Tuesday, 11 November 1986 Madam SPEAKER (Hon. Joan Child) took the chair at 2 p.m., and read prayers. Mr HAWKE(Wills-Prime Minister) —As a matter of courtesy, I wish to advise the House that the Minister for Local Government and Administrative Services (Mr Uren) will not be present in the House today and tomorrow. He is absent on Government business. In his absence the Minister for Sport, Recreation and Tourism (Mr John Brown) will handle any questions relating to his portfolio. Mr HOWARD —My question is addressed to the Prime Minister. I remind the honourable gentleman of the promise he made that, under the Medicare scheme introduced by his Government, all Australians would have improved access to quality health care at a lower cost. Given that public hospital waiting queues have trebled since the introduction of Medicare, that 10 per cent of nurses in the public hospital system resigned in the first 12 months of the operation of Medicare and that under Medicare there has been the highest level of industrial disputation within the hospital system ever seen in this country, including the first walkout of doctors in Australian history, how can he now say with any degree of honesty or accuracy that Australians are better off now with regard to health care than they were when the coalition Government was last in office? Mr HAWKE —The Government takes very considerable pride in its achievements in the health field. I am rather surprised to hear the comments by the Leader of the Opposition about the walkout by doctors. Of course, what we witnessed during the period in question was the unbelievable sight and hypocrisy of the present Opposition which spent all of its time attacking every other union in the country which considered or contemplated taking any form of direct action to improve their working conditions. But when it came to the position of arguably the most powerful and avaricious union in the country-the Australian Medical Association-of course its tune changed. The doctors were given every aid, comfort and support by this Opposition. Honourable members opposite have no morality and no principle when it comes to the question of direct action and walkouts. They encouraged the doctors to walk out and take direct action on these matters. As far as this Government is concerned, we will be quite happy when we go to the next election to stand on our record in this area and compare it with the pathetic performance of the previous Government. Mr GEAR —Has the attention of the Special Minister of State been drawn to an editorial in Saturday's Age criticising the Commonwealth Government for the resources provided to the Australian Bureau of Criminal Intelligence? Can the Minister inform the House of the Government's actions in relation to the funding of the ABCI? Mr YOUNG —I thank the honourable member for his question. The Age apparently had been told some time in the last week or so that there was a dispute between the Commonwealth and the States concerning the funding of the ABCI. Bob Bottom wrote an article to this effect on Wednesday last. No consultation or inquiries were made of me, my office or my Department about any of the matters contained in his article. The Age referred to my rebuttal of the article on Thursday but it repeated its original assertions in an editorial on Saturday. The ABCI is ultimately responsible to the Australian Police Ministers Council. I would like to emphasise that there is no dispute between Commonwealth and State Ministers on the ABCI. It appears that some discussions between Commonwealth and State police and officials have resulted in a detailed briefing on some bureaucratic wrangles being given to the Age and, even more surprisingly, printed by it. The errors in the original article, and repeated in the editorial, are legion. The Bureau's budget was not cut by 28.5 per cent in 1984, nor was its staff component reduced by five. The Age's source apparently does not distinguish between budgets allocated and the original bids by agencies. The Commonwealth did not propose to renegotiate the agreement with the States to change the basis for the sharing of costs of non-police staff as asserted by the Age's informant. No proposal has been put forward by the Commonwealth to Ministers to place the ABCI under a Federal statutory authority. The facts are that the ABCI has been well supported by the Commonwealth. Funding has been increased over the past four years and the growth of staff provided by the Commonwealth has more than kept pace with the staff provided by State police. The funding in 1983-84 from the Commonwealth was $1.2m; in 1984-85 it was $1.4m; in 1985-86 it was $2.6m; in 1986-87 it was $2.2m and, in the last two years including the commitment of the drug summit, it was $1.5m. Present staffing of the ABCI is 44, of which 22 are provided by the Commonwealth. It is certainly true that the ABCI estimates have been subject to the same scrutiny as the estimates of all other agencies and it has not always received everything it has asked for. The Commonwealth makes no apology for expecting the ABCI to justify its estimates. At the drug summit the Commonwealth commitment of $1.5m to enhance the automatic data processing capacity of the ABCI was announced. Ministers have now been informed that implementation of the Bureau's drug data base project may require a great deal more. Honourable members would no doubt agree that a project now estimated to cost at least $4m and a further $1m per year requires examination. This revised proposal has been considered by a meeting of Commonwealth and State Ministers, who agreed that options for implementing this proposal, including cost sharing proposed by the Victorian Minister, should be considered by the full meeting of the Police Ministers Council in December. This hardly seems to warrant the description of a Federal-State wrangle casting doubt on the future of the ABCI. Finally, the Age's sources seem to think that it is not proper for Australia to assist in funding a computer project for the Thai narcotics control board when they have not been given all they have wished for here in Australia. This is very much a Fortress Australia mentality. Presumably they are aware of the origin of much of the heroin entering Australia and the vital importance of overseas intelligence and co-operation in combating drug trafficking. But it seems to the Age that when there is a bureaucratic fight common sense goes out the window. I just make this offering, in conclusion, to the Age journalists in Melbourne or to anybody else: If they require a briefing on the ABCI I will be only too pleased to arrange it for them. Mr HOWARD —My question is addressed to the Prime Minister. I refer the Prime Minister to his general description of anybody who criticises the fringe benefits tax as greedy, as a rorter and as a friend of tax dodgers. Does the Prime Minister believe that this description accurately applies to members of the Commonwealth Bank Officers Association? Does he believe this description applies to many non-profit organisations, such as the Royal Society for the Prevention of Cruelty to Animals and the National Trust? Does he now believe that it applies to his colleague, Senator Richardson, in the light of Senator Richardson's Singleton speech? Or does the Prime Minister now agree that the extravagant rhetoric that he has used to smear honest Australians who genuinely oppose the fringe benefits tax has been without justification or warrant? Mr HAWKE —The honourable member asks with whom I am in agreement on the fringe benefits tax. I find myself in total agreement with the Federal President of the honourable member's Party, Mr Valder. I cannot find anyone in this country who has more explicity put the case for the fringe benefits tax than the Federal President of the Liberal Party. I know that the feelings I have for him are not always shared by the honourable member for Kooyong, but I cannot help that. The Federal President of the Liberal Party rightly said that what had happened in this country with regard to fringe benefits was a disease and he congratulated this Labor Government or its courage in tackling the disease of fringe benefits. That is who I agree with; the Federal President of the Liberal Party. On the question of the Commonwealth Bank employees, I make this general point: The Commonwealth Bank employees are objecting to the Commonwealth Bank, which has happily received a benefit of a flaw in the taxation system, now seeking to go back on its traditional arrangements with staff because that flaw has been removed. That is not an objection to a fair tax system; that is an objection to an employer which was happy to meet its obligations to its employees on the basis of a tax advantage but is not prepared to meet its obligations as soon as, in the interests of fairness, that advantage is taken away. That is something that will have to be resolved between the Commonwealth Bank and its employees, but that is not to be seen as an objection to what is unquestionably a significant improvement to fairness and equity in the taxation system in this country. Mr MARTIN —Can the Minister for Trade advise the House of the outcome of the deliberations of the Australian Coal Consultative Council last week particularly with regard to the new regime for coal export controls? Mr DAWKINS —I thank the honourable member for his question and particularly for the work that he and his committee have been doing in consulting the industry in relation to this matter. At the time the Prime Minister announced the streamlined arrangements for export controls on coal in the liberalisation of that regime, it was made clear that we intended to consult widely with the industry, both the producers and the unions, and the State governments to ensure that the Government was able to exercise its proper responsibilities in terms of safeguarding the national interest as far as coal exports were concerned. The committee which the honourable member chaired did valuable work in that regard. Last week the Australian Coal Consultative Council, which represents all sections of the industry, met to consider this matter and agreed on a number of important questions which the Government had put to it in relation to the continuing involvement of the Government in export controls on coal. The ACCC recognised that the decision of the Government was not made or designed to permit Australian companies to take existing market shares from one another but rather to increase Australia's total share of the world coal market. The Coal Consultative Council went on to note the sort of criteria, not necessarily exhaustive, which the Government would entertain when considering using its reserve power in relation to the price of coal being exported from Australia. Since the new regime of export controls there have been some 70 settlements involving some 10 million tonnes of coal and all but two of those settlements went without a hitch. There were two, however, on which I considered it necessary to withhold approval because I considered in both cases that the prices being asked for in those settlements were below the prices that would be normally justified by the world market price. As a result of withholding that approval, the companies came back to us within 24 hours with an increased price of some $3 a tonne. So I think that indicates the importance of retaining some reserve power and stands in stark contrast to what the Opposition is holding out as its policy of total disinterest about the way in which our No. 1 export is sold to the world. It is folly for the coal mining unions to be entertaining industrial action at the moment in protest at this decision by the Government. The Government is trying to give the coal producers the maximum flexibility consistent with the national interest to not only hold on to their existing markets in the face of weakening prices, but also to gather new markets both within our traditional areas of interest and in other parts of the world. People who suggest that we could, by some magical means through the creation of a national coal marketing authority, hold the position against the tide of lowering prices of coal are confusing themselves. The Australian Financial Review this morning made the very important point that in relation to wheat, where we have almost total acquisition by a central marketing board selling our wheat to the world, that board is not able to resist the lower prices we are being forced to accept for our wheat. The same sort of thing is the case in relation to coal. The coal industry, which is, as I say, our No. 1 export industry, faces very difficult circumstances. Those circumstances are not made any easier by the kind of disruption which has been threatened in some quarters. Mr BLUNT —My question is directed to the Minister for Sport, Recreation and Tourism in his capacity as Chairman of the Ministerial Committee on Government Information and Advertising. I refer the Minister to the Government's taxpayer funded $2m advertising campaign which suggests that the fringe benefits tax will relieve the tax burden on lower income groups. In view of Senator Richardson's admission that the fringe benefits tax will hit hard at many family breadwinners on low to medium incomes, what action will the Government take to correct the misleading nature of its tax advertisements? Mr JOHN BROWN —None. Mr LEE —Can the Prime Minister inform the House of the economic prospects facing Australia over the next 12 months? Mr HAWKE —I thank the honourable member for Dobell for his penetrating question. If honourable members cast their minds back to the Budget Speech delivered by my colleague the Treasurer they will recall that he made it clear that there was an expectation that economic conditions would improve in this country in the first half of 1987. I am very pleased to say that the most recent economic indicators are consistent with the expectation then expressed. I refer, amongst other things, to the greater confidence in the Australian dollar, to the indicated improvement in consumer confidence and also to the increasing evidence that domestic manufacturers are recognising the opportunities offered to them by the significant depreciation that has occurred in this country. These indications and this evidence are the direct result of the Government's economic policies that have been put in place to cope with the slump in the prices of our major exports. It is little wonder in these circumstances that the Government has been praised by the future shadow Treasurer of the Opposition, Mr John Hewson. The future shadow Treasurer, Mr Hewson, writing in the Business Review Weekly of 6 November, had this to say: . . . credit must go to the Government for some of the initiatives it has taken so far and the direction in which it has moved. Its early moves to continue the process of deregulating the financial system, to begin asset tests on some government benefits, to begin to rein in government expenditure, to begin the process of tax reform, to be prepared to renegotiate wage fixation principles and work practices have been moves in the right direction. I guess it is little wonder that the future shadow Treasurer of the Opposition should be saying things like that because no doubt he is experiencing a great deal of frustration witnessing the policyless position which characterises this Opposition, a concern, obviously, which has moved the honourable member for Denison to make the comments he has made recently. Honourable members will recall that on the World Today program on 3 November the honourable member for Denison had this to say about the Opposition, of which he is a member: I think it's a question of taking stock and deciding where we're going and what sort of policies we're going to have. That is all future tense. Honourable members opposite have been there for 3 1/2 years and have not yet got any policies. That led the honourable member for Denison to go on: I don't think we can go on with this business of saying we won't tell you our policies now, you'll have to wait till later. It is good to see the honourable member for Denison expressing his total contempt for the leadership of the Opposition. In the same interview the honourable member said: I think we have to watch our performance and that is all of our performances from the leadership right down. I had cause to say after the previous exercise by the Opposition: `You were threadbare at Thredbo'. Is it threadbare again. Again, those opposite have no policies, which is not surprising when, out of a potential of 73 Liberal members, the best they could do was summon up 46. I suppose that they thought it was not worth going because the conference would be a continuation of the same irrelevant policyless performance which has characterised this pathetic Opposition for 3 1/2 years. Mr CARLTON —I refer the Treasurer to his comments on 6WF in Perth last Thursday concerning his preparedness to change the fringe benefits tax if unforeseen issues arise. I also refer the Treasurer to his comments yesterday that at this point no areas of the fringe benefits tax require further adjustment. Given that Senator Richardson has stated that changes need to be made to the fringe benefits tax and the continuing uncertainty in the community over the fringe benefits tax, will the Treasurer explain exactly where the Government stands on changes to the fringe benefits tax and whether there will be any additional significant changes to the fringe benefits tax? Mr KEATING —Getting the honourable member for Mackellar to ask where the Government stands on tax would make a cat laugh. This Opposition has been trotting around, dodging questions and ducking punches on radio stations for weeks about fringe benefits taxation. Still it will not come clean. Let me give a morsel of the performance of the Leader of the Opposition-that great person of principle, Honest John-on the John Laws program. Laws asked: Would you agree that within certain bounds that anybody who accepts a benefit in lieu of payment, let us say if they were earning in excess of $60,000, they accept other benefits in lieu of payment, so they can avoid paying tax on it, that they should fall at the hands of the FBT? This is the answer: If the purpose of the arrangement is to avoid tax then it ought to be stopped. It ought to be taxed and it ought to be clobbered. Mr Griffiths —Who said that? Mr KEATING —That was said by J. Howard, who went on: I have said all along that if the purpose of the arrangement is to avoid tax then it should be stopped. He goes on-and this is where the dodginess comes in: . . . many of the arrangements . . . would in fact be caught by the existing anti-avoidance provisions of the taxation law that I put into the law in 1981. That is Part IVa. We keep getting this shonky answer about Part IVa, the catch-all avoidance provision which, the Commissioner of Taxation has made clear, can operate only if there is a head of power within the tax Act to make an assessment under. To use Part IVa the Commissioner would have to fall back on section 26 (e) which he, the Commissioner, has said will not work. The Leader of the Opposition knows that Part IVa only gives the Commissioner a right to raise an asessment. There has to be a head of power within the tax Act to raise the assessment. The only head of power within the tax Act is 26 (e), which cannot be used. This is an example of the crazy points that the Opposition has been putting across on one radio program and one television interview after another because it will not come clean on the fact that it does not have a policy in relation to fringe benefits taxation. The Leader of the Opposition went on to say: The Tax Office really does not want to know about that section of the FBT arrangements. It is a catch all section for general anti-avoidance provisions, but then needs a head of power under 26 (e)- the thing the Opposition favours- I suspect that these sorts of things are caught but the point is simply this: If the purpose is to avoid tax, it ought to be stopped. One would think from that that that is a position of principle from the Opposition, that it is opposed to fringe benefits taxation; but what do we find? It is all about Part IVa which cannot be used without relying on section 26 (e). Then we have the honourable member for Mackellar who has asked me this question. In Rydges magazine of October this year the honourable member for Mackellar was asked: You surely do not intend to go back to open slather and allow such things as hostess allowances and private scholarships? The honourable member for Mackellar answered: No. The situation is that we have much tightened up on what applied pre-FBT but using the old provision of the Act. That is section 26 (e). Then we have the Leader of the National Party, who said in Bathurst on 6 November: Indeed, the old section 26 (e), which is part of the existing tax system, has been used by the Tax Commissioner in the past. There is no reason why it could not have been used. In other words, he was saying that there is no reason why it cannot be used in the future. The National Party has referred to section 26 (e), the shadow Treasurer has referred to section 26 (e) and the Leader of the Opposition has referred to Part IVa relying on 26 (e), which the three of them know cannot be used, and then they say that they want us to stand up and say where we stand on fringe benefits. What a sick, squalid joke on the part of a major political party when, facing a question like the non taxation of benefits, it does not have an intellectual and honest position in relation to this question. Is it any wonder that Mr Hewson, who is going to be much quoted today, in relation to tax reform said: This process certainly has not been helped by the Opposition stating that it will abolish the fringe benefits tax without being prepared to say what it will do. Having begun to declare its tax policies, the Opposition's credibility on tax will continue to be questioned until it specifies all the detail. That is his position. The Prime Minister referred earlier to what the honourable member for Denison has said, and I will quote it again: I don't think we can go on with this business of saying we won't tell you our policies . . . The public of Queensland were very happy that we agreed to repeal the FBT but not happy that we wouldn't tell them what the alternative tax policy was going to be. That is the position of the Australian Opposition in relation to fringe benefits taxation. The Opposition should not ask me about the fringe benefits tax and where the Government stands on it. Where the Government stands has been very clear. Let me make this quite clear, as I have said, that we can see no cause for other changes but if we were to see cause we would make changes, like we did to every other section of the Act. Mr JENKINS —My question is directed to the Minister for Immigration and Ethnic Affairs. Is it a fact that a prominent Black Muslim person recently visited Australia under immigration guidelines which have applied for some time? Will the Minister outline these guidelines? Mr HURFORD —There is a separate set of guidelines for temporary visitors to this country who are visiting for a