation? Mr HOWARD —The false allegation that was made by the Prime Minister, the incorrect allegation, was that real wages during the last year of the Fraser Government rose by 9 per cent. That was the figure the Prime Minister used. The truth is that they rose by 3.6 per cent. In other words, the Prime Minister has exaggerated to the tune of about 300 per cent. Madam SPEAKER —Order! The honourable member will resume his seat. I remind members of the House that personal explanations are made with the indulgence of the Chair. They are expected to show how they personally have been misrepresented. Mr HOWARD —Well-- Madam SPEAKER —No, the honourable member has finished. Honourable members are not expected to debate the issues. I have another personal explanation. Mr HOWARD —No, I am sorry, Madam Speaker, I have not finished. There was another misrepresentation by the Prime Minister. The Prime Minister, in answering a question from his own side dealing with the operation of Part IVa of the Income Tax Assessment Act, falsely claimed that I was-- Madam SPEAKER —`Inaccurately claimed' might be better. Mr HOWARD —I think `falsely' is more accurate, but I will settle for `inaccurately'. The Prime Minister inaccurately claimed that I had been making assertions about the operation of Part IVa and the interaction with that section of section 26 (e) of the Income Tax Assessment Act. In the course of falsely misrepresenting me, the Prime Minister falsely claimed-- Madam SPEAKER —Order! Will the Leader of the Opposition get to the point of his personal explanation? If he wishes to criticise the Prime Minister he should do so under a substantive motion. The Chair's indulgence is running out. Mr HOWARD —Madam Speaker, I will bow to that ruling. The Prime Minister falsely claimed that in his speech yesterday-- Madam SPEAKER —The Leader of the Opposition is doing it again. If he wishes to accuse the Prime Minister or criticise the Prime Minister he will do so under a substantive motion, as he will for any other member of the House. Mr HOWARD —Madam Speaker, the situation is that if the Prime Minister says something of me which is incorrect-- Madam SPEAKER —You correct it. Mr HOWARD —I correct it. The correction I make is that the Prime Minister falsely alleged-- Madam SPEAKER —No. The Leader of the Opposition will resume his seat. The Chair will no longer hear him. Mr SINCLAIR(New England-Manager of Opposition Business)(4.19) —I move: That so much of Standing Orders be suspended as would prevent the Leader of the Opposition making forthwith a statement to the House on those issues on which he has been misrepresented. Madam Speaker, the Leader of the Opposition (Mr Howard) has been seeking to make a personal explanation to the House about misrepresentations made by the Prime Minister (Mr Hawke) about the administration of the Leader of the Opposition, as Treasurer of this country. The only way that the Leader of the Opposition can explain where he has been misrepresented seemingly is by my moving for the suspension of so much of Standing Orders as would enable him to make a statement to the House on the matters on which he has been misrepresented. There is a procedure within our Standing Orders which apparently he is to be denied. If he is to be denied that procedure, we must go through the processes of this Parliament so that he may be allowed to make his explanation. Madam Speaker, it has been the practice of the House to permit personal explanations. The Leader of the Opposition sought to avail himself of that and I suggest to you that, instead of proceeding with this motion, it would be far easier if you were to permit the Leader of the Opposition to make his personal explanation in the normal course. I suggest that that is more appropriate than our proceeding with the suspension of Standing Orders when there is a procedure available which would allow a proper correction of the matters which are are at the moment standing on the record but which are incorrect. The fact that they directly involve the Leader of the Opposition and that they have not been allowed to be corrected has led to my moving for the suspension of Standing Orders. It is essential that any member of this place, whether he be the Leader of the Opposition or a member holding some other position in this Parliament, have the opportunity to respond if a false statement is made about him. I suggest to you, Madam Speaker that the statements made during Question Time today are such a case. We all heard those statements-the Treasurer (Mr Keating) was calling the administration of the Leader of the Opposition a fraud. There was no suggestion that he had to say that by some type of resolution; it was allowed; he could make those remarks. It was with respect to those remarks and others that the Leader of the Opposition quite properly tried to avail himself of the normal Standing Orders procedure, and I suggest that rather than debate this suspension of Standing Orders motion it would be preferable to permit the Leader of the Opposition to behave as every other member of this House is required to-that is, to seek your leave on the matter of a personal misrepresentation and for you to allow him to make an explanation to the House. He was seeking to do just that when you required him to sit down. If there is no alternative, we will vote on the suspension of Standing Orders to allow the Leader of the Opposition forthwith to make a statement to the House on this very matter. Mr N.A. Brown —I second the motion. Mr YOUNG(Port Adelaide-Leader of the House)(4.23) —The Government does not agree to the suspension of Standing Orders. I have never seen the Opposition so rattled, and I have never seen the generous interpretation of `personal explanation' given by you, Madam Speaker, so abused. In relation to the first matter on which the Leader of the Opposition (Mr Howard) sought to make a personal explanation his name was not even mentioned. There was reference to the administration of the Fraser Government. It was called `the former Administration'. I am going on what the Leader of the Opposition said. He said that the Prime Minister (Mr Hawke) had alleged that there was a certain increase in wages in the last year of the former Government, and now the Leader of the Opposition wants to make a personal explanation on all the mistakes of the Fraser Government. We will be here for 10 years on personal explanations as the Leader of the Opposition explains away all the mistakes of the Fraser Administration. We hear enough of that outside now. Only about two people opposite are prepared still to be loyal to Malcolm Fraser. They all blame Malcolm for their being on the Opposition benches. Now the Leader of the Opposition says that he wants to abuse the right given to him by the Chair, specifically to make a personal explanation, to explain away some difference of opinion as to what the Prime Minister said the wage rise was and what he thinks it was during the last year of the Fraser Administration. We cannot allow the Parliament to fall into disrepute because of personal explanation of that nature, and the only reason the Opposition raises such matters is that it is totally incompetent. Opposition members cannot ask the questions, they cannot debate the issues, they do not know how to use the Parliament and they have no policies. They have the full trifecta as far as nonsense is concerned. The honourable member for Barker (Mr Porter) is always yapping at the Minister for Health (Dr Blewett), but where is the Opposition's health policy? The shadow Minister for Industrial Relations is always yapping away about industrial relations, but where is their policy? Where are all the policies they are supposed to have? The most honest person over there is the person who has been told by the Leader of the Opposition to shut up-the Deputy Leader of the National Party, the honourable member for Gwydir (Mr Hunt). What a terrifying phone call that must have been! He was sitting up there at his home at Moree, or somewhere, when someone said that big John was on the phone: `Ralph, shut up; you are saying too much'. That would have terrified him, would it not? The Deputy Leader of the National Party knows what is right and so do a lot of others over there. So do many members of the farming community. The payment of school fees, the provision of Mercedes-Benz cars and all those things are a rip-off, but where is the Opposition's policy? Members of the Opposition want to criticise the Treasurer (Mr Keating) about the policies brought in by the Labor Government to bring some equity and justice back into the taxation system, but the Opposition's spokesmen get on television shows and are mute; they cannot say a thing. They do not stand for anything. They are hoping to bumble along for the next 18 months and make their way into government without any policies at all. This attitude was not the policy of the elected Leader of the Opposition in September 1985. We were not going to have any more of that Peacockism of saying nothing and doing nothing and hoping that they could win the next election. Under the new Leader of the Opposition they were to have policies galore. Everyone would know where the Liberal-National Party Opposition stood on all of the great issues in Australia. Can they just tell us, across the table, whether they will tax the free Mercedes? The Leader of the Opposition sits there. No, he does not know whether the Opposition will tax the free Mercedes or school fees or golf club fees or free trips overseas. The Deputy Leader of the National Party knows. He gave an honest opinion to the country folk, and he was being honest about it because that is what his constituents were saying to him. He was listening to his constituents in the bush, and they said that there were too many rip-offs, totalling $700m, by people who were not paying taxes while all the wage and salary earners, whether they lived in the bush or in the city, were being taxed up to 60c in the dollar. Members of the Opposition talk about initiative in Australian industry. They strangled initiative in our industries. Whether they were rural industries or industries in the city, whatever the industry was the Opposition strangled it. They know that, and now they cannot bring forward a policy to argue for; it can put nothing up against what the Government is doing-it just wants to use personal explanations. The Government will not facilitate the use of the Parliament for such personal explanations. I have never seen such an abuse of the system of personal explanations as that indulged in by the Leader of the Opposition. Why does he not learn to speak in debates and ask questions if he wants to find out some of these things? He should use the Parliament in the way the Parliament ought to be used and not abuse it just because it suits the silly matters he brings forward after Question Time every day. If he wants to apologise for Malcolm Fraser he should do it at Liberal Party headquarters or at his latest find, the $100 dinners of the H. R. Nicholls Society, which he tumbles along to now to apologise for the Liberal Party. The honourable member for Boothby (Mr Steele Hall) and the honourable member for Goldstein (Mr Macphee) know what they are up to with the H. R. Nicholls Society. He should read the speeches of his colleagues in relation to what the H. R. Nicholls Society is trying to do to the Liberal Party in Australia. That is far more important than apologising for Malcolm Fraser. They are the major issues that the conservatives of Australia will have to sort out. They should listen to the honourable member for Boothby and the honourable member for Goldstein and stop trying to abuse privileges such as that given to the Leader of the Opposition by a very generous Speaker who has given him time to make personal explanations but not to speak on issues in regard to which he is not mentioned. I move: That the question be now put. Question put. The House divided. (Madam Speaker-Hon. Joan Child) Ayes . . . . . . . . . . . 73 Noes . . . . . . . . . . . 55 —— Majority . . . . . . . . . 18 —— Baldwin, P. J. Jenkins, H. A. Beazley, K. C. Jones, BarryBeddall, D. P. Kelly, R. J. Bilney, G. N. Kent, L. Blanchard, C. A. Keogh, L. J. Blewett, N. Kerin, J. C. Bowen, Lionel Klugman, R. E. Brown, Robert Langmore, J. V. Brumby, J. M. Lee, M. Campbell, G. Lindsay, E. J. Charles, D. E. McHugh, J. Chynoweth, R. L. McLeay, LeoCleeland, P. R. 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. Dawkins, J. S. 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. Free, R. V. Punch, G. F. Gayler, J. Saunderson, J. Gear, G. Scholes, G. G. D. Gorman, R. N. J. Scott, J. L. Grace, E. L. Simmons, D. W. Griffiths, A. G. Snow, J. H. Hand, G. L. Staples, P. R. Hayden, W. G. Theophanous, A. C. Holding, A. C. Tickner, R. E. Hollis, C. Uren, T. Howe, B. L. West, S. J. Humphreys, B. C. (Teller) Wright, K. W. Hurford, C. J. Young, M. J. Jakobsen, C. A. Adermann,, A. E. Hodgman, W. M. Aldred, K. J. Hunt, R. J. D. Andrew, J. N. (Teller) Jull, D. F. Beale, J. H. Katter, R. C. Blunt, C. W. Lloyd, B. Braithwaite, R. A. McArthur, F. S. Brown, N. A. McGauran, P. J. Burr, M. A. McVeigh, D. T. Cadman, A. G. Macphee, I. M. Cameron, Donald Miles, C. G. Cameron, Ewen (Teller) Nehl, G. B. Carlton, J. J. Peacock, A. S. Cobb, M. R. Porter, J. R. Coleman, W. P. Reith, P. K. Connolly, D. M. Robinson, IanCowan, D. B. Rocher, A. C. Dobie, J. D. M. Ruddock, P. M. Downer, A. J. G. Shack, P. D. Drummond, P. H. Sharp, J. Edwards, Harry Shipton, R. F. Fife, W. C. Sinclair, I. McC. Fischer, Tim Smith, W. Fisher, Peter Spender, J. M. Goodluck, B. J. Sullivan, K. J. Hall, Steele Tuckey, C. W. Halverson, R. G. Watson, D, J. H. Hicks, N. J. (Teller) Webster, A. P. Hodges, J. C. Lamb, A. H. Hawker, D. P. M. Dubois, S. G. MacKellar, M. J. R. Brown, John Millar, P. C. Jacobi, R. Moore, J. C. Question so resolved in the affirmative. Original question resolved in the negative. Mr PORTER(Barker) —Madam Speaker, I claim to have been misrepresented and seek leave to make a personal explanation. Madam SPEAKER —The honourable member may proceed. Mr PORTER —In response to a question during Question Time the Minister for Health (Dr Blewett) indicated that I had said that the Government's health budget would blow out by $120m. Whilst the Government's health budget has never been in accordance with the Budget Estimates, I did not say that. What I did say during my response to legislation in this House was: The fact is that if increase in the growth of utilisation continues at the same rate as last year, expenditure on medical services and the Budget deficit have both been . . . understated by $120m. 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 Braithwaite,Mr Cadman,Mr Ian Cameron,Mr Drummond,Dr Harry Edwards,Mr Hawker,Mr Mildren,Mr Ian Robinson,Mr Ruddock,Mr Shipton,Mr Slipper and Mr Smith. 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: 1. That over 67,000 men, women and students enjoy the pursuit of their sport and recreation every year at the Anzac Rifle Range at Malabar and have done so since 1967. 2. The people of Sydney through their membership of 41 clubs headquartered at the Anzac Rifle Range together with a number of other community, school and commercial groups, the police and armed forces will lose this community facility if the Federal Government proceeds to sell the Range to private developers. 3. The Australian Bicentenary Fullbore Rifle Championships are to be conducted at the Anzac Rifle Range in April 1988 as part of the celebration of Australia's Bicentenary. Your petitioners therefore urge the House of Representatives and the Government of the Commonwealth to retain the Anzac Rifle Range for the continued use and enjoyment of the people of Australia. And your petitioners, as in duty bound, will ever pray. by Mr Blunt,Mr Cadman,Mr Cobb,Mr Coleman,Mr Connolly,Mr Dobie,Dr Harry Edwards,Mr Hicks,Mr Mountford,Mr Nehl,Mr Ian Robinson,Mr Ruddock, and Mr Sinclair. To the Honourable the Speaker and the Honourable Members of the House of Representatives in Parliament assembled. The humble petition of the undersigned citizens of Australia showeth that whereas: They are completely satisfied with the design of the existing Australian National Flag. Your petitioners therefore pray that your honourable House will: Give a speedy passage to the Flags Act Amendment Bill which provides that the Australian National Flag can only be changed by a Referendum. And your petitioners, as in duty bound, will ever pray. by Mr Griffiths,Mr McArthur,Ms Mayer and Mr Shack. To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The petition of the undersigned respectfully showeth. We most strongly oppose the process of Food Irradiation by radioactive Cobalt 60 or any other radioactive substance. We oppose the introduction of regulations that will facilitate the food irradiation process by State Governments. We express our deep concern at this attempt to extend the use of radioactive substances and exposure of workers to radiation. We call on the Government to immediately ban the importation of radioactive Cobalt 60 or other radioactive substances and to immediately disallow the regulations that permit the irradiation of food here in Australia. by Ms Jakobsen,Mr Kent,Mr Milton and Mr Scott. To the Honourable the Speaker and Members of the House of Representatives assembled. We, the undersigned, are deeply concerned at the impact of the new Fringe Benefits Tax on the following grounds: 1. Its severe and damaging effect on business confidence, investment and incentive, especially in the rural, mining and small business sectors. 2. Its capacity to seriously worsen unemployment through the additional costs its imposes. 3. Its extremely negative impact on the competitiveness of export industries at a time when the nation desperately needs to improve its trading performance. 4. In that it may compel many honest and decent citizens to defy the Tax in order to preserve their livelihoods, their businesses and the jobs of their employees, thus causing hardship, the breakdown of respect for the law and discord within the community. We therefore most earnestly petition you to repeal the Fringe Benefits Tax legislation forthwith. And your petitioners as in duty bound will ever pray. by Mr Blunt. To the Honourable Speaker and Members of the House of Representatives in Parliament assembled. We, the undersigned, are deeply concerned at the impact of the new Fringe Benefits Tax on the following grounds: 1. Its severe and damaging effect on business confidence, investment and incentive, especially in the rural, mining and small business sectors. 2. Its capacity to seriously worsen unemployment through the additional costs its imposes. 3. Its extremely negative impact on the competitiveness of export industries at a time when the nation desperately needs to improve its trading performance. 4. In that it may compel many honest and decent citizens to defy the Tax in order to preserve their livelihoods, their businesses and the jobs of their employees, thus causing hardship, the breakdown of respect for the law and discord within the community. We therefore most earnestly petition you to repeal the Fringe Benefits Tax legislation forthwith. And your petitioners as in duty bound will ever pray. by Mr Braithwaite. To the Honourable Speaker and Members of the House of Representatives in Parliament assembled. We, the undersigned, are deeply concerned at the impact of the new Fringe Benefits Tax on the following grounds: 1. Its severe and damaging effect on business confidence, investment and incentive, especially in the rural, mining and small business sectors. 2. Its capacity to seriously worsen unemployment through the additional costs its imposes. 3. Its extremely negative impact on the competitiveness of export industries at a time when the nation desperately needs to improve its trading performance. 4. In that it may compel many honest and decent citizens to defy the Tax in order to preserve their livelihoods, their businesses and the jobs of their employees, thus causing hardship, the breakdown of respect for the law and discord within the community. We therefore most earnestly petition you to repeal the Fringe Benefits Tax legislation forthwith. And your petitioners as in duty bound will ever pray. by Mr Sinclair. 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 business 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 petition of the undersigned 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 the Parliament assembled. The petition of the undersigned citizens of Australia respectfully showeth that: The Fringe Benefits Tax will cause hardship to business throughout Australia, especially in the already severely depressed rural sector and in the motor vehicle industry. The Fringe Benefits Tax will be a disincentive to employment and worse, will result in additional unemployment. The economy of this country would best be served by policies that lightened the tax burden, not increased it, that encouraged enterprise, not stifled it, and stimulated growth, development and jobs, not prevented it. Your petitioners therefore pray that the House will repeal this legislation, and your petitioners, as in duty bound, will ever pray. by Mr Shack. 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 Ewen Cameron,Mr Hawker and Mr Kent. 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 Drummond. To the Honourable the Speaker and Members of the House of Representatives assembled. The petition of certain citizens of Australia respectfully showeth: That taxpayers with dependent children have been gravely disadvantaged by a serious decline in the level of recognition provided in the taxation system for the costs of maintaining a family, in particular: the failure to index family allowances which has resulted in an erosion of more than 50% in their real value since May 1976; the abolition of family allowances for dependants who have turned 18, even those still at school; the abolition of concessional tax rebates for education and other expenses. That this erosion in horizontal tax equity has placed an intolerable financial burden on many larger families, particularly those on middle incomes who fail to qualify for means-tested benefits such as TEAS but whose living standards are now well below average due to heavy expenses on necessities such as education, housing, food and clothing. Your petitioners humbly pray that: family allowances be restored to the 1976 value (in real terms), and indexed according to the CPI; the dependent spouse rebate be retained; the Federal Government take urgent measures to restore equitable provisions in the taxation system through the introduction of family income splitting. And your petitioners, as in duty bound, will ever pray. by Mr Mildren. 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 whereas: 1. They are completely satisfied with the design of the existing Australian National Flag. 2. They are aware it properly reflects immutable characteristics of Australia, namely: (a) The Union Jack, itself the creation of three Christian Crosses, represents the Nation's historical origin and the source of its language and law; (b) The Southern Cross on an azure blue background signifying its geographical location on this planet Earth; (c) The large star depicting the advent of Federation in 1901. 3. They know the Flag has been a source of inspiration to generations of Australians in peace and war. 4. They recall that millions of native-born Australians and newcomers to these shores from other parts of the world have become united under its proud symbolism. 5. They are certain that any change to the Flag will produce division in the Australian community. Your petitioners therefore pray that your honourable House will: Propose and pass a motion that ``the existing Australian National Flag be changed only with the approval of the Nation as expressed in a Referendum''. And your petitioners, as in duty bound, will ever pray. by Mr Hawker,Ms Mayer and Mr Shipton. To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The petition of certain citizens of Australia respectfully showeth: That the Australian flag symbolises the continuity between Australia's past, its present and the future; That the presence of the Union Jack on the flag represents not a subservience to Britain, but a reminder of our inheritance of the fruits of hundreds of years of struggle for individual liberty against the forces of tyranny and oppression; Nonetheless recognises the rights of Australians should they wish as a people to change the design of their flag. Your petitioners humbly pray that no change be made to the Australian flag except with the consent of the people in a referendum. And your petitioners, as in duty bound, will ever pray. by Mr Ruddock. To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled: We the undersigned citizens of Australia, hereby petition the Prime Minister as leader of the Australian Labor Party in Government in Australia and humbly showeth that: The voting public of Australia did in March 1983 and again in December 1984 vote as a majority for the election of a Labor Government who did claim to stand for social justice, equity and redistribution. That the said voters sincerely believed that a contract was entered into in voting for a Labor Government with democratic socialist principles. That there is an erosion of support for the pensioners, the unemployed, the aged, the sick and the working class of Australia, while the lot of the privileged class, the banks, the oil companies, and the money-changers continues to improve. Your Petitioners call on the Australian Labor Government to implement those policies and follow those principles of social justice, equity and redistribution which the majority of Australians voted for in 1983 and in 1984, and to adopt an immediate programme that will transfer the current economic burden to those better able to carry it. And your petitioners, as in duty bound, will ever pray. by Mr Kent,Mr Milton and Mr Scott. To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The petition of certain citizens of Australia respectfully showeth: that the Bill of Rights is a dangerous piece of legislation which gives us no new legally enforcable 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 Ewen Cameron and Mr Hawker. 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: By cutting ESL funding and eliminating funding for community languages and multicultural education you have attacked tens of thousands of Australian children. You have condemned these children with limited English to gross educational inequality and very dim prospects for their future. On behalf of these children we call on you to remove this new discrimination which your budget has guaranteed by immediately restoring ESL and Multicultural education funding. by Mr Coleman and Mr Ruddock. 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 Australia law. And your petitioners, as in duty bound, will ever pray. by Mr Cadman. To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The Petition of the undersigned 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. An your petitioners, as in duty bound, will ever pray. by Mr Cadman. To the Honourable the Speaker and the members of the House of Representatives in Parliament assembled. The petition of the undersigned residents of Australia respectfully showeth: That the humble petitioners are gravely concerned about recent changes in the Extradition (Foreign States) Act of 1966 which deny basic rights which have been a cornerstone of the English and Australian law for over seven hundred years. We are speaking of the right to be presumed innocent until proven guilty and the right of an individual to defend himself against his accusers. This concern has come to light during recent extradition proceedings against Mssrs, Hempel and Etheredge in Western Australia. We are concerned that because judicial protection of these basic rights has been excluded from the Act refugees, migrants, Australian overseas travellers, and visitors are at risk when they have been to (or come from) countries where the norms and practices of human rights and civil liberties are below traditionally accepted Australian standards. We, the undersigned petitioners, therefore urge the Government to re-examine the Extradition (Foreign States) Act as amended in 1985, and amend the current Act so that the rights of the accused are once again judicially protected in Australia. In addition, we urge the Government to refrain from entering 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 Drummond. To the Speaker and Members of the House of Representatives in Parliament assembled. The humble petition of the undersigned electors of Australia respectfully showeth: That the Government should cancel the Fringe Benefits Tax they intend to impose on businesses throughout Australia because: 1. The tax discriminates against charitable organisations, sports clubs, private schools and religious organisations; 2. The tax will mean employees around Australia will suffer reductions in their renumeration packages; 3. The Bill places another impossible burden of paperwork on small business; 4. The Bill is absurd in its application to Government employees, who now constitute 32% of the workforce. And your petitioners, as in duty bound, will ever pray. by Mr Drummond. To the Honourable the Speaker and 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 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 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 humble petition of the undersigned citizens of Australia respectfully 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 Benefits Tax and Labor's tax on lump sum superannuation. 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 petition of the undersigned shows: That the Hawke Government should; 1. Pass on the full benefit of lower international oil prices; 2. Not increase or extend fuel taxes, and 3. Maintain its tax cut commitments. Your petitioners humbly pray that the Hawke Government honour its commitment to the Import Parity Pricing policy. And your petitioners, as in duty bound, will ever pray. by Mr Hawker. To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The humble petition of the undersigned citizens of Australia respectfully showeth: That in the light of the Labor Government's failure to act to correct the many anomalies in the Assets Test on pensions brought to its notice, the Labor Government's legislation should be repealed before it has an unduly unfair impact on pensioners. Your petitioners therefore humbly pray that the House of Representatives in Parliament assembled should immediately seek the repeal of the Labor Government's iniquitous and unfair Assets Test. And your petitioners, as in duty bound, will ever pray. by Mr Hawker. To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The humble petition of citizens of Australia shows: That the people of New Zealand and the New Zealand Government have given an example to the world in their efforts to achieve a nuclear free South Pacific, and such decision being endorsed by the people at a general election. Your petitioners therefore pray that the Australian Government support the principled stand taken by the New Zealand Government and urges it to condemn any efforts by the U.S. Government to impose economic or other sanctions on New Zealand in retaliation for their stand on nuclear vessels. We further urge the Australian Government to urgently implement its policy to promote the development of zones of peace and nuclear free zones in the Indian and Pacific Oceans. by Mr Kent. To the Honourable, the Speaker and Members of the House of Representatives in Parliament assembled. The 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 the undersigned citizens of Australia respectfully showeth that: 1. The introduction of an administrative charge for annual enrolment will restrict access to higher education for a range of disadvantaged groups, particularly women, rural dwellers and some low income earners. 2. Students will be deterred from study because of the probable escalation in the charge in future Budgets, prohibiting students' ability to plan the long term costs of their education. 3. The introduction of an administrative charge is contrary to the education provisions of the ALP/ACTU Accord and ALP policy which states that the party ``will maintain the provision of free tertiary education.'' Your petitioners therefore pray that the annual administrative charge for higher education students not be introduced. Your petitioners as in duty bound shall ever humbly pray. by Mr McArthur. To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled: The humble petition of we, the undersigned respectfully showeth that the proposed government plan for aggregation of the regional television services of Australia will have a very destructive effect on the existing local services. Through aggregation the regional broadcasters will be forced into a situation of being merely a relay point for the ponderous networks. This in turn would place an even greater obstacle before the regional population in access to the media for communication, advertising, news, local disaster relief assistance and most importantly employment. The starting point for many young people in this industry has been provided by these regional operators. This avenue would virtually disappear along with a considerable number of existing jobs. Your petitioners therefore humbly pray that the alternative Multi Channel System as proposed by the majority of the regional operators and endorsed by Mr Duffy and the two Caucus committees be implemented. This approach to the plan for increased services to the regional areas of Australia would have the very desirable effect of providing a tailored service for the respective areas. Some viewers would receive the added benefit of being able to choose between regional and metropolitan signals. The ability of the regional operators to provide further employment would be enhanced. We believe that the M.C.S. alternative is by far the better way to proceed. And your petitioners, as in duty bound, will ever pray. by Mr Mildren. 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 re-invoke the blasphemy, indecency, and obscenity proscriptions into the Customs (Prohibited Imports) Regulations, by adding those proscriptions to the present Section 4a, sub-regulation 1a (b) (i), for the following reasons; because there is a flood of obscene publications into the country, because such publications depict the abnormal as normal because such publications degrade men and women because such publications create new, offensive demands on women, with which they do not willingly comply (Eysenck and Nias) because this causes marriage breakdown because children easily obtain such publications because children copy what they see because the child found in possession of such publications is at risk, facing rejection, and carrying the burden of having altered the relationships in his home for the worse, between parents, and between parent and child because such a child faces, alone, the loss of trust because I am a reasonable adult person and I am offended by the obscene books which you have legislated into this community. Your petitioners therefore humbly pray that you will give this matter your earnest attention, and your petitioners, as in duty bound, will ever pray. by Mr Shack. To the Honourable Speaker and Members of the House of Representatives in Parliament assembled. We, the undersigned, are deeply concerned that Australia's important horticultural industry is being severely disadvantaged by unnecessarily rising production costs. Many Federal and State Government regulations, excessive taxes and charges are damaging the ability of horticultural growers to maintain supplies of food and plant production to Australian families at a realistic cost. Widespread unemployment will result if horticultural producers are further depressed. The undersigned humbly petition the Parliaments of Australia, its States and Territories, to take all measures within their powers to reduce the burden of imposed costs and regulation, allowing Australian horticultural growers to develop production potential so the nation, as a whole, can share the benefits of the resulting growth and prosperity. Your petitioners as in duty bound will ever pray. by Mr Slipper. To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The humble petition of the undersigned citizens of Richmond electorate respectfully showeth that: Labor's Capital Gains Tax is standing in the way of economic development on the Far North Coast, a region with great potential for further growth and renowned for the enterprise and initiative of its local community. Your petitioners humbly pray that the House of Representatives, in Parliament assembled, urge the Government to: Repeal its anti-business anti-farming and anti-individual Capital Gains Tax. And your petitioners as in duty bound will ever pray. by Mr Blunt. 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 is 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 certain electors of the Division of Cowper respectfully showeth: That the Bill of Rights Bill, the Human Rights and Equal Opportunity Commission Bill, the Human Rights and Equal Opportunity Commission Amendment Bill and the Human Rights and Equal Opportunity Commission (Transitional Provisions and Consequential Amendments) Bill, if passed by the Parliament, will undermine the 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 Ewen Cameron. To the Honourable the Speaker and Members of the House of Representatives in the 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 taxation deductions; that the Hawke Government's Fringe Benefits Tax is an unwarranted burden on the small business and rural sectors, which will severely affect their long term viability. Your petitioners humbly pray that the Government withdraws the Fringe Benefits Tax legislation without delay. by Mr Halverson. To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The petition of the 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 petition of certain citizens of Australia, electors of the Division Prospect shows the Thai Government recently announced that Khao-I-Dang refugee camp will be closed on 31st December 1986. More than 25,000 Cambodian refugees who survived the ``Killing Fields'' of the Khmer Rouge and entered Thailand after 1979 are still resident in Khao-I-Dang. We hold grave fears for the future and safety of these refugees who will be relocated to camps along the Thai-Cambodian border when Khao-I-Dang is closed. Your petitioners therefore humbly pray that the Australian Government will uphold its enviable humanitarian record and act with all haste to facilitate the acceptance and resettlement of as many of these refugees as possible, including a proportion of those who have no relatives to sponsor them. by Dr Klugman. 