short time and for those who are applying to become permanent settlers. I can show just how long the guidelines have applied by giving one prominent example to the honourable member for Scullin. In 1982 when guess who were governing-the parties, of course, of those represented opposite-one Vanessa Redgrave, a member of the British Trotskyist Workers Revolutionary Party, visited this country openly under the previous Government's administration. Mr Hayden —She came and saw me. Mr HURFORD —She not only personally asked to see the now Minister for Foreign Affairs but also, I am sure, saw a lot of other people while she was here. In fact, she actually openly campaigned for the Palestine Liberation Organisation while she was here. She was very offensive in a lot of things she said while she was here. She claimed that the Israeli nation was racist. She claimed that zionists collaborated with nazis. She stated that the film proceeds of the film she was then showing would go to making another film linking zionism with nazism. That outrageous lady came into Australia under the policy guidelines that were in place under the Government of those who now sit opposite. We did not attack that then, for very good reasons; because we knew that the more that she ranted and raved against certain people the more those certain people would get support and she would lose support. But I also supported that at that time, and continue to support it, because we know that this country, as a liberal democracy, should be treating its people as adults and allowing freedom of speech and the exchange and free flow of ideas. We did not attack the then Government on the letting in of Vanessa Redgrave because we believe that we do not have to protect our people from such ratbags as Vanessa Redgrave or anybody else visiting this country unless they are advocating violence, have a history of violence or represent terrorist organisations such as the Palestine Liberation Organisation. With those principles in mind, when this Mr Lawrence J. Prescott, who calls himself Abdul Akhbar Muhammad, was allowed to visit us he did so quite within the policy guidelines that have applied for some time. He belonged of course to some Black Muslim group but he had no history of violence whatsoever. He was not linked to an organisation which is known to be a terrorist organisation. The sort of language used by the Leader of the Opposition in condemning this visit was either hypocritical, in view of the policies that he earlier supported, or it marks a change of policy. We would like to hear from the Opposition whether it marks a change in policy to a more totalitarian approach as to who visits this country and who does not. The Government will continue with a policy which allows freedom of speech in this country. Mr DOBIE —I ask a question of the Treasurer without notice and without squalor. I refer the Treasurer specifically to the Christian Brethren Youth Hostel in Campsie, which provides accommodation to country youths who need to go to Sydney to find work and/or to study. This organisation now claims that it is facing a fringe benefits tax liability of $6,000 for the volunteer live-in couple-and their two children-who act as house parents for such young folk. I ask the Treasurer: Is he aware that this hostel has been advised by the Australian Taxation Office that it cannot claim the exemption for public benevolent institutions because it takes in only young men who agree to go to a church service of their own choice on Sundays? Is it the opinion of the Treasurer that the volunteers who maintain and raise-- Madam SPEAKER —Order! The honourable gentleman may not ask the Treasurer for an opinion. He may not ask for the Government policy either. Mr DOBIE —Thank you, Madam Speaker. Is it correct that these volunteers who maintain and raise funds to keep these young people housed are greedy because they object to paying fringe benefits tax? Are they tax cheats and rip-off merchants? Finally, will the Treasurer refer this matter of whether this volunteer youth hostel should be liable to pay fringe benefits tax to Senator Richardson for his advice or at the least his comment? Mr KEATING —There is an exemption in the fringe benefits tax legislation in respect of institutions which are of benevolent nature. I should need to look to see whether such an institution is qualified in that respect. However, if it does not qualify the fringe benefits tax payable upon the rental accommodation of the people concerned would be diminished by the circumstances of the accommodation. If the accommodation is part of a hostel-type building where the quality of the accommodation is not akin to the quality of residential accommodation, the value of the accommodation therefore is so written down. That is why I should think that in the circumstances the honourable gentleman described the $6,000 mentioned is entirely unreasonable as an assessment and out of court on the part of the person who obviously was in touch with the honourable gentleman. I make the more general point that if people are subject to accommodation in these circumstances-be they employees of the Royal Society for the Prevention of Cruelty to Animals or the National Trust, or whoever-and the value of the accommodation is run down because of tourists going through the house, barking dogs outside, or whatever, the lower rental value is the value on which the fringe benefits tax is payable and, in all of these cases, that should be very modest indeed. Mr MAHER —My question is addressed to the Minister for Health. Have the bulk billing procedures under Medicare been of great benefit to Australian families, particularly families with sick children? Dr BLEWETT —Of course, the most obvious advantages of bulk billing have accrued to the great majority of pensioners and social security beneficiaries in this country who are covered by the bulk billing procedures. In addition, we now have very detailed evidence which shows that the expansion of bulk billing in Sydney has been overwhelmingly in the working class and lower income suburbs. Doctors increasingly are making use of the bulk billing facility to deliver services without cost to families in need. In fact, the September figures show that for the first time-at least, for the first time without any accounting problems being involved-over 50 per cent of all medical services in this country were delivered through the direct billing process. That is bringing very real benefits, particularly to the less well off in the community. Mr CARLTON —I refer the Treasurer to the continuing uncertainty surrounding the fringe benefits tax, especially after his announcement of various changes on 29 October. Given that nearly five weeks will have elapsed from the date of the announcement of changes until Parliament rises for the year, will the Treasurer give an assurance that the changes will be put into legislative form and introduced into the House this year so that taxpayers who have to make two payments of fringe benefits tax before Parliament resumes next year will be able to know exactly what is their liability under this taxation measure? Mr KEATING —I make the point more generally that it has been the practice of governments for years to announce and legislate changes to the tax law when practicable, when the laws can be drafted and when they can be introduced in the sittings of the Parliament. That does not diminish the force of the change or the force of the law. I am not entirely certain, without checking, what scheduling has been arranged; but I will let the honourable gentleman know. Mr CHYNOWETH —Can the Minister for Science give details of measures that are being taken by his Department to study the huge hole that has appeared in the ozone layer over Antarctica? Can he also inform the House of the consequences that may ensue? Mr BARRY JONES —The hole in the ozone layer over the Halley Base in Antarctica for a period of several weeks in the spring was first reported in Nature in 1985, and later in other media. Recent results show that in October this year the ozone content of the atmosphere over much of Antarctica was about half of that elsewhere. The values in October 1986 were 30 to 40 per cent less than they were in 1979. The most recent evidence suggests that a similar hole is starting to appear above the polar regions in the north-in the Arctic region. So far there has been no such extension of the hole over a temperate or populated region. But the implications, if a hole were to emerge, are particularly serious. As I will explain, the reasons are mysterious and quite uncertain. The hole over the Antarctic was approximately the size of the Australian mainland. An investigation was carried out in the Antarctic by scientists from the United States of America. Two fundamental theories have been put forward. One is that it is a transient climatic phenomenon. The second is that it is caused by man-made pollution, for example, by fluorocarbon gases, oxides and nitrogen generated by burning fossil fuels or chloro-fluorocarbon gases. The question of which theory is more appropriate is still unclear. Curiously, the Du Pont Corporation in the United States, which had always been very defensive about the matter and said that the ozone hole could not possibly have anything to do with emissions from the use of fluorocarbons and other spray emissions, has now changed position and thinks that there could be serious implications. The Scientific Committee on Antarctic Research-SCAR, which is a world-wide committee-has set up a specialist working committee on the depletion of ozones to provide international co-ordination of investigations of individual nations from 1986 to 1990. If the depletion of the ozone layer continues it may have the effect of disrupting the life cycles of marine plankton and fish larvae, of diminishing crop yields and of causing more cancers especially among humans, farm animals and other land-based species. The first measurements to confirm the depletion of the ozone layer came from Antarctic research and it is a pretty heartening confirmation of the importance of scientific programs being carried out in the Antarctic. However, the precise reason is not clear. Dr Susan Solomon, of the US National Oceanic and Atmospheric Administration, who led the recent team at McMurdo in the Antarctic, said that the evidence gathered so far does not point conclusively to any reason, either to the chloro-fluorocarbons or any other man-made material. Many American scientists believe that it is simply an unexpected climatic condition but it is something we certainly need to observe-- Mr Spender —Sun spots. Mr BARRY JONES —It could conceivably be related to that but it indicates how uncertain is the operation of the climate and that we need internationally-of course Australia cannot do this on its own-increased scrutiny of the upper and lower atmospheres. I assure honourable members that if this ozone hole were to develop over a temperate zone it would have very serious consequences and few countries would be more disadvantaged than Australia. Mr PETER FISHER —I refer the Minister for Primary Industry to the recent Industries Assistance Commission report that recommended no assistance be given to the Australian citrus industry that has suffered an unpre- cedented drop in returns. Will the Minister throw this report in the wastepaper basket and ensure that this vital regional industry receives appropriate support? Mr KERIN —All I can say about the IAC report is that the industry and other interested parties made submissions to the IAC on aspects affecting the citrus industry. The report has been received and released and is being given consideration by the Government. We will make a decision as soon as possible and announce it as soon as practicable. In addition, the Australian Customs Service is now examining whether orange juice concentrate from Brazil is being dumped in Australia and a preliminary finding is due soon. Before the break I pointed out to the House that imports of Brazilian juice were down by 24 per cent-what was coming into Australia had a different acid content than what we produce-that stocks as such were mainly of Australian origin and that this industry is highly protected already. The really big problem is the effect of the price of Brazilian juice translating through into the whole Australian structure and that is one of the matters the Government will be looking at. Mr BLANCHARD —My question is addressed to the Minister for Science. Is the Government concerned about reports that the `greenhouse' effect will raise ambient temperature to such an extent that sea levels will rise and flood coastal cities? Can the Minister inform the House whether these reports are soundly based? Mr BARRY JONES —Madam Speaker, this is the second leg of a double. There is growing public interest and concern about the prospect of a change in world climate as a result of increased levels of certain trace gases in the atmosphere. The primary climate impact will involve a warming of the lower atmosphere due to what has been called the `greenhouse' effect and this, of course, will lead to variations in other elements of climate. The Australian Government has been well aware of the problem for some time. In 1976 it funded the establishment of a base line pollution station at Cape Grim in Tasmania as part of an associated world wide research program to study increasing `greenhouse' gas levels. That station at Cape Grim on the far north-west tip of Tasmania is managed jointly within my ministry by the Commonwealth Scientific and Industrial Research Organisation's Division of Atmospheric Research and the Bureau of Meteorology. Research programs in CSIRO show that indeed certain gases are increasing, the important ones being CO2, Freon-11, Freon-12 and methane. The first, of course, is due to the burning of fossil fuels; the second is man made and is used in various industrial processes; and the third is primarily of agricultural origin, especially from ruminant animals. There is no realistic prospect of influencing the steady and accelerating increases in the background concentrations of these gases which, more than anything else, are due essentially to increasing world population. Crude estimates have been made of the direct effect of higher carbon dioxide levels on plant productivity, on warming the atmosphere and on changing rainfall patterns and sea levels. Regional effects and the confidence to be given to these estimates need much further research. CSIRO is giving some priority to such studies and a specific program is being set up in the Division of Atmospheric Research. However, I must emphasise that the consequences, at least for the next 50 years-or for the life of the Hawke Government-are not likely to be either catastrophic or even dramatic. There would need to be a very dramatic increase in ambient temperature to melt the Antarctic ice sheet which is generally about 2,000 metres thick. But if this were to happen, the consequences would of course be catastrophic. One problem to be examined is whether Asia, Africa and South America will adopt the same level of resource usage as is current in North America and Europe. I think for a whole number of economic reasons this is unlikely, but if it were to happen, it would have a very serious effect. This does reinforce the importance of thinking more seriously about the long term-something that the Opposition is not very good at-and taking appropriate preventative action for long term risk minimisation. Areas of immediate concern include coastal engineering, land development, water resources, agricultural economics and insurance. We have been warned. The printout, as they say, is on the wall and we have to take appropriate preventive long term action. Mr LIONEL BOWEN(Kingsford-Smith-Attorney-General) —Pursuant to sub-section 266g (2) of the Companies Act 1981, I present the annual report of the Accounting Standards Review Board for 1985-86. Mr KEATING(Blaxland-Treasurer) —Pursuant to sub-section 25 (8) of the Public Service Act 1922, I present the annual report of the Treasury for 1985-86. Mr KERIN(Werriwa-Minister for Primary Industry) —Pursuant to section 30 of the Rural Industries Research Act 1985, I present the annual report of the Dried Fruits Research Council for 1985-86. Mr HURFORD(Adelaide-Minister for Immigration and Ethnic Affairs) —For the information of honourable members I present a report of the Committee of Review of Migrant and Multicultural Programs and Services entitled `Don't settle for Less', together with a summary of the report. Mr HURFORD(Adelaide-Minister for Immigration and Ethnic Affairs and Minister Assisting the Treasurer) —Pursuant to section 24 of the Australian Bureau of Statistics Act 1975, I present the annual report of the Australian Bureau of Statistics for 1985-86. Mr HURFORD(Adelaide-Minister for Immigration and Ethnic Affairs) —Pursuant to section 21 of the Papua New Guinea (Staff Assistance) Act 1973, I present the annual report of the Papua New Guinea Superannuation Scheme for 1985-86. Mr HOWE(Batman-Minister for Social Security) —For the information of honourable members I present the annual report of the Policy Co-ordination Unit of the Department of Community Services for 1985-86. Mr PETER MORRIS(Shortland-Minister for Transport) —For the information of honourable members I present the Government's response to the report of the House of Representatives Standing Committee on Road Safety entitled `Education Training and Licensing of Drivers'. Motion (by Mr Young) proposed: That the House take note of the paper. Debate (on motion by Mr N.A. Brown) adjourned. Mr BARRY JONES(Lalor-Minister for Science) —For the information of honourable members I present the annual report of the Commission for the Future for 1985-86. Motion (by Mr Young) proposed: That the House take note of the paper. Debate (on motion by Mr N.A. Brown) adjourned. Mr BARRY JONES(Lalor-Minister for Science and Minister Assisting the Minister for Industry, Technology and Commerce) —For the information of honourable members I present the following Industries Assistance Commission reports: Reconditioned Automotive Engines, Interim Report on Citrus Fruit, and the Interim Report on the Rice Industry. These reports were circulated to all honourable members during the parliamentary break. Mr BARRY JONES(Lalor-Minister for Science) —For the information of honourable members I present the annual report of the Snowy Mountains Council for 1985-86. Mr BARRY JONES(Lalor-Minister for Science) —For the information of honourable members I present a report on the Review of the Australian Atomic Energy Commission. Mr DUFFY(Holt-Minister for Communications) —For the information of honourable members I present the annual report of Aussat Pty Ltd for 1985-86. Mr DUFFY(Holt-Minister for Communications) —For the information of honourable members I present the text of a statement relating to the Australian Telecommunications Commission's wholly owned subsidiary company Telecom Australia (International) Ltd. Motion (by Mr Young) proposed: That the House take note of the paper. Debate (on motion by Mr N.A. Brown) adjourned. Mr COHEN(Robertson-Minister for Arts, Heritage and Environment) —For the information of honourable members I present the annual report of the Australian Biological Resources Study for 1985-86. Mr HOLLIS(Throsby) —Madam Speaker, I seek leave to make a personal explanation. Madam SPEAKER —Does the honourable member claim to have been misrepresented? Mr HOLLIS —I do. The front page of the Wollongong-Shellharbour-Kiama Advertiser of Wednesday 5 November carried the heading: `Throsby member attacks nurses'. On page 3 of the same newspaper there was an article under the heading: Nurses `Immoral'-Hollis. On 24 October I had issued a Press release indicating an increase in nursing home benefits, and in doing so I criticised the New South Wales branch of the Nursing Homes and Private Hospital Association of Australia. All the local media in my electorate got it correct except the Advertiser, which had turned it into an attack by me on the nurses. I have never attacked nurses, nor did I do so in the Press release, and I support their campaign for wage justice. The Clerk —Petitions have been lodged for presentation as follows and copies will be referred to the appropriate Ministers: To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The humble petition of the undersigned citizens 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 Baldwin,Mr Blunt,Mr Cadman,Mr Carlton,Mr Dobie,Mr Dubois,Dr Harry Edwards,Mr Howard,Mr MacKellar,Mr Ian Robinson,Mr Tickner and Mr Webster. 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: 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 Charles,Mr Duffy,Mr Peter Fisher,Mr Griffiths,Mr Holding,Mr Barry Jones,Mr Lamb,Mr Lloyd,Mr O'Keefe and Mr Scholes. 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 Cadman,Mr Ian Cameron,Dr Harry Edwards,Mr Goodluck,Mr Hawker,Mr Rocher,Mr Ruddock and Mr Tickner. To the Honourable the Speaker and Members of the House of Representatives in the Parliament assembled. We, the undersigned express our deepest concern over the government's discriminatory policies on overseas students which were contained in the 1986/87 Federal Budget. We register our strongest outrage and opposition to: 1. The introduction and subsequent increase of overseas students charge imposed on overseas students. 2. The proposed imposition of fees to secondary and TAFE overseas students. 3. The restrictive quota system on the tertiary institutions entry. 4. The heavy-handed deportation of overseas students who fail to pay their fees in time. The overseas students program is an important education program to promote international goodwill and peace, especially among nations of Asia and Pacific region. The above mentioned policies have adverse effects on the objectives of overseas students program. Your petitioners therefore urge that the overseas students policies in the 1986-87 Budget be immediately reviewed. by Mr Baldwin,Mr Gorman,Mr Snow and Mr Tickner. To the Speaker and Members of the House of Representatives in Parliament assembled. The petition of the undersigned citizens of Australia shows that: - in this International Year of Peace, 1986, the world needs a Nuclear Test Moratorium by the United States, the Soviet Union, France and other nuclear-testing powers - that such a moratorium would create a favourable climate and basis for the negotiation of a Comprehensive Nuclear Test Ban Treaty - that such a Moratorium and Comprehensive Nuclear Test Ban Treaty would: - be the first vital step to nuclear disarmament - impede the development of new nuclear weapons - decrease the reliance upon an unstable nuclear strategy - inhibit the spread of nuclear weapons. Your petitioners therefore ask that the Australian Government be urged to: 1. Use its influence with the United States Government to encourage it to join the moratorium on nuclear testing begun by the Soviet Union on 6 August 1985. 2. Use its influence in all forums to encourage other nuclear nations to join the Nuclear Test Moratorium. 3. Use its influence in all forums to encourage non-nuclear nations to demand the establishment of a nuclear Test Moratorium and Comprehensive Nuclear Test Ban Treaty. by Ms Jakobsen,Mr Kent,Mr Staples and Mr Tickner. To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The humble petition of the undersigned citizens of Australia 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 Beale,Mr Hawker and 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 Charles,Mr Hawker and Mr Lloyd. 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 and Mr Rocher. 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 Wright. 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. The Humble Petition of the undersigned citizens of North Sydney respectfully showeth our strongest concern and objection to the Federal budget cuts in the English as a Second Language Program. The Federal Government holds the Constitutional responsibility for immigration and as such has an obligation towards immigrants and their children. Further democratic governments have their obligation to provide for the Educational rights of every citizen. To halve the ESL program is to renege on government responsibility and to disadvantage and, in fact, discriminate against tens of thousands of children from non-English speaking backgrounds. Your petitioners humbly pray that funding of the ESL program be restored to at least the 1985 levels. And your petitioners, as in duty bound, will ever pray. by Mr West. To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The humble petition of the undersigned citizens of Australia showeth: That Labor's capital gains tax, fringe benefits tax, tax on lump sum superannuation and assets test are an unwarranted burden on the people of Australia, have contributed to the national economic crisis and the anomalies in the legislation are causing confusion and anger amongst all sections of the Australian community. Your petitioners therefore humbly pray that the House of Representatives in Parliament assembled should immediately seek the repeal of Labor's Assets Test, Labor's Capital Gains Tax, Labor's Fringe Benefits Tax and Labor's tax on lump sum superannuation. And your petitioners, as in duty bound, will ever pray. by Mr Hawker,Mr Rocher and Dr Watson. To the Right Honourable the Speaker and Members of the House of Representatives in Parliament assembled: The Humble Petition of the undersigned citizens of North Sydney respectfully showeth our strongest concern and objection to the Federal budget cuts in the English as a Second Language Program. The Federal Government holds the Constitutional responsibility for immigration and as such has an obligation towards immigrants and their children. Further democratic governments have their obligation to provide for the Educational rights of every citizen. To halve the ESL program is to renege on government responsibility and to disadvantage and, in fact, discriminate against tens of thousands of children from non-English speaking backgrounds. Your petitioners humbly pray that funding of the ESL program be restored to at least the 1985 levels. And your petitioners, as in duty bound, will ever pray. by Mr Spender. To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The petition of the undersigned respectfully showeth. We most strongly oppose the process of Food Irradiation by radioactive Cobalt 60 or any other radioactive substance. We oppose the introduction of regulations that will facilitate the food irradiation process by State Governments. We express our deep concern at this attempt to extend the use of radioactive substances and exposure of workers to radiation. We call on the Government to immediately ban the importation of radioactive Cobalt 60 or other radioactive substances and to immediately disallow the regulations that permit the irradiation of food here in Australia. by Mr Kent,Mr Scott and Mr Staples. To the Honourable the Speaker and Members of the House of Representatives in the Parliament assembled. The petition of the undersigned respectfully showeth: That there is widespread community concern about the proposal to Irradiate Food in Australia. Your petitioners, most humbly pray that the House of Representatives in Parliament assembled, should- (1) Block the introduction of food irradiation into Australia; and (2) Ban the import of Cobalt-60 and Caesium 137 and Caesium 134 to be used to irradiate food products. And your petitioners, as in duty bound, will ever pray. by Mr Keogh. To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled: We, the undersigned, are deeply concerned at the impact of the new Fringe Benefits Tax on the following grounds: 1. Its severe and damaging effect on business confidence, investment and incentive, especially in the rural, mining and small business sectors. 2. Its capacity to seriously worsen unemployment through the additional costs it imposes. 3. Its extremely negative impact on the competitiveness of export industries at a time when the nation desperately needs to improve its trading performance. 4. In that it may compel many honest and decent citizens to defy the Tax in order to preserve their livelihoods, their businesses and the jobs of their employees, thus causing hardship, the breakdown of respect for the law and discord within the community. We therefore most earnestly petition you to repeal the Fringe Benefits Tax Legislation forthwith. And your petitioners, as in duty bound, will ever pray. by Mr Braithwaite. To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled: We, the undersigned, are seriously concerned about the impact of the Fringe Benefits Tax on the following grounds: 1. It is unjust for any person to be liable for tax on benefits received by another person. 2. Compliance with FBT will increase administrative costs for all employers including Local, State and Federal Government Departments. 3. FBT is an inefficient tax, which will require the Tax Office to employ an army of bureaucrats. 4. FBT is inequitable because liability arises regardless of capacity to pay. 5. The FBT laws are extremely complex. 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 Carlton. 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 Parliament assembled. The humble petition of the undersigned citizens of Australia showeth: That the anomalous Fringe Benefits tax is iniquitous, inequitable and unfair on the grounds that- it adversely affects business throughout Australia, including farms, by creating a further tax burden it destroys incentive, it has caused unemployment, it is costly to administer and its complexities have caused confusion and widespread anger. Your Petitioners therefore humbly pray that the House of Representatives in Parliament assembled should immediately seek the repeal of Labor's Fringe Benefits tax legislation. And your petitioners, as in duty bound, will ever pray. by Mr McGauran. To the Honourable the Speaker and Members of the House of Representatives in 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 Rocher. To the Honourable the Speaker and Members of the House of Representatives in Parliament House. The petition of certain citizens of Australia respectfully showeth: That the Bill of Rights is a dangerous piece of legislation which gives us no new legally enforceable rights; That the Bill of Rights leaves out vital rights such as the right not to belong to a trade union, the right to own private property, the right to a private education; That the Bill of Rights gives dangerous new powers to a Federal Government Commission to investigate in private, without legal representation and with criminal penalties for refusing to co-operate; That the Bill of Rights deals with our rights; therefore we, the people, should say whether we want it by a referendum. Your petitioners humbly pray that you repeal the Bill of Rights legislation and not restrict the individual freedoms of Australians and its present justice system, nor in any underhand way centralise power in our three tier system of Government. And your petitioners, as in duty bound, will ever pray. by Dr Harry Edwards and Mr Webster. To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. This petition of concerned Australian citizens respectfully points out: That deterioration of the total global environment is continuing at an increasing rate; that important environmental resources vital to human livelihood such as trees, soil and water are decreasing at an alarming rate; that there is a need for educating all people to assume a greater responsibility for the conservation, sustainable use and maintenance of vital resources; that dynamic and active initiatives are needed to conserve and renew the total environment; and that protecting, conserving and repairing the Earth can unite all people and nations in co-operative action for survival. Your petitioners therefore humbly pray that your Honourable House will: Propose to the United Nations General Assembly at its 41st Session in September 1986 that 1988 be proclaimed the ``First International Earth Repair Year'' (FIERY) as a vital action to ignite global co-operation for Worldpeace. And your petitioners, as in duty bound, will ever pray. by Mr Holding and Mr Howard. 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 and Mr Staples. 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: That we are dissatisfied with the present Federal Government's policy on Community Languages. And request that the Australian Government take urgent steps to formulate and approve a policy for the teaching of Community Languages, on a permanent basis, in the day schools, in order to safeguard the linguistic and cultural heritage of all Australians. Moreover, with the present petition, we request that Community Language Resources Centres be instituted, to operate within communities, in order to assist schools in the implementation of Community Language programmes. And your petitioners, as in duty bound, will ever pray. by Mr Leo McLeay and Mr West. To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The petition of the undersigned citizens of Australia respectfully showeth: (1) that the phasing down and eventual closure of the services of the Commonwealth Rehabilitation Centre at Glen Waverley will be detrimental to the rehabilitation of disabled Australian citizens; (2) that the Glen Waverley Rehabilitation Centre is ``purpose'' built and its loss would deprive disabled Australian citizens of a unique multi-million dollar facility; (3) that the essential accommodation for diabled Australian citizens will no longer be available. Your petitioners therefore humbly pray: (1) that the phasing down of the services of the Glen Waverley Rehabilitation Centre be reversed immediately; (2) that the one-hundred-and-four-bed residential facility be fully utilised immediately; (3) that sufficient funding is provided by the Commonwealth Department of Community Services to operate the Centre at full capacity. And we pray you may be conscious of God's sovereign purpose for our Nation and your petitioners in duty bound will ever pray. by Mr Aldred. 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: We the undersigned small business people and supporters wish to draw attention to and protest against recent tax changes and the horrific administrative burdens which will be placed upon small businesses by these changes. We request that Fringe Benefits Tax, Capital Gains Tax, Dividend Imputation, Negative gearing, Foreign tax credits and Substantiation legislation be immediately repealed. We also request that the proposed legislation yet to be tabled in Parliament in respect of self assessment be discontinued. To make up the shortfall in revenue as a result of these requests, the promised personal tax cuts should be deferred until such time as they can be funded by pruning government expenditure. Unless the above action is taken immediately the private sector of the economy will contract and Australia will be further down the road to becoming a banana republic. by Mr Beale. To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The petition of the undersigned shows: that we the citizens of the Illawarra Region condemn the decision to close the Wollongong office of the Department of Immigration and Ethnic Affairs and that we respectfully request that this decision be reversed immediately. And your petitioners, as in duty bound, will ever pray. by Mr Cadman. To the Honourable the Speaker and Members of the House of Representatives. The petition of the undersigned respectfully showeth that the Bill of Rights is not supported by the people of Australia, and calls on the Government to: Delay proclamation of the Bill until all matters of contention are settled by national referenda, and that: (1) Matters of States rights, property rights, rights of the newborn, the right not to belong to unions, among other issues, have not been submitted to the people of Australia to decide, and that; (2) No Australian Bill of Rights should depend on any foreign convention for its basis in Australian law. And your petitioners, as in duty bound, will ever pray. by Mr Cadman. To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The humble petition of the undersigned citizens of Australia respectfully showeth: 1. That we the undersigned are totally opposed to the introduction of a $2.00 fee on prescription drugs for pensioners; 2. That the impact of such a fee will be particularly felt by the chronically ill elderly who will be faced with a $2.00 burden with the purchase of each Pharmaceutical Benefit Scheme drug; Your petitioners therefore urge the House of Representatives and the Government of the Commonwealth to ensure that prescription drugs continue to be provided to the pensioner population without the $2.00 fee on each prescription. And your petitioners, as in duty bound, will ever pray. by Mr Connolly. To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The petition of the undersigned citizens of Australia respectfully showeth that persistent rumours suggest that the Hawke Government intends to reduce Government expenditure by contracting or eliminating programs for war veterans and war widows. Your petitioners humbly pray that the Hawke Government honour its commitment and that of previous Governments to ex-servicemen and women by: Ensure no additional cut-backs will be made to the portfolio of Veterans' Affairs. Review the previous cut-backs in such areas as the travel allowances, dental scheme and repatriation pharmaceutical benefits scheme. Proceed with abolishing more stringent conditions applying to the granting of the TPI pension. And your petitioners, as in duty bound, will ever pray. by Mr Connolly. 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 have grave concern about recent changes in the Extradition (Foreign States) Act of 1966 which deny basic rights which have been a cornerstone of the English and Australian law for over seven hundred years. We are speaking of the right to be presumed innocent until proven guilty and the right of an individual to defend himself against his accusers. This concern has come to light during recent extradition proceedings against Messrs. Hempel and Etheredge in Western Australia. We are concerned that because judicial protection of these basic rights has been excluded from the Act refugees, migrants, Australian overseas travellers, and visitors are at risk when they have been to (or come from) countries where the norms and practices of human rights and civil liberties are below traditionally accepted Australian standards. We, the undersigned petitioners, therefore urge the Government to re-examine the Extradition (Foreign States) Act (as amended in 1985), and amend the current Act so that the rights of the accused are once again judicially protected in Australia. In addition, we urge the Government to refrain from entering into any further extradition treaties or proceedings under the current Act until the process of re-examination and amendment of the Act has occurred. And your petitioners, as in duty bound, will ever pray. by Mr Drummond. To the Honourable 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 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 petition of certain citizens of Australia respectfully showeth: that the Bill of Rights is a dangerous piece of legislation which gives us no new legally enforceable rights; that the Bill of Rights leaves out vital rights such as the right not to belong to a trade union, the right to own private property, the right to a private education; that the Bill of Rights gives dangerous new powers to a Federal Government Commission to investigate in private, without legal representation and with criminal penalties for refusing to co-operate; that the Bill of Rights deals with our rights; therefore we, the people, should say whether we want it by a referendum. Your petitioners therefore pray that you will oppose the Bill of Rights, support Liberal amendments to improve it in case it is passed, and pledge to repeal it should it become law. by Mr Hawker. To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The 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 assembled, the petition of certain citizens of Australia respectfully showeth opposition to cuts in English as a Second Language (ESL) teaching, the scrapping of the Multicultural Education Program, the amalgamation of the Special Broadcasting Service (SBS) with the Australian Broadcasting Corporation (ABC), and the abolition of the Australian Institute of Multicultural Affairs (AIMA), as announced in the Federal Budget of August 19, 1986. Your petitioners humbly pray that the Government will review and reverse its decision on these matters. And your petitioners, in duty bound, will ever pray. by Mr Kent. To the Honourable the Speaker and Members of the House of Representatives assembled in Parliament. The petition of certain citizens of Australia respectfully showeth: That the intention of the Hawke Government to unionise independent contractors, sub-contractors, the self-employed, partnerships, sole traders and family businesses will: Remove the freedom of independent small business to: (a) set their own prices (b) work their own hours (c) control their own businesses (d) negotiate their own contracts; and will create impossible working conditions which will include the payment of: (a) union superannuation (b) compensation (c) payroll tax (d) annual leave loadings (e) public holiday loadings (f) PAYE tax deductions (g) limited incomes (h) inflexible awards and conditions; and (i) fixed hours of work. We the undersigned call upon the Government to restore incentive and opportunity to the Australian economy and to abandon these coercive measures. And your petitioners as in duty bound will ever pray. by Mr Lloyd. To the Honourable the Speaker and the Members of the House of Representatives of the Commonwealth in Parliament assembled. The humble petition of the undersigned citizens of Australia respectfully showeth that we strongly object to the Government's decision to sell Australia's uranium to France and elsewhere particularly in view of: all dangers to humankind inherent in the nuclear industry continued nuclear bomb testing in the Pacific by France. We regard the Government's proposed action as a complete negation of its stated policy for a Nuclear Free Pacific and request that the uranium is not sold and that all uranium mining ceases forthwith. And your petitioners as in duty bound will ever pray. by Mr McGauran. To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The humble petition of the undersigned citizens respectfully showeth that your petitioners are gravely concerned at the failure of the Government to honour its election promises to pensioners. In particular those promises relate to the following commitments: 1. That within three years of its election to office, a Hawke Labor Government would raise the level of the standard pension to 25% of Average Weekly Earnings; 2. That the lag time between the announcement of the Consumer Price Index figures and the subsequent adjustment of pensions would be reduced to one month, and 3. That the disproportionate tax burden borne by low income earners would be lifted. None of these promises has been honoured to date. Your petitioners are extremely angry at the failure of the Government to live up to its commitments and as in duty bound will ever pray that these serious omissions will be given the attention they deserve. by Mr Allan Morris. 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: Our opposition to the proposed increase in the cost of a prescription, this increase will cause great hardship to many families Medical treatment is a necessity not a luxury. Your Petitioners therefore humbly pray that the cost of a prescription remain at the current cost. An your petitioners, as in duty bound, will ever pray. by Mr Porter. To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. This petition of citizens of Australia shows that: Approximately 100,000 Australians live on the verge of homelessness, dependent on government resources to survive, or sleep out of doors or in refuges. Over 700,000 households, or in excess of 2 million Australians are living below the poverty line after paying their rent or mortgage costs. In addition, there are thousands of households with special needs, such as the disabled, who are not well catered for in the private sector but who nevertheless require suitable housing. Waiting lists for public housing have almost doubled in the past five years to 146,000 by June 1985. The list is expected to grow to some 250,000 by 1990. We therefore ask that the Australian Government, as a highest priority: undertake a campaign to bring the issue of poverty and, in particular, housing-related poverty, to the attention of the Australian public increase expenditure on public housing through the Commonwealth State Housing Agreement, by at least 15% annually in real terms increase rent relief payments for those on low incomes in the private rental market use its influence with State and Territory governments to encourage them to increase their expenditures on public housing. by Mr Staples. To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. This petition of concerned Australian citizens respectfully points out: That, for our survival, an effective Worldpeace Initiative needs to be established to work towards mutual understanding, world disarmament, economic well-being for all and full employment. This Initiative will help to ensure a sustainable society conserving natural resources, and revitalising soils essential for growing a plentiful and healthy food supply and tree cover for the needs of present and future generations. By working for these objectives, Australia can set an example for the rest of the world. Your petitioners therefore humbly pray that your Honourable House will: 1. Propose to the United Nations General Assembly that 1989 be declared International Year for Repairing the Earth. 