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 the undersigned citizens of the State of Queensland respectfully showeth that: The legislation to tax fringe benefits is iniquitous, inequitable and unfair; It will severely disadvantage both employees and employers; Employees will clearly lose many fringe benefits as a direct result of the additional heavy taxation burden being imposed upon employers; Employers will be forced to pay even higher levels of taxation to provide fringe benefits for employees. Your petitioners humbly pray that the House of Representatives, in Parliament assembled, urge the Government to: Immediately abandon the Fringe Benefits Tax. And your petitioners as in duty bound, will ever pray. by Mr Slipper. To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The humble petition of the undersigned citizens of the Federal Division of Fisher respectfully showeth that: The legislation to tax fringe benefits is iniquitous, inequitable and unfair; It will severely disadvantage both employees and employers; Employees will clearly lose many fringe benefits as a direct result of the additional heavy taxation burden being imposed upon employers; Employers will be forced to pay even higher levels of taxation to provide fringe benefits for employees. Your petitioners humbly pray that the House of Representatives, in Parliament assembled, urge the Government to: Immediately abandon the Fringe Benefits Tax. And your petitioners as in duty bound, will ever pray. by Mr Slipper. To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The petition of certain citizens of the Federal Division of Fisher in Queensland respectfully showeth: 1. They are completely satisfied with the design of the existing Australian National Flag. 2. They are aware it properly reflects immutable characteristics of Australia, namely: (a) The Union Jack, itself the creation of three Christian Crosses, represents the Nation's historical origin and the source of its language and law; (b) The Southern Cross on an azure blue background signifying its geographical location on this planet Earth; (c) The large star depicting the advent of Federation in 1901. 3. They know the Flag has been a source of inspiration to generations of Australians in peace and war. 4. They recall that millions of native-born Australians and newcomers to these shores from other parts of the world have become united under its proud symbolism. 5. They are certain that any change to the Flag will produce division in the Australian community. Your petitioners therefore pray that your honourable House will: Propose and pass a motion that ``the existing Australian National Flag remains sacrosanct from change''. And your petitioners, as in duty bound, will ever pray. by Mr Slipper. To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The petition of certain citizens of the Federal Division of Fisher in Queensland respectfully showeth: that the current policy pursued by the Hawke Government is causing an intolerable increase in home loan interest rates beyond the capacity of families to pay. that consequently this policy is causing grave hardship throughout Australia and is contributing to social problems and the breakup of the family unit. that unless the Government act urgently the Australian dream of home ownership is fast becoming shattered for many of our citizens. Your petitioners therefore humbly pray: That the Government make home loan interest rates tax deductible therefore alleviating the present crippling burden of current high interest rates on home owners and home buyers. And your petitioners as in duty bound will ever pray. by Mr Slipper. To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The petition of certain citizens of Federal Division of Fisher in Queensland respectfully showeth: that the actions of trade unions have gone beyond their traditional goals of protecting workers' conditions and rates of pay and have reached the point where they are seriously affecting the economic health of the nation and the people. Your petitioners therefore humbly pray: 1. That all Governments throughout Australia acknowledge and protect the Right to Work on behalf of all Australians. 2. That the total sovereignty of individual governments be recognised as a fundamental requirement of a workable, balanced Federal system of government. 3. That all necessary steps be taken to protect the citizens of Australia from any inducement, compulsion, threat or intimidation to join any trade unions. 4. That there should be no preference in employment for people who are members of trade unions. 5. That the supremacy of elected governments over the sectional interests of trade unions be recognised, and 6. That the provision of essential services be maintained, free from industrial disruption. And your petitioners, as in duty bound, will ever pray. by Mr Slipper. To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The humble petition of the undersigned citizens of the electorate of Fisher respectfully showeth that: Whereas the present Government of the Commonwealth of Australia has purported to present the title deeds to Ayers Rock in Central Australia, in reality the joint property of the people of the Commonwealth to an Aboriginal Land Council on 26 October 1985. Whereas opinion polls and statements of representative groups, Members of Parliament and respected individuals show clearly that the Commonwealth Government had no mandate from the citizens of the Commonwealth to act in such a disgraceful manner. Whereas the present Government claims to be totally opposed to apartheid (separate development) in South Africa but purported to hand over Ayers Rock to an Aboriginal Council in support of a policy of apartheid (separate development) which has been shown to be detrimental to the Aboriginal people of Australia. Whereas it is pursuing this policy making it a crime for most white and many Aboriginals to enter, without permit, large areas of the Commonwealth designated apartheid (i.e., set aside for separate development), contrary to our democratic traditions and experience of freedom of movement for citizens of all racial origins within Australia. Whereas Australian citizens have no present means available to them to prevent this violation of their natural rights to unfettered common ownership of, and access to, a treasured natural asset. Your petitioners therefore pray that the House of Representatives, in Parliament assembled, urge the Government to: Seek means available for the protection of the people's interests to reverse this outrage and preserve the democratic traditions of Australia. And your petitioners as in duty bound will ever pray. by Mr Slipper. To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The humble petition of the undersigned citizens of Federal Division of Fisher respectfully showeth that: The proposed capital gains tax penalises small business, discourages long-term investment, hinders capital formation and will freeze existing investment patterns and limits the investors' ability to adjust to changed market conditions. Your petitioners humbly pray that the House of Representatives, in Parliament assembled, urge the Government to: Immediately abandon its ill-considered capital gains tax proposal. And your petitioners as in duty bound will ever pray. by Mr Slipper. Petitions received. Mr DEPUTY SPEAKER(Mr Leo McLeay) —Madam Speaker has received a letter from the honourable member for Mackellar (Mr Carlton) proposing that a definite matter of public importance be submitted to the House for discussion, namely: The high cost to the Australian community arising from the intended and unintended consequences of the Hawke Government's Capital Gains Tax. 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 CARLTON(Mackellar)(4.44) —During Question Time, the Opposition asked the Treasurer of this nation (Mr Keating) three questions on the capital gains tax. Clearly the Treasurer could not answer those three questions-could not rather than would not. I remind the House that over a period of months I asked the Treasurer a number of questions about tax and he dismissed them all with contempt. The Press Gallery interpreted his failure to answer as some failure of the Opposition in that it asked unduly complicated questions. I actually wrote to the editor of one of those newspapers whose reporter had said that I had asked an unduly complicated question. I gave the editor the text of the question I had asked, which was in fact perfectly simple, and I said that, if the reporter could not understand that question, questions should be asked about the reporter. More seriously, if the Treasurer of Australia could not understand that question the Treasurer of Australia should be fired. The cover of this Treasurer is blown on tax. There is no way that he knew the slightest detail of the taxes he introduced into this House in May. It is quite clear that he did not understand anything about the fringe benefits tax and it is also becoming absolutely clear that he does not understand the first thing about the capital gains tax-and he never has. He said that he would not answer any questions put by the Opposition until such time as we agreed with the capital gains tax. I can tell you, Mr Deputy Speaker, that hell will freeze over before we agree to a capital gains tax. If the Treasurer thought that getting on to the fringe benefits tax train was going to be a long journey, I can tell the Treasurer that the capital gains tax train will go from here to Darwin and back before the Opposition will drop this matter. I can also say to the Treasurer that he had better do a quick learning course on the capital gains tax because he will be asked question after question on the capital gains tax. If he thinks that the fringe benefits tax is just a raging infection out there in the community, he will find that the capital gains tax is a slow-acting cancer on the community and on the future of this Government. This tale of infamy on the capital gains tax goes right back to the 1983 policy speech of the current Prime Minister of Australia (Mr Hawke). To his discredit I have to quote these words every time I talk about the capital gains tax-and I will continue to do so. This is what the Prime Minister of Australia said to the Australian people as his solemn pledge before this Government came into office: And here let me make one point so that even our opponents can understand it, and let me make it beyond all their powers of misrepresentation and distortion, there will be no new capital gains tax. That was the pledge of the Prime Minister. In the next election campaign in 1984 the Prime Minister was asked about this matter and he gave no answer. He gave no indication that there would be a capital gains tax. Indeed, the first thing the Government did when it got back into office was to proceed to implement a capital gains tax. The way in which it was put forward was disgraceful. It was announced on 19 September 1985 in the Treasurer's statement on the reform of the Australian taxation system-RATS. It was months and months before the legislation came into the House. In fact, it came into the House on 28 May-all 103 pages of it-breaking one of the most important principles enunciated by the Prime Minister: That any new tax should be simple to understand and operate. This legislation of 103 pages came into the House after the Government had had eight months to prepare it, but it had no explanatory memorandum. I have it now. I was given the explanatory memorandum on the night that the debate in this House was closing as the Minister opposite at the table, the Minister for Immigration and Ethnic Affairs and Minister Assisting the Treasurer (Mr Hurford), was coming in to sum up for the Treasurer. Let us note who is the Minister at the table. The Treasurer has failed to come into the House. He has failed to answer three questions on the capital gains tax, he has failed to come into the House to defend himself and he has sent in the assistant Minister, the Minister who has the task of signing not only the farewell Bob tax letters but also the capital gains tax letters in increasing numbers. I say to honourable members that, since we have the Minister who was the runner-up for the position of the wooden spoon-he did not even get the wooden spoon itself-now that Wooden Spoon is back, Scoop is starting to look good. I prefer the Scoop to the Wooden Spoon, I think. So the Assistant Minister, who is at the table, is welcome to answer the questions. If he does not answer the questions or the arguments, he will be treated in exactly the same way as we shall treat the Treasurer in succeeding months. He will not get away with this tax. The tax will eat away at the Government just as it is eating away at the people of Australia. It came in with 103 pages of extraordinary complication, with 155 pages of explanatory memorandum. We also got an explanatory booklet of 64 pages. We had 14 pages of rulings and 38 pages of Press releases trying to explain the details of the tax as queries have arisen. So we are building up, but have not quite got to the level of the fringe benefits tax. We are half way there. We still have the video to come and also the replacement video when the first one is found to be faulty, as the fringe benefits tax was found to be faulty. When the Treasurer introduced the matter into the House in September, he misled us. He said in the statement of 19 September: This tax will affect only a tiny section of the population. Its expected revenue yield in the fifth year of operation is estimated to be only $25m. That was an incredible statement. It could have been made only by somebody who did not have the slightest understanding of the ramifications of the tax. One has to read through only the first 10 of the 103 pages to know that it affects pretty well everybody, as I shall demonstrate. I will not have time today to demonstrate how it affects everybody; that will take days and days and weeks and weeks. There is example upon example of how this affects people which will be a shock for a whole lot of people. We are talking today not only about unintended consequences, as we did yesterday on the fringe benefits tax, but also about intended consequences. This is a typical Labor envy tax. It is a tax which penalises the risk takers, the improvers. It penalises new wealth rather than old wealth. That is an interesting concept for the Labor Party to put forward. That Party takes the view that it stands for the little people and wishes to diminish wealth. It brings in a tax that protects wealth to a point before 19 September last year, but penalises young people, risk takers, entrepreneurs, the new people who are to build the new Australia. As usual, the socialist principle of envy carries on its destructive effects on the very people in the community we want to support and encourage. If a family starts a new small business-the kind of people who give up the security of a fully paid job, workers compensation, annual holidays, leave loadings and all sorts of other benefits-and risks everything it owns to build a business, members of that family are building that business not just for themselves but for Australia. They create wealth and jobs. They are the people who have made this country what it is. I refer to people in small businesses, people who have built up farms, people who have risked their all, people who are prepared to work long hours for very little income, people who want to build something for themselves and their children, their grandchildren and for Australia. They are the people who will be hit by this capital gains tax. Compared with average award-paid workers, with all their privileges and security, many people in farms and small businesses are taking much lower income and they make great sacrifices and take risks. There is nobody to pay them sickness benefits, no company doctor to look after them, no chaplain or anybody provided by a big company. They are there on their own and they take that risk. Under this new government tax together with the fringe benefits tax, those people will be stripped of the fruits of their efforts to an extraordinary degree. The tragedy is that in future many will not even bother to make the effort. We have no idea of the extent of the damage this tax will cause because the damage is there in what has not happened and cannot be measured. That is the damnable aspect of this tax. Let me deal with what I see as the unintended consequences. In the House today the Minister for Housing and Construction (Mr West) misled the Australian people about the principal residence, which he said was exempt from the tax. People had better be very careful about that statement because it simply is not true. A whole stream of consequences arises from this tax on the family home. Let me give the House some of them. I have not much time, but this will be only the opening of the account in this long saga of the capital gains tax which will be very sad for the Government. The capital gains tax exemption on the family home is based on the qualification that the family home be not used for income-producing purposes. If a member of the family pays rent or board, the family home will lose its exemption, either in whole or in part. Similarly, if the family home has a study used for work, then a liability may be incurred. So be careful about that. The next item is that the sale of the family garden shed, storeroom or other structure will be subject to capital gains tax. This includes the case where a father gives his son the portable toolshed from the garden. In another case the capital gains tax will apply to a new family home purchased by a young couple while still living with their parents before their marriage. In other words, it is beginning to strike at the very heart of the formation of new families and new homes. The tax will apply also to a young couple who are renting and who purchase a block for their family home. The young couple will find that the block is subject to capital gains tax. This could occur under conditions I will spell out. The exemption is available only if upon completion of the new home it is occupied for at least 12 months. So if the bank for which the young couple work transfers them somewhere else, they are liable for capital gains tax. Do they know that? They do not. The maximum exemption-free time allowed under this provision is four years. This relates to a couple who are staying at home with their parents and building a home. If because they are building themselves, or are not saving fast enough and the time lapse between acquisition and occupation exceeds four years, then the young couple will have to pay capital gains tax on a pro rata basis. So there are pitfalls here for young people buying their own homes. Also, if the block is purchased by the young couple prior to their marriage and if one or both of them is during that time dependent on a parent, then for that period the block will not be exempt. If the family home is on more than two hectares-which can happen with hobby farms or in outer areas just outside cities, country towns and so on-it is subject to capital gains tax. Do all the thousands of people who are buying properties over two hectares just outside metropolitan areas know that they are not exempt? I do not think they do. If the family home is in excess of two hectares and one allows a neighbour to put in a drain at the back of the property, then under a quirk of the capital gains tax one is liable for the tax even though one receives no payment from the neighbour. I have no more time to go on with these examples. We have hundreds of them and we will bring them out every day until the tax goes. Mr DEPUTY SPEAKER(Mr Leo McLeay) —Order! The honourable member's time has expired. Mr HURFORD(Adelaide-Minister for Immigration and Ethnic Affairs and Minister Assisting the Treasurer)(5.00) —This afternoon we have another example in the long line of pathetic matters of public importance brought to this House by this Opposition. If I may say so as kindly as I possibly can, it is another in the long line of pathetic efforts from the honourable member for Mackellar (Mr Carlton). In this debate it is necessary for us to put taxation policy in its proper perspective. The Hawke Labor Government inherited a tax system which was in a mess. It inherited it from these very people who are seeking to criticise us in this debate. It inherited a system which was and still is grossly unfair and inequitable. The Government inherited this system from these conservatives who have brought this pathetic matter of public importance before the House today. Our Government has inherited this disastrous situation from a bunch of people whose leader was the Treasurer in the administration which bequeathed us this grossly inequitable taxation system. The little that was done while the Leader of the Opposition (Mr Howard) was Treasurer to improve this disgraceful tax system was done too late and, as the Treasurer (Mr Keating) so graphically pointed out during Question Time today and yesterday, so grudgingly. The Treasurer absolutely demolished the Leader of the Opposition's weak attempts to claim credibility in the tax area. The Treasurer showed how the then hapless Commissioner of Taxation had to write to the then Treasurer 26 times in increasingly bitter terms before he could get that weak, disastrous Treasurer to come so reluctantly to this House with any semblance of taxation reform legislation. Yet it is these people who have the gall to bring to this House today a matter of public importance on the subject of taxation reform, criticising an inevitable and just reform that the Hawke Labor Government has brought to this country. The contrast between the two sides in politics is this: We in the Australian Labor Party, true to our Party's traditions which go back uninterrupted to Federation and even earlier, believe in something. We are not just the protectors of the privileged, the better off and the lucky people in this life, as are honourable members opposite; we are not the defenders of the status quo; we are not the proponents of the do-nothing, easy life in politics. We in the Labor Party are proud that we believe in equity and justice and we are proud of the fact that this applies to the taxation system just as much as it does to anything else. We are proud of the fact that we are prepared to get on with the job of reforming our taxation system in order to bring equity and justice to it. Like other countries, Australia needs a system that is fair, square and equitable. We suffered a terrible period of neglect during the many years of coalition governments in this country. Our country's taxation system has also suffered from the results of poor decisions from conservative judges placed on the benches by the conservatives of this country. Unless we have a system that is fair and square and unless the taxpayers accept that system as being fair and square, the system will go from bad to worse because there will be a poor degree of compliance by those taxpayers. Unless we have a system that is fair and square, we will find non-compliance leading to a lowering of the amount of revenue collected. This will have the consequence not only of increasing the burden of those honest people who do comply, but also of providing a lesser amount of funds for the social objectives of government expenditure when Labor is in government-the creation of a fairer society. In order to get a fair and equitable system, a system which will gain and keep the respect of taxpayers and lead to their compliance, we must have a form of capital gains tax. Why should one group of people who earn their surpluses through gains on their capital be free of taxation on those surpluses at the expense of another group of people who earn their surpluses through, say, personal exertion at their places of work or by profits from their enterprises? Why should those who get these surpluses from capital gains be exempt from fair taxation? There is no earthly reason whatsoever why this should happen. No other comparable country, even that home of free enterprise, the United States of America, has such an inequity. No group, other than the Liberal and National Party members here in Australia, wants to put this extra burden on the wage, salary and profit earners of this country-that extra burden that is inevitably the result of capital gains not being properly taxed. Yet that is what coalition members want to do-put the burden on those who are not in a position to avoid and evade tax like those who are accumulating capital surpluses. Honourable members should make no mistake about it: At the heart of most of the tax avoidance in the 1970s and early 1980s was the conversion of what should have been income to capital at the bottom of which was so much effort on the part of smart people who could have been doing Australia a good turn by putting their talents to industry, trade and other such enterprises, but who were scheming to convert income to capital in order to avoid tax. Those in government were at fault-those members opposite who have brought in this matter today. They were at fault not only because they had no capital gains tax and thus they allowed these things to happen, but also because, accordingly, personal tax rates were too high and this led to people spending so much time on tax avoidance. I concede that that is one of the reasons why we have had avoidance-because those personal tax rates were too high. I am proud to be a member of a government which is doing something about both those issues. We have brought in a modest, sensible capital gains tax and we are reducing personal income tax as well. By our imputation proposal we are also encouraging enterprise within the corporate structures of this country. Along with our modest capital gains tax we are indexing cost values and taxing not nominal money gains but only the real gains at the time of realisation. By so doing we are putting a net under our tax system, so that respect and compliance will be restored. That is the context of this eminently reasonable approach that we have taken by bringing in a capital gains tax in this country. Let me go into more detail. Apparently the Opposition wants the majority of Australian taxpayers-the honest pay as you earn taxpayers-to pay more tax so that the wealthy pay substantially less. It wants people who are able to accumulate these capital surpluses, and dishonest people as well, to be able to opt out of the tax system. It wants privileged executives and others to be allowed to continue to receive non-cash remuneration free of tax. That is what the fringe benefits tax debate is all about. The Opposition wants people to gain massive incomes through capital gain without paying taxation. The truth is that this Opposition has a secret fringe benefits tax and I have no doubt that it probably has a secret capital gains tax in its locker as well, but it is not prepared to come out with that at this stage. The arguments are overwhelmingly in favour of taxing surpluses on capital. Let us look again at the consequences of not having capital gains taxes. The revenue lost would have to be gained through increasing taxation in other areas. This means that ordinary Australians would have to pay to support the rich. Opposition members are not prepared to end the rorts and rip-offs. The record of the failed Treasurer who is now the Leader of the Opposition demonstrates that. They are prepared to have the man in the street pay extra to support the luxuries of the rich and dishonest. Yet these are the people who nitpick during Question Time and during this matter of public importance debate about capital gains tax reform. Let me make it quite clear: The capital gains tax is firmly in place, it is here to stay and it is thoroughly fair and equitable. That is not to say that there will not be some fine tuning. All laws are under review all the time. Within the next hour I will bring in another tax reform Bill which contains some minor changes in clauses concerned with the capital gains tax. We will not do that fine tuning or announce changes during Question Time or during a matter of public importance debate such as this. There is no need whatsoever for a general review of this tax, nor have I said that there will be such a general review, in spite of the media comments and beat-ups which took place on Friday evening and in the Saturday newspapers. I have never said that, but I have said in Question Time just what I said to the House again today: We will be looking at certain clauses from time to time. The Prime Minister said on about the first day we came to government in 1983 that we were not a group of people who considered that all wisdom lies here in Canberra. We are prepared to listen to the community and, if necessary, to improve any section of any Act which needs attention-we will not resile from that. That will be done if representations are properly put to us and are found to have merit. Of course, if one does nothing, as this Opposition did nothing when it was in government-it did not bring in any reforms and it let the rorts and rip-offs continue because it was not interested in reform-it is not difficult not to make mistakes. It is easy not to get things right first time, however, if a party of reform is prepared to make some tax reform changes. But it is incumbent on it then to make any necessary changes. We are a government of reform. We are intent on that reform and we will make changes to any single clause if we find that those changes are necessary. Under the previous Government, the one in which the Leader of the Opposition failed as Treasurer and the one which did too little-and what it did, it had to be dragged into doing-Australia was virtually unique among Organisation for Economic Co-operation and Development countries in having no general capital gains tax. What is the purpose of a capital gains tax? Let me go over this again in more detail. Real capital gains represent an increase in purchasing power, as do real increases in wages, salaries and other forms of income. The lack of a general capital gains tax led to major breaches of principle, equity and efficiency. Its absence discriminated in favour of people who obtained some or all of their income in the form of capital gains. Because ownership of capital is heavily concentrated among higher income groups, it is they who mainly benefited from the very concessional treatment of capital gains under the previous Government, which led to an inequitable share of the tax burden being borne by other taxpayers, in particular lower income earners. In addition, it enabled non-resident owners of Australian assets to avoid paying their fair share of tax. A capital gains tax, as well as making the tax system fairer, will improve the performance of the economy. Its absence has distorted the pattern of investment by encouraging speculative activity as against investment in more productive activity. This has reduced the rate of growth of the Australian economy. By contrast, our capital gains tax actually encourages investment in all productive activities. The previous Government's refusal to introduce a general capital gains tax was also at the heart of the explosion of the tax avoidance industry while that Government was in power. It gave rise to all sorts of contrived paper schemes aimed at dressing up income as capital gains and hence avoiding income tax. The failure to introduce a capital gains tax showed just how unwilling the Opposition was to attack tax avoidance and evasion and to ensure that the burden of taxation was spread fairly throughout the community. A capital gains tax is a key element in any serious attack on tax avoidance and evasion. By opposing a capital gains tax the Opposition is showing that it is not dinkum about avoidance and evasion. A capital gains tax is part of the Government's package of reforms, whereas the Opposition has no policies whatsoever. I end as I began: We on this side of the House, in contrast to our opponents, are people who stand for something-fairness, equity, equality of opportunity and a more just society. We will not be put off gaining our reforms by this Opposition bringing such pathetic matters of public importance to the House as it has today. A capital gains tax is essential for equity and justice. Mr DEPUTY SPEAKER(Mr Leo McLeay) —Order! The Minister's time has expired. Mr TUCKEY(O'Connor)(5.14) —The first responsibility of the Government at Question Time is to give information. It is the responsibility of the Opposition to elicit information. This Government-I think it even has meetings about this-quite clearly feels that its responsibility is to deny the Parliament information. In denying the Parliament information it is denying the Australian people information which just might help them to understand this Government's new rules of self-assessment so that they can properly declare their tax responsibilities to the Commissioner of Taxation. Today, in the interests of those people, whom the Minister for Immigration and Ethnic Affairs (Mr Hurford) has just said the Government is so interested in, we asked some pretty serious questions. We asked one question about how a house would be treated in certain circumstances; something this Government chose to exempt. It was no coincidence that we chose a house very similar to the one the Treasurer (Mr Keating) has, because we wanted to know whether the Treasurer or the Commissioner of Taxation would consider a house to be a principal residence in those circumstances. Of course the Treasurer would not, nor would the Commissioner of Taxation, but the Treasurer wants to consider it a principal residence so that he can give himself $17,000 to $20,000 worth of taxpayers' money tax free by way of travel allowance. That is why we asked the question. We got the usual push off from the Treasurer, who could not answer, even if he wanted to in those circumstances. He is the Treasurer of misinformation, and he has been doing it all his life. He could not lie straight in bed. It is interesting that he has managed to bluff the media for so long that they are now starting to wake up to him. Let us look at what Terry McCrann had to say in the Age of 3 October about the Treasurer and his overseas trip. This is not a matter of opinion; this is a matter of fact. Under the headline `Keating's claim is outrageously risky business', he said: One certainly cannot fail to be impressed by the monumental arrogance of the man. But all his home-town trumpet solitaries fade almost into quietude before his performance at the annual IMF meetings this week. For Paul Keating to stand up in Washington before the world's finance ministers and lecture the United States about economic policy-and hold out his performance down under as the model-takes some beating in the glorious annals of sheer bare-faced gall. From the man whose sojourn as Treasurer has seen the dollar plummet, our Foreign debt soar, our triple-A disappear, our inflation run at multiples of that in the industrial countries we like to think we are one of, our interest rates stay at punishingly high record levels-etc. etc. etc. . . . In short, from the man whose brief sojourn as Treasurer has seen Australia take one mighty step from First World towards Third World status, the secret of his ``success'' for all the world to share. It is difficult to think of one measure of economic health and success in which Hawke-Keating's Australia outranks Reagan's America. Unemployment 7 per cent in the US, 8 per cent down under; inflation 1.5 per cent there versus 8.5 per cent here- Mr Cleeland —I take a point of order. Mr TUCKEY —Sit down, you have no point of order. You deal with him, Mr Deputy Speaker. Mr DEPUTY SPEAKER(Mr Leo McLeay) —Order! The honourable member for O'Connor will resume his seat. Mr TUCKEY —This is a frivolous point of order. Mr DEPUTY SPEAKER —Order! The honourable member for O'Connor will cease interjecting while the Chair is asking him to resume his seat. I call the honourable member for McEwen. Mr Cleeland —The debate today, as fixed by the Opposition, refers to the high cost to the Australian community arising from the intended and unintended consequences of the Hawke Government's capital gains tax. The honourable member for O'Connor has yet to go on to the debate and has not yet raised one matter which is relevant to the debate. Mr DEPUTY SPEAKER —Order! I am hoping that the honourable member for O'Connor is coming to the question of the matter of public importance. Mr TUCKEY —Thank you, Mr Deputy Speaker. The point I am making is that two questions were asked of the Treasurer on the capital gains tax and he came out with his usual bravado, arrogance and attempts to mislead. I am making the point that while he was overseas he did not want to get out of practice; he tried it on the leading international monetary people of the world. That is a disgrace and a shame for Australia. I could go on, but I will not bother. We had more of that today at Question Time-we had the Minister and the Treasurer telling us all about tax avoidance under the previous Government and about Costigan. I read from page 33 of the Costigan report of the Royal Commission on the Activities of the Federated Ships Painters and Dockers Union, which states: 3.24 As I have mentioned, the Australian Taxation Office in Perth detected the operation of these schemes- that is, the bottom of the harbour schemes- as early as 1973 . . . Who was in office in 1973? Certainly not the Liberal Government. If the schemes were detected in 1973, they had started before that, probably in 1972. In its full time the Whitlam Government, under various Treasurers, had an opportunity to correct that problem, which was well known to the Australian Taxation Office, but it did not. The schemes started under the Labor Government. What happened with the Curran scheme? Treasurer Crean knew plenty about that, did he not? If honourable members opposite want a history lesson as to who was pretty crook on tax I will give them one. But that is only half of it. I could go on with some of the things said about Treasurer Keating in that article by Terry McCrann. He identifies how the Treasurer went on and on, rounding out the figures by a few per cent here or something of a per cent somewhere else, telling fibs to people who would know better and would, no doubt, be laughing at him behind his back. All he knows is winning the argument. He does not understand anything but politics. It is a pity that