2. Implement action programs leading up to 1989 which will include: (a) Actively supporting the International Year of Peace in 1986 by reallocating at least 10% of our military expenditure to fund environmental repair programs. (b) Implementing National Recycling Programs to reuse water, and to compost into hygienic humus all presently wasted organic garbage and sewage-sludge mixed with fine ground powder from mineral-rich gravels and rocks, to use as a natural fertiliser in revitalising impoverished soils; (c) Developing National Employment Programs giving priority to the planting and growing of healthy forests, food-producing trees and other crops and vegetation including environmentally sound use and reuse of water to assist the greening of Australia. And your petitioners, as in duty bound, will ever pray. by Mr Staples. To the Honourable the Speaker and the Members of the House of Representatives in Parliament assembled. The humble petition of the undersigned citizens of Australia showeth that they are opposed to the elimination, as from 1 November 1986, of a number of commonly used medications previously on the Schedule of Pharmaceutical Benefits. Your Petitioners therefore humbly pray that the House of Representatives assembled call upon the Government to reject any proposal that discontinues the provision of free medications to pensioners. And your Petitioners as in duty bound will ever pray. by Mrs Sullivan. To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. We the undersigned citizens of the Commonwealth, do humbly pray that the Commonwealth Government: Take the action necessary to create an Australian republic on or before 1st January 1988. And your petitioners, as in duty bound, will ever pray. by Mr Tickner. To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled, Parliament House, Canberra, A.C.T. 2600. We your petitioners, humbly showeth: That the wildlife species, in this case-the kangaroo, have a right to exist and flourish independently of human needs. For this reason alone we should not regard the kangaroo as a human resource nor contemplate commercial exploitation simply because more offspring are born each generation than can hope to survive. Permissible cropping rates are unknown and the means of enforcing controls or protective legislation is completely ineffective and inadequate due to the widespread nature of the industry. All Australians have a responsibility to our already declining wildlife. We your petitioners therefore humbly pray that you will: 1. Ban the exports of products made from kangaroos. 2. Take action to see that State Governments prohibit the commercial killing of kangaroos. by Mr Tickner. To the Right Honourable the Speaker and Members of the House of Representatives of the Commonwealth in Parliament assembled. The humble petition of the undersigned citizens of New South Wales respectfully showeth: That they strongly support the establishment of the Western Sydney State University as recommended in the Parry report and call upon the House to establish the Western Sydney State University in conjunction with the New South Wales Government. And your petitioners, as in duty bound, will ever pray. by Mr Cadman and Mr Grace. To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. We, the undersigned citizens of Western Australia call on the Commonwealth Government to reverse recent decisions which deny Secondary Allowances to Year 11 Students under the age of 16 years and make such allowances directly payable to students on attaining the age of 16. This request is made on the basis that: (i) Education benefits as part of income support benefits generally are a Commonwealth responsibility under the constitution. (ii) It is the right of parents with children in Year 11 in Western Australia to receive the same benefit as parents with children at the equivalent stage of their education in other parts of Australia irrespective of their age. (iii) This decision by the Commonwealth Government will impact most unfairly on the capacity of low income families in Western Australia to keep their children at school in Years 11 and 12. (iv) Direct payment of the allowance to 16 year olds will make it easier for young people to leave home and bring more pressure on State Authorities to find alternative accommodation for them at the community and taxpayers' expense. 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 Blanchard. To the Honourable the Speaker and Members of the House of Representatives in Parliament: The petition of certain residents of the Northern Territory of Australia draws to the attention of the House that the Fringe Benefits Tax Legislation recently passed by Parliament is unfair and will prejudice the current working conditions of all Territorians. 1. It will increase both personal and company taxation. 2. It will undermine employment levels through reducing profitability and international competitiveness of industry. 3. It will result in price increases. 4. It will force employers to withdraw voluntary incentives to employees paid over and above existing payments. 5. It endangers stable industrial relations because of the potential for forced withdrawal of Fringe Benefits. Your petitioners therefore pray that the House take such action as is necessary to rescind the Fringe Benefits Tax Assessment Act 1986, the Fringe Benefits Tax Act 1986, the Fringe Benefits Tax (Application to the Commonwealth) Act 1986 and the Fringe Benefits Tax (Miscellaneous Provisions) Act 1986. by Mr Everingham. To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. We the undersigned petitioners of the electorate of Farrer, do respectfully show our opposition to the introduction of a Fringe Benefits Tax and Capital Gains Tax, and related legislation. Your petitioners do humbly call for the repeal of both pieces of legislation. Such taxes are an additional burden upon small businesses, and lead to increased bureaucracy. And your petitioners, as in duty bound, will ever pray. by Mr Tim Fischer. To the Right Honourable Speaker and the Honourable Members of the House of Representatives in the assembled Parliament of the Commonwealth of Australia. We the humble petitioners at Warrnambool Institute Student Union, in the Federal electorate of Wannon respectfully showeth: That the introduction of an Administration Charge of $250 for higher education students in Appropriation Bill 1986-87 (Volume 1, Page 98) is a regressive step for the Education system; That the introduction of an Administration Charge will force students to withdraw from studies and thereby destroy the opportunity for them to complete their education; That the Administration Charge is a form of Tuition Fees and as such destroys the principle of free education for all; We the humble petitioners hereby request you to amend the Appropriation Bill 1986-87, so that the system of free education for all students will continue. And your petitioners, as in duty bound, will ever pray. by Mr Hawker. Speaker and Members of the House of Representatives in Parliament assembled: We the undersigned employees of B. F. Goodrich Chemical Limited ask the Government not to adopt the Industries Assistance Commission recommendations for the chemical industry without modification, as any significant reduction in tariffs over a short period of time will adversely effect the long term viability of the Altona chemical complex. We pray that the Government not adopt the Industries Assistance Commission recommendations for the chemical industry without modification. by Mr Barry Jones. 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 Sutherland Shire respectfully showeth: That they oppose the construction of any additional nuclear reactor at the Australian atomic energy establishment at Lucas Heights in N.S.W. Your petitioners therefore pray that the Government of Australia will not construct an additional nuclear reactor at Lucas Heights. And your petitioners, as in duty bound, will ever pray. by Mr Tickner. The humble petition of certain citizens of Queensland, Australia, respectfully showeth that we are totally opposed to any change in the Australian National Flag as declared in the Flags Act (1953). Your petitioners humbly pray that Parliament in its wisdom will take no action to change the Australian National Flag. And your petitioners, as in duty bound, will ever pray. by Dr Watson. Petitions received. Assent to the following Bills reported: Australian Institute of Sport Bill 1986 Australian Institute of Sport (Consequential Provisions) Bill 1986 Remuneration and Allowances Alteration Bill 1986 Social Security and Veterans' Affairs (Miscellaneous Amendments) Bill 1986 Freedom of Information Laws Amendment Bill 1986 Taxation Laws Amendment Bill (No. 3) 1986 Bank Account Debits Tax Amendment Bill 1986 Income Tax Rates Bill 1986 Income Tax Bill 1986 Taxation Laws (Miscellaneous Provisions) Bill 1986 Medicare Levy Bill 1986 Student Assistance Amendment Bill 1986 Mr YOUNG(Port Adelaide-Leader of the House)(3.03) —I move: That leave of absence for one month be given to the honourable member for Hawker, on the ground of ill health. I am sure that if the honourable member for Hawker (Mr Jacobi) is listening he will know that he has the best wishes of every member of this House for a very speedy recovery, which I understand he is making. We look forward to seeing him shortly and being given some of his good traditional advice. On the subject of ill health, another honourable member unfortunately has been grounded. The honourable member for Kingston (Mr Bilney) decided that he had the ability to climb up a big gum tree with a chain saw and cut down a limb. He now knows that he does not have that ability. He will be out of action for some weeks. He is in the Royal Canberra Hospital. If he is listening, we wish him all the best. We will send over the honourable member for Gwydir (Mr Hunt) to give him a bit of advice about that sort of thing. Question resolved in the affirmative. 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 cynicism and lack of principle displayed by the Government in its introduction and subsequent handling of the fringe benefits 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)(3.04) —Once again it is the duty of the Opposition to raise the matter of the fringe benefits tax. This time we speak on behalf of all those Australians who are utterly sick of the sheer cynicism and lack of principle of the Government in the way it announced this tax, in the way it delayed its introduction into the House and in the way it has conducted itself since then-on again, off again, denying that there were any troubles, being dragged screaming to the point that two weeks ago it had to announce some changes which it claimed would remove the so-called unintended consequences of the tax. Where are we now? We have a whole new series of difficulties. Before I go to the heart of the matter of the cynicism and lack of principle I draw the attention of the House to a question asked in the House today by my colleague the honourable member for Cook (Mr Dobie), who represents a constituency in the southern suburbs of Sydney. The honourable member specifically referred the Treasurer (Mr Keating) to the Christian Brethren Youth Hostel in Campsie, which provides accommodation to country youths who need to go to Sydney to find work or to study. This organisation now claims that it is facing a fringe benefits tax liability of up to $6,000 for the volunteer live-in couple and two children who act as house parents and clean and cook meals for the resident boys each day. It is true that the Treasurer introduced some changes earlier which freed benevolent institutions of the fringe benefits tax but this organisation, a Christian organisation, cannot be classified as a benevolent institution because it is a requirement that the boys admitted to the institution attend a church service of their own choice on Sundays. Because the purpose of the body being set up was Christian it is perfectly reasonable that that be a condition of entry. It is left to the boys which church service they choose. By this very commitment to a Christian principle the institution is obliged to pay the fringe benefits tax. So money which has to be raised partly from subscriptions, donations, from the public has to be used to pay tax to the Government. Such a situation is absolutely disgraceful. If we cannot go through a cleaning up of the legislation to remove such nonsenses we wonder what other nonsenses there are in the legislation. I must say that there are many. The Prime Minister (Mr Hawke) has been trying to sell this tax. Trying to sell the fringe benefits tax is like selling the benefits of leprosy. The Government is doing so using $2m of taxpayers' money on grossly misleading advertisements which claim that the tax does not affect low income people. That is a palpable nonsense as I shall demonstrate later. Those advertisements, introduced at a cost of $2m to the public, also create class division in Australia. The very nature of the advertisements suggests that the lowly-paid workers are being ground into the dust by those higher up the managerial ladder. At a time when we are trying to engender a spirit of co-operation between employers and employees to try to get this country moving again, when work practices have to be sorted out, when the Government through other arms is trying to engender this spirit of co-operation in the work force we see the stupid, divisive class war-type advertisements which are paid for with taxpayers' money. After the first advertisement, which shows a pyramid of workers being ground into the dust by those higher up the ladder and misleadingly claims that those on lower incomes are not affected by the tax-they are-the second advertisement shows two people, one holding a glass of beer, presumably to denote a worker, and the other person wearing a suit. This is tending once again to depict some form of class division and it tries to set one Australian against another. The irony in that advertisement, which was pointed out to me by the honourable member for O'Connor (Mr Tuckey), is that this Government has taxed the pants off the beer drinker. Every six months the beer tax goes up automatically under this Government. It has the infernal hide and cynicism to use a picture of a man holding a glass of beer in an advertisement in its divisive attempt to set one Australian against another. What really gets my goat is that the Government is doing this with our money-with the taxpayers' money. It is misleading the public and trying to sell something that cannot be sold. My friend the honourable member for Wakefield (Mr Andrew) has sent me a report from the Flinders News of 4 November 1986 which tells us about a whirlwind tour by the Prime Minister. The dateline is Port Pirie and the article states: The Prime Minister Mr Hawke visited the three Iron Triangle cities of Whyalla, Port Augusta and Port Pirie in a flurry of hand-shaking last Thursday. This is the man who went out into the bush near Blayney last year after these taxes were introduced and told the farmers there that they would not be disadvantaged, that he would go back and talk to the Treasurer about removing the anomalies in the fringe benefits tax that affected them. He listened to everything they said. He got a whole stack of favourable publicity on television but he came back here and did nothing for the farmers. For month after month the Opposition asked why it was equitable to put a tax on farmers, who were not earning anything in current international markets, which had to be paid before they even earned a profit, because the fringe benefits tax-any Australian who does not know this has to know this from now on-is paid not after profits but before profits. Farmers expected that the Prime Minister would come back here and do something to tell the Treasurer to get off their backs, but he did nothing. Even after the so-called anomalies have been removed, are the farmers exempted from the tax? Of course they are not. The tax still applies to work related costs on the farms as it does in small business, in mines and in various other areas. The Prime Minister had the hide to say, as reported in the Flinders News, that he believed the changes in the fringe benefits tax announced last week would remove any criticisms from the business community. Some hope! He went on to say, and this just goes to show what a pixieland he lives in: In any case the FBT won't affect farmers very much. Heaven forbid, what have we got? Time and again the Prime Minister goes out and claims that he is going to do something and time and again he comes back and fails. He kids himself that he has done something and he goes around expecting to be believed. Two weeks ago we reached the absolute pits in this debate when the Treasurer, speaking on the Michael Schildberger program on 3 November, said this: If any Commonwealth Government tried to levy the FBT on employees, the industrial disruption that would follow would have had the employers up to Canberra a week later. That is one of the most disgraceful admissions ever made by a Minister in any Australian government. This Government cynically and without principle decided, for purely political reasons, that it could not tax the people who were enjoying benefits and therefore it decided in the interests-it became clear subsequently in its advertisements-of class division and the Australian Labor Party envy principle to levy the tax in the most complicated and damaging possible way on every employer in the country. That is an absolute disgrace. The Treasurer is responsible once again for that and he has not even got the guts to come into the House and defend himself. He has sent the honourable member for Charlton (Mr Robert Brown) in to give his usual speech. He may as well just have his speech included in Hansard as we already know what it is. We have not even got the Minister Assisting the Treasurer (Mr Hurford) in here. Mr Griffiths —Talk about the real issues. Mr CARLTON —The real issue, my dear friend, is that you will not be here next time. If the honourable member for Maribyrnong would like to listen for a moment I will tell him what the power broker of the right wing faction of the ALP thinks about the fringe benefits tax. I refer, of course, to Senator Richardson, who is a close adviser to the Prime Minister and a former friend of the Treasurer. Oh, the Treasurer has come into the House. We have finally flushed him out. Senator Richardson used to be a friend of the Treasurer before the Treasurer said in the Caucus room that Senator Richardson had a PhD in greed. They were mates. Senator Richardson is still a friend and adviser of the Prime Minister. He spoke to the Australian Labor Party conference in the Hunter Valley only at the weekend. He said this: I want to give you an example that where I still think there's improvement to be made in our review of the FBT if you look at the problems faced by Commonwealth Bank employees it is best crystallised. There are some 36,000 people working for the Commonwealth Bank, 2 per cent of them earn salaries of $28,000 or more. What we're talking about here by Australian standards is a low paid work force. The average salary is around about $18,000, less than average weekly earnings. Now the salaries in that bank have been depressed for years because they were getting another benefit, the benefit of low interest loans. But in the regime that faces Australia today they can't get a big pay increase to make up for losing a low interest loan and then we make a decision- that is the Government, Senator Richardson's own Government- that affects the low interest loan as well. Senator Richardson then described the Commonwealth Bank employee meetings all round Australia which had an extraordinary attendance. He said that those employees are not like members of the Builders Labourers Federation. He continued: when 36,000 white collar employees, not front line radical trotskies, but bank employees, bank tellers and the rest turn out in those numbers you've got a problem and when a 20-year old bank employee at the Sydney Entertainment Centre bags our government and gets a standing ovation you've got real problems. Now I'd like to see us address those problems. The basic problem is there from the start. The Treasurer claimed that this was a tax designed to stop the big time rorts. The Treasurer came into the House and talked about people going in the train with a brown paper bag full of sandwiches and looking out the window at those who were driving their Mercedes-Benz motor cars to work. All I can say is that after all this, after all the pages of legislation, after all the guides to employers, after all the pages of rulings-with all the legislation to come-the people at the top of the ladder still have their benefits and the lowly paid workers such as those in the Commonwealth Bank do not have them. They are the ones who have been hit. At the same time that the Treasurer talked about brown paper bags and the plight of the lowly paid workers he had to justify in this House why he claimed $17,000 in travel allowance. He tried to explain to us and the rest of Australia how he could write down on the form that his place of residence was in Sydney when he actually lives in Canberra. Mr Keating —Don't compound your dishonesty. Mr CARLTON —I am raising this as a very serious issue because in the ordinary meaning of the word for anybody we all have an understanding of what we mean when we fill in the particular form and state where we live. I would not be raising this matter in this House in this way if the Treasurer himself had not lectured us day after day on the rorts that people were supposed to have. Mr DEPUTY SPEAKER(Mr Leo McLeay) —Order! If the honourable member for Mackellar wishes to make an attack on another member he has to do that by substantive motion. That is the only thing I draw to the honourable member's attention. Mr CARLTON —I accept your ruling, Mr Deputy Speaker. Opposition members interjecting- Mr DEPUTY SPEAKER —Order! The honourable member for Mackellar does not need any help from his colleagues on his left. Mr CARLTON —We have reached a low level when people can be lectured about rorts by people in high places-people who themselves are suspect in these matters-when Commonwealth Bank employees in the lower categories are being hit, and they are being supported by the power brokers in the Australian Labor Party. This Government will live to regret this legislation. The fight is not finished and it will not be finished until the legislation is removed from the statute book lock, stock and barrel. Mr KEATING(Blaxland-Treasurer)(3.19) —Whenever one introduces some decent tax law in this country, one is the subject of attack, particularly from an unprincipled Opposition, which has never had the decency to say what it would do about fringe benefits taxation and which never, as a government, had the decency to do anything about it. It let the matter sit there for years. It tried to say that, because it wiped out the criminal paper evasion schemes, in some way that did something to clean up the tax system. It knows that it never had the decency or the courage ever to touch fringe benefits-a tax which is much closer to home than some paper scheme or criminal evasion scheme. All we have ever heard from the Leader of the Opposition (Mr Howard) is how he wiped out criminal evasion schemes-after, of course, he was dragged screaming to do so by the Costigan and McCabe-Lafranchi reports. He was five years late in wiping out criminal evasion schemes. He never touched the massive avoidance areas and shelters in the system and, especially, he never touched the fringe benefits, which were close to home. The Opposition has never had any morality in regard to taxation policy. It abuses the Parliament by trying to besmirch me, by making a totally spurious and inaccurate claim about travelling allowance in respect of my property, while the Deputy Leader of the National Party of Australia (Mr Hunt) is in exactly the same position, as well he might be, because he is exactly in the right, as he has always been and as I am. If honourable members opposite wish to continue to compound their dishonesty, they may do so by all means. The position is this: The Opposition has never been decent enough to do anything about the tax system. This Government has decided to do something serious and fair about the taxation of fringe benefits in this country. But honourable members opposite do not have in them a morsel of decency to say: `This is a bit of good tax law'. If they do not have the brains or the intellect to support it, at least they should have the enlightened self-interest to realise that at least that is another item that has been rubbed off the agenda, even if it has been done by this Government. As Mr Valder said: `Let the Labor Party do all the hard things that need to be done'. But honourable members opposite do not even look at it in these terms: `All right, we will support this. It is pretty tough. It is the sort of thing we never wanted to do. But they have done it'. They run around, trying to make a mockery of it and crying about a bank teller while the Deputy Leader of the Opposition (Mr N.A. Brown) is telling people that we must have a wage pause. He is telling us what a terrible time someone on $18,000-- Mr N.A. Brown —Under the present system. Mr KEATING —In other words, the honourable member is saying that their money should be cut out. He is saying: `Under the present system, cut their money out'. Mr N.A. Brown —That is not true. Mr KEATING —Of course it is. A document from the Opposition, dated 7 November and entitled `A Better Way', reads: We must also say that the only way we can get our wage costs under control through the present system is by a wage pause during 1987. Mr N.A. Brown —Under the present system, the centralised system. Mr KEATING —The system does not matter. The honourable member is saying: `Stop their wages growing'. Mr N.A. Brown —Under the present system. Mr DEPUTY SPEAKER(Mr Leo McLeay) —Order! The Deputy Leader of the Opposition will cease interjecting. Mr KEATING —The honourable member is saying: `Stop their wages growing'. Mr N.A. Brown —I am not going to sit here silent while he is talking this rubbish. Mr KEATING —Yes, I have stung you, and I know I have. The Opposition is such a motley, dishonest crew. The shadow Treasurer, the honourable member for Mackellar (Mr Carlton), has said what a terrible thing it is that the Commonwealth Bank, or maybe its employees, will have to pay fringe benefits taxation; yet the Deputy Leader of the Opposition has said: `Let us give them a wage freeze'. These crocodile tears-- Mr N.A. Brown —Under the present system. Mr KEATING —Regardless of the system, he is saying: `Let us have a wage pause in 1987'. That is the honourable member's document. On the one hand he is saying `They are only mugs; let us freeze their wages', while on the other the honourable member for Mackellar, who represents all the things that the Liberal Party stands for-one thing that it certainly does not stand for is people on $18,000 a year-is saying: `We are worried about their fringe benefits taxation'. That is a matter between the Commonwealth Bank and its employees. It is a matter between the Commonwealth Bank and its employees. It is a matter between the banks and their employees. I suppose that, if we were bank clerks and the Commonwealth Bank had asked us to pay $3m in taxation when it is producing a profit of $400m, we would probably ask a few questions about that. But that is a matter for them. The dishonesty of the Opposition's remarks is shown by the fact that, if the Government were to exempt loan benefits, it knows that the middle-ranking executive with a $250,000 to $300,000 home loan at 5 per cent would be exempt, too. How does a government stop one of the largest areas of evasion of the tax system-massively subsidised loans? Mr N.A. Brown —Put a ceiling on it. Mr KEATING —The genius opposite says: `Put a ceiling on it'. In other words, it is right at one level, but it is wrong at another. The honourable member would go really well defending that. Mr N.A. Brown —Get a bit of fairness into it. Mr KEATING —I know. The honourable member would go really well defending that. These are the absolute gutter tactics of a mindless, useless, idealist, unprincipled Opposition. Mr DEPUTY SPEAKER —Order! There is far too much noise on my left. The Deputy Leader of the Opposition will cease interjecting. Mr N.A. Brown —We will respond-- Mr DEPUTY SPEAKER —The Deputy Leader of the Opposition will not interrupt the Chair. Mr N.A. Brown —When he says things like that. Mr DEPUTY SPEAKER —I warn the Deputy Leader of the Opposition. Mr KEATING —Recently a survey in the Australian Financial Review by Chandler and McLeod in relation to the fringe benefits tax stated: The fringe benefits tax already cut a swathe through executive remuneration packages according to the latest Chandler McLeod remuneration survey. The survey shows that many fringe benefit items are being added back into basic salaries often to be taxed at the top rate of 60 per cent which will apply unless the Government delivers its promised personal tax cuts. As a result of the FBT related changes the survey shows that top executives have recorded a high percentage growth in salaries over the year which largely reflects incorporation of entertainment and other allowances back into their base salary rather than an absolute increase in total remuneration. The executives showing strong apparent salary growth are largely those whose salary package has previously included extensive arrays of hitherto free fringe benefits areas. In other words, the point of the legislation, in trying to remove this area of growth in the tax system, is largely being effected by that survey. However, the Opposition is not interested in the fact that there has to be a bit of decency in the tax system. What it wants to do is attack the Government but it attacks it when it has the most confused and dishonourable policy approach one could ever imagine. For instance, let me record the Opposition's position on this matter. On 25 September 1986, an interview was conducted on the front steps of Parliament House, with the Leader of the National Party of Australia, the right honourable member for New England (Mr Sinclair): Reporter: Should any fringe benefits be taxed? Mr Sinclair: Well there is already an application of some fringe benefits taxed by the Tax Commissioner under 26 (e). That's a system that has continued and we are not recommending any changes to that. On 25 September 1986, the shadow Treasurer, the honourable member for Mackellar, took part in a Sydney radio interview: Reporter: What is the (Opposition) policy, how would it be done? Carlton: What I have said is, that under the original law, there is a capacity, administratively, if people had wanted to work it out properly, in a properly controlled management situation, to crack down on the rorts and you had to do that. Reporter: How would you ensure that those benefits would be paid, the tax on those benefits would be paid? Carlton: I think, well I think that is a fairly simple management problem to solve. On 25 September 1986 the honourable member for O'Connor (Mr Tuckey), in a television interview in Townsville, stated: We would repeal this entire document (the Fringe Benefits Tax), but we have always said that we would return to the previous arrangements that existed which were the arrangements by where (sic) non-cash fringe benefits paid in replacement of income-not giving you a car to do work in but letting you drive it home on the weekend-a car that had no relationship to your work, or a house, your children's education-we would oblige the employee to pay tax on that. On 29 September the Queensland Liberal Leader, Sir William Knox, endorsed the coalition's commitments to rely on section 26 (e) to tax fringe benefits. He said: As far as housing and perks for executives are concerned, the Tax Act, for years, has had a provision that that must be quantified and is taxable. Subsequently, the Leader of the Opposition gagged his front bench and said that the Opposition had nothing to say on the issue. However, before he did that the Deputy Leader of the National Party said: Mr Howard has made it clear that he is not going to allow the fringe benefits issue as such to be a great tax avoidance device. In other words, he is not going to allow company executives to have half their salary paid by kind without tax, such as providing a house, interest free loans- honourable members will notice he included interest free loans- and Mercedes Benz cars and free education for their children. That's obviously a tax avoidance scheme. Today in Question Time I quoted Forbes magazine to the honourable member for Mackellar and I stated: What about the FBT? You surely don't intend to go back to open slather and allow such things as hostess allowances and private school shelters. The answer was: No. The situation will be much tightened up on what applied pre-FBT by using old provisions of the Act. On the John Laws program in reply to the question `Would benefits come within the purview of the tax?' the Leader of the Opposition stated: If the purpose of the arrangement is to avoid tax, then it ought to be stopped, it ought to be taxed and it ought to be clobbered. The Leader of the Opposition continued: I suspect that those sort of things are caught. But the point is simply this. If the purpose is to avoid tax it ought to be stopped. Mr Laws asked: So in summary, the big money makers who are taking fringe benefits in order to avoid taxation should be- The Leader of the Opposition stated: They will be stopped. That is where the Opposition is. It is running around saying: `They get the best of both worlds'. When confronted in radio and television interviews with the question `Do you allow free cars, free loans and all of these other things?', of course they cannot defend such an immoral position. So gutlessly they say: `Oh, yes, we will stop that. We will stop it under some section that has existed in the past'. But the Commissioner of Taxation has said that this section does not apply and cannot apply. They go on to say that they will not have anything to do with the fringe benefits tax-the specialist tax that the Government has put in place to deal with this matter. The honourable member for Mackellar is smirking. This is what he learned from Senator Sir John Carrick when he used to work for the Liberal Party of Australia in Ash Street. We all remember the maps of China and Australia and the red arrows indicating the invading hordes. This was the lowest common denominator politics of the Liberal Party. Honourable members opposite should go and tell the 500 families whose sons were killed in Vietnam that it was a joke. The honourable member for Mackellar is laughing. I ask him to go and tell the 500 families who lost sons in Vietnam because of Senator Sir John Carrick's big red arrows that it was a joke. The Opposition has always been into massive electoral lies. It is now into another one. Members of the Opposition think that they can come into the House and put it over us on the basis that they think they have a solution. They say that they would not do all of these things but at the same time they are proposing wage freezes. They go around crying crocodile tears and saying that people have lost income at the same time as they are proposing to freeze their wages. To my knowledge they have been proposing this course of action since 1977. They proposed it yet again in 1983, 1984, 1985 and 1986. Honourable members opposite are worried about some bank clerk losing a proportion of the fringe benefits on his loan from the Commonwealth Bank but they want to freeze his salary. They want to freeze his salary-they want a wage freeze. That is the position honourable members opposite are in. While ever the Opposition takes this immoral and unprincipled position in relation to taxation, wages and the general conditions of employment and at the same time knows that if these areas were exempted a horse and cart could be driven through the fringe benefits tax, it is simply playing a low electoral tune. That is fine-the Opposition will be judged on that position when we go to the polls. The slick suburban solicitors and the rest of those on the Opposition side are quite wrong if they believe that the Australian public will elect an opportunist Opposition. The public wants quality, and it is getting it. It wants reason, and it is getting it. It wants decisive leadership, and it is getting it. It is getting no such thing from the Opposition. When we get to the barrier and people consider where Australia is going and the situation that existed in 1982-83 of double digit unemployment and inflation, the first negative growth in 30 years, smashed profits and massive bankruptcies and they look at what they have had and where they are going, they will vote for us. We will be back and the fringe benefits tax will still be in place. Honourable members opposite will be back in opposition prattling on about the tax again. Well, I say: `Fine, keep doing it. Stay there and learn to enjoy it because you are going to be there a long time'. Mr McGAURAN(Gippsland)(3.34) —If anyone listening had any doubts at all that the Treasurer (Mr Keating) was totally out of touch and was living in an unreal atmosphere far removed from the everyday business practices of small business and farmers, today's speech would have dispelled them. If the Treasurer and his Government think that the fringe benefits tax worries will be cured by the window dressing politically expedient exercise he has engaged in, they have seriously misjudged the mood of the Australian community. We are witnessing nothing more than an exercise in window dressing. No amount of tinkering at the edges will cure the basic and fundamental defects of the fringe benefits tax. Mr Hunt —That is what Richardson said. Mr McGAURAN —Senator Richardson slammed the Government. His remarks are hot off the presses from the rural conference at Singleton in the marginal electorate of Hunter, which is certain to fall at the next election. A oncer holds it at present. The Treasurer was at pains in his contribution to make it clear that he is on a collision course with his factional colleague and factional leader. My money would be on the Treasurer. I think Senator Richardson's reputation has been tarnished in recent days as a result of revelations about his administration as the State Secretary of the New South Wales branch of the Labor Party. But the fact remains that Senator Richardson has struck a raw nerve with this Government which highlights again the differences and the divisiveness within the Government, a divisiveness which was pushed even further along by the honourable member for Charlton (Mr Robert Brown) who, in his capacity as chairman of the Caucus economic committee, is reported by the Melbourne Herald as saying on the same night as the Government's revised plans for the fringe benefits tax were announced that it was quite certain that further anomalies would come to light. Of course they will come to light. We know that a fringe benefits tax has to be paid by the giver of the benefit, not the recipient. The fringe benefit is taxed at the highest marginal tax rate of 49c in the dollar. It is paid by employers whether or not a profit is made and whether or not a loss is incurred. It remains as long, complex and confused a tax as ever. Its interpretation will be difficult as it previously has been. It will be expensive for small businesses and farmers to obtain accounting and, in many cases, legal advice. Furthermore, the tax remains fundamentally flawed because of the onerous paperwork and record keeping. Mr DEPUTY SPEAKER(Mr Leo McLeay) —Order! The honourable member for Dunkley will cease interjecting. Mr McGAURAN —Look, Mr Deputy Speaker, we know that you are a factional colleague of those who have just spoken but you might care to give us some protection for the first time since you have been in the chair. Mr DEPUTY SPEAKER —Order! The honourable member for Gippsland will withdraw those remarks. Mr McGAURAN —I withdraw, for the moment. Mr Deputy Speaker, does the Government really think the issue will go away? Does it really believe that the great many Australians affected by this tax, not least of all those who once believed in a Labor administration, will lie down and die? The Opposition has conducted a substantial poll on the fringe benefits tax. That poll of 650 persons was undertaken from 13 to 15 August 1986. Mr DEPUTY SPEAKER —Order! There is far too much noise on both sides of the chamber. Mr McGAURAN —On both sides of the chamber? I do not hear a word from this side, Mr Deputy Speaker. The interference and harassment are coming from the Government side. You may care to differentiate in your rulings. Mr DEPUTY SPEAKER —I am sure that a few moments ago the honourable member for Gippsland probably heard the remarks of the honourable member for Groom, who is sitting behind him. It would help everybody if the honourable member for Gippsland could be heard in silence. Mr McGAURAN —Mr Deputy Speaker, in that poll one of the questions was: `Are you in favour of the new fringe benefits tax?'. The average answer for all capital cities in Australia was: Those in favour of the fringe benefits tax, 22 per cent; those against 66 per cent. Some 11 per cent did not know but I can assure the House that they will know by now. The next question was: `Will any of these new taxes affect you personally?'. Again, 650 people were questioned. An average of all capital cities in Australia indicated that 57 per cent of people believed that the new tax would affect them, only 37 per cent said no and 7 per cent did not know. The next question, which is even more important, was: `If you are opposed to any of these new taxes, will they affect how you will vote at the next Federal election?'. The average of all capital cities in Australia was `yes' 54 per cent, `no' 39 per cent and `do not know' 8 per cent. Again, the people in the `do not know' category will have decided by now. Besides the tax remaining fundamentally flawed, the anomalies continue and surface more and more as the dust settles on the Government's so-called revision. The Opposition has compiled some 25 further anomalies that are not cured in any sense by the Government's revised plans for the fringe benefits tax. Mr Donald Cameron —Only 25? Mr McGAURAN —There are 25 to date, and this is the result of the effort of only a couple of us. There will be more than 25 when we collate all of them. Perhaps the Government will care to answer just one of these anomalies. What about the special provisions made by some employers to cover death and total disability for workers in the period prior to their qualifying for full company insurance schemes? There has been one case in which the cost of this service to employees of a mining company is $152,000 a year. As a result the company has incurred a fringe benefits tax of $70,000. I am aware of a $75,000 payment to the beneficiary of someone who recently died, which attracted an expected fringe benefits tax of $37,000. The list goes on and on. We know that where an organisation or an authority pays for the funeral of a policeman, an army officer or a fireman killed on duty, the gesture will be subject to the fringe benefits tax. Mr Hollis —Rubbish. Mr McGAURAN —The honourable member for Throsby says: `Rubbish'. His colleague the honourable member for Maribyrnong may care to dispel or prove the `disaccuracy' of that point. In this case the fringe benefit applies because benefits are given to a worker's associates, in this case his family, and they are relieved of paying funeral expenses. Local councils in remote areas will be subject to the fringe benefits tax. Schools in remote areas which provide accommodation and board for teachers will be caught. Country school hostels which provide in-house accommodation to wardens and staff and university colleges will also be liable to pay the tax for the accommodation and board provided for their staff. The list goes on and on. But more than that, we notice that clergy and other religious people will be caught by the fringe benefits tax. The Treasurer has replied to the Opposition in regard to religious institutions saying that the fringe benefits tax will apply unless the clergy and members of the religious orders are actually engaged in religious duties. Mr Cobb —The Pope will have to keep a log book. Mr McGAURAN —The honourable member for Parkes raised a very legitimate point. If the Pope should deviate from the agreed route in any way whatsoever when travelling from one religious function to another his sponsors will have to pay the fringe benefits tax. The fact is that unless the religious person is actively and directly engaged in the performance of his or her religious duties, the fringe benefits tax will be payable. Mr DEPUTY SPEAKER(Mr Leo McLeay) —Order! We might get this debate back on to a different plane. Mr McGAURAN —No, Mr Deputy Speaker, the debate is perfectly on the rails. The Minister Assisting the Treasurer, the Minister for Immigration and Ethnic Affairs (Mr Hurford), stated in a letter dated 5 September this year to Senator Bernie Kilgariff that religious people will have to pay the fringe benefits tax unless directly engaged in religious duties. It is a sad day for this country when we have to tax religious people engaged in activities incidental and indirectly arising out of their oath of their religious office. A number of us have grave reservations whether the Australian Taxation Office is efficient enough or frankly objective enough to administer this tax. We well remember the letter sent by the Commissioner of Taxation to all businesses in June advising them of the legislation that will pass through the Parliament, including an explanatory booklet on just how that would affect small businesses and primary producers. Of course that book has been rewritten and updated several times. Moreover, the Auditor-General has brought down a report which shows large scale incompetence and inefficiency within the Taxation Office and raises questions as to whether it will be able to cope with the new fringe benefits tax. Mr DEPUTY SPEAKER —Order! The honourable member's time has expired. Mr GRIFFITHS(Maribyrnong)(3.44) —The honourable member for Gippsland (Mr McGauran) asked me to define the word `disaccuracy'. I have never heard the word before and his use of that word goes some way to making a reflection on the rest of his contribution. But I will say that I do know what the term `disrespectful' means. I, for one, will not be dragging His Holiness into a tawdry debate in this chamber. The honourable member for Gippsland ought to be ashamed of