he did not pick his friends a little better too. Some people in this country, such as Warren Anderson, have been reported to be very shonky. Warren Anderson had a tax problem. Mr DEPUTY SPEAKER(Mr Keogh) —Order! Mr TUCKEY —Mr Deputy Speaker, there is nothing wrong with my mentioning Warren Anderson and I will move dissent from your ruling if you try to stop me. Mr DEPUTY SPEAKER —Order! The honourable member for O'Connor will resume his seat. First, the Chair will not tolerate threats from the honourable member for O'Connor. Mr TUCKEY —It is not a threat. Mr DEPUTY SPEAKER —Secondly, I suggest to the honourable member for O'Connor that, while it is the general practice of this House to allow discussion on matters of public importance, once introduced, to be fairly wide-ranging, he needs to be extremely careful that he is not approaching a matter that, to be considered, needs to be the subject of a substantive motion in the House. Mr Cadman —How can you predict the debate? Mr Rocher —That is outrageous. Mr DEPUTY SPEAKER —Order! I will not tolerate that from any honourable members. The honourable member for O'Connor needs to be careful that he is not approaching a matter that, to be considered, needs to be the subject of a substantive motion. Mr Carlton —How much time does he have? Mr Rocher —You are using up the speaker's time. Mr DEPUTY SPEAKER —If honourable members on my left are so discourteous to the Chair as to continue to interrupt-the honourable member for Mackellar or anyone else for that matter-they are taking up the time of their colleague. The honourable member for O'Connor needs to be sure that he is not approaching things in that way. Mr Beale —You said that once. He can get on with it. Mr DEPUTY SPEAKER —I will not call the honourable member for O'Connor until his colleagues cease interjecting. I call the honourable member for O'Connor. Mr TUCKEY —Mr Deputy Speaker, I had not mentioned a member of this House when I mentioned Warren Anderson. If you know so much about the links between Warren Anderson and the Treasurer, that is not my fault. Mr DEPUTY SPEAKER —Order! The honourable member for O'Connor is getting very close to reflecting on the Chair. The honourable member will resume his seat. I was not calling him to order on that matter; I was calling him to order on things he had referred to earlier. Mr TUCKEY —Mr Deputy Speaker, I am talking about a gentleman called Warren Anderson who has declined to deny that he had some $11m worth of bottom of the harbour tax claims against him which were reduced to $4.7m. We are also discussing the matter of capital gains tax. That man has substantial properties all over Australia which, no doubt, are subject to capital gains tax. We wonder whether his problems are the same as those of some other people. We have now discovered that if people who owned a freehold property in an operating business before 20 September now wish to sell a lease for $30,000 or $50,000-they might be in the circumstances that a Labor member mentioned yesterday of having a husband die and they are left with seven kids and have to sell a lease on that operating business-that $30,000 or $50,000 is now subject to a capital gains tax, and it will be reduced by half irrespective of that. Warren Anderson is a friend of the Treasurer. It ill becomes the Treasurer to mix with someone who has already had tax avoidance problems, and it ill becomes him to take $300,000 for clocks and to miss the payment of capital gains tax when the clocks were worth only about $10,000. I am talking about the Treasurer. The clocks were not worth that. Getting $300,000 for those clocks was like placing a bet on a horse at the races after it had gone past the post. This is the man who will not come into the House and debate with us. This is the man whom I have got half way-- Mr DEPUTY SPEAKER —Order! The honourable member's time has expired. I call the honourable member for McEwen. Mr Rocher —Mr Deputy Speaker, I would like to move an extension of time for the honourable member for O'Connor. Mr DEPUTY SPEAKER —There would need to be a suspension of Standing Orders for the honourable member to do that. Prior to calling the honourable member for Curtin I had called the honourable member for McEwen. The honourable member might be aware of that. Mr CLEELAND(McEwen)(5.26) —It is a pity that this debate is not being televised so that all of Australia could have seen the antics-that is all that they were-of the honourable member for O'Connor (Mr Tuckey). As an Australian citizen I am ashamed of the behaviour that I have just witnessed. It does no credit to this Parliament and to this House to have someone behave in such a despicable manner. The Opposition brought on this matter of public importance and it set the terms of the debate. Neither the honourable member for Mackellar (Mr Carlton) nor the honourable member for O'Connor has actually tackled the terms of the debate. It indicates to me that either they do not know their subject-that does not surprise me because they are deficient on all matters of tax-or they are just using the House for their own weird political machinations. This Opposition is also very strange because it purports to be a follower of Thatcherism and Reaganism. Members of the Opposition give very similar lines of argument in this House to that used by the British Prime Minister, Mrs Thatcher, and the American President, Mr Reagan. But when it comes to the matter of the capital gains tax they do not tell this House that the American President, under his so-called tax reform Bill, has just increased the capital gains tax in the United States of America. The Americans have a very solid capital gains tax and have had one for many years. In fact, they have no principal exemption on the family home. It is not a gentle capital gains tax such as this country has; it is a very heavy capital gains tax. Only recently the Leader of the Opposition (Mr Howard) said that he was very impressed with the so-called tax reforms of the American Government. He was very impressed with the transferring of $120 billion of tax deductions to wage earners and the imposition of an added $120 billion of taxes on business. I hope that the business people of Australia listen very carefully to what the Leader of the Opposition is saying about his proposed tax reforms because if he follows what Mr Reagan and the Americans have done he will not have very many friends in the business community. What about Great Britain and the great friends of Mrs Thatcher, the privateers of Australia who will sell off Australian assets if they get half the chance? Britain has had a capital gains tax for years. The conservatives of Great Britain and the conservatives of America at least, to their credit, understand about equity, fairness and the need for a capital gains tax. When the Opposition eventually has a policy on anything, particularly on tax, I will be most interested to see what it comes up with. In the last few days we have heard the shadow Treasurer and the current Leader of the Opposition-I do not know how long he will be in that position-talking about how they were going to abolish the fringe benefits tax and go back to section 26 (e) of the Income Tax Assessment Act. As the Treasurer (Mr Keating) rightly pointed out today, they have been bombed down on that one because the Commissioner of Taxation, Mr Boucher, has clearly said that that is a joke. If that is what they think they are going to do they are tax illiterates. They learn nothing, they know nothing and they live in rhetoric and in history. They have been unloaded on section 26 (e) and on the fringe benefits tax by the Commissioner of Taxation, and they will be unloaded on the capital gains tax. The reality is that none of those people opposite has ever practised in tax. They know nothing whatsoever about it. The reason for a capital gains tax is very simple. It was very easy for people, with the proper advice, to buy a series of properties-real estate. Of course, under the former Administration these people could negatively gear. They could transfer income, get a tax deduction and borrow highly on the properties that they had bought for long term gain. There was a wonderful system under the former Government. People could negatively gear. They could buy property to make money-the properties were bought to make a profit-hold the properties for a sufficient period, sell the properties, make a profit and pay no tax at all. Members of the Opposition seem to think that that is a very desirable thing to do. They seem to like the system under which some people-not everyone, but some people, those who have a sufficient capital to do it-have the opportunity to use the scheme I have just mentioned, make a profit, pay no tax and, in the process, get a tax deduction for the investment. They think that is a wonderful thing. They think everyone should be able to do it, but very few people can. That is the sort of thing that they will support as much as they support free holidays, free overseas trips and all those sorts of things. Mr Reith —Why are you taxing family homes? Mr CLEELAND —I think we should ignore the honourable member because, like most members of the Opposition, he does not know anything about tax. It is one of the tragedies of the whole debate in this House: We never debate the real subjects. The honourable member for Mackellar did not once go to the terms of the debate. For 10 of his 20 minutes speaking time he harangued the House on the deficiencies of the Government and did not go to the terms of the debate. It is a really great tragedy that in this House a fourth grader such as I can stand up here and do members of the Opposition one-handed, with one arm tied behind my back. We do not even need notes to debate tax matters with honourable members opposite. They are a joke. The reality of a capital gains tax is that under our previous system of taxation there was a distinction between capital and income. The former well-known High Court judge, Chief Justice Sir Owen Dixon, once described capital as a tree and the income as the fruit which grew from the tree. Over many years we have distinguished between those two matters in our tax Act, but the reality has always been that profits are made from both capital and income. If a wage earner puts $5,000 in the bank and gets interest on it, he pays income tax on the interest. To the wage earner that $5,000 is a capital investment, but he is paying tax on the fruit which is coming from that $5,000. The person with the greater wealth or the greater capital base, who has the greater options available and who buys real estate in the manner I have described, would pay no tax under the Opposition's proposal and under the tax system it administered. Again, honourable members opposite are working on those who have the capital base, those who have the ability to use the system which exists to make profits and pay no tax, but they are quite happy to tax the man who has the small amount of $5,000 in the bank. I think that is inequitable and wrong, and I do not support their proposals at all. I will tell those opposite something they probably do not know. Many, many farmers in this country are supporting a capital gains tax. They have spoken to me and to the country task force, and they have said that the capital gains tax is one of the best things that has happened to Australian farming. I will tell honourable members opposite why because they probably do not know. The reality is that Australian farmers have been overcapitalised for years. Because of a tax Act that was administered by the present Opposition it was easy for a city dweller with a large income to pay excessive amounts of money for a farm and use it as a tax deduction against his income, but a genuine farmer was forced to buy on the market overvalued farming properties. The farmers in Australia realise that the capital gains tax will reduce the capital value of their farms. It will bring farming land back to its real value so that the income they produce from it is commensurate with the value of the land. They understand that; they are supporters of this Government. Many Australian farmers, particularly in my electorate, are very pleased that the value of their farms is coming down. It means that the income they will be able to make will be more profitable, they can buy other farms and improve their properties, and they do not have to compete with the higher earners from the cities. The Opposition does not like this. It would like to see farm values skyrocket again and inflate to the stage at which the income produced from a farm is not commensurate with the value of the farm. There is another interesting section on capital gains tax which anyone who has practised in tax matters knows damned well. Any tax lawyer or accountant of reasonable note can advise any person with a sufficient capital base on how to transfer a taxable income item to a tax-free capital gain. It is so relatively simple that everyone in this country has been doing it for years. It has been a rort. Professor Russell Mathews identified it in the 1970s in his very well-known report on the Australian taxation system and the Asprey Taxation Review Committee report identified that problem. Every academic report on the Australian taxation system in the last 15 years has identified the ease with which people can transpose an income-producing asset to a capital-producing asset and pay no tax on the profits. One of the things that members of the Opposition did not do today in the debate was distinguish between, nor could they argue about, the difference between a capital profit and income. They could not come into this House and argue cogently in any way, shape or form why a person who makes a profit from capital should not pay tax while a person who produces income should pay tax. I would like them to come into this House one day and explain to us why that distinction should occur in our Income Tax Assessment Act. I cannot see a difference between a profit from an income source and a profit from a capital source. A profit is a profit and should be subject to tax. Members of the Opposition do not support that. They like their friends, those exclusive few, the people at the top end of the market, to have the opportunity to increase their wealth at the expense of the wage earner. Frankly, I do not know why they want that. Mr DEPUTY SPEAKER(Mr Keogh) —Order! The honourable member'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 at the next sitting. Bill returned from the Senate with an amendment. Ordered that the amendment be taken into consideration in Committee of the Whole House at the next sitting. Mr BARRY JONES(Lalor-Minister for Science and Minister Assisting the Minister for Industry, Technology and Commerce)(5.37) —I move: Excise Tariff Proposals Nos. 11 and 12 (1986) and Customs Tariff Proposals No. 17 (1986). The proposals I have just tabled relate to proposed alterations to the Excise Tariff Act 1921 and the Customs Tariff Act 1982. Excise Tariff Proposals No. 11 (1986) and Custom Tariff Proposals No. 17 (1986), operative on and from 16 October 1986, provide for reduced rates of duty on certain refined petroleum products resulting from the Government's decisions on the pricing of indigenous crude oil and related issues. The decisions were announced by my colleague the Minister for Resources and Energy (Senator Gareth Evans) in a Press release of 22 September 1986. The operative date for the decrease in duty is the same as that for the new wholesale prices for petrol. The Prices Surveillance Authority has announced that the new prices will operate on and from 16 October 1986. Excise Tariff Proposals No. 11 (1986) decrease the excise duty on the relevant petroleum products. Excise duty on motor spirit and diesel is reduced by 0.479c per litre. The reductions for aviation gasolene and aviation kerosene are 0.404c per litre and 0.383c per litre respectively. For other kerosene, fuel oil and heating oil the reduction is 0.099c per litre. Customs Tariff Proposals No. 17 (1986) make complementary changes to the Customs Tariff Act in respect of duties applying to equivalent imported refined petroleum products. Excise Tariff Proposals No. 12 (1986) formally place before Parliament, as required by law, a tariff alteration introduced by Commonwealth of Australia Gazette notice No. 20 (1986) under authority of section 160b of the Excise Act. The proposals decrease the excise duty on naturally occurring liquefied petroleum gas from $50.77 to $18.27 per kilolitre, operative on and from 1 October 1986. This change was announced by the Minister for Resources and Energy on 25 September 1986. Summaries of the alterations contained in these proposals have been prepared and are being circulated to honourable members. I would also advise honourable members that rates of diesel fuel rebate decrease in conjunction with these duty changes. The new rebate rates for currently eligible use of diesel fuel will be 19.706c per litre in respect of primary production, 17.318c per litre for mining operations and 15.004c per litre for other prescribed use in residential premises, homes for aged persons, nursing homes, hospitals and other institutions providing medical or nursing care. Honourable members will note that the rebate for eligible primary production remains a 100 per cent rebate of the duty and the new rebate rate for eligible mining operations effectively means no change in duty payable. I commend the proposals to the House. Debate (on motion by Mr Hunt) adjourned. Mr NEHL(Cowper) —On behalf of the Joint Committee of Public Accounts, I present the 256th report of the Committee, relating to forward obligation of Government expenditures, and I seek leave of the House to make a short statement in connection with the report. Leave granted. Mr NEHL —I thank the Minister and I thank you, Mr Deputy Speaker. The inquiry into forward obligation of government expenditures was initiated by the Public Accounts Committee following the finding by the Auditor-General, in his September 1985 report, that significant weaknesses existed in the forward obligations control systems of several departments. This finding arose from audits at the Departments of Finance, Aboriginal Affairs, Local Government and Administrative Services, and Territories. Audit found that the departments did not keep accurate records; monitoring by the Department of Finance was inadequate; approved limits to forward obligations were exceeded by substantial amounts on a number of occasions; there was no mechanism through which the Government could be regularly informed of such breaches; and there was a reluctance by departments to accept responsibility for the inadequacies discovered by audit. Because the Auditor-General's comments had wide implications, for the whole of the Public Service, the Committee sought submissions from all departments. Additional information was sought from Treasury and the Department of Finance. A total of 29 departments responded to the initial request. Procedures to secure government approval to enter into expenditure commitment against budgets of future years-that is forward obligations-have existed for some time. Such procedures are essential in cases where financial commitments cover several years. Purchase of defence equipment or property by the Commonwealth, or contractual arrangements such as the cleaning of airports or the maintenance of computer equipment, are typical examples of where the forward obligations system would be used extensively. The forward obligations system was introduced in its current form in 1976, at a time when the Government attached particular importance to the objective of reining in the rate of growth in government spending. The stated aim of the procedures was the application of a forward programming system to enable the Government to regulate the extent to which commitments involving future Budget allocations could be made. This forward programming system was to apply across a broad range of Budget expenditures to minimise the extent of Budget lock-in. The Committee examined the Auditor-General's findings within the framework of the broad objectives set for the forward obligations system in 1976. Information obtained through submissions, discussions with officers of the Department of Finance and further research indicated that forward obligations covered less than 20 per cent of Budget outlays. The breaches against approved limits reported by the Audit Office had a relatively minor impact on overall expenditures. This was because, in most cases, departments have been able to find offsetting savings to the funds they needed, over and above the approved forward obligations limits. Non-compliance tended to bear mainly on internal program management, rather than on overall budgetary control. The Forward Estimates system, which covers all Budget outlays, has become the best available indicator of the extent of Budget lock-ins. The 1985-86 Budget statements noted that, in that year, Forward Estimates formed the basis of individual portfolio targets for the first time, and that these targets served as guidelines in the determination of Budget estimates and the existing legislative and policy framework placed primary responsibility for forward obligations with departmental secretaries. The Committee concluded that the forward obligations system, while important to departments, had limited value to overall Budget strategy and control. In addition, the budgetary impact of the breaches reported by Audit were found to be relatively minor once offsetting savings had been taken into account. These findings suggested that tighter monitoring by the Department of Finance and regular reporting to the Government on possible future breaches were unlikely to have a significant impact on overall Budget outlays. In addition, greater involvement by the Department of Finance would not be within the spirit of the current policy of devolution of financial responsibilities to departmental secretaries. The Committee also concluded that it was time to review the purpose and the operations of the system. This was because the environment in which the forward obligations system was introduced a decade ago has changed considerably. The Committee noted that, in response to the Auditor-General's findings, the Department of Finance initiated an internal review of the forward obligations system. The review proposes that monitoring activities of the Department of Finance be, in future, limited to only the major forward obligations categories, and that monitoring of expenditures against all other obligation limits be the responsibility of departmental secretaries. The Committee recommends that the current review of the forward obligation system by the Department of Finance be expedited; and that the new regulatory framework arising from this review specify that the system's main objective is to authorise departments to enter into forward commitments in certain expenditure categories and limit the extent of monitoring by the Department of Finance to cases where commitments could have a significant impact on overall Budget outlays. The Committee further recommends that, in developing the details of the new regulatory arrangements, the policy of greater devolution of responsibility to departmental secretaries be given as much weight as possible. In this context, the Committee considers that monitoring arrangements by the Department of Finance which rely on global obligation limits for departments would be preferable to arrangements which monitor obligations at the program level. I would like to express the Committee's appreciation of the effort put in by departments in preparing their submissions, and thank the Department of Finance for the supplementary information it prepared for this inquiry. I commend this report to honourable members. Bill presented by Mr Lionel Bowen, and read a first time. Mr LIONEL BOWEN(Kingsford-Smith-Attorney-General)(5.46) —I move: That the Bill be now read a second time. This Bill continues the practice of introducing an omnibus Bill into each sittings of the Parliament as an expeditious way of making a large number of non-contentious amendments to legislation not otherwise being amended. Some of the amendments made by this Bill tidy up, correct and update existing legislation. Other amendments are of minor policy significance or are matters of routine administration. None of the amendments made by the Bill has any significant financial impact. However, the amendments of the Migration Act 1958 are expected to result in a marginal increase in revenue in the long term. Many of the proposed amendments will be self-evident or sufficiently explained by the explanatory memorandum circulated with the Bill. I propose to confine my comments to addressing the more noteworthy changes included in this Bill. Air Navigation (Charges) Act 1952 At present a statutory lien for the payment of outstanding charges can cease to have effect only if all the outstanding charges are paid or the aircraft is seized and held by the Commonwealth. The amendments provide the power for a lien to be lifted in other circumstances where continued existence of the lien is no longer appropriate. An example of such circumstances would be where all outstanding debts have been waived or written off. Ashmore and Cartier Islands Acceptance Act 1933 Australian Antarctic Territory Act 1954 Christmas Island Act 1958 Cocos (Keeling) Islands Act 1955 Coral Sea Islands Act 1969 Heard Island and McDonald Islands Act 1953 Norfolk Island Act 1979 Seat of Government (Administration) Act 1910 Amongst other things, these Acts provide that the Governor-General may make ordinances for the peace, order and good government of the Territories. The ordinances are subject to Parliamentary scrutiny and disallowance. The Acts provide that where an ordinance repeals another ordinance and the repealing ordinance is disallowed, the repealed Ordinance is revived. As the Acts currently stand, where the disallowed ordinance repealed a law other than an ordinance, the disallowance does not result in the revival of the repealed law. Important areas of the law in force in the Territories are not contained in ordinances and, accordingly, if such a law were to be repealed by an ordinance which is subsequently disallowed, a gap in the relevant Territory's law could result. The fact that disallowance of the repealing ordinance does not, in these circumstances, revive the former law also detracts from the effectiveness of disallowance. The Bill amends the Acts in question so that any law which is repealed by an Ordinance will be revived upon disallowance of the repealing Ordinance. Australian Capital Territory Supreme Court Act 1933 The proposed amendment will enable the Australian Capital Territory Ordinance to authorise the judges of the Australian Capital Territory Supreme Court to make Rules of Court on particular matters. The amendment will remove legal doubts that arose recently in two cases as to the extent of the current rule-making power conferred on the Supreme Court judges under the Act in respect of matters arising from the vesting of jurisdiction in the Court by Ordinance. The Act authorises such conferral of jurisdiction by Ordinance. Australian Institute of Marine Science Act 1972 The Act currently provides for a Council consisting of a Chairman and four members to govern the Institute. It also provides for a Director to manage the affairs of the Institute subject to the general direction of the Council. The Director is accountable to Council on all matters involving the Institute including managerial and administrative matters. As chief manager of the Institute, the Director is the executive arm of Council and should therefore be an ex-officio member of Council. The amendments now provide for the Director to be included as an ex-officio member of the Council of the Institute. Australian Trade Commission Act 1985 At present, the Australian Trade Commission may insure the direct overseas investment of an Australian organisation against losses due to war, expropriation, or foreign exchange transfer blockage. The main purpose of the proposed amendments is to allow the Commission to extend this form of insurance to Australian organisations where the overseas investment is made indirectly via a foreign subsidiary or corporation in which the Australian organisation has a substantial shareholding. Bankruptcy Act 1966 The amendments to this Act proposed in the Bill are designed to improve the administration of bankruptcy. The Official Trustee is restructured from a corporation aggregate into a corporation sole vested in the Secretary to the department for the time being administering the Act, presently my Department. This will enable the performance of the trustee function by the Official Trustee to be more effectively managed and its procedures to be streamlined. The Federal Court of Australia will also be empowered to delegate certain of its powers under the Bankruptcy Act to Registrars of the Court. The Federal Court is already able to delegate it powers in jurisdictions other than bankruptcy. Similarly, the Family Court of Australia is able to delegate certain of its powers to Registrars of that Court. Experience has shown that such provisions permit considerable freeing up of judicial time enabling resources to be devoted to more complex disputes between litigants rather than spent on minor procedural and interlocutory matters. Biological Control Act 1984 The purpose of the proposed amendments to the Biological Control Act 1984 is to bring the Commonwealth Act into line with the co-operative Commonwealth, State and Northern Territory scheme on biological control. Each State and the Northern Territory will establish a biological control authority and the Act will be amended so that the Industries Assistance Commission Act 1973 will apply to declarations under each of the complementary State-Northern Territory Acts. Complementary State legislation has now been passed in the Victorian, New South Wales, Tasmanian and South Australian parliaments. The aim of the Act will continue to be one of establishing procedures for assessing and, where appropriate, authorising biological control programs in Australia. The decision-making process presently being followed will not be changed by the amendments and the direct costs to the Commonwealth for salaries and administration are not expected to be increased by the amendments. Commonwealth Places (Application of Laws) Act 1970 The proposed amendments will enable the Director of Public Prosecutions to institute proceedings in relation to offences against the applied provisions of State laws committed on Commonwealth places in the States. The amendments will also enable the Director to carry on such proceedings when they have been instituted by Commonwealth officials. This will include proceedings instituted by members or special members of the Australian Federal Police. Such proceedings may currently be instituted or carried on by State prosecutors. The right of State authorities to institute or carry on proceedings in respect of offences against applied State laws will not be affected. Copyright Act 1968 The amendment will clarify the definition of `broadcast', which was modified by the Copyright Amendment Act 1986, passed last sittings. Interested groups have submitted that the wording inserted by that Act is ambiguous, and does not express the Government's intention that `broadcast', in this context, should cover transmissions to the copyright owner's public, whether the `general' public or part of the public. Following consultations there is agreement with the policy and wording of the proposed new definition. Crimes Act 1914 The amendment makes it clear that the Act does not, and was never intended to, limit the operation of any Territory law relating to search in connection with offences against any law of that Territory. Dried Vine Fruits Equalization Act 1978 The amendments are being made to overcome certain practical difficulties associated with the administration of levy payment and disbursement. The need for these amendments arises from relatively recent legal interpretations of the Act. To enable the Australian Dried Fruits Corporation to continue to distribute equalisation payments to producers through the packing establishments that first receive the fruit for processing, the concept of a packer is being amended so that it no longer includes the establishments that remove seeds from raisins on behalf of the original packing establishment. The need for this change arises from the fact that the `deseeding' establishments do not have records which would allow them to pass on equalisation payments to individual producers. Consequential amendments deal with the circumstances in which fruit is regarded as being in the custody of the packer. Other amendments are being made to ensure that equalisation levy rates can be set late in the season without excluding fruit which leaves the custody of a packer early in the season from the penalty provisions for non-payment of the equalisation levy. At present, interest which accrues on equalisation moneys held in trust by packers prior to disbursement to individual entitled producers must be returned to the Corporation. Amendments are being made to provide that such interest be passed on by packers to those producers in proportion to their individual entitlements to the principal sum. The proposed amendments have the support of the Australian Dried Fruits Association, the principal industry representative body, and the Australian Dried Fruits Corporation. Family Law Act 1975 Australia presently has reciprocal arrangements for enforcement of maintenance orders with 29 States of the United States of America. However, those arrangements apply only to final orders of United States courts. The scheme which operates within the United States of America by virtue of the enactment by all States of the Uniform Reciprocal Enforcement of Support Act does not allow for the making of orders if the respondent is not present within the jurisdiction. Instead, a `petition for support' is obtained from a court in the claimant's State and remitted to the respondent's State for hearing. This amendment will enable the regulations to make provision for courts having jurisdiction under the Family Law Act to accept petitions for maintenance remitted by courts of the United States states that conclude reciprocal arrangements with Australia, and for the Australian courts to make orders in respect of such petitions. Insurance Act 1973 It is proposed to make a number of amendments of a minor or machinery nature, the more significant of which relate to the solvency requirements. They will make it clear that current account balances due from related bodies corporate are not to be regarded as assets for solvency purposes unless they have been approved by the Insurance Commissioner for this purpose. Also, assets otherwise subject to such approval of the Insurance Commissioner cannot be placed outside this requirement through the use of trusts. The amendments also provide that, for the purposes of the required solvency margin, the value of shares held by an authorised insurer in an authorised related body corporate is to be reduced by an amount that is equivalent to the solvency margin, per share, of that related insurer. Insurance (Agents and Brokers) Act 1984 The proposed amendments are, in the main, designed to clarify a number of provisions and overcome certain difficulties that have been identified in the operation of the Act with a view to avoiding the imposition of unnecessary administrative costs. The proposed clarifications relate to the nature of misrepresentation, the acceptability and scope of the professional indemnity cover required for registered brokers and the provision of information. The amendments designed to overcome administrative difficulties relate to dealings with Lloyd's brokers, the provision of receipts, especially where premiums are paid by instalments, and the remission of premiums to insurers. Other proposals permit brokers to deposit funds with building societies and require brokers acting as agents of insurers under other than binding agreements to advice intending insureds. Insurance Contracts Act 1984 The proposed amendments are designed to clarify certain provisions and reduce unnecessary administrative costs in complying with the Act. The proposed clarifications aim to remove any uncertainty regarding the right of an insured to recover an amount greater than the amount of a loss, cover the position where more than one interest holder is involved in a claim on an insurer and make it clear that notices regarding renewal should be provided even where a broker is acting for the insured. The administrative changes relate, in the main, to the scope of the requirement to provide certain notices each time a contract is renewed, extended or varied. Migration Act 1958 In April 1986 it was announced that the Government intended to introduce a more flexible re-entry policy for migrants. The new policy, to be introduced from 1 January 1987, will allow migrants multiple re-entry to Australia without having to reside in Australia for 12 months to obtain a re-entry visa. The amendments will make it clear that different charges can be fixed for processing the new resident re-entry visas compared with other visas. It is anticipated that the net effect of the implementation of the new policy in terms of revenue, will be a marginally reduced level of revenue in the transitional fiscal year of operation. However, in the longer term, it is expected that revenue will increase. The amendments will also extend the operation of the Act to the Territory of the Cocos (Keeling) Islands and to the Coral Sea Islands Territory. Ombudsman Act 1976 These are minor administrative amendments designed to delete obsolete provisions and to clarify the existing powers of the Ombudsman to decline to investigate certain complaints. They will also enable the Ombudsman to make preliminary enquiries when considering investigating action on his own motion, and to obtain information and documents from an agency when he does not know the identity of the officer holding the information or documents. In addition, the power to make acting appointments of Deputy Ombudsman is transferred from the Governor-General to the Minister to expedite the making of such appointments. Postal Services Act 1975 The Special Premiers Conference on Drugs agreed on 2 April 1985 that the Commonwealth should create an offence of sending illicit drugs through the mail. The amendment provides that it is an offence to send through the mail, without lawful authority, a prescribed narcotic substance as defined in the Customs Act 1901. A penalty of a maximum of two years' imprisonment and/or a fine not exceeding $5,000 attaches to the offence. This amendment will provide another weapon in the Government's fight against drug trafficking. Public Order (Protection of Persons and Property) Act 1971 The amendments will place the Northern Territory on the same footing as the States under this Act, consistent with the grant of self-government to the Northern Territory. Removal of Prisoners (Australian Capital Territory) Act 1968 The proposed amendments will enable Territory offenders to have their non-parole periods reduced by the remissions which are granted by State law. The Act already provides that their sentences are reduced by remissions granted by State law, but the High Court of Australia held recently in Paivenen's case that `sentences' did not include non-parole periods. The present policy in the legislation is that Federal and Territory offenders should receive the same remissions granted by law as their State counterparts, whether on sentences or non-parole periods. Since the Probation and Parole Act 1983 of New South Wales came into force on 27 February 1984 Federal and State offenders have their non-parole periods reduced by remission whereas Territory offenders, as a matter of law, do not have their non-parole periods so reduced. The amendments will put Territory offenders on the same footing as New South Wales offenders. Also, since the coming into force of the New South Wales Act courts in that State are required to set non-probation periods, not non-parole periods, where the sentences are three years ar less. Where the sentences are more than three years the court may still set non-parole periods in New South Wales. Non-probation orders in New South Wales are reduced by the same remissions applying to non-parole periods. In the Australian Capital Territory, however, a court may only set a non-parole period. There are technical differences between a non-probation period and a non-parole period, particularly relating to release. The amendments will therefore ensure that Territory offenders sentenced to three years or less will have their non-parole periods reduced by remission. At common law, it has been held that where a prisoner escapes while serving a term of imprisonment he cannot be detained under the sentence once the term has expired. The amendments will make it clear that a Territory offender's sentence will cease to run for the period he is at large. Trade Practices Act 1974 The first amendment rectifies a possible unintended limitation on what bodies corporate may be considered to be associated with an acquirer. The words to be deleted were originally added during the Senate debate and could operate to create a significant loophole in merger regulation. As the Act now stands it may not apply to takeovers where the takeover vehicle has no market activities. The amendment will correct this. Consistent with existing provisions, the second amendment prohibits a corporation converting an existing credit card so that it can be used as a debit card, or vice versa, without a prior request from the consumer. The final amendment will enable an applicant to bring an action to seek certain relief in respect of a contravention of the consumer protection provisions. Under existing law a consumer would have to commence an action for damages or injunction before seeking his relief. The amendments do not involve any policy changes. Wheat Marketing Act 1984 The proposed amendment is to redefine wheat of a season. The redefinition would include wheat which has been sown after 1 January, but harvested before 1 October, in a particular year. This will have regard to the practices of the Australian Wheat Board and has industry support. The proposed amendment is to be retrospective to the commencement of the Wheat Marketing Act 1979 to cover the full period of that Act, and includes wheat pools already realised by the board as well as one pool which is yet to be closed. Repeal of Spent and Inoperative Acts No comment is necessary about most of the Acts being repealed. As 1986 is the International Year of Peace, it is appropriate that I briefly mention the background to the repeal of the Trading with the Enemy Acts. The Acts were passed to provide for offences during the period of war in respect of trading with the enemy, and also to provide for the control of enemy property. The period of war was proclaimed to exist from 3 September 1939 until 8 May 1952 when, by proclamation, the state of war was declared no longer to exist. No enemy property from the war period is now held or administered by the Commonwealth, and the Acts have been inoperative for a number of years. I commend the Bill to the House and I present the explanatory memorandum to the Bill. Debate (on motion by Mr Connolly) adjourned. Bill presented by Mr Hurford, and read a first time. Mr HURFORD(Adelaide-Minister for Immigration and Ethnic Affairs and Minister Assisting the Treasurer)(6.07) —I move: That the Bill be now read a second time. This Bill to amend various taxation and other laws will give effect to further decisions of the Government announced by the Treasurer (Mr Keating) in the Budget. In particular, it will advance the due dates for payment of instalments of company tax by early balancing companies and introduce measures to overcome arrangements to avoid provisional tax by the manipulation of income distributions of closely held partnerships and trust estates. Legislation to provide for the payment of a $200 filing fee for applications to the Administrative Appeals Tribunal to review certain decisions of the Commissioner of Taxation is contained in this Bill. Amendments of the capital gains and capital losses provisions of the income tax law to give effect to the announcement by the Treasurer on 22 July 1986 are included in this Bill. The Bill also proposes amendments of the income tax law to attribute a wholly Australian source to certain payments of natural resource income to non-residents and to provide for payers of natural resource income and certain royalties to non-residents to make regular remittances to the Commissioner of amounts retained from such payments. Exemption provisions of the income tax law are also being amended by the Bill to reflect the introduction of the Government's new age-related study assistance scheme-Austudy. Payments under this scheme, including payments of a kind formerly made under the secondary allowances scheme, are to be made subject to tax. Extension of the rebate of tax available in respect of taxable amounts received under certain life assurance policies to amounts received under policies issues by the State Insurance Office of Victoria is a further measure in this Bill. Also proposed by this Bill are amendments of administration provisions of the Australian Capital Territory tax law consequential on two Australian Capital Territory tax Bills that I will introduce shortly. Finally, the Bill will strengthen the management of the Australian Taxation Office by creating a third position of second commissioner and correct several minor drafting errors identified in the taxation laws. I now turn to discuss in greater detail the more important aspects of this Bill. Instalments of Company Tax This Bill gives effect to the Budget decision to advance the due dates for payment of instalments of company tax by early balancing companies. These are companies that, by agreement with the Commissioner of Taxation, have adopted accounting periods ending other than on 30 June. In many cases these companies balance on a date after 30 November in lieu of the succeeding 30 June. Under the existing law, a company's income tax liability for a year of income is met by the payment of three quarterly instalments in August, November and February in the following financial year with the balance paid after the issue of a notice of assessment. Each instalment is generally equal to one-quarter of the company's tax for the year preceding the year of income. As the dates for payment of instalments are, under the present law, the same irrespective of the company's balancing date, a company that balances early enjoys a deferral of tax compared with a company that balances on 30 June. This Bill will remove this advantage by providing for instalments to be payable by early balancing companies 1 1/2, 4 1/2 and 7 1/2 months after the end of the month in which the accounting period ends. This will mean that the interval between the end of the accounting period and the date for payment of instalments will generally be the same for all companies. However, a company with an accounting period ending before 31 December in lieu of the succeeding 30 June will be treated as if its accounting period ends on 31 December. The new arrangements will be phased in over three years to lessen their impact on companies that could otherwise be called upon to pay up to 1 1/2 years tax in the current financial year. Instalments that would otherwise be payable before 30 June 1987 are to be paid in three approximately equal amounts on dates not earlier than 15 June 1987, 15 June 1988 and 15 June 1989. The measure will produce gains of $220m, $230m and $240m in 1986-87, 1987-88 and 1988-89 respectively. Provisional Tax The Bill will also give effect to the Budget decision to amend the income tax law to overcome arrangements for the avoidance of provisional tax. The arrangements involve the manipulation from year to year of distributions of net income of `closely held' partnerships or trust estates between partners or beneficiaries. They rely on the ability of a person to furnish to the Commissioner of Taxation his or her own estimate of taxable income for a year of income and to have provisional tax recalculated on the basis of that estimate. By varying the distribution of the net income of a partnership or trust so that a partner's or beneficiary's income in alternate years is only slightly above or below the tax free threshold, liability for provisional tax could be completely, or almost completely, eliminated. The new measures will effectively deny to a taxpayer the right to vary provisional tax on account of a reduction in income from a family partnership or family trust estate, as defined in the Bill, where the Commissioner considers that the reduction is the result of an arrangement that, objectively viewed, had the dominant purpose of reducing the provisional tax. Where a taxpayer has made application for a variation of provisional tax and the Commissioner has formed such a view, an amount calculated in accordance with provisions in the Bill and referred to as the `provisional tax benefit' will be added to the taxpayer's estimated taxable income before effect is given to the application. However, addition of the provisional tax benefit amount is not to result in a provisional tax liability greater than that originally imposed on the taxpayer. Notice in writing of the amount of the provisional tax benefit is to be given to the taxpayer, who will have rights of objection and appeal corresponding with those available against an assessment. The estimated revenue effect of this measure is $50m in 1986-87. There will be no revenue effect in subsequent years. Capital Gains Tax The Bill will give effect to the announcement on 22 July 1986 that the capital gains and capital losses provisions of the income tax law would be amended in relation to certain options granted after 19 September 1985 by a company. Under the existing law, where a company grants an option to acquire shares of the company, and the options are exercised in a later year of income, the capital gains tax applies in the year of grant, but the gain is excluded when the options are later exercised. If the options are not exercised, the gain on the grant of the option remains subject to tax in the year of grant. There are no capital gains consequences where the options are both granted and exercised in the same year of income. As announced on 22 July, the Bill will provide that, where a company grants options to acquire shares in or debentures of the company, there will be no capital gains tax liability to the company in the year of income in which the options are granted. Instead, the liability will arise in the year in which the options expire, and then only in respect of options which expire without being exercised. The amendment will equally apply to similar options granted by a trustee of a unit trust. The Bill also contains several technical amendments of the capital gains and capital losses provisions, details of which are given in the explanatory memorandum on the Bill. These amendments are not expected to have any significant effect on revenue. Natural Resource Payments and Royalties The Bill will also give effect to the decision, announced on 7 April 1986, to amend the income tax law to ensure that certain income derived by non-residents of Australia and directly related to the development and exploitation of Australia's natural resources-referred to in the Bill as `natural resource income'-is treated as having a source in Australia. The amendment will, subject to an exception I will mention shortly, make natural resource income derived by a non-resident assessable in full. The amendment will apply to payments made after 7 April 1986 that are based on production and recovery of natural resources after that date. Until that date, payments of certain natural resource income had been treated, under a long-standing agreement between the Commissioner of Taxation and one of Australia's taxation treaty partners, on the basis that only 50 per cent of the payments had a source in Australia. That arrangement will continue where natural resource income is paid to a non-resident who, as at 7 April 1986, had an entitlement to receive income subject to that agreement, provided that the non-resident was at that time a resident of a country with which Australia had a double taxation treaty. A non-resident taxpayer who does not satisfy these criteria will not, after 7 April 1986, be entitled to the benefit of this agreement, although any payments made after 7 April 1986 based on production and recovery of natural resources on or before that date will be assessable on only 50 per cent of those payments irrespective of the country of residence. A person liable to make a payment of natural resource income to a non-resident is required, under the existing law, to retain tax that is, or may become due, by the non-resident. Under provisions included in the Bill, the amount retained is to be remitted to the Commissioner within 14 days after the end of the month in which the payment is made. The requirement to remit is, by the Bill, to apply also to payers to non-residents of royalties, other than film and video tape royalties. These royalties are, under the existing law, subject to retention requirements similar to those just mentioned for natural resource income. The Bill will give the force of law to administrative arrangements under which most payers of royalties have, in the past, remitted tax deducted on a regular basis to the Commissioner. The legal requirement to remit deducted tax to the Commissioner will apply in respect of payments made after the day on which royal assent is given to the Bill and will be supported by appropriate penalty provisions. The Crown priority that applies to pay as you earn deductions and deductions under the prescribed payments system in the event of bankruptcy or insolvency of the payer is to be extended to amounts that are required by the Bill to be remitted to the Commissioner. The gain to revenue from these measures is estimated to be $6m in a full year, but for 1986-87 estimated collections are $11.7m, reflecting the earlier receipt of amounts that would not otherwise have been collected until 1987-88. Tribunal and Court Fees Measures contained in this Bill give effect, in relation to the various taxation laws, to the Budget decision to introduce a general filing fee of $200 for most applications to the Administrative Appeals Tribunal. With a taxation objection decision that is reviewable by the AAT, the $200 fee will be payable when the Commissioner of Taxation is requested to refer the decision to the Tribunal. If a request for reference to the Tribunal is not accompanied by the fee, the request will be treated as not having been lodged. As announced in the Budget, the fee will be refunded where the application is successful. In relation to taxation decisions, this will be where a decision on an objection is varied to any extent in favour of the applicant. The fee will also be refunded where the request is withdrawn by the applicant before the Commissioner has forwarded it to the Tribunal. The fee will be payable where the objection decision that is subject to a request for review by the Tribunal is served after a date to be fixed by proclamation. The various taxation laws generally provide for the review of decisions on objections by a supreme court of a State or Territory as an alternative to a review by the Administrative Appeals Tribunal. The Bill also provides for the payment of a refundable $200 fee where a person requests review of an objection decision by a court. The $200 fee for court requests will apply to objection decisions served after a date to be fixed by proclamation. This measure is expected, at the current rate or requests for reference, to yield $2m in a full year. I take this opportunity to indicate that the Government has decided that, along with jurisdiction to review certain other Commonwealth Administrative decisions, jurisdiction to review decisions of the Commissioner of Taxation on objections against assessments and other decisions is to be transferred from the supreme courts to the Federal Court of Australia. Legislation to give effect to this decision will be introduced into the Parliament in the near future. Educational Allowances The Income Tax Law will be amended as a consequence of recently proposed amendments of the Student Assistance Act 1973, which provided for the introduction of the Government's new Age-related Student Assistance Scheme called `Austudy'. Austudy will replace the Tertiary Education Assistance Scheme, TEAS, the Adult Secondary Education Assistance Scheme, ASEAS, and the Secondary Allowances Scheme, SAS. As a result of amendments of the Income Tax Law in 1985, TEAS and ASEAS payments have been subject to tax since 1 January 1986. In my second reading speech on the introduction of those amendments I foreshadowed that SAS payments would become taxable from January 1987. The main effect of the amendments now proposed will be to tax, from 1 January 1987, Austudy payments to people who, under existing arrangements, would have qualified for SAS payments. Recipients of such payments will, however, be entitled from 1 July 1987 to the beneficiary rebate available to recipients of unemployment benefits. I note that people currently in receipt of TEAS and ASEAS payments are to be entitled to those rebates for 1986-87 under amendments in the Taxation Laws (Miscellaneous Provisions) Bill 1986 at present before the Parliament. Short Term Life Assurance Policies This Bill will extend to recipients of taxable bonuses and similar amounts paid under life assurance policies issued by the State Insurance Office of Victoria eligibility for the income tax rebate presently available on similar amounts paid under certain other life assurance policies. Bonuses received under a life assurance policy within either four or ten years of its commencement date, depending on that date, are generally subject to tax. Where such a bonus is included in a taxpayer's assessable income, a tax rebate is allowed to the recipient to compensate broadly for the tax paid by the policy issuer. Although State government insurance offices do not pay Commonwealth tax, the rebate was extended last year to short term policies issued by certain of those offices. This was on the understanding that the relevant State governments would reimburse the Commonwealth for revenue forgone by allowing the rebate. The State Insurance Office of Victoria has since commenced to offer similar policies and this Bill will extend application of the rebate to amounts paid under those policies. In return, the Victorian Government has also agreed to reimburse the Commonwealth for revenue forgone. The Bill will further amend the rebate provisions as a consequence of the recent renaming of the State Government Insurance Office, Queensland, to which those provisions presently refer, as Suncorp Insurance and Finance. Second Commissioners of Taxation Finally, this Bill will provide for the creation of a third statutory office of Second Commissioner of Taxation. The third Second Commissioner will have the same powers and function as the two existing second commissioners. Second Commissioners of taxation have all the powers and functions of the Commissioner of Taxation except the general administration of the taxation laws, the authority to report to Parliament on the working of those laws and the power to delegate to subordinate officers. The Government sees a need to strengthen the top level management of the Australian Taxation Office to cater for the increased responsibilities given to that Office, to assist in oversighting improved administrative arrangements in the Office and to co-ordinate implementation of the Government's tax reform initiatives. As an explanatory memorandum providing detailed explanation of this Bill and the remaining three Bills in this legislative package is being circulated to honourable members, I will not trouble the house with further explanation of the Bill. I commend the Bill to the House and I present the explanatory memorandum to the Bills. Debate (on motion by Mr Connolly) adjourned. Bill presented by Mr Hurford, and read a first time. Mr HURFORD(Adelaide-Minister for Immigration and Ethnic Affairs and Minister Assisting the Treasurer)(6.24) —I move: That the Bill be now read a second time. This Bill will give effect to the 1986-87 Budget proposals to impose new and increased stamp duties in the Australian Capital Territory. The measures are part of wider proposals to increase the Australian Capital Territory revenue-raising effort so that Australian Capital Territory residents make a more equitable contribution to meeting territorial expenditures. The specific changes to the Australian Capital Territory stamp duty law are as follows. First, the marginal rate of duty payable on transfers of interests in land is to be increased, for properties valued at more than $100,000, from $2.50 to $3.50 for each $100, or part of $100, of the excess over $100,000. This should produce a revenue gain of some $3 million in a full year. Secondly, this Bill will impose Australian Capital Territory stamp duty on leases of land granted by the Commonwealth. Since the introduction of Australian Capital Territory stamp duty in 1969, duty has been imposed on all transfers and sub-leases of crown leases of land but not on the initial grant of such leases. That exception is now to be removed, so that duty will be payable on the same basis for all dealings in crown leases in the Australian Capital Territory. The rates of duty on the grant of crown leases are to be the same as those on transfers. That is, duty payable will be $1.25 for each $100 or part of $100 where the value of the lease is $14,000 or less, increasing to $1.50 up to $30,000; $2 up to $60,000; $2.50 up to $100,000; and $3.50 over $100,00. The estimated revenue yield from this measure is about $2m in a full year. The Bill will also amend the Australian Capital Territory stamp duty law to include the value of chattels conveyed with residential property in the value of the property for stamp duty purposes. This amendment will remove the opportunity to minimise stamp duty by overstating the value ascribed to chattels in a full year. A revenue gain of some $300,00 is expected. The final measure concerns the rate of duty on the non-rent component-for example, a premium-of consideration for a lease of land other than a crown lease. At present, marginal rates of duty similar to those on transfers of interests in land are payable on the non-rent consideration. The higher rates applicable to the non-rent component could distort the choice between non-rent and rent consideration for a lease. The rate of duty on the non-rent component is to be aligned with the rate of duty on the rent component-that is, 35 cents for every $100 or part of $100. As little consideration in non-rent form is presently paid for leases in the Australian Capital Territory, there will be no significant effect on revenue. The new duty on the grant of crown leases will apply to leases that commence on or after the first day of the month following that in which this Bill receives the royal assent. The other changes to the Australian Capital Territory stamp duty law will apply to instruments executed on or after that day. An explanation of the provisions of the Bill is contained in the explanatory memorandum that has been circulated to honourable members with the explanatory memorandum to the last Bill I introduced. I commend the Bill to the House. Debate (on motion by Mr Connolly) adjourned. Bill presented by Mr Hurford, and read a first time. Mr HURFORD(Adelaide-Minister for Immigration and Ethnic Affairs and Minister Assisting the Treasurer)(6.28) —I move: That the Bill be now read a second time. This Bill proposes a new Act to impose Australian Capital Territory tax on the registration, by a company incorporated in the Australian Capital Territory, of transfers of marketable securities listed in a register kept outside the Australian Capital Territory. This will give effect of the proposal announced on 10 June 1986 to counter the practice, known as the Darwin shuffle, that avoided Australian Capital Territory stamp duty on marketable security transfers by the use of registers outside the Australian Capital Territory. The rate of tax to be imposed by the Bill is 15c for every $25, or part thereof, of the unencumbered value of the marketable security. This is the same as the rate of Australian Capital Territory stamp duty imposed on the transfer of a marketable security listed in an Australian Capital Territory register. The Bill provides certain exemptions from the tax, which are based on and are broadly consistent with existing exemptions under Australian Capital Territory stamp duty and related tax laws applicable to transfers, purchase and sales of marketable securities. In addition, an exemption is to be provided for marketable security transfers that are subject to a broadly equivalent amount of duty or similar tax in the jurisdiction of registration. Such transfers will be prescribed by regulations. In other cases where duty or tax is paid in another jurisdiction, a credit against Australian Capital Territory tax will be allowed. In other words, the Bill will in practice operate only where Australian Capital Territory stamp duty, or its equivalent, has been avoided and then only to that extent. The administration and collection of the tax is provided for by amendments of the Australian Capital Territory Taxation (Administration) Act 1969 contained in the Taxation Laws Amendment Bill (No. 4) 1986 that I introduced earlier. The explanatory memorandum circulated to honourable members also explains the provisions of this Bill. I commend the Bill to the House. Debate (on motion by Mr Connolly) adjourned. Bill presented by Mr Hurford, and read a first time. Mr HURFORD(Adelaide-Minister for Immigration and Ethnic Affairs and Minister Assisting the Treasurer)(6.30) —I move: That the Bill be now read a second time. This Sales Tax (Exemptions and Classifications) Amendment Bill (No. 2) 1986 is the last Bill in this package of four taxation Bills. It will amend the sales tax law to bring it into line with the Customs and excise laws that apply to vice-regal exemptions. The Bill will limit existing sales tax exemptions to articles for the official use of the Governor-General, the Governor of a State or a member of the family of the Governor-General or of a State Governor. Personal-use articles purchased by such persons will no longer be exempt from sales tax, nor will articles for the personal or official use of non-Australian members of the staff of the Governor-General or of a State Governor. This will place Australian and foreign staff members on an equal footing for sales tax purposes. The existing vice-regal sales tax exemptions go back to the time when Governors and their staff were generally citizens of Great Britain. That is no longer the case and thus there is no longer any justification for the sales tax exemptions in question. Another amendment of the sales tax law being made by the Bill will make it clear that a general exemption item does not override a specific taxing provision. As a matter of statutory interpretation, that has always been the approach adopted in the administration of the sales tax law. The amendment will, however, put the issue beyond doubt. The amendments contained in this Bill are not expected to have any significant effect on revenue. Details of this Bill are also set out in the explanatory memorandum that has been circulated to honourable members earlier with the Taxation Laws Amendment Bill (No. 4). I commend the Bill to the House. Debate (on motion by Mr Connolly) adjourned. Sitting suspended from 6.32 to 8 p.m. Bill presented by Mr Hurford, and read a first time. Mr HURFORD(Adelaide-Minister for Immigration and Ethnic Affairs and Minister Assisting the Treasurer)(8.00) —I move: That the Bill be now read a second time. The purpose of the International Financial Institutions (Share Increase) Bill is to obtain parliamentary approval for Australia to take up increases in its capital subscriptions to two international financial institutions-the International Bank for Reconstruction and Development and the International Finance Corporation. Honourable members will be aware that the main activity of the International Bank for Reconstruction and Development, which was established in 1947, is that of providing loans to developing member countries. Following an increase in the International Monetary Fund's quotas in 1983, in August 1984 the governors of the IBRD approved an increase in the authorised capital stock of the IBRD of $US7 billion. This allowed the Bank to pursue the practice whereby its members' shareholdings were increased in parallel with their IMF quotas. In September 1984, the governors authorised an additional resolution which provided for those members who had suffered a relative decline in their shareholding to regain their relative share. Australia was one of the countries affected by this resolution. The text of the two resolutions, including the number of shares to which each member is entitled to subscribe, is included in the explanatory memorandum to this legislation. These two increases will allow the Bank to expand its borrowing on the world capital markets. It is these borrowings which largely finance the Bank's loans to developing countries. Australia voted in favour of the resolutions authorising these capital increases. Members, including Australia, are entitled, but not obliged, to subscribe to this authorised increase. Australia is entitled to subscribe to 745 shares under the special capital increase and to 70 shares under the increase in certain subscriptions to capital stock, a total of 815 shares, valued at $US98.32m. Under these capital increases, 91.25 per cent of the subscription is to remain on call and the other 8.75 per cent, which is $US8.60m, is to be paid in. Of the paid-in portion, 10 per cent-$US0.86m-has to be in the form of gold or United States dollars while the balance-$US7.74m-can be in Australian dollars. The latter amount, which is $A12.29m at the current exchange rate, will be paid in the form of a promissory note. The initial 10 per cent cash payment will be made by 31 December 1986. Subject to agreement with the Bank, the promissory note will be encashed in eight equal bi- annual instalments of approximately $A1.54m each over the five financial years commencing 1986-87. The exact Australian dollar cost will depend on the exchange rate in effect at the time of lodgement of the promissory note. The IBRD is an effective and efficient institution in the provision of development assistance to developing countries, and it plays an important role in the South East Asian region. This has been recognised by Australian governments over the years since the Bank's establishment. Up to the end of June 1986, the Bank had lent about $US105 billion to its member countries. Projects financed covered all the major sectors of economic development but there has been emphasis on infrastructure facilities in the transport and communications, industry and energy sectors, as well as projects for agriculture, education and water supply. I believe it to be in Australia's interest to continue its policy of support by taking up in full the increase in our capital subscription to which we are entitled under the two resolutions. The International Finance Corporation, which was established in 1956 as an affiliate of the World Bank, is an international development institution established to promote the growth of productive private investment and to assist enterprises which will contribute to the economic development of its developing member countries. In addition to the direct financial assistance it provides, which may take the form of loan or equity investment, it also arranges other investment finance, mainly from the private sector, to be made available. Up to the end of June 1986 the Corporation had outstanding investments of about $US2.4 billion. In view of the need to ensure that the IFC has adequate resources to expand its operations, the governors of the Corporation approved a resolution in December 1985 authorising an increase in the IFC capital of $US650m. This will double the IFC's capital. Australia voted in favour of the resolution. As in the case of the IBRD capital increase, member countries are entitled, but not obliged, to subscribe to additional shares. Australia is entitled under the resolution-the text of which is set out in the explanatory memorandum-to subscribe to an additional 14,560 shares at a cost of $US14.56m, all of which would be paid in. Under the terms of an amendment to the resolution, the initial payment associated with the additional subscription must be made by 1 February 1987. It is expected that payment of $US5.824m will be made by that date, with the remaining commitment being paid in three annual cash payments of $US2.912m each, beginning in February 1988. The Australian dollar cost of these instalments will depend on the exchange rate in effect of the time of payment. The IFC helps to provide the finance, technical assistance and management skills needed to develop productive private sector investment opportunities in its developing member countries. The encouragement of direct foreign investment in developing countries is particularly important given the external debt problems of those countries. I believe that it is appropriate therefore for Australia to register its support for the Corporation and its activities by taking up its full share entitlement. I commend the Bill to honourable members. I present the explanatory memorandum to this Bill. Debate (on motion by Mr Shack) adjourned. Bill presented by Mr Howe, and read a first time. Mr HOWE(Batman-Minister for Social Security)(8.09) —I move: That the Bill be now read a second time. The Nursing Homes and Hostels Legislation Amendment Bill contains Budget measures that will amend the Aged or Disabled Persons Homes Act 1954, the National Health Act 1953 and the Nursing Homes Assistance Act 1974. These measures will begin the process of redistributing resources for care of aged people away from nursing homes to alternative forms of residential care as part of the Government's objective to increase the range of both residential and community care services. In recent years there have been a number of reports, in particular, from the Senate Select Committee on Private Hospitals and Nursing Homes, the Giles report, the House of Representatives Expenditure Committee, the McLeay report, and the Auditor-General, which have identified significant problems associated with the provision by the Commonwealth of aged care services. Prominent among the criticisms was that government intervention in residential care programs for the aged had been largely unseen, unplanned and unco-ordinated and that there was an inappropriate mix of services between and within institutional accommodation and home and community care programs. In addition, there has been an inordinate increase in the cost of nursing home accommodation in the past 13 years compared to increases in the consumer price index and average weekly earnings. Against this background, the Minister for Community Services (Senator Grimes), commissioned a review by the Department of Community Services with the objective of developing a strategy for change. The report of the Nursing Homes and Hostels Review, which was tabled in the Senate on 14 April 1986, made recommendations for the development of a restructured residential care program within the framework of four basic philosophical goals: Aged and disabled people should as far as possible be supported in their own homes, in their own communities. Aged and disabled people should be supported by residential services only where other support systems are not appropriate to meet their needs. Services should be provided in an atmosphere and using processes which promote as far as possible rehabilitation and restoration of function. The manner in which services are provided should develop and enhance personal freedom and independent functioning of all residents. Services should be based on a recognition that, for many people, discharge to a residential service providing a less intensive form of care or to a community-based support service will be a possible and desirable outcome. The review made recommendations over the whole range of issues relating to the Government's programs for the provision of residential care for the aged, including assessment and rehabilitation, program structure, growth control, standards, funding issues and the need to promote innovation and flexibility. When the review was tabled by the Minister, he stated that the Government endorsed its broad philosophy, directions and strategy for change. Since April, the Commonwealth has undertaken extensive consultations on the strategy for change with State governments, the nursing homes and hostels industry, consumer and other welfare groups and professional and staff organisations. A number of important matters