himself and ought to apologise not only to His Holiness but also to this House. That comment makes his contribution even more shameful. The honourable member for Mackellar (Mr Carlton) talked about grossly misleading advertisements. I could not help holding my breath almost in shame. The honourable member for Mackellar was around when the infamous fistful of dollars advertisement was run in the 1977 election campaign, which really marked out the high ground in deceptive advertising in this country. As you would be aware, Mr Deputy Speaker, and as the rest of the Australian community is aware, immediately after that election-the honourable member for Mackellar may very well have drafted that advertisement and he certainly never dissociated himself from it-there was a big grab back. All the money went back to the Treasury. Not only that, but a 1.5 per cent tax surcharge was imposed on those gullible enough to believe what the then Liberal Government had said about their tax cuts. The Opposition has about as much credibility as Malcolm Fraser had standing in the foyer of his Memphis hotel without his dacks on and trying to say that someone had slipped him a Mickey Finn-no credibility whatsoever. Further to compound the deception the honourable member for Mackellar then referred to advertisements encompassing the use of a glass of beer. He said, and he was right, that the Labor Government has indexed the excise on beer, as well it should, to maintain the real value of that excise level and certainly not increase it over time. The point I wish to make-the honourable member for Gippsland made a similar point-is that many years ago in my old home town when I was a paper boy I remember selling newspapers in a hotel on Budget night and ordinary working class Australians were shaking with fear because they knew what the conservatives were going to do with the beer excise. It went up year after year over and above the consumer price index increases. So the Opposition has no credibility on that issue. In this whole tax debate there is this great $6 billion credibility gap. If we are going to reduce the tax burden on Australians-we have already done that and the Opposition purports that it will go further-where is the money going to come from? It cannot go before the Australian community and on the one hand argue that there will be greater tax cuts and on the other hand embrace the arguments supporting fiscal responsibility. They are two mutually incompatible positions. As I have said, there is a $6 billion credibility gap. We heard again today the arguments about how this tax is going to hurt the churches. But what is the Opposition's policy? It floats the American tax reforms. What do they encompass? One component of the American reforms is the complete non-tax deductibility of any donation whatsoever to any church or religious institution in that country, and this is the policy that has been floated by the Opposition! The lack of honesty on these things is simply mind boggling. The honourable member for Mackellar comes into this House and talks about credibility. By way of a question during Question Time he raised the issue of a person who owned a flat in, I think, Campsie, and who had to pay something like $6,000 fringe benefits tax per year. That would mean that the weekly rental of that property would be in the vicinity of $240 a week. For goodness sake, that is high for Campsie. It would have to be a particularly palatial flat for that to be the case. But that is not all. If the honourable member for Mackellar has any respect for this institution-he was bleating about honesty and integrity-he ought to have indicated that the person who supplied him with that information is in fact a prominent member of the Liberal Party and has in fact been a candidate for the Liberal Party. He is well known to the honourable member for Mackellar. The honourable member ought to have had the decency to indicate to the Australian community that at the very least this information may have come from a highly partisan source. Not to have indicated that to the House is, in my submission, most misleading, and the shadow Treasurer ought to be a little more careful in the future. The United States model is the one the Opposition has embraced. About 30 per cent of America's gross domestic product goes in tax. That is similar to this country. I say, firstly, the top marginal rate of tax in America is actually 33 per cent, not 28 per cent as has been indicated, because of the phasing out of the tax threshold and personal exemptions. Secondly, the rate does not include compulsory social security levies, which are very high in America and which average some 6.7 per cent of income. Thirdly, the rate does not include State and local government income taxes, which range from nil in some States to 16 per cent in others. If we take all these things into account we see that the average earner in the United States faces an effective marginal tax rate of between 39.7 and 55.7 per cent, depending of course, as I have indicated, on his place of residence. By comparison, even the highest income earner in Australia, under the Labor Government, will face a marginal tax rate of 49 per cent which is a significant reduction on the regime which applied under the previous Government. What is more, the American tax reform-it does not only attack the churches-will be financed by a 25 per cent increase in business taxes. If the Opposition wants to use the American model it ought to at least have the integrity to put to the community what that model automatically comprises. The Opposition will have at some stage-I for one am getting a little sick of waiting for this-to put to the Australian people a reason- able, comprehensive alternative set of taxation policies. It has yet to do this. It will not do so because it wants to do this in a couple of weeks in a pre-election environment where distortion will be the order of the day rather than a timeframe which will allow proper assessment and analysis of the shoddy proposals that it will once again put up. We have had many comments on the fringe benefits tax. It is probably appropriate to go to what is demonstrably a non-partisan source rather than simply to rely on those who have a vested interest in abusing the freedom of speech by grossly misleading people. I refer the House to an article by Peter Lloyd, Professor of Economics, and Ian McDonald, Reader in Economics, both at the University of Melbourne, and published in the Australian Financial Review of 29 October 1986. It was a long article. It was comprehensive and sensible. Inter alia, they said: Under the old law (S26 (e) of the Income Tax Act)- which is referred to by nearly all honourable members opposite on the front bench as the alternative in this debate- tax should have been paid by the employee on non-cash fringe benefits. In practice, of course, as was indicated by my colleague the Treasurer (Mr Keating), no tax was collected as the law was simply impossible to police. One of the great problems we have in this community with tax is that people were forced into these areas because they knew of the rorts that were going on. It was not a question of voluntarily getting into those rorts, it was a matter of getting into them or seeing one's tax burden increase over time. In 1980, the Leader of the Opposition (Mr Howard) tried to tax the housing of coal miners in the Bowen Basin and failed. The reality is that it would engage any employer in this country in a significantly increased administrative burden. They do not want to do that. People such as Mr Ansett can argue all they like, but the reality is that employers will not embrace that extra administrative burden as it would require them to fill in a lot of paper work every week rather than once a year. The alternatives to the FBT are simply to leave the rorts and the ramps, as they have been described, to continue unabated. That is not the role of this Government, nor should it be. Mr DEPUTY SPEAKER(Mr Leo McLeay) —Order! The honourable member's time has expired. The discussion is concluded. Mr WILSON(Sturt) —On behalf of the Standing Committee on Expenditure, I present the report of the Committee entitled `A Taxing Problem: Review of 5 Auditor-General's Efficiency Audit Reports into the Australian Taxation Office', together with extracts from the minutes of proceedings, the transcripts of evidence and submissions authorised for publication. Ordered that the report be printed. Mr WILSON —by leave-The report of the Standing Committee on Expenditure, which I have just tabled, has the title `A Taxing Problem'. It results from the review by the Committee of five efficiency audit reports of the Auditor-General. These reports contained his conclusions and recommendations resulting from the examination of various aspects of the operations of the Australian Taxation Office. These audit reports are among the most significant and disturbing of their type. Without some Government initiative-which the Committee recommends that it now take-it is probably only the Auditor-General who, because of his statutory powers, is able to conduct such a penetrating, external examination into aspects of the administration of the Australian Taxation Office. In reviewing the reports the Committee's attention was drawn to broad issues associated with the administration of this most important Government office. Administrative Changes Needed The theme of the Committee's report is that substantial administrative changes need to be made in the Australian Taxation Office if it is to effectively implement the legislation for which it is responsible and, using its own words, to `gather the revenue'. Only if this is done will a satisfactory level of taxpayer compliance be achieved, and only by the achievement of a satisfactory level of compliance will the tax burden be spread in accordance with the legislative intention of this Parliament. Simplify Tax Law In spite of recent changes to the law, the tax collection system remains in need of further reform-that kind of reform which leads to a simpler system which all Australians can understand more easily than is now the case. Over recent months not only the decisions of this Parliament but also those of the administration have added further complexity to an already complex system. This increasing complexity, coupled with an unsatisfactory level of ambiguity, means that tax law has become a significant concern to tax collector and taxpayer alike. The conclusion of the Committee contained in its report is that review by the Australian Taxation Office of existing taxation law is urgently required. Crisis Management The Australian Taxation Office argued that the problems identified by the Auditor-General and probed by the Committee were, to a significant degree, the result of the preoccupation of senior staff in dealing with the growth of tax avoidance and evasion schemes and the implementation of the freedom of information legislation and other tasks heaped upon it by Parliament. The Committee is of the view that the problems of the Australian Taxation Office are more serious than this explanation for what appears to the Committee to be a crisis management approach. There are serious shortcomings within the Australian Taxation Office's administrative philosophies which reflect in the way it operates. These result in the revenue which should be collected, not being collected. They also impose unnecessary costs upon taxpayers by requiring them to provide information which is not used in the naive belief that this requirement alone will result in increased taxpayer compliance. There are a number of other aspects of the Committee's report which I particularly wish to draw to the attention of the House. Computerisation Firstly, I turn to the Australian Taxation Office's lack of computerisation. The Committee found that the lack of computerisation, entwined with a continuation of labour intensive work practices, has retarded the Australian Taxation Office's efficient operation. The Committee concluded that the Australian Taxation Office has failed to acquire adequate data processing equipment. We were told `their data base is woefully inadequate' and that `it is operating in a computer environment that was planned in the early 1970s'. That would be like the Commonwealth car pool operating in the automobile environment of the T-model Ford. It seems that poor internal guidance effectively nullified any substantial implementation of new technologies. The result of this was that over a 10-year period, the Australian Taxation Office underspent by $49m its appropriation for computer equipment, and as a consequence, failed to process data available to it, and where it did so it often used highly labour intensive procedures. Though for so long the Australian Taxation Office did not fully appreciate the potential of computerisation, the Committee acknowledges that the ATO has now set about developing new ADP strategies. So that the ATO does not again fall behind the times and the technologies, the Committee has recommended that priority setting mechanisms be established to review and report regularly on its ADP operations, actual, proposed and potential. Alternative Collection Systems Secondly, I draw the attention of the House to the Committee's recommendation that the Australian Taxation Office undertake a study of the cost effectiveness of alternative collection systems, with particular attention being given to the advantages of a generalised withholding tax structure. Coupled with this proposal, the Committee has recommended that the Australian Taxation Office, as a matter of urgency, advise the Government-maybe not for the first time-on the effectiveness of a withholding tax on interest paid to Australian residents as compared to the present method of tax collection based on taxpayer reporting of income derived in this way. Many forms of withholding tax are currently being used. The most common is the pay as you earn requirement applicable to wages and salaries under which employers deduct at source the tax due by their employees. The withholding tax method is, however, also used to collect tax due by overseas residents on dividends and interest payable to them from Australian sources. The prescribed payments tax is by nature a form of withholding tax. In evidence to the Committee, the Commissioner of Taxation agreed that a withholding tax could be more effective than traditional collection techniques when he said: An appropriate system of deduction at source could raise more revenue than an information reporting system. Based on Australian Bureau of Statistic figures, the Australian Audit Office has estimated that tax revenue forgone because of the failure under a reporting system of taxpayers to disclose dividend and interest income is in the range of $308m to $512m a year. These estimates were not disputed by the Tax Office. Indeed, it acknowledged that non-disclosure of interest was a major problem. The Treasury informed the Committee that, were a withholding tax to replace the present information reporting system, it could `bring in about two-thirds of the amount of tax evaded on undisclosed interest'. Furthermore, it appeared from the evidence before the Committee that not only would a withholding tax regime collect more revenue but it would also be far less costly to administer from the point of view of both taxpayer and tax collector. Tax Identification System Thirdly, the Committee believes that there is a need for a high integrity taxpayer identification system. Such a system would lead to substantial improvements in the ATO's information and checking systems and this, in turn, would generate greater tax revenues through increased taxpayer compliance. In spite of the fact that a tax file numbering system is well suited to this purpose, the system now used by the ATO was not, as it could have been, designed with the necessary degree of integrity. This design failure is yet another in the series of opportunities squandered by the Tax Office. The Committee has recommended that to ensure maximum taxpayer compliance the Tax Commissioner establish a high integrity identification system of his own. This, it believes, should be done whether the Australia Card is introduced or not. Joint Management Review Fourthly, I return to the issues raised in the introduction to this statement, namely, the need for substantial administration changes in the ATO. The Commissioner was critical of the fact that the Audit Office looked at particular segments of the Tax Office without having regard to the whole area of Tax Office operations. If this criticism was meant to imply that the reports unfairly reflected on the Tax Office in that other, unaudited areas of the Tax Office were operating at a high level of efficiency, the Committee rejects such an assertion. The Committee, on the evidence before it, believes that wherever the Auditor-General had looked in the Tax Office he would have found significant problems. In the light of the poor standard of Tax Office management the Expenditure Committee recommends that the Government establish a joint management review to investigate the overall performance and operation of the Australian Taxation Office and that Parliament be informed of the outcome of the review. In conclusion, I want to thank all members of the Committee's staff who assisted in the conduct of the inquiry and the drafting of the report. I would like to thank the members of the Hansard staff who took down the record of the evidence. In thanking members of the Committee, I wish to single out Greg Burgess. His substantial contribution was very much appreciated by members of the Committee. I hope that the response to the Committee's report will be a simpler, fairer and more efficient tax collection system. I commend the report to the House. Mr MOUNTFORD(Banks) —by leave-It is timely indeed that this report of the House of Representatives Standing Committee on Expenditure be tabled now. The present Labor Government is engaging in the most comprehensive review of the Commonwealth tax system which has been undertaken since Federation. This review has introduced changes which will clear up rorts and discrepancies that have existed for far too long. But while that review goes on, it is imperative that the system of tax collection and administration be carried out efficiently and effectively. It is this aspect of the Australian Taxation Office's activities which we have concentrated on in this report. The report looks at five efficiency audit reports on the Australian Taxation Office carried out between January 1982 and December 1984. In doing so, we were interested in the substantive content of the audit exercise itself as well as what the reports revealed about the office under examination. In effect, we were looking for ways and means of improving both the examiner and the examined. In looking at the Audit Office itself, the Committee has found that the Auditor-General has a greater role to play in follow-up procedures. In the past the Audit Office has seen its role as identifying problems and making recommendations but not in actively pursuing the matter further. That task has fallen largely to committees such as the Expenditure Committee and the Joint Committee of Public Accounts. To facilitate greater involvement in the review process by the Audit Office, the Committee's first recommendation is that the Audit Office provide more detailed and constructive recommendations in all future reports, especially where serious deficiencies are observed in an office's operation. Under the present procedure, the Department of Finance receives quarterly reports from audited departments concerning implementation. It is our recommendation that the Audit Office also receive these reports, so that it may more effectively review shortcomings which the Office has already identified. The Committee having recommended that the Audit Office be more specific and positive in its recommendations for change, as well as requiring it to receive reports on the progress of changes, it follows that we should also recommend that the Australian Audit Office advise the Parliament at the earliest opportunity of any failure of audited organisations to act on recommendations. Through these recommendations, the Auditor-General will take a more active role in future review procedures, rather than merely make suggestions and have little or no part in follow-up action. Our sixth recommendation is that the Department of Finance take action when the Auditor-General has identified and called attention to the deficiencies of an office to follow audit recommendations. Following the finalisation of the Expenditure Committee report, the Audit Office tabled a report on prescribed payments, in September. The report being tabled now contains two recommendations concerning prescribed payments. The Expenditure Committee will be reviewing these two recommendations with the benefit of the findings of the Audit Office's report. The Government will then be able to respond to recommendations with the most recently available information on the subject. Turning now to the Australian Taxation Office, the Committee has found that the Office deals with an enormous volume of work and that much of this can be dealt with more effectively through improving computer facilities to the Office. At present, the Tax Office manually checks and oversees each and every income tax return lodged. This is one of the mammoth tasks performed by the 2,500 assessing officers. Perhaps it is time for us to look at the possibility of doing assessments on a sample basis. In selecting the sample taken, the Tax Office should take account of the income of the taxpayer involved to assess the possibility of a mistake. Thus, it might have very few samples taken of lower income earners, larger samples for those on higher incomes and complete coverage of those on very high incomes. The samples taken could then be strained on the basis of tax bracket. The Committee's inquiry showed that the Tax Office has been unable to collect all of the tax liabilities in many areas. The non-reporting by taxpayers of dividends and interest earned and the Tax Office's inadequate checking procedures is resulting in up to $500m in tax being uncollected each year from that area. The Auditor-General has drawn attention to the fact that taxes evaded by the understatement of income and the overstatement of expenses by unincorporated businesses was estimated to amount to $1,000m per annum and that such practices by companies was estimated to be $500m per annum. It is apparent that a large amount of tax liabilities are not being collected by the Tax Office and if this situation is allowed to continue such tax losses will have a large effect on the lessening of the tax burden on low income earners who are forced to shoulder their tax responsibilities through the pay as you earn system. The Tax Office needs quickly to overcome the deficiencies within its office by more efficient use of the resources available, particularly in the computer technology area and the possible use of withholding taxes on institutions, interest and dividends earned. Finally, I am sure that honourable members will be impressed with the high