were raised in the consultations which have influenced the overall strategy of changing the emphasis of the program from nursing homes to hostels, and indeed now form part of the basis of the decisions taken by the Government in the recent Budget process. These matters include: (i) the requirement for flexible planning, which provides for monitoring, evaluation and changes where necessary, including more integration with community services; (ii) a publicised and better resourced hostel sector so that hostels can care for increasingly dependent aged people; (iii) the extension of residential care services beyond hostels to other forms of accommodation such as group housing arrangements; (iv) the expansion of community services to assist those elderly people most at risk of premature and inappropriate institutionalisation; and (v) the importance of carefully developing the process of assessment so that it will gain support from consumers, professionals and service providers. This Bill will implement decisions concerning two of these matters, namely, the need for a more flexible and integrated planning approach to the provision of residential services and a better resourced hostel sector. The other three matters are being addressed outside the context of this Bill. While Australia overall has a very adequate provision of nursing home accommodation, its community care and domiciliary services have been traditionally underdeveloped, as have its facilities for hostel care. In order to redress this imbalance, there is a need to moderate the historical largely uncontrolled growth in the nursing home sector and encourage further development of hostel accommodation for the aged. This change in emphasis must be implemented now because the current system, which emphasises the provision of the more intensive institutionalised care services provided by nursing homes, is not producing the range of care options which elderly people want and does not respect their drive for independence. It is also encouraging a significant level of inappropriate admissions of up to 25 per cent of current nursing care residents. Furthermore, it will be difficult to sustain rapid growth in expensive nursing home beds in a climate where there is a rapidly aging population, both in terms of numbers an as a proportion of the total population. In seeking to change the system there is a need to develop a total aged care policy with an expanded range of options that will achieve improved quality of care within residential institutions and will better match individuals' needs and the care provided. The Minister for Community Services, in his statement on the care of aged people tabled in the Senate on 17 September 1986, announced the Government's planning strategy for the provision of residential care services over the next three-year period. The strategy is to maintain growth in new services on the basis of the current national ratio of 100 residential care places per 1,000 people aged 70 or over, and within this national ration to limit the rate of growth of numbers of new nursing home beds to a maximum of 10 per cent of new approvals. This Bill amends the National Health Act 1953 and the Nursing Homes Assistance Act 1974 to implement this strategy by introducing new growth control arrangements over the approval in principle and approval mechanisms for nursing homes. The new provisions will enable the Minister to specify the maximum number of nursing home beds which can exist at any time during a financial year in each State and Territory. The Minister will specify the maximum number of ordinary beds which may exist in a region in a State or Territory and the maximum number of special needs beds which may exist in a State or Territory. The Bill also provides that the sum of the regional maxima in a State or Territory and the special bed maximum for that State or Territory will not exceed the relevant State or Territory maximum. The State, regional and special needs maxima will each comprise the number of existing approvals in principle and approvals, plus the number of new beds to be approved during the financial year in each category. These maxima will be determined by a Commonwealth of Australia Gazette notice, and may be revoked or varied by later notices published in the Gazette. This gives the Minister the flexibility to vary the allocations between States, regions and special needs groups, whilst remaining within the national ceiling determined by government. Approvals in principle, however, will be granted only if they are consistent with State, regional or special needs maxima in force under a current Gazette notice. The Minister for Community Services, in his recent statement on care of aged people, announced that the Government plans to approve 2,750 new places in 1986-87, 4,730 in 1987-88 and 5.400 in 1988-89-12,880 additional places overall, of which up to 1,295 places over the three-year period will be for nursing homes and the balance for hostels. In line with needs-based planning principles, the allocation of resources within the State and Territory maxima to both regions and special needs groups will be determined by the Minister on the basis of supply and demand data, and appropriate consultative processes. The Minister is currently seeking the advice of relevant bodies in each State and Territory, and will both announce and gazette the regional and special allocations of beds later in 1986-87. In future years, new aged care advisory committees in each State and Territory will be providing the Minister for Community Services with planning advice so that State, regional and special needs allocations can be announced at the start of each financial year. The Bill will introduce a mechanism to enable the approval of beds in relation to special needs groups. At this stage it is envisaged that special needs groups could include Aboriginals, ethnic communities and the aged disabled, including the deaf and blind aged. This is consistent with the Government initiatives in the Budget context, such as the introduction of funding of up to 100 per cent of the capital costs of projects for financially disadvantaged groups. This Bill will also apply uniform conditions of approval to both government and non-government nursing homes. The existing provisions of the National Health Act 1953 exempt government nursing homes from statutory conditions which relate to the number of beds in an approved nursing home, and the approval of patients for admission to a nursing home. However, government nursing homes have in practice been subjected to restrictions on the approved number of beds since 1981. The practice is formalised in this legislation, for both new government nursing homes and additional beds in existing government nursing homes. It is proposed that assessment procedures will also apply in government nursing homes. The new planning arrangements will mean that from now on there will be a limited number of nursing home beds available and the administration of the program will move from a submission based, unplanned approach, with discretionary decision making on the selection of service providers, to a more needs based planning approach supported by a tendering process for the selection of service providers. Under existing provisions of the National Health Act 1953 and the Nursing Homes Assistance Act 1976, we have the ridiculous situation whereby the Minister may invite interested persons to apply for a certificate of approval-in-principle only where a person applies to the Minister to invite persons so to apply. This approach effectively prevents the needs based allocation of resources. This Bill accordingly omits these provisions. In future, advertisements would be placed inviting tenders for a certificate or certificates of approval-in-principle in a region where the regional maximum allows, or for special needs beds where the special bed maximum allows. The change in the existing balance between providing intensive care through nursing homes and providing appropriate community services and hostel options will be gradual. It is essential that implementation does not affect residents who are already in nursing homes and that it is carefully monitored, evaluated and, where necessary, adjusted. The introduction of the new growth control arrangements is estimated to result in savings of $4m in 1986-87 and $27.7m in 1987-88. The Bill will also make a number of minor amendments to the National Health Act 1953 and the Nursing Homes Assistance Act 1974. These amendments will correct some minor drafting defects, update provisions and substitute a notice mechanism in the Acts for some of the regulations under the Acts. None of these measures has expenditure implications, although some will result in small administrative savings. Key elements of the Government's revised residential care program for the aged are to provide alternative residential care services to nursing homes in the form of hostels and to strengthen the role of hostels in the care of the more frail aged. The consultation process has confirmed the problem of hostels being under-resourced. In the recent Budget and in response to concerns expressed by the hostel industry and consumer groups, the Government decided that steps should be taken now to provide a firm commitment to maintain the real level of hostel subsidies over time and to increase assistance for care of more frail aged people. The Bill therefore will amend the Aged or Disabled Persons Homes Act 1954 to provide for: An increase to the hostel care subsidy, respite care subsidy and personal care subsidy beginning 22 October this year; the hostel care subsidy will increase from $1.80 per day to $1.95 per day, the respite care subsidy will increase from $7.00 per day to $7.50 per day, and the personal care subsidy will increase from $7.80 per day to $8.40 per day; and an additional increase of $2.60 a day in the value of the personal care subsidy to $11 a day from May next year to assist the hostel industry provide more adequate levels of personal care for dependent elderly people. The Bill will also provide a mechanism for annual automatic increases in the subsidy rates for hostel care, personal care and respite care. These measures will cost $5.6m in 1986-87 and $24.7m in 1987-88. In addition the Government recognises that increased numbers of hostel beds will necessitate a significant strengthening of the resources available for capital funding. In particular, it has sought to address problems being faced under the current legislation by some financially disadvantaged groups. Under the Aged or Disabled Persons Homes Act 1954, the Commonwealth makes grants to eligible organisations towards meeting the capital cost of homes for aged or disabled people. The amount of a grant may not exceed 80 per cent of the capital cost of the home under the Act. Some eligible organisations which represent financially disadvantaged groups in the community experience difficulty in raising matching funds. The Government in this Bill is introducing flexibility in matching arrangements to allow for up to 100 per cent of Commonwealth funds for special groups, including ethnic communities, Aboriginals and other disadvantaged groups. This measure is estimated to cost $500,000 in 1986-87 and $2.8m in 1987-88. I commend the Bill to the House and I present the explanatory memorandum to this Bill. Debate (on motion by Mr Shack) adjourned. Bill presented by Mr Barry Jones, and read a first time. Mr BARRY JONES(Lalor-Minister for Science and Minister Assisting the Minister for Industry, Technology and Commerce)(8.15) —I move: That the Bill be now read a second time. This Bill proposes amendments to the Excise Tariff Act 1921, in particular, to incorporate into that Act various excise tariff proposals tabled in this Parliament as at 1 October 1986. Included in the Bill at clauses 4, 5 and 16 are provisions to remove from excise control stabilised crude petroleum oil, naturally occurring liquefied petroleum gas, LPG, and condensate produced from the Territory of Ashmore and Cartier Islands where the Jabiru project is located. The excise removal is part of a package of measures associated with the Government's policy of imposing a resource rent tax, RRT, on production from off-shore petroleum projects developed in any off-shore permit area for which no production licence was in force on 1 July 1984. The RRT will therefore not apply to the Bass Strait and North West Shelf permit areas. The introduction of RRT was announced by the Government on 27 June 1984 and its first application will be to production from the Jabiru project. The balance of the RRT legislative package is expected to be introduced later in this Budget sittings by my colleague the Treasurer (Mr Keating). I now turn to the other excise tariff alterations in the Bill. The majority involve alterations to the excise duty rates on refined petroleum products mainly brought about by the volatility of world oil prices for indigenous crude oil since early this year. Honourable members will recall that on 24 February 1986 the Government announced that it had decided to adhere to the long-standing policy of determining crude oil excise on the basis of import parity pricing. At the same time it was announced that because of the significant fall in oil prices and its resultant impact on the revenue there was no alternative to an increase in the excise duties on petroleum products. In accordance with these principles a number of excise duty alterations have been made to petroleum products since 15 March 1986. These changes are set out at clauses 7, 9 to 13, and 15 of the Bill. In his Budget Speech the Treasurer announced an increase in excise duties on petrol and diesel fuel of 3c per litre and increases in other refined petroleum products effective from Budget night. The increases which are set out at clause 14 were necessary because of the substantial reduction in revenue from petroleum product taxation caused by further declines in international oil prices. Despite these increases, there is expected to be little change in total Commonwealth revenue from petroleum product taxation in 1986-87 compared with 1985-86. It is worth noting that at each change to the excise duty on refined petroleum products corresponding changes were made to the rates of rebate of excise on diesel fuel. Eligible primary production continued to receive the full rebate of duty. The other significant excise alterations in this Bill are at clause 8, proposing a change to the duty on LPG, and at clause 14 (a), proposing a change to the duty on manufactured tobacco. The LPG change is made in accordance with the Government's LPG excise policy which, briefly, provides for the LPG excise rate to be calculated on the basis of 60 per cent of the amount by which the weighted average price for naturally occurring LPG exceeds $147 per tonne. The average price is calculated as a weighted average of the price received from exports and local sales of LPG. Finally in relation to clause 14 (a) increases in tobacco duty were foreshadowed in the 1983-84 Budget when measures were announced to align the excise rate for tobacco progressively with that applying to cigarettes and cigars. The increase in the rate of excise duty applicable to manufactured tobacco at clause 14 (a) which was announced in the Budget completes the alignment of the tobacco rate with that applicable for cigarettes. Financial Impact Statement The removal of Jabiru production from excise control as proposed by clauses 4, 5 and 16 is an integrated package with the introduction of RRT for that project. No receipts are expected from RRT on Jabiru in 1986-87. Receipts thereafter are uncertain and will depend upon the profitability of the development. The increases in refined petroleum excise effective from 15 March 1986, 17 April 1986 and 17 May 1986 and the 14 June 1986 decrease in excise, at clauses 7, 9, 10 and 11 respectively, were expected to result in a net increase in revenue of $564m in 1985-86 and $1,980m in 1986-87. The 18 July 1986 and 16 August 1986 excise increases and the 13 September 1986 excise decrease at clauses 12, 13 and 15 are expected to result in a net decrease in revenue of $420m in 1986-87. The increase in the LPG excise rate at clause 8 is expected to result in a revenue increase of $0.2m in 1985-86 and $0.8m in 1986-87. Finally, because of a decline in the use of manufactured tobacco, the Budget increase in tobacco excise is not expected to result in any revenue increase. The alterations at clauses 6 and Part III of the Bill make corrections to existing provisions and therefore have no financial impact. I commend the Bill to the House and present the explanatory memorandum to the Bill. Debate (on motion by Mr Shack) adjourned. Consideration resumed. Schedule 3. Deptartment of the Treasury Proposed expenditure, $723,995,000 Deptartment of Finance Proposed expenditure, $110,747,000 Advance to the Minister for Finance Proposed expenditure, $160,000,000 Mr HODGMAN(Denison)(8.33) —The Treasurer (Mr Keating) should resign forthwith. He is totally without credit and under his policies this country is now on the brink of bankruptcy. Mr Chairman, I have to say that you have a far greater knowledge of economics, government expenditure and good budgetary house keeping than the Treasurer will ever have. He had better put his gold medal in a safe because they are coming to repossess it. The gold medal of 1985 has become the wooden spoon of 1986. He is, in Treasury terms, a veritable St Kilda-although I might say in passing that St Kilda will probably be revived next year through the auspices of an eminent Tasmanian. Mr Chairman, you have chaired one of the most important committees of this Parliament. I invite you and all honourable members to tell me of a worse piece of legislation than the Income Tax Assessment Act 1936. It is just two years older than I am. It is a disgraceful piece of legislation; it is a legal jungle; it is an accountant's nightmare; it is veritable choke on the development of this nation. I have said before and I will say again that one of the major shackles on enterprise in Australia is excessive taxation coupled with incomprehensible legislation. When I hear the Treasurer coming in here and pontificating about his reforms and how he is making taxation more simple, I have to say the facts refute that completely. Under him over 1,000 pages of additional legal gobbledegook have been added to the horror that is the Income Tax Assessment Act. Added to that there are 2,000 pages of explanatory memorandum, Australian Taxation Office rulings and-I note the presence in the chamber of the honourable member for Flinders (Mr Reith)-the video put out by this Government to try to explain the abomination known as the FBT, the farewell Bob tax, to an Australia which no longer can understand why this Government continues to place on the statute books law which is unintelligible, law which is contradictory, law which is ambiguous, law which is so bad that the Treasurer himself cannot explain it in this Parliament. On three occasions when the Treasurer endeavoured to explain individual issues in this House he got it wrong. He had the log books the wrong way around and he gave a totally erroneous answer in the House. The second time he was asked a question about the application of the fringe benefits tax, he clearly did not have a clue. He was asked questions today about the capital gains tax. The Australian Associated Press telex headline is `Keating dodges answering questions on tax'. If the Treasurer of Australia cannot explain the law, if he does not understand the law, what have we got with a government saying: `Gaol the farmers'? It is putting people in prison because they cannot understand the law, that the law says they must comply with. The Treasurer himself cannot explain it in this House. I have said before that if the Prime Minister and the Treasurer were accountants they would now be in prison for what they have done to the Australian economy, but I stick now to the law. I have been very concerned about the law because I have sincerely endeavoured to understand one simple aspect of the law in relation to what I think is a very simple matter. I admit, in all humility, that I have not practised extensively in taxation law, but I have been in the profession now for some 24 years and I am proud to be one of Her Majesty's counsel. When I cannot understand the law I have to say, quite frankly, that I think there is something wrong. I have consulted the best texts I can to get some interpretation of section 51a of the Income Tax Assessment Act 1936. I will just deal with the section that is troubling me. Section 51a, sub-section (3), the definition of living away from home allowance, states: `Living-away-from-home allowance' means so much of any allowance or benefit paid or granted in money or otherwise as the Commissioner is satisfied is in the nature of compensation to the employee for the additional expenses (not being expenses which are allowable as a deduction under section 51) incurred by him, or which would be- these seem to be the important words, to my humble understanding- incurred by him if the allowance or benefit were not received, through having to live away from his usual place of abode in order to perform his duties as an employee. I repeat the words `having to live away from his usual place of abode in order to perform his duties as an employee'. I said: `I am going to find out what this all means'. Naturally, being patriotic, I first consulted the Australian Legal Dictionary by Marantelli and Tikotin to find out what was meant by `place of abode'. I find on page 2030: `Place of abode' usually means the place of residence; ``in Johnson's Dictionary `abode' is defined to be `habitation, dwelling, place of residence,' and `residence' is defined to be `place of abode, dwelling.' A man's residence, where he lives with his family and sleeps at night-- Mr Peacock —I think I know where you are heading. Mr HODGMAN —Yes. It continues: is always his place of abode in the full sense of that expression''- The reference is Chief Justice Campbell in Queen v. Hammond, volume 17 Queen's Bench, page 772. So that gives us a clue. It is where he normally lives and sleeps, where his wife and kids are. I did not just accept that Australian definition, so I decided I would go a little further. I decided to consult Words and Phrases Legally Defined. Under `abode' it says: A person's dwelling-place; where he or she ordinarily lives and sleeps. So `sleep' comes into it again. I thought I would take it a little further because I wanted to find out where a person's place of abode is for the purposes of sub-section 51a(3) of the Income Tax Assessment Act 1936. I consulted Stroud's Judicial Dictionary. I am delighted to see the Minister for Aboriginal Affairs (Mr Holding) in the chamber. He knows Stroud; he worked with Stroud in his student days. In relation to `abode' Stroud says: A man's residence where, he lives with his family and sleeps at night, is always his place of abode in the full sense of that expression. And what do you know-Stroud quotes Regina v. Hammond, 1852, 17 Queen's Bench, page 772, and it was Lord Campbell, Lord Chief Justice, who said that; so there is no argument as to one's place of abode. However I decided I would take it even further. I consulted the Australian Income Tax Guide, edited by E. F. Mannix and J. E. Mannix-great Australian names. In relation to one's place of abode and section 51a, at page 155 they say: The deduction allowed under this section does not arise merely because an employee moves his place of employment. He must be actually living away from his home-usually this can be demonstrated by the fact that his family continues to reside in that home-and he must be incurring additional expense such as additional rent or additional cost of living. I then looked at another book, Leading Cases on Australian Income Tax. I find many authorities saying the same thing. I looked also at the second edition of Cases and Materials on Taxation, edited by R. Baxt, R. Gelski, Y. Grbich, B. Marks and K. Poset. Do you know what? They all say the that one's place of abode is where one usually sleeps and where one's wife and children usually reside. I do not want to suggest that the Minister of the Government in charge of the taxation law, the Treasurer does not know the law, but if anyone would like to take another line of attack it may be checked with the Commissioner of Taxation himself. He has issued a Canberra income tax circular, memorandum No. 821, serial No. J199/1. I invite the Treasurer to have a dashed good look at it and at Taxation Ruling No. IT2117 because, whilst he might have complied with something else, he has inadvertently breached two sections of the Income Tax Assessment Act, section 51a- The CHAIRMAN —Order! Mr HODGMAN —I will tell honourable members about the other section when I next have a chance to speak. The CHAIRMAN —Order! The honourable member will withdraw that allegation. He cannot make allegations against another member without doing it under substantive motion. Mr HODGMAN —Mr Chairman, I said that he has breached section 51a, and he has. The CHAIRMAN —Order! The honourable member for Denison knows he cannot make an allegation against another member except by substantive motion. The honourable member for Denison will withdraw. Mr HODGMAN —Mr Chairman, I ask you to hear me on this. The CHAIRMAN —The honourable member for Denison will withdraw. Mr HODGMAN —No, Mr Chairman, be fair. I have not even had a chance to mention sub-section 82kt (1). The CHAIRMAN —Order! The honourable member for Denison will not compound the problem. Mr HODGMAN —I am saying that you are wrong in saying that I made an imputation. I think it is incompetence rather than dishonesty that has caused him to breach two sections of the Income Tax Assessment Act. The CHAIRMAN —Order! The honourable member for Denison will withdraw the allegation he made and then resume his seat. Mr HODGMAN —Mr Chairman, I appeal to you to hear me. I have made no imputation. I have simply said that, on the facts as I understand them, the Treasurer has apparently breached two sections of the Income Tax Assessment Act. I do not have to withdraw that. The CHAIRMAN —You do have to withdraw that. Mr HODGMAN —I am sorry, sir, and with great respect I ask you to hear me. It is not an imputation to say that somebody has broken two sections of the Act that he is administering. The CHAIRMAN —The honourable member for Denison knows that he cannot make an allegation or an assertion such as that against a member without doing so by substantive motion. The honourable member for Denison will withdraw the allegation. Mr Peacock —On a point of order, Mr Chairman: I submit to you that the criterion in determining a matter such as this is whether it is personally offensive. The CHAIRMAN —Order! There is no point of order. Mr Peacock —You have not even heard me yet. The CHAIRMAN —You just said that the criterion for dealing with something was such and such, and I said that that is not a point of order. Mr Peacock —It is. It is a question of being personally offensive, and a submission based on a long legal argument substantiated by legal authority leading to the conclusion that there is a breach of a section of an Act is not personally offensive. The CHAIRMAN —The honourable member for Denison advanced some points in debate. At the end of those points he made an allegation against another member. The honourable member for Kooyong, the honourable member for Denison and other members of the House know that one cannot make allegations such as that, an accusation of a breach of the law, against another member at the end of a submission in a debate. The honourable member for Denison will withdraw or he will find himself in considerable difficulties with the Chair. Mr HODGMAN —Mr Chairman, you do not have to threaten me. The CHAIRMAN —Is the honourable member for Denison going to withdraw? Mr HODGMAN —Yes, if you will hear me. The CHAIRMAN —All you have to say is that you withdraw it. Mr HODGMAN —I will withdraw and if I may-- The CHAIRMAN —Fine. The honourable member for Denison can resume his seat. I call the honourable member for Isaacs. Mr Hodgman —No, Mr Chairman, I take a point of order. The CHAIRMAN —The honourable member for Denison indicated that he was withdrawing. Mr Hodgman —I had not finished. The CHAIRMAN —His time for debate is over and I have called the honourable member for Isaacs. Mr Hodgman —Mr Chairman, this is not fair. I want to be heard on a point of order. The CHAIRMAN —The honourable member for Denison will resume his seat. Mr Hodgman —No, Mr Chairman, I take a point of order. I had not completed my statement. I was prepared-- The CHAIRMAN —Order! The honourable member knows the procedures. He said he withdrew. He then resumes his seat. Mr Hodgman —No, I had not finished. You interrupted me before I completed my remarks. I ask to be heard on the point of order. The CHAIRMAN —The only remarks necessary were that you withdrew. The honourable member will resume his seat. Mr Hodgman —Mr Chairman, I have a further point of order. You have no grounds upon which to ask me to withdraw because I have not breached the Standing Orders. I ask to be heard on that point of order because if you are calling on me to withdraw when you have no grounds so to do, you are acting contrary to the Standing Orders. The CHAIRMAN —Order! The honourable member for Denison indicated that he was withdrawing. You cannot change your mind half way through. Mr Hodgman —I am sorry, sir; with great respect, that is not true. The CHAIRMAN —The honourable member for Isaacs has the call. Mr Hodgman —Mr Chairman, I do not want to detain the Committee but I ask you to hear me on a point of order. You have required me to withdraw something that you had no right to require me to withdraw. I had not breached the Standing Orders; I merely pointed out that, on the basis of facts, the Treasurer appears to have breached two sections of the Income Tax Assessment Act. If that offends you, I will withdraw that statement for the purpose of substituting that if any-- The CHAIRMAN —It does not offend me. Mr Hodgman —Would you let me finish, sir? I just want to finish this to conclude the matter. If an ordinary citizen did what the Treasurer has done he would have breached section 51a of the Income Tax Assessment Act and also section 82kt. Two sections would have been breached by an ordinary citizen. Why is the Treasurer of this country above the law? The CHAIRMAN —Order! The honourable member for Denison knows that you cannot make an allegation such as that against a member. Mr Hodgman —It is a fact. The CHAIRMAN —The honourable member knows you cannot make those sorts of allegations. He should withdraw and let the Committee get on with its business. Mr Sinclair —On the point of order, Mr Chairman, as I understand it- Mr Holding —If there are any points of order, I have been trying to make one for some time. The CHAIRMAN —Does the honourable member for Denison- Mr Hodgman —If I may speak further to the point of order and if you will let me- Mr Holding —On a point of order, Mr Chairman. Mr Hodgman —But you called me, Mr Chairman. Am I to be given a chance to be heard or not? The CHAIRMAN —Order! The honourable member for Denison will resume his seat. I call the Minister. Mr Hodgman —You just called me and now you ask me to resume my seat. Mr Holding —No, he called me. In support of your ruling, Mr Chairman, I point out that the honourable member for Denison began his speech by saying that he believed that the Treasurer should resign. That is a view that he is entitled to put by way of general argument but, when he gets to the stage of saying against any member of this place that that person has breached the law in the way in which it is contended, that is not a matter to be raised within the forms of the Committee in the way in which it has been raised. The honourable member for Denison, knows the forms well enough, as does the Leader of the National Party, to know that, if the submission is being put forward not as a piece of scuttlebutt but as a genuine and serious argument, the proper form to use is a motion of no confidence which calls upon the honourable member concerned to resign. That is the point being made by the Chairman. But simply to come into a debate of this kind and put forward what is nothing more than a set of assertions-well put, but they are nothing more than a set of assertions-and to finish with the conclusion that a member of the House has breached the law is not allowed. If the honourable gentleman is serious about that, the proper forms of the Committee, have not been used and the ruling of the Chairman is completely right. I suggest that, in that case, in order to allow the debate to proceed, the honourable gentleman should withdraw the substance of this allegation against another member and rely on the forms of the Committee which he knows well. He can do that on another occasion because he is not foreclosed and then the issue can be joined if that is the course followed. The CHAIRMAN —The honourable member for Denison made a point in his remarks. I understood the honourable member to say that he withdrew the allegation. I think it would be best to pursue the matter from there and allow the honourable member for Isaacs to get on with his speech. Mr Sinclair —I take a point of order, Mr Chairman. The Minister for Aboriginal Affairs has just identified the succession of events that has led to the quandary in which the Committee is now placed. The Minister for Aboriginal Affairs has quite properly identified the series of arguments which the honourable member for Denison put to this chamber. The honourable member for Denison presented a series of authorities and showed a succession of events. If those events were right, there was an inevitable conclusion. I put to you, Mr Chairman, that if one goes through a series of arguments and reaches a conclusion everything has to be-- The CHAIRMAN —Is the right honourable gentleman getting to his point of order? Mr Sinclair —I will. The point of order is that there is no point in the honourable member's withdrawing his conclusion if the conclusion has been justified by a series of submissions which lead to an inevitable conclusion. It is like saying that one and one and one and one do not equal four. The CHAIRMAN —Order! The right honourable gentleman has no point of order. He should resume his seat. Mr Sinclair —Mr Chairman, there is a point of order and that is that there is no basis upon which you can call upon a member to withdraw a conclusion if the arguments that lead to the conclusion are supported even by the Minister for Aboriginal Affairs. Mr Holding —Mr Chairman, I take a point of order. The CHAIRMAN —Order! The Minister might resume his seat for a moment. Mr Hodgman —Mr Chairman, I take a point of order. The CHAIRMAN —Order! The honourable member for Denison will resume his seat also. The right honourable member for New England at times takes great delight in addressing the Chair on matters relating to the Standing Orders. As he would know, standing order 76 provides: All imputations of improper motives and all personal reflections on Members shall be considered highly disorderly. Standing order 77 provides: When any offensive or disorderly words are used, whether by a Member who is addressing the Chair or by a Member who is present, the Speaker shall intervene. I have intervened in accordance with those Standing Orders, as the Leader of the National Party knows quite well. The honourable member for Denison can make any type of legal argument but the Standing Orders do not allow him, except by substantive motion, to arrive at the conclusion at which he has arrived. The honourable member will withdraw so that we can proceed with the business before the Committee. In the words of the right honourable member for New England, that is as simple as one and one making two. I call the honourable member for Denison on a point of order. Mr Hodgman —Mr Chairman, can I express it without you asking me to resume my seat? This is the third time that you have called me but only the first time that you have not asked me to resume my seat. In the interests of the Committee, I accept the commendation by the Minister for Aboriginal Affairs that I had argued my point well. I contend that I have not breached standing order 76 and I conclude by saying that, if it will suit you, I will adopt these words: If anybody else did what the Treasurer has done, he would be in breach of section 51A and section 82K (1) of the Income Tax Assessment Act. I rest my case. The CHAIRMAN —I take it that the honourable member has withdrawn. I call the honourable member for Isaacs. Mr Shipton —Mr Chairman, I take a point of order. In respect of your ruling under standing orders 76 and 77, am I to take it that, having accepted that the honourable member for Denison has withdrawn, you withdraw your ruling under standing orders 76 and 77? If you do, you are creating a precedent that I think should be debated in this place. The CHAIRMAN —There is no point of order. I call the honourable member for Isaacs. Mr CHARLES(Isaacs)(8.56) —We are back to dealing with Appropriation Bill (No. 1) 1986-87 and the estimates of the Department of the Treasury and the Department of Finance. These important estimates are being considered today but we have witnessed the ratbaggery of some members of the House, including the honourable member for Denison (Mr Hodgman), who in his speech did not speak about the estimates or anything to do with the estimates for those departments. Mr Hodgman —Mr Chairman, I take a point of order. I submit with respect that the honourable member cannot speak on continuation. He was on his feet earlier before progress was reported. The CHAIRMAN —There is no point of order. We are in the Committee stage. The honourable member for Isaacs has time left. Mr CHARLES —When considering the estimates before the Committee, we see that the deficit has been brought down to $3.5 billion, which is a substantial reduction when one looks at the deficit that we inherited in 1983. The projected deficit then was $9.6 billion; it is down to $3.5 billion this year. A number of other economic decisions have been taken such as the floating of the dollar, which has made our manufacturing industries more competitive. Other decisions regarding the economy have strengthened the economy and over the next 12 months we will see a number of things come to fruition, including the lowering of interest rates, which has already started. Interest rates on 90-day bills and in a number of other areas have dropped significantly and that will continue across the board