quality and presentation of this report. For this I would like to thank all members of the Committee and its staff, in particular the work of Peter Ratas and Greg Burgess. The capability of the Sub-Committee Chairman, the honourable member for Sturt (Mr Wilson), has been amply demonstrated by the detailed remarks that he has just made to the House. His involvement has been very much appreciated. I commend the report to the House. Mr CARLTON(Mackellar) —by leave-I have not had an opportunity to read thoroughly the report from the Standing Committee on Expenditure. It has only just been tabled in the House. It is the only opportunity I will have to speak directly to the report and, therefore, as the Opposition person in this House responsible for these matters I should make a few remarks. I will make them in a measured fashion because I understand fully the burden of responsibility on the Australian Taxation Office in dealing with a very difficult task. I also understand that if things proceed as I believe they will the Opposition before not too long will have the task of implementing those of the recommendations which should be accepted. The problems brought forward in this report are very serious. Obviously I was interested in the interchange between the Auditor-General and the Commissioner of Taxation recently when the report on the prescribed payments system was tabled. There was rather acrimonious correspondence at the back of that report between those two gentlemen. This report throws some light on the nature of that difficulty. The Commissioner of Taxation is besieged with a work load which he thinks has been thrust upon him by schemes that have been built up in the private sector. Mr Beale —Wait until he gets the fringe benefits tax. Mr CARLTON —As my friend the honourable member for Deakin correctly points out, there is additionally the work load brought in by the incredible increase in complexity of taxation measures introduced by this Government. Before I remark on those issues I just say that this report reflects a fundamental problem in the Australian Public Service; that is, the problem of management. I had the fortune, or misfortune, for less than one year, to be Minister for Health. I was sworn in to administer that large Department, which was spending at that time $3 billion or $4 billion worth of taxpayers' money and employing, I think, about 3,500 people directly and another 6,000 or 7,000 in statutory bodies. As a trained manager-my background outside this place is as a general manager and a management consultant advising the chief executives of large organisations-I simply could not believe the lack of managerial and organisational capacity in that Department to perform the task that had been put upon it. I do not blame the people who were in charge of that Department because the system had never required them to learn the well-known techniques of management of large organisations. In a Public Service that has been built up on the basis of personal professional advice-the quality of many of those advisers is exceptional-the managerial skills have simply not been developed in any orderly way. I acknowledge that some changes have been made recently. I am quite happy to acknowledge the role played in this matter by Ministers in the current Government. This report illustrates, as do my observations about the management of the Department of Health, that we have a very long way to go before there are adequate general management capacities and managerial structures within the major operating departments of the Australian Public Service. That is the heart of the problem. Mr Deputy Speaker, I know that in your other capacity you would have had an opportunity to observe this in considerable detail. I make those remarks as a preparatory comment before I address the points in the report. The report indicates a very serious situation. It is clear that on balance the comments of the Auditor-General in his report on the prescribed payments system were probably accurate. It is also understandable why the Commissioner felt besieged and attacked and reacted in the rather emotional way that he did. It is clear that he felt that he had been underresourced and overburdened by activities in the private sector by people trying to fiddle their tax and also by the present Government which has virtually doubled the number of pages in the Income Tax Assessment Act. Since the so-called taxation reforms of September last year which were announced by the Treasurer (Mr Keating)-the taxation Act then amounted to some 1,100 pages-we have had another 800 or 900 pages of immense complexity added to the Commissioner's burden. Throughout the whole of that period I have been saying that I cannot understand how an already overstressed operation is capable of dealing with those additional burdens. It is clear from this report that it is not. It is in desperate trouble. Therefore, a lot of the backwash that we are getting in our electorate offices is perfectly understandable. A lot of decisions obviously are being made by junior staff sometimes even without reference to previous years files. This is causing considerable difficulty to taxpayers. Also, there is the other problem of uncollected revenues with which the present system is not capable of dealing. I go on to make another and final point. In the midst of this appalling mess and difficulty a recommendation has been put to the Government that it introduce a new measure, an identification system, under the general title of the Australia Card. It is put to us that the minimum cost of introducing that system will be about $600m-and estimates have gone up to $1,000m. It is also estimated by the head of the Government's Business Regulation Review Unit, Dr Moran, that the cost to the private sector of that new set of proposals would be at least double the cost to the taxpayer of introducing it in the public sector. Apart from all my concerns about the privacy aspects of this matter I am simply not prepared to accept a recommendation of such complexity and extraordinary forward implications from a department which is as ill-managed, for whatever reason, as is the Taxation Office. In other words, it is as if the Treasurer and the Government were approached by people in the Taxation Office-and they are the main requesters of the ID card system, not the Department of Social Security, which says that it will not help it very much-and told that they should give the Tax Office $600m to $1,000m to introduce a new scheme. It is as if the Tax Office were struggling to get a Tiger Moth working and were asking for the immediate delivery of an F111. That is what we are faced with and the matter will come up in debate later this week. This report highlights in a most dramatic way the kind of difficulty that the Treasurer has faced when he has had proposals of immense complexity put to him by his own Treasury Department and/or by officers of the Australian Taxation Office to meet the problems. We had this in the case of the fringe benefits tax where he was told on the one hand that every minor benefit was taxed in the hands of the recipient or on the other hand, as far as the employers were concerned, every minor benefit was taxed, and the employer was taxed. But the managerial requirements of analysing the real needs of cutting out tax avoidance in the fringe benefits area were clearly not addressed and it is evident from this report that the managerial skills which would have been required to put a sensible proposal to the Treasurer were not there. Unfortunately, the Treasurer did not have the kind of experience which would have enabled him to find that one or other of the proposals was unsatisfactory. I think the same thing goes for the capital gains tax, the foreign tax credits scheme and a whole series of other quite complicated measures that have been recommended, presumably in combination, by the Treasury and the Australian Taxation Office. It is now clear that those complex, detailed and burdensome recommendations are put forward by bodies, or at least by one body, where the managerial skills are simply not there. In this set of remarks I am not making any attack on the people running the Taxation Office. For the most part they are professional advisers and experts in taxation. It is a characteristic of a lot of our Public Service that we have people highly skilled in particular professional and technical areas who are asked to manage enormous organisations. Certain techniques can be used to make sure that those organisations are well run and those techniques have been well developed since the 1920s, beginning in the United States of America with Alfred Sloane's management of General Motors. They have been developed in various ways since then and much more imaginative ways of running things in a more decentralised way have been developed, particularly in the last decade. It is clear from this report that even those basic ways of organisation that were pioneered by Alfred Sloane in the 1920s are still relatively new to the Taxation Office, as they were virtually unknown to the Department of Health. If I can give one example in closing, when I took over the Department of Health it had no centralised management information system. All it had were lateral information systems feeding into the Department of Finance. There was no material or set of figures against budgets or targets available to the Minister for Health other than the number of doctors prosecuted for overservicing and fraud in the previous six months. There was no central management information system for a department spending $3.5 billion of taxpayers' money. That is something that people in private enterprise find impossible to believe but may I also say that people in other better managed departments of the Commonwealth Public Service found it almost impossible to believe because at least under their own management arrangements they had organised that for themselves. Until comparatively recently at no stage had the Public Service Board introduced management training programs which would have made it quite clear that those things were fundamental in managing anything of the size of the Australian Taxation Office. The report points out that the present Commissioner is taking a number of forward steps in order to get these things in as quickly as possible. It points out the great difficulties in trying to computerise the systems of the Taxation Office as quickly as possible, but the backwardness of those things and the excessive reliance on manual labour have been a major factor in the incapacity of the Office to deal with this major burden. I feel very concerned about the people who work in the Australian Taxation Office. I have a very great deal of sympathy for them. I believe that they are dedicated officers who are particularly good in the area of their professional expertise and that they are paid salaries which are very much lower than those received by many of those people who are advising the private sector about how to get around them. There is a constant drain of people from the Taxation Office. The ones who remain at the salaries they are paid are dedicated public servants who have the true interests of Australia at heart. It does not mean that they are the best managers in the world. It does not mean that they can produce the product without those managerial skills being put into it and there is obviously a requirement on the political wing of the Government to try to help them bring about a fundamental change. I hope that as far as management is concerned these changes can proceed on a bipartisan basis. I will, however, say that any requests by that Office and by other instruments of the Government to introduce further extraordinarily complicated and intrusive schemes such as the Australia Card will be strongly opposed by this side of politics. It is quite clear from this report why we are so overwhelmingly justified, quite apart from the privacy and civil libertarian arguments which I think are overwhelming in themselves, and why we will be justified in taking the stand that we will be against the introduction of a comprehensive identification card. Mr ROBERT BROWN(Charlton) —by leave-Mr Deputy Speaker, first of all I would like to endorse most of the comments that were made by the honourable member for Sturt (Mr Wilson) who, as you indicated in your contribution to this discussion, acted as the chairman of the sub-committee, and the comments that were made by yourself, not only as a member of the sub-committee but also as the Chairman of the House of Representatives Standing Committee on Expenditure of which that sub-committee formed a part. The report entitled `A Taxing Problem' which has just been tabled, as both you and the honourable member for Sturt indicated, was a response of the Expenditure Committee to five of the Auditor-General's efficiency audits into the Australian Taxation Office which did a number of things, including looking at questions of administrative structures and changes that may have been desirable; the way in which procedures had been followed within the Taxation Office; the way in which Budget allocations had been expended or had been underexpended and some of the reasons for that. There are a number of extremely important recommendations which the Expenditure Committee brought forward and some of those have been referred to by both yourself and the honourable member for Sturt. In each of those cases the Expenditure Committee was concerned with the substantive nature of those efficiency audit reports as well as the specific recommendations which had been made, the bases upon which those recommendations had been made, the extent to which any commitment had then been made to follow up those recommendations and the extent to which they may have been followed up. From the point of view of those members of the full Committee who were members of the sub-committee I think it was a particularly enlightening and interesting experience to participate in those inquiries. I know that the honourable member for Sturt, the chairman of the sub-committee, stated that a sum of $49m was indicated in those reports to have been underspent on computer equipment. He indicated as well that we received evidence from the Taxation Commissioner, Mr Boucher, and from his officers of the new strategy which they had devised in order to ensure that the money which was being allocated for a more highly developed computerised system within the Taxation Office would be spent and would be spent properly. Reference was also made to the recommendation concerning the possible further inquiries into an extension of the withholding tax principle. That is a principle that I endorse as well as, of course, did the other members of the sub-committee, but each of those members was fully aware of some of the particular difficulties which could be related to that, particularly in the area of interest payments, to which our attention was specifically drawn. It was also mentioned that the sub-committee recommended the need for a high integrity taxpayer identification system. It was suggested that the Taxation Commissioner should devise such a system of his own-that is, within the Taxation Office and within the procedures of the Taxation Office-quite apart from anything that may happen as far as the Australia Card is concerned. I take issue with what the honourable member for Mackellar (Mr Carlton) has said. In reference to the Australia Card he indicated quite correctly that later this week this will become a matter for significant debate within this chamber and later within the Parliament as a whole. The question of the adequacy, the purpose and the reasons for introducing the Australia Card proposal and the type of results and benefits which may flow from that, not only to public revenue but also to the question of the whole equity of the taxation system in Australia as well as the efficiency of the social security and social welfare system, is to be pursued. It is my strong belief that if the Parliament decides to proceed with the Australia Card proposition any higher integrity identification system within the Taxation Office will probably not be necessary. I am not saying that it would not be desirable. Any higher integrity identification system, for whatever reasons, clearly would be desirable. What we need to do is to understand that the tax file system that is used by the Taxation Office is simply a device which assists it to collect the revenue. The point has been made repeatedly that if anyone wants to pay tax, the Taxation Office will quite correctly issue them with a tax file number in order to collect that revenue even if there may be some confusion about the exact identification of the person, the institution, the authority, the company, the business, the partnership or whatever it happens to be that wishes to make a tax payment. It would be absurd if the situation were otherwise. I would like also to emphasise that not all the deficiencies to which attention is often drawn in the media and in public controversy about the taxation system result from inadequacies within the Australian Taxation Office. Successive governments over many years, of different political complexions, need to take some responsibility for the degree of confusion which has developed within the taxation system, within the Income Tax Assessment Act. It has been indicated that this taxation Act approaches 2,000 pages. One of the essential reasons why a substantial increase has taken place in the volume of that taxation Act since the Hawke Government came to office is the need to clarify and improve the Act, the need to take out the confusion, ambiguity and complexity, the rorts and ramps that tax evaders and avoiders had been able to operate within the system. We inherited a taxation system through which people who wanted to avoid their responsibilities could virtually drive trucks. Mr Hollis —And did. Mr ROBERT BROWN —And did, as the honourable member for Throsby interjected. That is not my judgment; that is not my assessment. The honourable member for Mackellar knows that it is the objective, fair, honest and truthful assessment of people in Australia who are thoroughly conversant with the taxation system and the way in which it operates. They recognise and they declare that during the period of the Fraser Government the amount of revenue that was lost to the Commonwealth as a result of tax evasion and avoidance amounted to $7,000m every year. That is the conservative estimate. There are members of the Opposition now who are declaring that as a result of the cash economy and tax evasion it is possible that the sum may amount to $30,000m. Mr Deputy Speaker, please let us not ever-- Mr DEPUTY SPEAKER(Mr Mountford) —I remind the honourable member for Charlton that he should be speaking to the report which has been tabled. Mr ROBERT BROWN —What I am doing is emphasising the particular aspects of the Auditor-General's report on the efficiency audits which are so important for the efficient operation of the Australian Taxation Office. There is an absolute necessity to ensure, by inquiries of that kind and by parliamentary responses of the kind that we are going through at the moment, that the Office does what is expected of it not only by the Parliament but by the whole of the national community. Mr Deputy Speaker, as you would be aware, in one section of the Taxation Office alone just recently as a result of a rather minimal increase in staffing the increased taxation revenue was $1.5m per man year. During the time of the Fraser Government as a result of staff ceilings being applied to the Taxation Office there was a saving of a few hundred thousand dollars in salaries but there was an estimated loss of taxation revenue of $45m as a result. They are aspects of the whole question of the efficiency of the operation of the taxation system. The honourable member for Mackellar drew attention to the problems of management in the Taxation Office. That is not something that is experienced only within the public sector, within government departments; within the private sector and particularly within large corporations in the private sector there are very significant management problems. I am delighted that in the private sector there appears to be a new generation of managers coming through who have been more exposed to the winds of competition and who are responding very well, unlike many of those in the older generation who were feather-bedded and extremely comfortable. These problems are not just a deficiency within the public sector. We all have to recognise that in recent years there has been a revolution in management and administrative procedures and practices, skills and structures not only within the private sector but also within the public sector. It has been indicated within the debate so far that many of the officers of the Taxation Office are significantly underpaid in terms of the sort of salary they could command in the private sector. It is to the great credit of the public conscience, dedication and commitment of those capable and qualified officers within the Taxation Office that they stay there. They cannot possibly be staying there for the salary they receive; they are obviously staying because they know that they are fulfilling an important national purpose. Therefore they are deserving of our support. Mr Deputy Speaker, I am pleased to endorse the essence of the report `A Taxing Problem' and I endorse your remarks as Chairman of the Expenditure Committee and the remarks of the honourable member for Sturt as the chairman of the sub-committee which produced the report. Debate resumed from 8 October, on motion by Mr Peter Morris: That the Bill be now read a second time. Mr LLOYD(Murray)(4.38) —This legislation continues the bipartisan support for international maritime conventions relating to pollution and safety. The Protection of the Sea Legislation Amendment Bill amends four Commonwealth Acts to implement more completely the 1973 International Convention for the Prevention of Pollution from Ships, commonly known as MARPOL. Legislation to implement annexes I and II was passed in 1983. This covers discharges of oil and noxious liquid substances. Earlier this year further legislation increased coverage of these annexes to the Australian territorial sea and coastal waters. That was done pending State legislation. I understand that that State legislation is under way. This Bill enables annexes III, IV and V to be implemented by complementary Federal, State and Territory legislation. Annex III requires that there be special containers on board ship to hold specific substances. Their discharge at sea is prohibited except where the safety of the ship or its crew is at risk. The Navigation Act 1912 is being amended to incorporate this annex. Annex IV covers the discharge of sewage by all Australian ships over 200 tonnes or carrying more than 10 people. No discharge is permitted in the Great Barrier Reef area. Annex V covers pollution from garbage and there is a prohibition on the dumping of synthetic ropes and fishing nets. Minimum distances off-shore have been set in relation to the degree of degradability, once again with a prohibition on