into housing loans gradually over the next few months. Also, we will see a drift downwards in inflation from the measures which are before the House at present. Those are all decisions taken by this Government for a resurrection of the economy from what was literally a disaster, a depression economy-the economy that we inherited from the totally incompetent management of the conservatives who now sit opposite us and who, after all, spent 31 of the 34 years prior to 1983 with the stewardship of the economy of this country. What did they do? They left the economy in total depression, in a mess and with a projected deficit of nearly $10 billion. The Hawke Government has drastically reduced that. We have seen record growth, record employment and the lowering of unemployment. Interest rates are dropping now and inflation is getting lower. By the time of the next election inflation will be half what it was when we took over government in 1983. Looking at some of the estimates and the figures before us, it is interesting to note that it is estimated that only 1.8 per cent of total tax receipts this year will come from crude oil and liquefied petroleum gas excise. That compares with 8.9 per cent in 1980-81. That was the easy money that was obtained by the previous Government. That percentage has come down to 1.8 per cent this year. Yet when they had that massive amount of easy money, what did they do with it? They did nothing. Mr Beale —But you moved that to the produce excise. Mr CHARLES —Here comes the honourable member for Deakin. What did the honourable member's Government do with that easy money? It did nothing. After three decades of conservative government, honourable members opposite left office leaving the top rate of taxation at 60c in the dollar. Yet the Leader of the Opposition (Mr Howard) pontificates in this House when he, after being Treasurer for five years, left the tax system in complete disarray. The top rate of tax was still 60c in the dollar. Honourable members opposite have no idea whatsoever what they want to do with taxation now. If the honourable member for Kooyong (Mr Peacock) said one thing, Andrew Hay would say totally the opposite. Mr Beale —Is Andrew Hay in this place? Mr CHARLES —He might be after the next election. One never knows. One keeps hearing certain things. But I am sure that whether he is here or not, he has a number of mates sitting with honourable members opposite. The honourable member for Deakin should not worry about that. What has this Government done? It has restructured the tax system so that we will see next year, as the honourable member for Melbourne (Mr Hand) and the honourable member for Aston (Mr Saunderson) would know, that the lower tax rates will be 24c and 29c in the dollar and the two top rates will be 40c and 49c in the dollar-a long way from the situation after three decades under the stewardship of honourable members opposite during which we saw 60c in the dollar as the top rate while the previous Government ripped off the people. It is also interesting to note that during the Fraser Government years, between 1975 and 1981, we saw the percentage of tax paid by persons on lower incomes significantly increased. The tax for a taxpayer with a dependent spouse and two children who was earning in 1981 $10,700, which is approximately $14,000 in today's values, increased by 381 per cent as a proportion of income. The tax for someone in the same situation on an average wage of around $11,000, which would be worth about $15,000 now, increased by 72 per cent as a proportion of income. For someone on average weekly earnings in 1981, tax as a proportion of income increased by 21.6 per cent. The honourable member for Melbourne would want to hear this: Someone earning in excess of $1,000 a week had his tax decreased by 2.9 per cent. People at one end of the scale, earning the equivalent of around $14,000 a year today, had their tax increased by 381 per cent, and on the other end of the scale people earning more than $1,000 a week had their tax decreased by around 3 per cent. That is what honourable members opposite did to the Australian working people when they ripped them off. Yet they had the money. They did not do anything with the money they received from the petrol excise, which was nearly 9 per cent of the previous Government's receipts. That figure has nearly disappeared today; it is now 1.8 per cent. That is the mess that honourable members opposite left us in after three decades. Honourable members opposite still do not know what they are doing. They have made $5.9 billion worth of promises from things that they will cut. They say that they will balance the books in their first term; that is another $3.5 billion. They will fiddle with the assets test. They will fiddle with Medicare to disadvantage the poor and the chronically ill. All that adds up to around $11 billion. How are they going to do it? Where will they find the money? That amount is practically the entire education and defence budgets put together. Mr Hand —Get it from the honourable member for Deakin. Mr CHARLES —They probably could if he has enough money. Where will the Opposition get the money? The Opposition has not one policy. That is shown by the 30 years of incompetence when honourable members opposite were in government. Honourable members opposite did not have any policies then, either. Look at the mess that they left the country in-the biggest depression since the 1930s and a tax system totally distorted and up the proverbial creek. It was left to this Government to fix things up. This Government has done wonders in regard to the economy and the taxation system in general. Over the next 12 months as things progressively get better and better and as the things I have mentioned regarding interest rates occur and they come down-this will affect and assist everyone-and as the housing industry, which completely stopped under the previous Government, gets going again and as people receive the genuine tax cuts, we will see a country that will thrive as it has begun to thrive over the last four years under this Government. The country will continue to thrive and the people, seeing that, will put us back at the next election because they will not want the nonsense, the lack of management and the incompetence that they copped from honourable members opposite for 30 years. Proposed expenditures agreed to. Department of Employment and Industrial Relations Proposed expenditure, $818,629,000. Department of Industry, Technology and Commerce Proposed expenditure, $353,853,000. Mr SMITH(Bass)(9.07) —I thank the honourable member for Melbourne (Mr Hand), who is trying to interject, for his encouragement. I would like to make a few remarks about the Estimates for the Department of Employment and Industrial Relations. I would like to refer first to item 6.1, Labour market and economic analysis and to express concern about the future of the Bureau of Labour Market Research. The Department is to establish, I understand, a program assessment branch to strengthen the capacity of the Department to assess the labour market. It is therefore of great concern that the Bureau of Labour Market Research may in fact be closed down by this Government. I believe the BLMR has much to offer the Government and Australians in general in terms of labour market analysis. The Bureau of Labour Market Research has had a history of producing papers that, because of their independence and integrity, have often been critical of policies of the Minister for Employment and Industrial Relations (Mr Willis) and his Department's analyses of the labour market. Possibly because of its honest analyses and the fact that the Bureau of Labour Market Research is not under union or government control, it now faces the axe. It is my personal view that the Minister should banish from his mind any thoughts of scrapping the Bureau. One should really ask why it is being closed. If one looks back to some of the previous reports and sees the objective and critical analysis that has been brought to bear on some of the issues in the labour market area, one can see why the Minister perhaps does not want to accept them. Be that as it may, I wish that the Minister would reconsider-although probably the day that that could actually happen has now passed. I think it is a tragedy that the people who have put in such a lot of good work for the Bureau of Labour Market Research have now been subsumed into the Department, where their independence will not be as easily accessible to the wider community. There are many people in the wider community who have taken a long interest in the excellent reports produced by this Bureau. I would like also to refer to item 5.5, Working Environment. That item covers funding to increase the awareness and practice of industrial democracy. This seems to be something of a buzz-phrase within the Australian Labor Party these days, following from its commitment contained in the accord. Grants are now made available to employers, employer groups and trade unions. The research grants scheme is part of this area. Eleven grants totalling $180,000 were made in 1985-86. Industrial democracy grants totalled $757,737 in 1985-86. That is estimated to increase this year by 30.3 per cent to $987,000. It is interesting to note some of the types of organisations receiving funding under this program. Page 127 of the explanatory document states that there is to be an evaluation of the research scheme later this year. It will be interesting to see whether that review is made public. I ask the Minister to make that public so that one may see the results. One of the recipients of a grant has been the Trade Union Community Research Centre situated in Hobart. During 1985-86 the centre received considerable financial support from the Federal Government including, believe it or not, two $11,000 grants from the Australia Council. Taxpayers' money is being spent on the Centre, so on 30 April this year I wrote to a Mr Dallas, the Director of the Centre, seeking information. I quote from that letter: . . . I would very much appreciate gaining a greater knowledge of the operations of the centre, and particularly the papers you may have prepared in the area of industrial democracy. It may also be possible to meet with you at some future date, to discuss further the role of the centre. I would have thought that was a reasonable request written in moderate tones. The response came from a Mr Dain Bolwell, Secretary to the Centre and, I believe, a senior union official in Hobart. On 10 June 1986 I received from him a letter stating: Under the circumstances this organisation is not prepared to further entertain your request . . . Apparently a Press statement I issued on 4 May 1986 warning the business community that it should lift its game was considered offensive. I find that hard to believe. I question the motives and open-mindedness of associations who say that unless one is in agreement with them 100 per cent they will not entertain discussions. I certainly question whether taxpayers are receiving value for money if this is the attitude exhibited by such union associations, and in particular by the individual concerned. I think he had the bull by the horns. I question the justification for increasing funding for such centres by a massive 30 per cent. Why the Government believes that it must finance union-sponsored ideological binges is beyond comprehension. Perhaps the Minister has some debts to repay to his friends in the Australian Council of Trade Unions. What does a member do if he seeks to find out about such funding? He has a right to pursue the matter and the only access left to him is through the Freedom of Information Act. Surely that is not conducive to the good relations we all seem to want to impress on the community as between employers and employees in seeking to deal with some of this country's problems. What steps can the Minister take to facilitate my access to the activities of this Centre in Tasmania to find out what is being done in research with grants that have been paid and approved by this Parliament? I would have thought that to be a reasonable request, and it saddens me to see union officials taking such a stance. I wish also to refer to item 5.6 concerning the Trade Union Training Authority, which this year will be funded to the tune of $8.5m. It represents an increase of $600,000, or 8.3 per cent, on funding last year. Funding last year exceeded the estimate by $630,000. It will be interesting to see whether the Minister's friends overspend their budget again this year. The Government now finances training of union leaders to an enormous degree. In fact, there are now nearly 16,000 participants in Trade Union Training Authority programs. At a time when the assets of Australia's 20 largest unions total $118m, one questions the necessity for the Government to underwrite the training of such union leaders. The Authority's headquarters are at the Clyde Cameron College in Wodonga. It is estimated that up to $1.5m will be spent this year-$200,000 more than actual expenditure last year. The Clyde Cameron College is supplemented by a number of centres in other States, with centres in Hobart, Adelaide, Perth and so on. One hopes that the understanding by the graduates, or trainees, or however one describes them, of these colleges of the absolute damage done by the 17.5 per cent leave loading permitted by Clyde Cameron as a Minister in the Whitlam Government will not be lost on those attending the courses. Mr McGauran —Does he regret it? Mr SMITH —It is interesting that the honourable member for Gippsland interposes to ask whether he regrets it. Page 8 of the Melbourne Sun of 26 June 1986 contained a leading article by Ken Merrigan entitled `Loading founder wants massive rort examined' from which I quote the following passage: Still there's no mistaking the tone of regret as Mr Cameron describes how his aim of being fair to holidaying employees was distorted to the state of producing a massive rort. There we have use of the word `rort' that we seem to be hearing a lot about in regard to taxes at the moment. He said that Mr Cameron `never expected the holiday loading to emerge as a universal benefit'. The man who created it felt that he was conned by his union friends and now regrets it. I hope that his words are not lost on the union movement. This is a time when the Government is telling us that it is about time we tightened our belts and tried to get greater productivity into industry. The honourable member for Melbourne (Mr Hand) has been saying consistently that we should be improving manufacturing industry, and I agree with him. One way of going about that process is to get rid of these types of rorts in holiday leave loadings that employers cannot afford to pay-loadings that keep young people, about whom the honourable member for Melbourne professes to be concerned, out of jobs. For the information of the public, the Trade Union Training Authority is a statutory authority whose functions are to co-ordinate trade union training in Australia and to do anything conducive to the performance of such training. Once again I question the validity of spending $8.5m of taxpayers' money to promote the training of the Minister's friends. What funds are being used by the Minister's Department to assist management training or the industrial training of management? There has been recent criticism that this has all been management's fault. I do not think that is the case. Certainly management is not the beneficiary of $8.5m a year in training assistance, as is the union movement. I conclude my remarks on that note. Mr HAND(Melbourne)(9.17) —I will answer one of the criticisms made by the honourable member for Bass (Mr Smith). I place on record my congratulations, as I did last year after the Budget, to the men and women who work in trade union training under the national directorship of Ken Stone, former Trades Hall Secretary in Victoria. The Victorian director is Geoff Fary, a man I have known for many years, and there are many other hard-working men and women who provide excellent training for trade unionists, both at Albury-Wodonga and in the State branches. Anybody who has ever taken the time to visit Albury-Wodonga and the Clyde Cameron College will see there a unique building designed by Australians and built by Australian workers. The people who are turned out of those courses are excellent and are making a contribution to Australia's welfare, particularly in the manufacturing sector. When I was in Warrnambool in the electorate of Wannon I was involved in the running of courses with the Trades and Labour Council in that area. The first Victorian trade union training course in rural Victoria was held following a request I made to the centre in Melbourne. Mr McGauran —Congratulations. Mr HAND —I thank the honourable member very much. I am always glad to have a bit of praise. It was an excellent course and we were able to make a contribution to a number of issues in western Victoria. Tonight I want to speak on the portfolio of Industry, Technology and Commerce and, if I have sufficient time, to canvass four main aspects of the Budget allocation. First, on a point of clarification it is important to note that overall expenditure in this portfolio is expected to rise by 7.6 per cent to $380m. This figure varies somewhat from estimates given in Budget Paper No. 1, where it is stated that there will be a decrease in expenditure of 21.1 per cent in total assistance to manufacturing industry. The discrepancy arises because the figure of $124.8m given to the oil refineries is a one-off payment to offset losses in February liftings of crude oil at the prevailing parity price artificially inflated in 1985-86 actual expenditure. It is difficult to cover a lot of ground in 10 minutes. One of the highlights of this Government's many successes has been our industry plans. If one looks at those plans one will see that a lot of work has been put into them by government, management and employees. It would be a good thing if Opposition members, particularly the honourable member for Bass, who referred to my concern about manufacturing industry, were to take a bit more time to talk to the people involved in these industries, both at management level and in the work force. As chairman of the Government's caucus industry committee I have had the opportunity to meet people from both these sectors and the spirit of co-operation that has been developed through the industry councils set up by the Government in the various industries has been quite an eye opener to me. It would be much more to the point if Opposition members went out and talked to people on the ground instead of coming in here with biased views about industry and the involvement of trade unionists. Recently, through our Caucus committee, we have been examining the question of the textile, clothing and footwear industries which have often been mentioned by Opposition members in adjournment speeches. As a former textile worker, I found it very pleasing to visit these plants and hear the glowing terms in which the management talked about the quality of Australian workers. To use their words, those workers are second to none anywhere in the world and their level of productivity is second to none. That is quite pleasing to hear. Mr Beale —That is if they are allowed to do the job. Mr HAND —The honourable member, with his wealth and background, makes a typical comment. Australian workers are better than any others and it is about time Opposition members who profess to talk on behalf of Australia from time to time, got up off their backsides and stopped knocking the country. Every time they open their mouths they shaft us. I believe that Australian workers are sick and tired of the negative approach that Opposition members take. It is about time they started to praise a few people instead of knocking Australian men and women who are, after all, trying to earn a living in this country. The problem with Opposition members is that they have to have someone to bash and unionists are the flavour of the month. Opposition members get behind people such as Copeman from Peko-Wallsend Limited who have been proved to be bloody minded and who are set to drag down industrial relations in this country. When such people went to court they were proved to be wrong and they will be proved wrong again. If people such as the honourable member for Deakin (Mr Beale) want to hide behind the Copemans and the Stones and the H. R. Nicholls Society and if they want to be associated with people such as Sir Phillip Lynch's broken-down research officer who now heads the H. R. Nicholls Society and the Melbourne Chamber of Commerce, then good luck to them. The Australian community will reject them. I want to mention the bounty decision because that decision to cut all bounties by 20 per cent, except in shipbuilding, has caused some problems particularly in the industries to which I have just referred. This measure is expected to save about $43m on estimated bounty payments for 1986-87. Total expenditure on bounties in 1986-87 is estimated at $213m, compared with $209.6m in 1985-86. These payments constitute about 56 per cent of the Department of Industry, Technology and Commerce budget and about 80 per cent of the industry development allocation. Since 1980-81 bounty payments have increased by 394.4 per cent, reflecting in part a shift away from tariff-related measures towards bounties as a means of providing assistance for particular industries. I raise this because in my electorate I have in excess of 20,000 jobs in the textile, clothing and footwear industries. I believe that the Government's decision on bounties could well have waited until we had determined our findings on the Industries Assistance Commission report. I think the decision came out of the blue and it has caused some problems for those particular industries. However, I am hopeful that the sorts of discussions that the Government is holding with those industries will overcome the difficulty. Nevertheless I make the point that it would have been better not to make that decision until we had settled on our position on the IAC report. It might have been better if that had been done another way. We have a responsibility as a government to take note of the comments being made by the textile, clothing and footwear industries. As I said, our Caucus committee has been touring the country. Tonight the Textile Council of Australia is having its annual dinner and I understand that the Minister for Industry, Technology and Commerce (Senator Button) is making a speech at that dinner, giving his views on those three industries. I believe that these industries are now capable of moving into exports in a significant way. When one visits these plants, one finds that most of these companies are now gearing themselves to exports. There is great potential for these industries in the export business. In the past they have not even considered exports because they have not been able to do so. I was a textile worker before I came here and I have been amazed at the changes that have taken place in these three industries-changes in management, technology and the trade union movement affecting workers on the floor. I was astounded by the level of competence that I saw and the developments in machinery and equipment in those industries. I believe that these industries are worth saving, and that the jobs of the workers in those industries are worth protecting. I will do everything that I can to ensure that no decision made by the Government brings about job losses. As the Minister said to me recently, the Government will not rush into a decision; it will think things through and make a decision that is sound, in the best interests of those three industries and in the best interests of Australia. I am quite confident that that will be of great benefit-- Mr Beale —You have spent five minutes saying absolutely nothing. Mr HAND —Of course the honourable member never worries about anything concerning jobs. He is not worried about jobs or anything to do with workers. The CHAIRMAN —Order! The honourable member's time has expired; he will resume his seat. Mr REITH(Flinders)(9.28) —My remarks tonight are directed towards the community training program, the details of which appear on page 81 of the explanatory notes for the Department of Employment and Industrial Relations. My remarks will also be within the context of the Budget estimates which detail the payments to be made by the Commonwealth for unemployment benefits. The Budget estimates for 1986-87 are $3.5 billion, which represents a 14 per cent increase over last year. The Budget also proposes certain minor changes to the criteria for the benefit and of course includes some funding for the voluntary community program. The proposals do not go nearly far enough. Some people like to criticise the Opposition as simply reacting to events, rather than putting up constructive proposals for consideration. I am sure that the honourable member for Curtin (Mr Rocher) will agree that the Leader of the Opposition (Mr Howard) has led the intellectual debate on industrial relations and has been very much the man to set the agenda. The Government, judging by its rhetoric, is now attempting to take on board some of the views of the Leader of the Opposition. Honourable members should also remember that it was the Leader of the Opposition who established the Campbell Committee of Inquiry into the Australian Financial System, which set the tone for the debate in this country which led eventually to considerable financial deregulation, which has been good for Australia. On the concept of the work-for-the dole proposals, the Leader of the Opposition has again been way out in front. A lot of people have been talking about this in the community but the Leader of the Opposition started the debate in his address to the National Press Club in August 1985. On this issue, as with the fringe benefits tax and the capital gains tax-it is a pretty long list-the Government quite frankly does not know what it is doing. In the middle of the year the Prime Minister (Mr Hawke) mentioned a possible scheme which was to be voluntary. When the Leader of the Opposition, in his reply the following week, said that it ought to be compulsory, the Australian Labor Party backed off on the instructions of its ex-communist Senate candidate for Victoria, Mr Halfpenny. Mr Hand —What a load of rubbish! Mr REITH —It is quite true. The Minister for Employment and Industrial Relations (Mr Willis), in an address in Queensland on 3 September 1986, tipped a bucket on the scheme. Mr Hand —Oh! Mr REITH —This is what he said. It is on the public record. He said: The most savage impact of the proposal is that it promotes a grossly unfair dole bludger mentality. Those were his words. He then went on to say that the cost would be prohibitive and the whole idea was impractical. His figures, quite frankly, were shonky to say the least. He was certainly not prepared to release them. I hope that the Minister might release those documents, as I have asked him to do, under the Freedom of Information Act. Mr Rocher —This was all before Kelty and Crean went to Sweden. Mr REITH —That was before the Australian Council of Trade Unions went off on its free trip to Sweden. The interesting thing is that I rang and talked to a member of the Minister's staff about how he had worked out this cost which he said was prohibitive. The member of staff did reveal something-he let something out of the bag. What he said was that the costings were prepared on the assumption that there was no fraud, cheating or bludging in the current dole system. The Minister has assumed that not one cent will be saved by the introduction of a compulsory system. That is plainly ludicrous. Other Federal Ministers have acknowledged that there are widespread abuses. The anecdotal evidence of cheating is everywhere. Blind Freddie knows that people are cheating on the dole. The Melbourne Herald of 6 October referred to a case where a person was convicted for his part in a $200,000 dole fraud. The convicted person was charged with 62 counts of forging and uttering and used 15 fictitious names. I am even told that there are books available in Europe on how to go to Australia and have an extended holiday on the dole. The Government has no idea of the extent of cheating in the system and the Minister for Social Security (Mr Howe) and people such as the honourable member for Melbourne (Mr Hand) think that all dole recipients are simply victims of the nasty capitalist system. One result of a compulsory scheme will be to cut back on fraud and the Government ought to support that objective. I suggest that some other objectives could be to provide a system that helps the genuinely needy-the Government should support that; a system to promote financial independence; provide the community with some benefit in exchange for expenditure of taxes on benefits for the unemployed; provide a deterrent or disincentive to those who are otherwise capable of work and who are not genuine; discourage the situation where the dole payment encourages dependency on the State; and provide work experience and introduce work disciplines such as punctuality so as to improve the prospects of the participants to return to the work force on a permanent basis. I would have thought that on a bipartisan basis most of those objectives ought to be agreed between both sides of the House. The public's attitude to these proposals generally is very favourable because they see them as a means to help the unemployed. One municipality in my electorate has responded very positively to the concept. The Phillip Island Council has decided to proceed with a scheme. I compliment the Shire President, Councillor John Bailey, Councillor Greg Price and their fellow councillors, Shire Secretary Barry Hayes and Shire Engineer Jock McKechnie on their initiative to help Phillip Island residents overcome the problems of unemployment. I particularly compliment the people receiving the unemployment benefit who have been prepared to come forward and participate. They have taken a positive attitude, which is something I cannot say about honourable gentlemen opposite. The Shire has advertised the scheme using its own funds and it has received some preliminary responses. Next week it will be the first shire in Australia to commence a scheme. Instead of knocking it, those opposite ought to give the Shire some encouragement because its primary motive is to help those who are unemployed. The scheme will start next week. A professionally qualified person has come forward and volunteered to supervise the work and the first project is to beautify the grounds of the information centre. I honestly cannot see how honourable members opposite can somehow find a basis for criticism of the initiative taken by this municipality. The scheme will be for two days a week. The Shire is seeking some financial assistance from the Government and I hope that the Minister will favourably consider its request. Whether one likes it or not, I believe it is a subject which is very much on the political agenda. If we have a municipality which is prepared to take the initiative with a pilot project in a semi-rural area, it ought to be encouraged so that we can see how it gets along. The Government has adopted a very negative attitude to the proposal. A more positive attitude would offer some hope of assistance from the Government for the unemployed. The Government's Budget this year predicts increasing levels of unemployment. Surely it is a matter of bipartisan agreement between us that constructive efforts to help those people who will find themselves unemployed or who are currently unemployed ought to be adopted by both sides of this House. An imaginative scheme, heavily reliant on volunteers, could be of great help to many unemployed persons and should be embraced by the Government. The fact is that the Government is being left behind. The Opposition has outlined its scheme. We are working on the details, but we have been quite forthright as to the direction in which we should be going. Just last Sunday we saw in the National Times on Sunday a headline which said `ACTU wants to end youth dole'. The article went on to say: The ACTU has endorsed a radical youth policy based on the premise that young people should not receive the dole unless they are engaged in work, training or education. Mr Hand —I raise a point of order. The point of order is that the honourable member is misleading the House. The ACTU has not advocated a work for the dole scheme for young people. That is my point of order, so I am demanding that he tells the truth. The DEPUTY CHAIRMAN(Mr Keogh) —Order! The honourable member's point of order may be well taken. I was not aware of the remarks of the honourable member for Flinders. Mr Hand —Tell the truth if you're going to come in here. Mr REITH —I was simply quoting from a national newspaper which is quite readily available to everybody. The DEPUTY CHAIRMAN —Order! The honourable member will resume his seat. I am not aware of the remarks that the honourable member may have made that were the subject of the point of order. I ask him to stick strictly to the subject before the Committee. Mr REITH —The sensitivity of the honourable member for Melbourne is that I have read from a newspaper which thousands of Australians read on Sunday. The point I simply make, before he uses up my time-- Mr Hand —I raise a point of order. The DEPUTY CHAIRMAN —Order! The honourable member's time has expired. Mr Rocher —I raise a point of order. The honourable member for Melbourne accused my colleague the honourable member for Flinders of not telling the truth. I ask that it be withdrawn. The DEPUTY CHAIRMAN —If the honourable member for Melbourne made that accusation, I ask him to withdraw. Mr Hand —If I can just have a moment to get some clarification. Mr Beale —Withdraw. Mr Hand —Just a minute. I just want some clarification. The DEPUTY CHAIRMAN —Did the honourable member for Melbourne-- Mr Hand —If I can just ask a question of you, Mr Deputy Chairman, in responding to the point of order. Mr Porter —I raise a point of order, Mr Chairman. The DEPUTY CHAIRMAN —I am hearing the honourable member for Melbourne. Mr Porter —I rise on a point of order. You have asked the honourable member for Melbourne to withdraw. That does not give him an opportunity to debate the issue. Are you going to enforce your ruling or not? The DEPUTY CHAIRMAN —The honourable member for Barker will resume his seat. I have asked the honourable member for Melbourne, if he made that remark, to withdraw it. Mr Hand —What I said is that the honourable member was not saying what was true. The ACTU is not advocating that and therefore-- Mr Rocher —He is debating the question. Mr Hand —Just a moment and I will answer your question over there. For God's sake be quiet. What I am saying is that, therefore, what he was saying was in fact not true, and that is a fact. What you were saying was not true. If you want me to withdraw something that happens to be true because it offends you, I do not think I can do that, because what you are saying isn't true. The DEPUTY CHAIRMAN —The honourable member for Melbourne has indicated to the Chair that in his opinion he does not believe that the remarks made by the honourable member for Flinders were correct. I take it as fact. Mr Rocher —Mr Deputy Chairman-- The DEPUTY CHAIRMAN —I have ruled on the point of order. Mr Rocher —I take another point of order. My point of order is that the honourable member for Melbourne has himself told an untruth in claiming that he did not accuse my colleague of not telling the truth. I heard the matter clearly and it will be recorded in Hansard. You have asked the honourable member to withdraw if he said that and he has refused to withdraw. Are you going to enforce your ruling or not? The DEPUTY CHAIRMAN —The honourable member for Curtin is taking the same point of order that I have just ruled on. Mr Reith —Mr Deputy Chairman, on a point of order: You might find it useful if I clarify the statement that I made. The statement that I made was quite simple. I have in my hand a photostat copy of a newspaper article. I simply made the assertion, which is provable by the piece of paper in my hand, that certain things were said in a national newspaper. It is not-- The DEPUTY CHAIRMAN —The honourable member has made his point. I have not required the honourable member for Melbourne to withdraw. There is a difference of opinion between the two honourable members. The Chair will not be involved in holding up the proceedings of this Committee to determine which opinion is correct and which is not. Mr Beale —Mr Deputy Chairman, I raise a point of order. The honourable member for Melbourne said: `You should tell the truth when you come in here'. When you came to the chair you said that you had not heard what the honourable member for Melbourne had said. In those circumstances, with the requirement being that proper parliamentary conduct be carried out, and you having asked the honourable member for Melbourne to withdraw any comment in view of the fact that he had said `You should tell the truth when you come in here', I ask again that you require the honourable member for Melbourne to withdraw his remark. The DEPUTY CHAIRMAN —The point of order that has been taken by the honourable member for Deakin simply goes over the ground that has already been covered. Mr Beale —With great respect, Mr Deputy Chairman-- The DEPUTY CHAIRMAN —Order! The honourable member for Deakin will resume his seat. He is going over the ground that has already been covered. I allowed the honourable member for Melbourne to explain the situation. He did not repeat, as had been suggested, the particular words that he was alleged to have said. It is not my intention to allow the matter to proceed any further. Mr Beale —Mr Deputy Chairman, I take a further point of order. I accept what you say about the fact that you were not in the chair or that you were taking the chair when the honourable member for Melbourne made those remarks. In those circumstances would you then require the honourable member for Melbourne to withdraw the words `You should tell the truth when you come in here', if he made those remarks? The DEPUTY CHAIRMAN —The honourable member for Deakin will resume his seat. If the honourable member for Melbourne uttered words that were offensive to the honourable member for Flinders I ask him to withdraw those offensive words. Mr Hand —Just a moment. Mr Deputy Chairman. I have some difficulty- The DEPUTY CHAIRMAN —Order! I have requested the honourable member for Melbourne- Mr Hand —Mr Deputy Chairman, you are asking me to withdraw something- The DEPUTY CHAIRMAN —Order! If the honourable member for Melbourne has made an offensive remark concerning the honourable member for Flinders, I ask him to withdraw the remark that is considered by the honourable member for Flinders to be offensive. Mr Hand —Mr Deputy Chairman, on a point of order: If what you say is what I said-I questioned something that the honourable member said which was untrue-and I am bound by the rules of this chamber to withdraw something like that, God help us. I withdraw. The DEPUTY CHAIRMAN —Let me explain the situation quite clearly to the honourable member for Melbourne. He is not helping the Chair in this circumstance. I have suggested to the honourable member for Melbourne- Mr Hand —Mr Deputy Chairman, with deference to you, I withdraw if it offends. I have questioned what the honourable member said. I have to point out to him that he is making a terrible mistake by saying that. If it is offensive to him, I will withdraw. The DEPUTY CHAIRMAN —Order! The honourable member will not debate the issue. Mr Hand —I withdraw it for the third time. The DEPUTY CHAIRMAN —The honourable member for Melbourne has withdrawn. Mr Beale —Mr Deputy Chairman, on a point of order, I just want to thank you on behalf of the Committee for requiring the honourable member for Melbourne to withdraw those offensive remarks when you were in the difficult situation of changing the occupancy of the chair. The DEPUTY CHAIRMAN —I do not consider that to be a point of order. I think the honourable member for Deakin knows that. Mr ALLAN MORRIS(Newcastle)(9.47) —I doubt whether the Committee will thank the Opposition for its behaviour during the last five minutes. All too often after dinner the wanderers and the strayers find their way into the chamber and spend the rest of the evening provoking honourable members, disputing facts and disturbing the proceedings. I find that a bit distasteful and I am sure that it does the Opposition no credit. The honourable member for Flinders (Mr Reith) indicated the difficulty that we as a government have when we come to grappling with the intellectual logic of the Opposition. In fact, having started his speech by talking about working for the dole which his Leader purports to espouse, he ended up supporting a voluntary youth employment program which the Government has had running for some years, and which it is extending. I found it very difficult to work out just what the honourable member was on about. Of course, the scheme that he put forward is identical to the scheme that is currently running in many parts of Australia, including my electorate. It is running very successfully and has done for some years. In fact, it was initiated originally by the previous Government and it is one which we have extended, supported, and are extending further. If that is what the honourable member for Bennelong (Mr Howard) calls working for the dole there is no argument at all-we all agree with that. If that is what the honourable member means, let there be no argument and let us get rid of that nonsense. If the scheme is the voluntary youth program I am sure that there is no dispute on this side of the House. Tonight I came into the chamber to speak to the appropriations for the Department of Industry, Technology and Commerce. In doing so, I want to focus on what I believe to be the major problem facing the country-that is, the tendency of Australians to buy more from overseas than they can afford. The Treasurer (Mr Keating) once referred to Australians as import junkies, meaning that we had an unhealthy addiction to imported goods to the extent that our whole economy had become vulnerable. One can argue about this or blame individual segments of the community or anybody else, but the fact is that eventually we as a nation must face up to the fact that we all have a responsibility for the problems. In looking at the massive imbalance in our export trade between manufactured goods and primary industry and raw materials it becomes obvious that this imbalance has always left us vulnerable to shifts in world demand and prices. In recent years a downward trend in world commodity prices has been occurring but the dramatic change in the last 18 months was not predictable, nor can it be absorbed by the economy without significant impact. The reduction in the past year, equivalent to about $1,000 per taxpayer or $20 per week, has to flow through the economy. The task facing the Government in framing this Budget was to ensure that this flow on was equitable. Despite efforts to ensure that, there is no doubt that pockets of the community will bear a disproportionate share of the responsibility. I urge all Ministers to treat such occurrences, as and when they occur, with sensitivity and compassion. This Budget has been framed in circumstances in which we as a nation are required to import an additional $14 billion of capital from overseas merely to balance our current account. Since we will spend $14 billion more than we earn as a nation we cannot pretend that, at the same time as we import the $14 billion, we can dictate the terms of that capital inflow. The obvious question that arises is: Who is this Budget aimed at? Is it designed for the world finance markets or the Australian community? The answer is simple-it is designed for both. The Government seeks to secure for Australia a high level of economic independence. To achieve this in the short term we need to attract the $14 billion that we as a country have overspent. More importantly, we have to address the core problem, which is the excessive importation of consumer goods and the lack of export of products of Australian manufacture. In doing that, we should ask ourselves: Why is it that we have a problem? Why is it that Australians do not readily buy Australian goods? For months now we have watched Australian goods reduce relatively in price and yet still not sell. Many Australian products are either equivalently priced to, or cheaper than, imported products, yet we are still buying imports. For some reason, a significant number of Australians do not want to buy Australian goods. While ever this is the case, our economy will be vulnerable and dependent upon capital inflow. To achieve economic independence we need to pay our way in the world by buying less and selling more. While we have a massive trade deficit we will be a hostage to world financial forces. Australian businessmen can blame the Government and they can even blame the consumers, but eventually they have to face up to the fact that in so many cases what they are producing is either unattractive or irrelevant to significant sections of the Australian public. The Government can encourage the public to buy Australian, and this is a worthwhile effort, but we cannot pass laws to force people to buy Australian made goods. My advice to those businessmen who complain so much and who want to blame the Government for the lack of appeal of their products is to spend a lot more time talking to the public about what it wants and then set about producing those products. If the devaluation, which represents a doubling or even tripling of the effective rate of tariff, does not help them it is obvious that nothing ever will. I recently spent some time looking at various industries in Europe. I went to factories in Sweden, Germany, Belgium, Holland and England. I came back committed to trying to rectify what I perceived to be the major deficiency in our manufacturing sector, namely, the lack of attention to, and concentration on, quality. In Europe I observed workers using similar equipment and displaying similar skills to their Australian counterparts. I saw little evidence of significant difference in skill or application. I did see a massive concentration on quality throughout all the European organisations. In Europe `quality' is not a trendy word but a fundamental aspect of manufacturing. It does not consist alone of the checking of final product but is paramount at all stages of product development from design through to final assembly. My concern with the quality of Australian manufacturing was heightened by this inspection. Since returning I have made a submission to the Minister for Industry, Technology and Commerce (Senator Button) proposing a method of accelerating quality consciousness in Australian manufacturing. This suggests the development of a joint government-industry mechanism to develop and monitor quality standards and with the capacity to verify the quality of individual companies' products. Companies that are able to meet appropriately high standards would be able to use a badge on their products to indicate this. The Government would provide industry assistance to companies wishing to upgrade the quality of their manufacturing and would also promote public awareness of the badge and its verification procedures. Companies in turn would extend their guarantee period; in other words, they would put faith in their own products. Such a program could be introduced industry by industry. It would obviously require State and trade union involvement. It would also indicate to public servants that a justification for not buying Australian goods would not exist. Perhaps nothing better demonstrates the betrayal of the Australian business community by those who sit opposite than the appalling conclusion of all their years in office since 1949-a public service and a community not committed to buying products from Australian industry. The disaster that this Government has had to face in virtually every area of industry policy is a stark reminder of the sheer incompetence of Liberal-National Party coalition governments for most of the last 37 years. These supposed supporters of free enterprise sold out their supporters year by year. This Government has gone a long way towards creating a climate of industry policy that is conducive to improving Australian industry competitiveness, particularly in the export field. The introduction of export bounties on computer assemblies and shipbuilding was a significant first step in integrating our domestic and export markets. The recent announcement of a bounty on export ship repair work is a logical extension of these initiatives. Other initiatives of the Government which are visible include the tax write-off for research and development, the management investment companies, and the extension of the Australian Industry Development Corporation's financial capacity and growing industry involvement. The initiatives are in place; the policy framework that was for so long deficient is now appropriate; and the currency that was for so long overvalued is now at a suitable level. We have put our money where our mouth is. As a government we have made a significant national investment in the development of industry. Business and industry leaders and management now face the challenge. There has never been a better opportunity to invest in Australian manufacturing, but it must be better directed and better managed than previously. Mr SHIPTON(Higgins)(9.56) —The outstanding feature of the Department of Industry, Technology and Commerce estimates in Appropriation Bill (No. 1) 1986-87 is the way they fail to recognise the importance of the small firm and the small business sector in the Australian economy. I believe they are negligent in so doing. The estimates do not mention in any substantial way the importance of the small firm, the small enterprise or the family business in the Australian economy and the importance of the small business sector to growth and the availability of jobs in the future. There is no mention of the proper place of the small or medium size firm in economic recovery which is so important in Australia today. In the estimates not even lip service or tokenism is given. I am willing to stand corrected, but the only reference I can find in the estimates to small business is a throw-away mention on page 17 of the explanatory notes in relation to the industry policy and development program. On page 34 there is a throw-away line in relation to the industry policy and development program, but in none of the other major sections of the estimates-industry policy and development and industry development-is there recognition of the role of the small firm. In relation to industry infrastructure there is no mention to the importance of small business, and in relation to industry research, which comes under industry policy and development on page 77, again there is no recognition of the role of the small firm and the small enterprise in the Australian economy. I am not arguing that the estimates should have special subsidy programs or that small business should have any special treatment. All the small business sector needs today is breathing space and a fair go. It does not want to be subsidised; it does not want government hand- outs, but it does want a climate so that it can invest, grow, work and create jobs. Small business is the major employer. Small business is big business and has the potential to be even bigger business in the Australian economy. I think it is outrageous and negligent of the Government not even to mention the importance of that sector, with its employment capacity and employment potential. Nowhere in this estimates document, which is a far-reaching policy document that discusses industry development, technology and business efficiency, industry infrastructure, industry research, corporate strategy and services, is there any recognition or acknowledgment of the importance and the role of the small firm. The Government should be asking itself: What is good for small business? The answer is that what is good for small business is good for Australia. If one asks what is good for Australia, what is good for small business and what policies have to be put in place to encourage the growth of small business, one gets the right policies for Australia. The industry policies of this Government are a failure. Obviously, industry has no voice in the Cabinet. Small business and large business alike are neglected because the Government has failed to create the proper climate for investment in the Australian economy. The role of government should be to create the proper climate, environment or framework through economic and industry policies for investment, growth, profit and jobs. That has not happened. In fact, the reverse has happened. The climate being created by the Government through its industry and economic policies is a climate that discourages investment, discourages jobs and is a positive disincentive to investment and growth in the Australian economy. The Government's industry policies have created uncertainty and instability and there is an outflow of investment from Australia overseas. Daily we see another Australian businessman or entrepreneur investing outside the country. They are doing that because the industry policies of this Government are encouraging Australian entrepreneurs and firms to invest outside Australia and not inside the country. The Government's policies are creating uncertainty and instability. Who would invest in Australia today when one can go and buy a bank bill, the interest on which varies from time to time, from week to week-it ranged from 17 per cent to 20 per cent in the last two months? What businessman will invest in productivity capacity when he could let his money sit on deposit and get a return of that nature? It is accepted that business will not invest until there is a climate of certainty for investment. We need stability. What we have is instability and uncertainty because of the failure of the Government's industry policies and particularly the failure of the Government to recognise the role and importance of the small firm and the small business in the Australian economy. I would like to focus on the question of technology transfer, which is also a subject of the portfolio we are discussing. Obviously, technology transfer to Australian enterprise and business is vital. I support offset programs. I think that the large corporate sector has an advantage because of its capacity to deal with companies overseas and the small firm suffers a particular disadvantage. We have to concentrate on high technology industries in the areas where we have skills. We have areas of great skill across the board in Australia. We have them in medicine, in engineering and in bio-technology and plant technology. Australians have made great inventions over the years. The photocopier was invented in Australia. Our problem in the past has been that we have not developed those inventions. I think there has been too much emphasis on high technology. High technology has its place. We must encourage technology transfer at both the small and the large firm level. We must concentrate on low technology and what I might call mid-technology. I do not mean old fashioned low technology; I mean modern low technology that can be carried on particularly by small firms and small enterprises. I would have thought it would be much better to encourage people in the nation to create their own firm and their own enterprise rather than to encourage the large business sector. The reality is that the large business sector is rationalising. Because of the unfavourable climate that I mentioned previously, it is not investing in Australia; it is disinvesting in Australia and investing overseas. We have to encourage small people, individuals, to create their own enterprises. High technology generally requires a massive investment which is beyond the reach of individuals or small groups of individuals. I believe that Australia has the potential in the manufacturing sector to have thousands of new generation mid- or low technology factories that are innovative and productive. We could have thousands of secondary small businesses if only we had the policies, the climate and the environment for them to grow and prosper. To do that we do not need increases in company taxation such as we have; we do not need fringe benefits taxation such as we have and we do not need a capital gains tax. In fact, we need the reverse of those taxes. We need lower business taxation to encourage the investment I talked about, to encourage thousands of individuals throughout the nation to invest in their own small enterprise or their own small firm. Not only are the estimates deficient; the Government's policies are totally deficient because they fail to recognise the role and the importance of the individual small firm in the Australian economy. The DEPUTY CHAIRMAN(Mr Keogh) —Order! The honourable member's time has expired. Mr HODGMAN(Denison)(10.06) —I believe in Australian manufacturing and I believe in Australian manufactured products because I am one myself, made and assembled in Australia and delivered on time on 16 November 1938. I am very proud once again to say that every item of clothing I am wearing in this House tonight has been made in Australia. The DEPUTY CHAIRMAN —Order! I point out to the honourable member for Denison that it might be disorderly to prove that. Mr HODGMAN —I will not prove it in that sense, but I will just expose the facts. I am wearing an Anthony Squires suit made in Australia; I am wearing a Van Heusen shirt made in Australia; I am wearing an Austico tie; I am wearing John Brown socks; I am wearing Flor- sheim shoes; and, if honourable members want to know, I am wearing Jockey underwear made in Australia. Mr Robert Brown —Where was the flower grown? Mr HODGMAN —It was grown here in the national capital. I am particularly proud that the honourable member for Charlton (Mr Robert Brown) is in the chamber tonight, as are my very good and long-standing friend the Minister for Science (Mr Barry Jones) and my very good friend the honourable member for Herbert (Mr Lindsay). Mr Downer —What about your friends over here? Mr HODGMAN —They are here, together with the packed benches of my Liberal and National Party colleagues. I remember with some very great affection speaking in this House on the Australian steel industry plan, brought in by the Hawke socialist Government and in particular by the Minister for Industry, Technology and Commerce (Senator Button), supported by the Minister for Science. I applaud that plan. I believe it is a good plan and it is working. On that occasion, for whatever reason, I was applauded in the chamber by a number of members who occupied that part of the chamber which I refer to as Moscow corner. However, it is possible for persons of good will on both sides of the House to reach agreement on issues and to find, as I think I do find, that there is a feeling in Australia-I am particularly grateful for the presence of my friend the shadow Treasurer, the honourable member for Mitchell (Mr Cadman) because we have jousted on this issue-that perhaps we have been moving too fast to dismantle a system of protection which I believe is essential if Australian manufacturing is to survive. I believe Australia is like a 17-year-old youth-strong, virile and having all the potential in the world, but requiring protection, particularly against those with whom he has to compete who are older, more cunning and more powerful. I feel there has been too much of a rush towards a unilateral withdrawal of protection of Australian manufacturing. It is fashionable today to say that everybody agrees that protection must be reduced. People assume that point; the only argument concerns the speed at which it is done. To draw crude analogy, to me it is like the difference between being raped quickly and raped slowly. As I speak there are in this chamber the ghosts of 250,000 Australians who were employed in the manufacturing sector just a few short years ago but who are no longer so employed. In the late 1960s, 25 per cent of the Australian work force was employed in the Australian manufacturing sector. What is the position in 1986? The figure is 14 per cent. Five years ago 1.25 million Australians were employed in the manufacturing sector; today the figure is one million. So 250,000 Australian ghosts float in this chamber as we talk tonight. We have before us a critical report of the Industries Assistance Commission with respect to textiles, clothing and footwear. If the preferred option of the IAC is implemented by this Government, on the IAC's own figures a further 20,000 Australian jobs will be lost. The industry says that we can treble that figure-it is closer to 60,000. I have been chastised for talking in terms of wet and dry, but I worked under one of the greatest Australians this country has ever seen-the late Sir Phillip Lynch. Rightly or wrongly I still espouse the basic philosophies that he implemented during his term as Minister for Industry and Commerce. I have to say with great passion, because I feel about this passionately, that the dry mania pervading Australian political and economic discussion in this country has gone too far and the thought that Australia should lead the world, when just 20 years ago we were in the top six nations and now find ourselves at position number 32, is nothing more nor less than economic madness, suicide and the genocide of our manufacturing sector. I say: Halt, enough, we have gone too damned far down this track. I feel this strongly. I never could understand why, when we were in Government and when Australian steel was being exported and 49 per cent of the steel being used in Australia was imported back from Korea and Japan, we were paying Korea a developing country preference. It just did not make sense to me. My colleague the honourable member for Kooyong (Mr Peacock), who is in the chamber, took over as Minister for Industry and Commerce and with great distinction served in that portfolio in the last months of the Fraser Government. He decided to tackle something which, frankly, I do not think has been properly tackled since-certainly not with the same effect. He directed me to have brought into my office every anti-dumping file in the Department of Industry and Commerce, and he directed that a decision was to be made as to whether anti-dumping notices were to be issued. The record shows that under his direction I, as the Minister Assisting the Minister for Industry and Commerce, issued some 89 anti-dumping notices in January of 1983, two days before Australia Day. One would have thought that it was the end of the world. The Japanese Ambassador called on the Prime Minister and the Korean Ambassador called. A great friend of mine, the late Ken Caldicott, who was the No. 1 boss of Hitachi Australia Limited, told me at Wrest Point at the time of the Sydney-Hobart yacht race that we would be dragged through every court in the land. The plain fact was that every one of those anti-dumping notices stuck and every one was complied with. I give full marks to the honourable member for Kooyong for having had the guts to do it. In my concluding minute I say to the Government: Before you decide that Australian manufacturing industry is so strong that you can tear away its protection and leave it standing naked against a ruthless and cruel competing world, just think a little about the jobs of Australians that depend on the decisions of this Parliament. I find wisdom in some of the remarks of the honourable member for Charlton and-I will surprise the Committee-I find wisdom in some of the remarks of the honourable member for Calwell (Dr Theophanous). There are people on both sides of the chamber who approach this problem in the right way; that is, we should not stand by and cut the throat of the Australian manufacturing sector so that we get ten out of ten for economic purity but put another 100,000 Australians out of work. I appeal for a rational and proper approach and for genuine and rational protection of real Australian manufacturing and the thousands and thousands of Australians who depend on it for their jobs. The DEPUTY CHAIRMAN(Mr Keogh) —Order! The honourable member's time has expired. Mr O'KEEFE(Burke)(10.16) —I welcome the opportunity to follow my colleague the honourable member for Denison (Mr Hodgman). Many of the points he made at the start of his contribution, including his concern for the future of Australian manufacturing industry, are valid and worth having regard to. But towards the end of his contribution he moved once again into the humbug and what has been regarded elsewhere as the carpetbaggery espoused by those on the other side of the chamber. These are not my words; I am just quoting from the editorial of the National Times on Sunday, 7 September. The editorial, headed `This is the wall the Right built', referred to protection, including the carpetbaggery that has been built up over the years under the guise of protection. The editorial states: This is particularly so of the Liberal Party. True, there has long been a free-market faction in the Liberal Party: for many years, its name was Bert Kelly. He is known as the Modest Farmer. The editorial further states: His party colleagues regarded him with amusement; his political career went nowhere. . . . . And the stifling of trade- I repeat: `The stifling of trade'- which Liberal-Country Party governments fought for, achieved and defended was not an isolated thing: its effects spread throughout the economy, fattening profits, adding to wage increases and helping to foster the very work practices that today's Liberals so angrily denounce. That is an interesting analysis. The editorial concludes: It is fairly pointless identifying humbug in politics, since without humbug few politicians would be left with much to say. I suggest that the honourable member for Denison could gather much from that. However, it ought to be remembered, as the editorial states: But as they arrive at the free market battlefield and unpack all those glittering `New Right' gee-gaws from their carpetbags, you might have hoped that even politicians could make some concession to history and acknowledge their part in creating the evil they now so rail against. This Government has many initiatives which will continue under the Budget provisions contained in the Appropriation Bill we are debating tonight. Something which we do not speak about much in this chamber but which ought to be drawn to the attention of honourable members, and be commended, within the employment and industrial relations sector is the initiative of the Minister for Employment and Industrial Relations (Mr Willis) in the field of industrial democracy and employee participation. We have a situation in which our manufacturing sector, and in fact most parts of the business sector, have developed on the structure of saying: `We own it; you work for us and you do what you are told'. We are one of the few nations in the world that have yet to learn the message that, if we go to those who do the job, we may find out that they know a hell of a lot more about doing it than do those who profess to know. As we move down the path of more and more industrial democracy and more and more employee participation, we will find the answers for increased productivity; increased quality control; and increased industrial co-operation and consensus in the market-place. I remember that before I came to this place I attended a seminar one day. The fellow who was delivering the speech to us made the point that Australian workers are amongst the most innovative and capable people in the world. He made the point that between 5 o'clock on Friday night and 9 o'clock on Monday morning they are capable of running local committees, running local sporting clubs, renovating houses, rebuilding cars and doing all sorts of magical things in the community and in the local area. The skills and the talents are there. So one turns around and asks oneself what happens in the work place. I point to the management of the work place. Nobody goes to work to do a poor day's work. Everybody goes to work to try to do the best he can. If we cannot manage the work environment in order to create the opportunity for people to do their best, we should not point to the unions or to the Government; we should not wave our fingers looking for someone to blame. We should point to ourselves and ask: `Why are we not managing it properly?' That is the real issue. I welcome the points made by the honourable member for Denison (Mr Hodgman). He mentioned that every single piece of apparel that he is wearing is made in Australia. I congratulate him and I join him, as do my colleagues on this side of the House. We did not ask him prove it. But this leads me to the issue of the `Buy Australia' campaign. I cannot help taking this opportunity to boast about a great initiative by one of my local regional newspapers. It has a supplement this week which urges people to buy Australian products. Throughout the advertisement is the new Skippy logo, as I call it-the easily identifiable Australian kangaroo which identifies Australian made products-in the colours of the true blue. That is really great and I commend that newspaper for taking the initiative in picking up the marketing thrust. I also make the point that people are picking up on this Australian made thrust. Today at one of our meetings we heard evidence from a major group of retailers to the effect that in just the few weeks that this campaign has been running, there has been a 15 per cent shift in consumer preference for Australian made products. Every member of this House-- Mrs Darling —Who said that? Mr O'KEEFE —A major retailing group. Every member of this House should be out in the community pointing out that message-not preaching doom and gloom pointing out that Australians are prepared to buy Australian made products if they are offered then and if they are given the initiative. I came across the example of a product which is dressed up to look like an import but which is really made in Australia. It is a cheese product which purports to be a French import, but written on the packet is: `Product of Australia'. I congratulate the manufacturer. The point I make is: How did this come to be bought? The person who brought this sample to me said: `Look, this is crazy. I went into the shop looking for Australian cheese. I picked up products, I looked at them all and I saw this one made in Australia'. Why on earth a manufacturer would pretend that it was a French product was beyond this person because he was looking for an Australian made cheese. That sort of message has to get through. Dressing up a product as some sort of fancy import is not the way to go in the market-place any more. I also want to make one final point about the budget for the Department of Employment and Industrial Relations. The Minister for Employment and Industrial Relations deserves a very big commendation for his efforts with the community employment program and his efforts in job generation. The 670,000 new jobs in Australia cannot be acknowledged as anything but a major achievement. The creation of the 400,000-I repeat, 400,000-new jobs for new participants in the work place, many of them females and many of them women re-entering the work force, is to be commended. It is a measure of the true commitment of this Government to getting people back into the work place, getting a fair taxation system, getting a fair go for employees in the work place and, most of all, doing something genuine to get Australian manufacturing industry back on to its feet. The DEPUTY CHAIRMAN(Mr Keogh) —Order! The honourable member's time has expired. Mr DOWNER(Mayo)(10.26) —It will not come as any surprise to the Committee that I always put the interests of my nation before anything else. One of the objectives that I have for building up this nation-I share this view with the honourable member for Denison (Mr Hodgman)-is that we must do what we can to build up our manufacturing industry. Parts of our manufacturing industry have enormous potential. That is one of many areas of agreement that I share with the honourable member for Denison. In talking of building up Australian industry, I want to say something about Australia's automotive industry. As a South Australian, it is obviously of direct importance to me, but also it is an industry with tremendous potential in this nation, if it is given opportunities. At the moment, even though the industry is extremely visible on the roads, it represents only 6.6 per cent of employment in manufacturing industry and only 7 per cent of the turnover of the manufacturing sector. Looking at the appropriations for the Department of Industry, Technology and Commerce, it is interesting to see that some $29m is being devoted to the automotive industry. That figure is very much underestimated because it does not take into consideration things from which the industry would benefit, such as the 150 per cent research and development tax concession. Nevertheless, if one looks at it within the totality of the Budget, the automotive industry receives a fairly small amount-indeed an almost negligible proportion-of Budget funds. I am not arguing that it should receive more; I am just observing that the industry is not one of the major beneficiaries of budgetary expenditure, although it is assisted by a number of other Government policies such as protection. Turning to budgetary expenditure, about $3.5m is spent on the bounty for commercial motor vehicles and $25.9m is to be spent on the Automotive Industry Authority, representing an increase of over 21 per cent on that Authority. If people are objective about this, it is probably true to say that over the last decade or so there has been a changing mood in the automotive industry in spite of the vicissitudes that it has inevitably gone through as the economy has gone up and down. There has been a steadily growing confidence as new products have been developed and they have been found in some ways to be a little more competitive than some of their predecessors. For example, one can see the way that General Motors-Holden's Ltd has built its engine plants and now has substantial capacity to export to countries such as Germany and Britain. Mitsubishi Australia Ltd, as it has now become, having taken over from Chrysler at Tonsley Park in Adelaide, has turned a very inefficient Chrysler plant into an extremely efficient Mitsubishi plant. I congratulate the South Australian Tonkin Government on all of the help it provided in making that transition smooth and successful. The industry very clearly recognises the objective of a lean, efficient and dynamic industry. It also recognises that that can be achieved by four basic means. I want to say something about each of those means of achieving that objective. First of all, it is recognised in the industry-and, I would have to say, recognised in the Government's car plan, as it is recognised also by the Opposition-that some degree of rationalisation in the car industry has been and still is absolutely necessary. It is fairly absurd in a country of Australia's size that we have five manufacturers manufacturing a vast array of models. We have 14 heavy commercial vehicle assemblers in this country, and anybody who has been to the city of Adelaide knows that component manufacturers are very thick on the ground. There are component manufacturers galore in Adelaide. One of the principles of the car plan has clearly been to rationalise the Australian automotive industry in order to try to make it more efficient. I want to pick up one point about rationalisation, though, because it has been brought to my attention very recently that part of the Government's rationalisation plan apparently is to impose some penalties on manufacturers who are producing low volume models. The definition of low volume is perhaps 20,000 or 30,000 units a year, but we are not quite sure of that. The car plan did stipulate-and quite rightly so-that there would be certainty and predictability for the industry until at least 1992, when the plan comes up for review. But this new rumour which is circulating-and it has been confirmed by Senator Button-about penalties for low volume manufacturers creates new uncertainty in the industry, and that uncertainty has very strongly been brought to my attention. I would like to say more about that but time does not permit. But I would certainly appreciate some response from the Minister on that particular issue. The second means of achieving the greater objectives of an efficient industry is that Australia must get into export markets. The industry has a total turnover of $6.2 billion; yet only 6 per cent of that turnover comes from exports. The Government has its export facilitation scheme, which I support. I think that is a reasonable way to try to assist and encourage the industry not only to import components but to export as well. These incentives through the export facilitation scheme have been successful, as I have already mentioned, in the case of General Motors-Holden's, with its export of car engines. GMH will also build a new plant, I understand, very soon. Mitsubishi has also, I understand, made some attempt to get into the export market and has been moderately successful in doing so. I do not think, therefore, that the Government's policy, insofar as its car plan is concerned, is misdirected in terms of what it is doing for exports in the industry. It is misdirected in a lot of other ways, but not in terms of the car plan. The third means of achieving the objective of a strong industry is to improve quality in the industry. I think we have gone a long way towards improving quality in the car industry, but there is still a long way to go. The responsibility for improved quality does not rest just on the major manufacturers; it also rests with that myriad of component manufacturers, because one of the common complaints we get from manufacturers is that the quality of components is too low and that that directly affects their products. I would like to feel that that is an issue which the automotive authority-I have forgotten precisely what it is called-will look at over the next year, because I think that quality control, whilst difficult to quantify, is a vastly important issue for that industry. One of the reasons the industry in Sweden-to take a country of a similar size to Australia-has been so successful is that it has concentrated on very high quality products. In contrast, we have not. Of course, the fourth means of achieving our objective is to make the industry much more competitive internationally. One of the ways we must do that is clearly to improve the quality of management. I think that has been a problem in manufacturing industry generally in Australia and there are cultural reasons for it. We see the same problem in the United Kingdom, which has the same sort of cultural pressures. I would like to feel that some effort within tertiary institutions-not necessarily effort by the Government, but effort within the institutions-could be made to improve that cultural climate. I notice that the Government is spending some $30,000 on management training schemes in the automotive industry under the car plan. I notice that one of those programs has apparently been described as inventory control. I do not have time to talk about that. I think accelerating inventory turnovers is not a very fashionable thing to talk about, but is an extremely important aspect of industry policy. Rather than spreading that $30,000 all around the place, I would have thought that inventory control was one area that the Government could target on, because that is what a lot of other countries and a lot of other industries are doing very successfully. Finally, of course, the Government has to try to get the macroeconomic climate right. A whole lot of issues are involved there. Interest rates, which everyone in the industry would say are far too high and are inhibiting investment; restrictive work practices; wages rates; and inflexibility of the labour market are all inhibiting factors. The tax system is the factor above all others which in the last 12 months has really savaged the motor industry. Sales have been collapsing. The latest figures show a 15 per cent fall in registrations year on year to August 1985 and a 22 per cent decline in the eight months to 1986. That master of mendacity the Treasurer (Mr Keating) is responsible for these policies which he railroaded through against the-- The CHAIRMAN —Order! The honourable member for Mayo should withdraw that remark. Mr DOWNER —I withdraw that remark. These policies were railroaded through over the dead political body of Senator Button, who realised that the fringe benefits tax would do untold damage to the industry. The Treasurer said that the industry had had it `too good for too long'. He said that in this place. If he thinks it has had it too good for too long, he has to understand that 4,500 jobs will be lost in my State of South Australia thanks to his tax policy and 10,000 jobs will be lost nationally. The Government is trying to do the right thing through the car industry plan. I have supported that, but why undo it all with the fringe benefits tax? The CHAIRMAN —Order! The honourable member's time has expired. Mr RUDDOCK(Dundas)(10.37) —In relation to the estimates for the Department of Employment and Industrial Relations I would like to offer some comments on the question of employment. I was interested to note that in the debate that we have had tonight the honourable member for Denison (Mr Hodgman) received a good deal of support from both sides of the chamber as he spoke about the consequences of unemployment in his very excellent speech on industry matters. We also heard similar comments from another honourable member on this side, the honourable member for Mayo (Mr Downer). I think it is important that it be recognised that members of the Liberal Party of Australia and the National Party of Australia have a real concern about the unemployed and unemployment in this country. It is not a matter upon which one can score cheap points; it is a matter upon which there ought to be a constructive approach to finding reasonable ways of addressing unemployment over the longer term. There has been over time a change in community attitudes on the question of work for unemployment benefits and the impact that might have, if it were introduced, on the way in which the unemployed see their position in our society. It is interesting that over a period we have had operating in Australia a program whereby some people are required to work for moneys that they receive in substitution for unemployment benefits. That program, which has been in place for a long time, operates in Aboriginal communities in Australia. It is known as the community development employment program. Under that program an amount of money equivalent to the unemployment benefit is paid to a community council to enable the community to put in place arrangements to employ Aboriginals within the community for an appropriate amount of time relative to the money that is available for the substitution of unemployment benefits. They are then able to work on constructive tasks in the community. They are able to do a lot of the repair and maintenance work that is so essential, and this program ensures that the Aboriginal community is not placed at greater risk through having people with time on their hands and money in their pockets which could often be spent in a frivolous way and is often seen as not being very important. In fact, one of the rather novel ways in which Aborigines often describe the money that is paid in the form of social services is as `sit-down money'. I think that puts into perspective the way in which money that comes into people's hands very easily is sometimes construed. It is not a new issue for members of Parliament to take up the question whether it is unreasonable to ask people who receive unemployment benefits to undertake some form of community service or employment for the moneys they receive. I have been surprised at the extent to which there has been widespread support for the view that some effort is required to develop a program along these lines. What has surprised me even more is the extent to which Labor members, and members of the Australian Council of Trade Unions, have now come to the view that this is the time to think about ways and means of ensuring that some form of community service is achieved. We all know that the Prime Minister (Mr Hawke) intended to speak about a compulsory scheme for people to undertake work for unemployment benefits. He changed his address to the nation and indicated that a more voluntary, and perhaps more relaxed, program would develop. We all sat on the edge of our seats waiting to see how those proposals would be developed by this Government. In recent weeks the ACTU has suggested that the unemployed should have available training programs in which they would have to participate or unemployment benefits would no longer be available to them. The Minister for Community Services (Senator Grimes) indicated that he saw nothing wrong with a scheme of that sort. He saw such training as being no different from the imposition of a work test, as we have long understood it, in the provision of unemployment benefits. What is so interesting about this change of Government attitude is that there was a good deal of castigation of the Opposition for suggesting that programs of this sort would be desirable. There was also a significant condemnation of the Sydney Channel 9 program covering a range of interviews on the American program known as Workfare. A vigorous debate took place at Mount Druitt when discussing some of the American proposals. Viewers saw a group of people in that audience at Mount Druitt seeking unfairly to limit the freedom of speech of a lady who came to Australia to tell us a little more about the Workfare arrangements in the USA. In the context of that program comments were made by the Minister for Employment and Industrial Relations (Mr Willis) to the effect that the development of any schemes that would require people to undertake some form of employment for unemployment benefits would be administratively so costly that such programs could not be reasonably put in place. The Minister also used a report from the Department of Social Security review staff, a background and discussion paper No. 6 entitled `Workfare in America: An initial guide to the debate', as a basis for suggesting that American schemes were not relevant to Australia and could not be reasonably undertaken in this country. It is important that honourable members read that paper because my reading of it suggests that it does not condemn the American schemes out of hand. The following paragraph is worth reading: Whether or not overseas schemes, such as any of the versions of Workfare, are worth importing to Australia depends in part on value judgments as to whether their objectives are desirable, and in part on judgments as to whether they would actually work in a different context. That writer was not rejecting Workfare out of hand. She was correctly diagnosing that one would need to develop programs of this sort specifically for Australia to take into account the different circumstances in this country, the different contexts, and to put in place somewhat different programs. She drew attention to one important aspect of which all honourable members should take note. That was that the American schemes themselves, because they were not available to every participant, had certain shortcomings. He said: This aspect is particularly important when schemes do not even offer everybody the opportunity to participate. It seems to me that if we are going to develop programs of this sort in Australia, they need to be available so that everybody who wants to participate can do so. I watched the debate at Mount Druitt with a great deal of interest because I thought certain people were working to denigrate certain types of work. One person there, an Australian Labor Party Senate candidate in prospect, Mr Halfpenny-- Mr Barry Jones —In prospect. Mr RUDDOCK —A candidate in prospect. He indicated that there were certain types of work that he saw as being more in the form of mickey mouse jobs and jobs that some people could not reasonably be asked to undertake. I think that is a very cavalier and unfortunate attitude, because I think any form of work that people are able to undertake ought to be respected and ought not to be condemned out of hand. I think there are many people in the community who see the prospect of being able to work in any field at all as being very desirable, and who, if it is at all achievable, would welcome the opportunity to undertake it. I regret very much that people are critical of the sort of work that might be available in the community when looking at schemes of this sort. I think the proposals before us are realistic and should be developed in the nation's interest. The CHAIRMAN —Order! The honourable member's time has expired. Mr BARRY JONES(Lalor-Minister for Science and Minister Assisting the Minister for Industry, Technology and Commerce)(10.47) —I thank honourable members who have contributed to this debate on the Department of Employment and Industrial Relations and the Department of Industry, Technology and Commerce. I will pass on to the Minister for Employment and Industrial Relations (Mr Willis) the observations that have been made about that area of Government administration. But I want to make a few observations of my own and also to respond to some questions that were raised in the course of the debate. I will do these as briefly as I can and not necessarily in the order in which the points were raised. The honourable member for Mayo (Mr Downer) asked specifically about whether small production runs were going to lead to some kind of penalty, in effect, through the reorganised car plan. The Automotive Industry Authority has circulated a discussion paper within the industry on the question of the need to reduce the number of models produced here. There has been no Government consideration of the issue and there will not be any until there has been a full discussion on all the elements which will be concerned, and I know this is of particular concern in South Australia. It will be discussed within the industry and generally, and that process may continue for some time. There was a debate earlier, I think, about protection and free trade. I think it is fair to say that much of that debate has been conducted at a fairly primitive, almost instinctive, level. The partisans of each position argue dogmatically and there is no common ground, and each of the partisan views tends to overstate it. One sees the solution to every problem as being the imposition of free trade and the operation of market forces alone. The others see extraordinary life-giving qualities to industry in the imposition of protection. I listened with some sympathy to what the honourable member for Denison (Mr Hodgman) was saying in his advocacy of protection, but I listened in vain for a single example of an industry which had begun as a weakly infant and then by the judicious application of protection had in fact turned into a vigorous adult. The Canberra economist Gerry Gutman once wrote savagely, but with an element of truth: Protection policy is aimed at nurturing . . . infant industries until able to stand on their own feet. It rarely happened that way. With the passage of the years, aging infants merely exchanged the crib for the wheelchair. Their growing debility presented their bureaucratic godparents with endless problems of devising increasingly complex life-support systems for their stricken offspring. The experience in Australia has been that the most heavily protected industries-motor vehicles, metals, textiles, footwear and clothing-have been the greatest shedders of labour for 15 years, while the non-protected industries in large part, such as the service industries and tourism, have been the major areas of growth. The problem about protection, mostly by tariff but also by quotas, is that it has had the impact of imposing isolation, encouraging insularity and distancing local producers from the realities and opportunities of world trade. When we talk about having internationally competitive industries in Australia we use the term in a very odd way. We mean that we hope that goods made in Sydney may be competitive in Sydney with goods made in Stockholm or Singapore. With very rare exceptions we rarely contemplate the possibility that Sydney made goods might compete on equal terms in Stockholm, Singapore or more neutral markets. The problem for us has been that, in the last few years, the countries that have overtaken us as world traders, particularly in brand names or packaged goods, have been countries that have generally had considerably lower protection levels than we have. A few days ago I was examining supermarkets in Tokyo and I was very disturbed that, with the exception of beer and wine, in major supermarkets the only packaged food from Australia was that familiar item, Vegemite. In one supermarket I found two containers of Vegemite. If one looks at all the products that are made in Australia under brandnames such as Kelloggs in which one would think we had good export potential, one finds instead that these products are supplied from Europe or North America. There are all sorts of things, such as nuts and tinned fruits, which we should be able to export but somehow we have not succeeded in doing so. Mr Humphreys —What about the Queensland nut, the macadamia? Mr BARRY JONES —I did not see macadamia nuts on display. The sad thing is that Australian wines, which were a major selling item in Japan a few years ago, have now been completely outstripped by Californian wines. In one large supermarket I saw about 80 bottles of Australian wine and perhaps 2,000 or 3,000 bottles of Californian wine. Five or six years ago that proportion would have been reversed. Our problem is-and the honourable member for Newcastle (Mr Allan Morris) and some Opposition members were absolutely correct in this-that we have to get that emphasis on quality. The emphasis on quality has not been there. We have never developed that international reputation for quality. Mr Downer —How do you get it though? Mr BARRY JONES —That is the most difficult question of all. How does one develop a reputation in an area where one does not have one? I hope that in connection with the Australian-made campaign, which I think we all support very strongly, there will be a greater, growing and recurring emphasis on the need for quality. We cannot just produce the begging bowl, put on the dark glasses, take out the white cane and say: `Please buy our goods, we call on you for sympathy'. We can only do it if we are producing a worthwhile product. In a number of areas we have very able people, but a lot of our management is not terribly adventurous and not really concerned about the long term. The point that worried me about the speech of the honourable member for Higgins (Mr Shipton)-and I am glad he is gracing us with his presence again-is that when he talked about the problems of small business he said that too much emphasis was placed upon high-tech and not enough on low and medium-tech. The difficulty there is that his case would have been stronger if he had given an illustration of the kind of products with export potential that are based on low-tech. Mr Shipton —I can do that later. Mr BARRY JONES —The point that needs to be made is that much of the new high-tech, particularly the new high-tech of micro-electronics, permeates so many products now that we cannot do without it. For hundreds of years Britain sold slide rules, but the development of the pocket calculator that sells for a few dollars has made all that obsolete. It is difficult to say: `We will go back to making the slide rules even better and we will make them genuine products of craftsmanship'. It is too late. Mr Cadman —You should not tax software. Why are you taxing software? Mr BARRY JONES —I think the honourable member misunderstood what we are doing about the software. That is not the anomaly it is held out to be. In Australia we persist in applying our 40-watt lightbulb minds to problems that need the operation of a searchlight or a laser. The situation is desperately serious and we do not have the luxury of a great deal of time. It is an immensely serious problem. Proposed expenditures agreed to. Progress reported. House adjourned at 10.57 p.m. The following notice was given: Mr Uren to present a Bill for an Act to establish an Australian Protective Service. The following papers were deemed to have been presented on 15 October 1986: Customs Act-Notice-1986-No. 10. Excise Act-Notice-1986-No. 18. Public Service Act-Determinations-1986-Nos. 66, 67. The following answers to questions were circulated: (Question No. 1666) Mr Jacobi asked the Attorney-General, upon notice, on 11 September 1985: Will he propose urgent amendments to the Crimes Act to make it an offence for bank officers to be knowingly involved in opening accounts in false names. Mr Lionel Bowen —The answer to the honourable member's question is as follows: The Government has recently approved proposals for a comprehensive legislative package dealing with the proceeds of crime. One of the new measures proposed would require the proper identification of all persons and corporations opening book accounts. Legislation giving effect to these proposals will be introduced into the Parliament as soon as practicable. (Question No. 2442) Mr Sinclair asked the Minister for Defence, upon notice, on 15 November 1985: (1) What expenditure was proposed in Army Major Equipment Submission No. 80 for the purchase of equipment for the Army Reserve. (2) When will the proposed expenditure be achieved. (3) What amounts were (a) allocated and (b) spent as a result of that ministerial directive in (i) 1982-83 and (ii) each year since. (4) What amount of the proposed expenditure remains unspent. (5) What is the proposed expenditure on equipment for the Army Reserve in each year of the current Five Year Defence Plan. Mr Beazley —The answer to the honourable member's question is as follows: (1) The estimated project cost for Army Major equipment Submission No. 80 (MES80) included $64.8m for `stores and equipment' based upon broad assumptions about equipment likely to be required to support the planned expansion of the Areas. Actual acquisitions were to be subject to detailed development in the course of the normal review processes, before proceeding. (2) Final expenditure under the currently forecast phasing of expenditure against present commitments is planned to occur in 1988-89. (3) (a & b) The amounts allocated and spent on stores and equipment under MES80 since 1982/83 are as follows: Financial year Allocation Actual expenditure $m $m 1982-83... 13.447 12.380 1983-84... 3.998 5.179 1984-85... 1.853 1.846 1985-86... 0.623 0.729 1986-87... 0.551 N/A (4) In project terms, $19.84m of the stores and equipment component remains uncommitted. As noted in the answer to (1) above, the project was a broad provision, based on a range of initial assumptions. Actual requirements proved to be less than the intitial assumptions and other acquisitions which could, possibly, have been charged to MES80 have proceeded as part of specific equipment projects (e.g. Medium and Light trucks). (5) The question cannot be answered readily in the form sought. Quite apart from MES80, the Army Reserve will benefit from a wide range of expenditures on new and replacement equipment and stores over the FYDP. In the case of new major equipment projects yet to be approved, the timing and phasing remains subject to the normal budgetary processes. Expenditure on replacement equipment and stores is forecast on the basis of many factors including rates of consumption. Army Reserves units enjoy the same priority as the bulk of the Regular Army in the issue from stocks or acquisition and the expenditure is related to the nature and timing of the satisfaction of unit demands. (Question No. 2501) Mr Ruddock asked the Attorney-General, upon notice, on 18 November 1985: 1. Does the Minister's Department, or any statutory authority responsible to the Minister, provide grants to organisations operating in the ACT. 2. Do such grants have a requirement that any organisation so funded be registered under the ACT Associations Incorporation Ordinance 1953; if so, what steps are taken by the Minister's Department to ensure that the funded organisation has complied with the Ordinance before any grant is made. 3. Does the Minister's Department or statutory authority carry out a search of the register at the ACT Corporate Affairs Commission. 4. If the search discloses a failure to comply with the ACT Associations Incorporation Ordinance, what steps are taken to ensure that the matter is remedied by those responsible for administration of the Ordinance, or the incorporated association. 5. Have all incorporated associations within the ACT funded by the Minister's Department or statutory authority complied with the Ordinance requirements for lodging particulars of financial affairs or balance sheets annually. Mr Lionel Bowen —The answer to the honourable member's question is as follows: 1. Grants are provided to the following organisations and individuals operating in the ACT: (A) Human Rights Commission Community Education Grants Foundry Association Inc. Women and Development Network of Australia, Inc. ACT Association for Mental Health. (B) Special Services Branch Marriage and Grants Section Grants under the Family Law Act & Marriage Act Canberra Marriage Counselling Service Inc. (includes funds for the Wagga Wagga Marriage & Personal counselling Service). Catholic Family Welfare Bureau (C) Legal Aid Branch Canberra Welfare Rights and Legal Centre 2. It is not required that the organisations so funded be registered under the ACT Associations Incorporated Ordinance, 1953, 3. A search is not made of the register at the ACT Corporate Affairs Commission. 4. Not applicable. 5. Although none of the organisations listed at paragraph 1 is required to be registered under the ACT Associations Incorporation Ordinance 1953, each is required to provide particulars of their financial affairs. Particulars required from the organisations set out in paragraph 1 are: (a) Organisations receiving Community Education Grants are requested to supply a copy of the most recent financial report; (b) Organisations receiving grants under the Family Law Act and Marriage Act are required to furnish the Department with an audited financial statement of the receipts and payments and a report on activities; (c) The Canberra Welfare Rights and Legal Centre must supply to the ACT Legal Aid Commission copies of its audited financial statements as soon as possible after the end of the previous funding period. (Question No. 3303) Mr Jacobi asked the Attorney-General, upon notice, on 11 March 1986: (1) Has his attention been drawn to the report of the British Fraud Trials Committee, chaired by Lord Roskill, which recommended changes to the laws in order to deal with fraud trials and investigations more effectively. (2) Has his attention been drawn to a proposed alternative to jury trial in complex fraud cases whereby a fraud trial tribunal composed of a judge and 2 lay members with experience of complex business transactions would conduct cases. (3) Will he investigate whether the need for judges to understand complex business transactions and scientific and technological evidence will make it essential for them to have readily at hand appropriate technical advice. (4) Is there widespread public concern that juries are no longer appropriate to try cases of `pin-stripe crime'; if so, will he give consideration to (a) summary trial by judges in appropriate cases sitting with assessors and (b) substitution of pre-trial procedures for committal proceedings to ensure that accused persons are adequately informed of the case against them. (5) If changes are not made to the existing structure of dealing with complex commercial fraud cases might the system break down. (6) Will he investigate whether there is a need for judges who have special expertise in commercial law. (7) Will he take steps to set up a body of review to investigate the applicability in Australia of the recommendations of the British Fraud Trials Committee. Mr Lionel Bowen —The answer to the honourable member's question is as follows: (1) Yes. (2) Yes. (3) and (6) The Commonwealth has a long standing policy of investing State courts with federal criminal jurisdiction. Thus most federal criminal cases are tried by State courts. As regards the trial of criminal cases by the Federal Court of Australia and the Supreme Court of the Australian Capital Territory, the Government is of the view that there are judges of these Courts with appropriate expertise to try cases involving complex business transactions. (4) and (5) I am not aware of widespread public concern that juries are no longer appropriate to try cases of commercial crime involving complex business transactions. Nor do I consider that there is any likelihood that the criminal justice system will break down if changes are not made to the existing structures for dealing with complex commercial fraud cases. However, that is not to say that consideration should not be given to improving the present system. Work is being done at State level with a view to improving the functioning of the jury system. The Commonwealth is monitoring these developments closely. (7) The establishment of such a review could not be justified at this time. (Question No. 3321) Mr Staples asked the Attorney-General, upon notice, on 11 March 1986: (1) Has his attention been drawn to reports in the West Australian of 10 January 1986 and the Age of 11 January 1986 dealing with proceedings involving companies associated with Mr Robert Holmes a Court and the Foreign Proceedings (Excess of Jurisdiction) Act 1984. (2) What is the (a) background to, (b) state of and (c) position of the Government on the substance of those proceedings and any related foreign proceedings. (3) Has Mr Holmes a Court made any representations to the Government concerning investigations by the US Department of Justice; if so, what was the (a) nature and (b) outcome of those representations. Mr Lionel Bowen —The answer to the honourable member's question is as follows: (1) Yes. (2) and (3): In August 1985, following investigations by the United States Federal Trade Commission, the United States Department of Justice instituted proceedings against Mr Robert Holmes a Court, Bell Resources Ltd, and Weeks Petroleum Ltd, alleging violation of the United States pre-merger notification laws. The allegations related to the acquisition of shares in a U.S. company, ASARCO Inc., by Weeks Petroleum Ltd, a subsidiary of Bell Resources Ltd of which Mr Holmes a Court is Chairman. In March 1986 the proceedings against all defendants were settled without going to trial and without any admissions by the defendants, on the basis of a payment by Weeks Petroleum Ltd of a civil penalty of US$450,000. The proceedings against the other defendants were dismissed. During the course of those proceedings, Bell Resources representatives made representations to the Australian Government, asking that it hold consultations with the U.S. Government pursuant to the Australia/U.S. Antitrust Co-operation Agreement. The Australian Government did not initiate such consultations. However, the Government had been kept fully informed by the U.S. Government of developments in the proceedings pursuant to the notification provisions (Article 1.2 and 1.3) of the Antitrust Co-operation Agreement, and was closely monitoring the matter. Subsequently, representations were made asking me to exercise my powers, pursuant to section 7 of the Foreign Proceedings (Excess of Jurisdiction) Act 1984, to prohibit certain Australian residents from giving evidence or information to the U.S. authorities. At that time Mr Holmes a Court and Bell Resources Ltd had obtained an injunction from the Western Australian Supreme Court which restrained various persons from disclosing, without the applicants' consent, information concerning the matters in question. In light of all the circumstances of the matter, I was not prepared at that stage to consider the exercise of my powers under section 7 of the Foreign Proceedings (Excess of Jurisdiction) Act 1984 or to make any decision on the exercise of those powers. (Question No. 3929) Mr Downer asked the Attorney-General, upon notice, on 7 May 1986: What amount was spent by the Minister's Department and statutory authorities under the Minister's control on the use of Commonwealth vehicles in 1984-85. Mr Lionel Bowen —The answer to the honourable member's question is as follows: According to Departmental records and records maintained by the various statutory bodies within my portfolio, a total of $1,524,312 was spent on the use of Commonwealth vehicles in 1984-85. A breakdown of that expenditure is set out hereunder. Organisation Amount $ Attorney-General's Department... 296,769 Administrative Appeals Tribunal... 56,753 Administrative Review Council... 12,970 ACT Legal Aid Office... 5,102 ACT Courts... 23,793 Commonwealth Reporting Service... 31,000 Director of Public Prosecutions... 107,454 Family Court... 493,600 Federal Court... 254,339 Film Censorship Board... 2,479 High Court of Australia... 88,114 Human Rights Commission... 54,135 Institute of Criminology... 768 Institute of Family Studies... 15,886 Law Reform Commission... 22,071 National Companies and Securities Commission... 17,624 Office of Parliamentary Counsel... 7,126 Trade Practices Commission... 34,329 1,524,312 The amount of $269,769 shown for my Department includes expenditure incurred by the ACT Corporate Affairs Commission, the Solicitor General, regional Legal Aid offices and regional offices of the Official Receiver in Bankruptcy. The figures include the costs of taxis and hire cars provided in lieu of Commonwealth vehicles. (Question No. 4338) Mr Jull asked the Minister for Defence, upon notice, on 19 August 1986: (1) Is it a fact that 1063 workers at 4 defence sites (Williamstown Dockyard, Melbourne, the Government Aircraft Factories, Melbourne and Avalon, Garden Island Dockyard, Sydney) will be retrenched in the next year: if so, are there any plans for the placing of these workers in alternative employment. (2) What will be the saving to his Department in decreasing the workforce by this number. (3) In what areas is efficiency expected to increase in line with the proposed retrenchments. (4) Is there any provision for the re-employment of retrenched workers if efficiency increases to such an extent to warrant the employment of additional staff. Mr Beazley —The answer to the honourable member's question is as follows: (1) In my news release of 18 July 1986 I indicated that the workforce at Williamstown Dockyard, Garden Island Dockyard and the Government Aircraft Factories would be reduced by 1063 based on February staffing levels. The Federal Government's intention to cut the workforce at the three establishments was made in an announcement on 21 March 1986, and was followed by extensive discussions with the ACTU and all relevant unions. Where possible redeployment and retraining opportunities have been pursued for staff in affected areas. However given the magnitude of the reductions a voluntary retrenchment package, negotiated with the ACTU, was offered to staff. (2) A total of 806 workers chose to leave under the conditions of the voluntary retrenchment process which concluded on 31 August 1986. When combined with natural attrition and redeployment since February 1986, a total of 1162 workers have chosen to leave. This overachievement is due primarily to natural attrition occurring in non-surplus areas. In wages and administrative costs alone it is estimated that the current staffing levels indicate an annual saving of $30m based on February 1986 staffing levels. The cost of the severance package (excluding superannuation) is estimated at $18.5m. This includes $7.5m paid out in accrued recreation and long service leave entitlements. (3) The reductions in the workforce are part of a program of restructuring and reforms to work practices which have been implemented within the Office of Defence Production. Overall the achievements to date amount to significant improvements in productivity and reduction of the subsidy needed to operate these establishments. (4) Increases in efficiency would not justify the recruitment of staff. Should additional staff be required to replace staff lost by natural attrition, or should Defence work increase significantly, those staff retrenched will be able to apply. The choice of workers would be based solely on the operational needs of the establishment. (Question No. 4629) Mr Blunt asked the Minister for Social Security, upon notice, on 19 September 1986: (1) What is the estimated cost of travel, accommodation and related expenses for work re-organisation in regional offices in his Department in 1986-87. (2) What was the expenditure on these items in 1985-86. Mr Howe —The answer to the honourable member's question is as follows: $'000 (1) Travel... 140 Consultants... 39 Overtime... 55 (2) Travel... 175 Consultants... 6 Overtime... 70 Office Services... 35 Furniture & Fittings... *124 Computer... *690 Incidental & Other... 3 * These items will be required in the Department beyond the life of the project. In addition during 1985-86 the Department of Housing and Construction was allocated $810,000 for work organisation trial fitouts in Regional Offices. This fitout will continue to be used after the trials have concluded. (Question No. 4648) Mr Hunt asked the Minister for Primary Industry, upon notice, on 22 September 1986: (1) How many Merino rams were exported during 1985-86. (2) How did the price of those rams compare to the average price paid by Australian buyers at auction sales. (3) Is Merino ram semen being exported from Australia; if so, to what extent. (4) How many Merino rams have been sold to overseas buyers at auction sales since 1 July 1986 and at what price. (5) What has been the average price of rams sold at Australian stud Merino auctions since 1 July 1986. Mr Kerin —The answer to the honourable member's question is as follows: (1) There were 737 Merino rams exported from Australia in 1985-86. (2) Average price paid for rams exported in 1985-86 was approximately $1400. Average price paid at auction by Australian buyers is unknown. (3) 1167 pellets (approximately 3500 doses) of Merino ram semen were exported to New Zealand in April this year. Exports of semen to countries other than New Zealand is not permitted. (4) There have been 506 Merino rams sold to overseas buyers at auction sales from 1 July 1986 to 27 September 1986. Prices have ranged from $500 to $102,000. (5) Information on average price of rams sold at auction since 1 July 1986 is unavailable. (Question No. 4657) Mr Ruddock asked the Minister, representing the Minister for Community Services, upon notice, on 22 September 1986: Further to question No. 2526 placed on notice on 18 November 1985-(a) have more than 10 months passed since the question was first placed on notice, (b) have 27 Ministers already replied to a similar question, (c) when can I expect an answer to this question and (d) what does this delay say about the efficiency of the internal reporting system in his Department. Mr Howe —The Minister for Community Services has provided the following answer to the honourable member's question: The answer to question 2526 appeared in Hansard dated 24 September 1986 on page 1371.