dumping in the Great Barrier Reef area. The Bill also amends annex II to include changes agreed to at the December International Maritime Organisation meeting to implement the 1984 protocol to the International Convention on Civil Liability for Oil Pollution Damage. These changes include new insurance requirements to cover civil liability and this, in turn, will mean an increased cost for insurance for shipowners. Protocol I of the MARPOL Convention is also amended to incorporate new, comprehensive, mandatory reporting requirements. The Minister for Transport (Mr Peter Morris) stated that at the Australian Transport Advisory Council meeting there was unanimous support for these provisions and that industry also had agreed. I have contacted the relevant State Ministers in Queensland, the Northern Territory and Tasmania, and a number of industry organisations. They, as the Minister said, support the legislation. Their only comments concern such things as a related, but I suppose not specific, problem concerning this legislation-that is, greatly increased Commonwealth charges for garbage services, irrespective of whether those garbage services have to be used-the problem already mentioned of increased insurance charges, some problems with the remeasuring of ships, and doubts as to whether annex IV will be fully implemented internationally. Evidently, there are problems in Norway and the United States. Mr Deputy Speaker, the Opposition continues the bipartisan attitude to this legislation and therefore supports the amendments. Mr HOLLIS(Throsby)(4.42) —I am pleased to speak in the second reading debate on the Protection of the Sea Legislation Amendment Bill 1986. I am pleased to hear from the shadow Minister, the honourable member for Murray (Mr Lloyd), that there will be bipartisan support. I must say that there could hardly be anything but bipartisan support for it. The object of the Bill is to amend four Commonwealth Acts to facilitate the implementation of a number of anti-pollution incentives which have been incorporated in international conventions. To state the obvious, I suppose, Australia is a maritime nation. It is a nation that is dependent on the sea for imports and exports, an island nation, a nation of coastal dwellers, a nation whose history has been shaped by the sea that surrounds us, and a nation whose recreation, in large measure, is sea based. Therefore, I believe, all Australians should welcome this Bill, which represents a further major step in maritime pollution prevention and control in Australia. The electorate of Throsby embraces the beautiful south coast area of New South Wales from Warilla to Shoalhaven Heads. Tourism is a major industry as people-- Mr McVeigh —Mr Deputy Speaker, I raise a point of order. I seek your guidance as to the procedures that are available to me to ensure that the honourable member who is speaking has a sufficient number of his colleagues here to see him make an absolute ass of himself. Should I do so by calling your attention to the state of the House? Mr DEPUTY SPEAKER(Mr Mountford) —I ask the honourable member to withdraw that statement about another member. Mr McVeigh —I withdraw. It was just a query. I draw your attention to the state of the House. (Quorum formed) Mr HOLLIS —We have just seen the childishness of the honourable member for Groom, who called a quorum. I point out to those who are listening that the Opposition is so interested that, although the government benches are, as usual, full only four Opposition members are present. In fact, one of the Australian Labor Party members had to go to the Opposition side to add to its numbers. Mr Shipton —We do not want to listen to you. Mr HOLLIS —You might not want to listen to me, but you will have to listen to me. Because of an agreement that had been made, I had decided to limit my comments to 10 minutes; but because of the childishness of the honourable member for Groom I will take the full 20 minutes to which I am entitled. Mr Martin —Move for an extension. Mr HOLLIS —As the honourable member for Macarthur said, I might move for an extension of time. As I was saying, the electorate of Throsby embraces the south coast area of New South Wales from Warilla to Shoalhaven Heads. Tourism is a major industry, as people from all over Australia take advantage of the fine south coast beaches. This Bill will help to keep those beaches free from pollution being dumped at sea. It will also help to protect the important south coast fishing industry. I do not wish to be too parochial in this regard. This Bill will help to protect the beaches and the fishing industry not only in my electorate but throughout Australia. Mr Martin —Not to mention Macarthur. Mr HOLLIS —Not to mention Macarthur, which has very nice beaches, but they are not as good as those in the electorate of Throsby. It is therefore pleasing that there are additional safeguards in respect of the Great Barrier Reef. Special recognition of this unique area is contained in the Bill. This special recognition is maintained. As the shadow Minister mentioned, the discharge of chemicals, sewage and garbage in the Great Barrier Reef area is specifically prohibited. This Bill is a further indication of the Government's firm commitment to ensuring Australia's acceptance of conventions which have benefits for Australia and which will enhance our reputation internationally. Our national transport policy supports the promotion, conclusion, ratification and application of transport conventions under the auspices of the United Nations and its specialised agencies-in particular, the International Maritime Organisation. I digress slightly to say that, at a time when the United Nations and its specialised agencies are under growing attack, it might be enlightening for those critics, both here and overseas, of the United Nations and its specialised agencies to look at the work of bodies such as the International Maritime Organisation. (Quorum formed) Again we have seen the pettiness of the honourable member for Groom who seems to have a personal vendetta against me because he keeps calling quorums. There are still only three members of the Opposition in the House; so much for the Opposition's interest in the Protection of the Sea Legislation Amendment Bill. Australians, like people in other places, have become conservation conscious and this applies as much to the control of pollution at sea as it does to pollution on land. We do not want a situation developing in Australia, especially in our coastal areas, such as that which is happening at this very moment in the Rhine River in Europe because of a marine pollution spill. The Rhine is being turned into a dead river in the very heart of Europe. Toxic wastes from a pollution spill are destroying all life in the Rhine. We do not want that to happen here and this Bill will go a great way to prevent it. Since coming into office this Government has had an excellent record on environmental issues. The Hawke Government has demonstrated an active participation in the work of the International Maritime Organisation and Australia has become a party to a number of its conventions. It is of fundamental importance that we face up to our responsibility and that we continue to provide a high level of protection to our maritime environment. The Bill contains amendments to the Protection of the Sea Act 1983 and the Navigation Act 1912 and enables Australia to implement annexes III, IV and V of the International Convention for the Prevention of Pollution from Ships 1973. There is bipartisan support for the Bill; other speakers will go into it in greater detail. As it looks as though I will have quorums called while I am speaking, I will wind up. I do not think there will be great opposition to these government measures. I believe that the amendments contained in the Bill will result in substantial improvement in both the control of ship source pollution and compensation available for damage caused by a pollution incident and will maintain Australia's position of being in the international forefront in the field of maritime pollution convention implementation. I commend the Bill to the House. Mr EVERINGHAM(Northern Territory)(4.54) —Quite understandably, the Minister for Transport (Mr Peter Morris) used the opportunity presented by the Protection of the Sea Legislation Amendment Bill to wax lyrical on the achievements of the Government on the protection of the seas. Quite correctly he states that our extensive coastline and spread of territorial waters represent a national asset of immense economic and recreational worth. I agree that it is imperative that we should continue to extend the highest standards of protection to those waters. When one flies from Perth to Darwin and from Darwin to Cairns one wonders how it would be feasible to extend the highest standards of protection to those waters. Nonetheless I support that as a principle whilst recognising that at the present time probably, other than the passage of legislation, very little is being done in a practical sense to afford protection to those waters. While there is no doubt that this Bill and earlier legislative moves in the same direction will help to protect the ocean environment this Government is giving contradictory signals on the protection of our seas. In particular, I raise the question of very necessary research and investigation of our coastline and waters because if we know little about our aquatic environment it follows that we cannot know best how to protect it. In the words of Longfellow: `Wouldst thou'-so the helmsman answered,- `Learn the secret of the sea? Only those who brave its dangers Comprehend its mystery.' It seems that under this Government those who would brave its dangers will no longer be able to do so due to the announced 25 per cent funding cutback in 1987 and apparent intention of the Government to dispense altogether with marine research in 1988, a sad thing to happen in our bicentennial year. The marine science and technology grants scheme was commenced under the previous Government in the late 1970s specifically to address the sad luck of knowledge that Australia holds about its surrounding oceans. Since then some 150 researchers a year have benefited from the scheme and contributed a great deal to the formerly small store of knowledge about Australian oceanography, estuarine systems, coastal and ocean engineering, environmental pollution and related fields. However, all that is about to end. The Government intends scrapping the scheme and forcing marine researchers to gain their grant funding by competing alongside all the other academics and scientists under the general Australian research grants scheme. I cannot emphasise enough what this will mean to the advance of knowledge in Australian marine science. Quite literally it will be cut off at the knees. Marine science research is always more expensive than terrestrial research involving, as it must, high cost equipment, sea travel and all the other complications of marine studies. This is particularly true for northern Australian marine research where most of Australia's most urgent and necessary studies must be carried out because of the necessity to use laboratory and study facilities located in the south and other cost factors of isolation. Therefore, it is clear that if marine researchers are forced to compete with all other researchers for an annual and reduced pool of funds marine studies will fall behind dramatically. The irony is that a part of the Government's justification for this year's 25 per cent cutback in funding and next year's total abolition of the marine sciences and technology grants scheme is that it has been so successful. The Government seems to be under the impression that past success provides the proper qualification for future cutbacks. I do not oppose the intention of this Bill but I use my time to make a plea on behalf of all those who are daily advancing our knowledge of the environment that this Bill will help to protect. The marine sciences and technology grants scheme has not achieved all that it was set up to achieve. In fact it has only just begun to assist the long term effort of some clearer understanding of the muddy waters of marine research. I will give just two examples. The first is that the Darwin-based research in northern waters on the distribution and abundance of trash fish-the additional and presently peripheral catch of northern prawn fishermen-has recently been completed. This resource presently goes to waste but it has the potential to boost industry earnings. Secondly, in 1988 and 1989 it is proposed that we study the mangrove ecosystems, geomorphology and sedimentary habitats of Darwin Harbour. Both of these projects are vital to the overall development of a coastal management strategy for the entire Northern Territory coastline. They have been identified as priority research programs by no fewer than eight government departments involved in various ways with the coastal management policy. Our understanding of the coastline and seas is the very basis of legislation such as this and yet our knowledge is in its infancy. We all recognise the need for reductions in government expenditure as a result of the profligacy of this Government in its term of office. However, I suggest most strongly that the Government seek to make its cuts in the fields of social engineering rather than ocean engineering. This Government seems to have endless funds available to prop up underachievers, to enforce its peculiar preoccupations on business, to establish new commissions and offices of vague social ideals and to provide grants for creative artists, for union organisations and peace buses for professional travelling protesters. Such funds would be much better invested in the economic future of Australia, and a clearer understanding of our marine resources would contribute greatly to that future. Mr O'NEIL(Grey)(5.01) —It gives me a great deal of pleasure to have the opportunity to speak today in support of the Protection of the Sea Legislation Amendment Bill 1986. As a person who spent a number of years in the late 1960s and early 1970s working in the waterfront industry, I am well aware of the pollution that can take place in our harbours and off-shore waters. I am, therefore, extremely pleased to see this legislation brought before the Parliament. I feel that it will be applauded by those in this House, and in the community at large, who care about the delicate marine environment that surrounds our island continent of Australia. In essence the legislation will amend four Commonwealth Acts to facilitate the implementation of a number of anti-pollution measures which have been incorporated in international conventions to which Australia is a signatory. The Bill also contains amendments to penalties provided for in the Navigation Act 1912 and the Protection of the Sea (Prevention of Pollution from Ships) Act 1983. Being an island continent, we rely almost exclusively on the shipping industry for transportation of our exports and imports. Trade with other nations is the life- blood of our country and, to a large degree, depends on an efficient and cost effective method of transporting goods and materials between Australia and our trading partners. The maritime industry, particularly the Australian maritime industry, provides this vital connection with the world at large. In the first three years of the Hawke Labor Government there has been a renaissance in the Australian maritime industry. This is in no small part due to the approach of the Minister for Transport (Mr Peter Morris), who has fostered and promoted the resurgence of a strong and competitive Australian maritime industry after many years of neglect by successive coalition governments. I pay tribute to the Minister for his efforts in this area and I also pay tribute to the good sense of maritime unions and their membership which have co-operated in an outstanding fashion with the Government and with maritime employers to create the environment in which the Australian maritime industry can flourish. This is yet another example of what can be achieved when governments, unions and employers sit down seriously to attempt to resolve problems in a co-operative manner. This is something that the pedlars of conflict and confrontation on the other side of the House will never understand. They should hang their heads in shame for they would see industries like the Australian maritime industry destroyed rather than change their perverse views and policies on industrial relations. Our reliance on shipping as the carrier of our international trade brings with it a whole set of problems which need to be addressed. One major problem is, of course, pollution of the marine environment which can be accidental, incidental or deliberate. With approximately 6,000 ship visits to our shores each year the magnitude of the problem becomes apparent. Some would argue that, whilst pollution of the oceans can be damaging, its effects are not irreversible. This is to a degree correct. There is in fact an inbuilt capacity within ecosystems to recover from some forms of pollution. However, this is not so in all cases and surely prevention is the best cure. Unfortunately, for many years the human species has used the 78 per cent of the world's surface that is water as a repository of its wastes. The world's oceans and waterways were seen as little more than massive sinks into which we deposited all of our unwanted by-products and rubbish. Over the years, attitudes have changed and by and large this type of behaviour is no longer tolerated. It is now well understood that the ocean's capacity endlessly to accept wastes is not unlimited and within this realisation has come legislation to govern the disposal of wastes at sea. One of the areas most sensitive to the effects of pollution, and also one of the areas most productive in terms of its ability to support life, is the shallow waters of the continental shelves. Unfortunately, these are also the areas where the input of wastes are at their highest. It is estimated that as much as 240,000 tonnes of sewage and 3,750 tonnes of garbage can be dumped in our waters per annum without fear of prosecution. This is indeed an undesirable activity and I believe that the vast majority of Australians would wish to see an end to it. The measures in this legislation will go a long way towards reducing the risk of pollution in our coastal waters. The Bill will facilitate the implementation of 1985 amendments to annex II and Protocol I of the International Convention for Prevention of Pollution from Ships-the MARPOL Convention. The first covers noxious liquids carried in bulk and the second sets out pollution reporting requirements. The Bill also will assist in the implementation of annexes III, IV and V of the MARPOL Convention as well as the 1984 Protocol to the International Convention on Civil Liability for Oil Pollution Damage. The details of these annexes and protocols are set out in the explanatory memorandum which accompanies this Bill, so there is no need for an explanation from me on the finer details. The Minister covered these points in his second reading speech. I am sure that he will discuss the finer points in his summary when he is replying to the second reading debate. Suffice it for me to say that all of these measures have had the support of bodies involved in the maritime industry, including the Australian Transport Advisory Council and the former Marine and Ports Council of Australia. It should also be remembered that the MARPOL Convention was originally ratified in Australia in 1974 after close co-operation with the States and Northern Territory. In relation to annexes III, IV and V of the MARPOL Convention, it is proposed that continuing consultations will be undertaken with the States and the Northern Territory to ensure the development of uniform legislation. It is proposed that the Commonwealth will legislate to control discharges from Australian ships on the high seas and that the States and Northern Territory legislate to prohibit all discharges from ships in coastal waters. This close co-operation will give us uniform legislation which will provide the protection required for Australian coastal waters, and we will also be playing a responsible role in protecting the open oceans. A further function of the Bill will be to ensure that adequate compensation is available to persons who suffer oil pollution damage from ships carrying oil in bulk as cargo. The liability limits established in the 1969 civil liability convention have become, with inflation, inadequate. The 1984 protocol to this convention addresses this problem by setting new limits and also by providing a mechanism by which limits can be increased in future. This legislation will ensure the control of ship-sourced pollution in Australian waters and will also ensure that adequate compensation is available when pollution occurs. I believe that this course of action deserves the support of both sides of the House. It is gratifying to see that it has received bipartisan support despite the usual diatribe from the honourable member for Northern Territory (Mr Everingham). But this is not new; it is something which we on this side of the House are getting used to. This course of action has the support of State and Territory governments and also the support of environmentally conscious Australians. I pay a tribute to the maritime unions because of the constructive role that they have played and particularly because of their positive and objective approach in discussions with the Government and the Minister for Transport. We are now getting to the stage where we really have a viable shipping industry. The maritime unions can hold their heads high for the positive approach that they have taken to bring this about. I congratulate the Minister for Transport for introducing this legislation. I have no difficulty at all in commending this Bill to the House. Mr WEBSTER(Macquarie)(5.10) —The Protection of the Sea Legislation Amendment Bill is a very important Bill and I am a little disappointed that there are not more members listed to speak on it. I was asked earlier why I wanted time to speak on the Bill as I come from a landlocked electorate. I want to do so because passing through my electorate is the magnificent Hawkesbury-Nepean River which flows into the beautiful sea that surrounds this country and I believe that that river needs to be given considerable protection from the problems confronting it. I am also interested in this legislation as I am the Deputy Chairman of the Standing Committee on Environment and Conservation and I therefore felt it necessary to speak on this subject. I would first like to make a couple of comments about the oceans. I have done a little research which has revealed that nearly three quarters of the earth is covered by the sea. As has already been mentioned, the sea is the unique asset of our small world. As far as we know no other star or planet has water on its surface. Only minute traces of water in liquid state have been found anywhere within reach of our telescopes or space probes. Nearly four-fifths of all the plants and animals on earth live in the shallow coastal seas fringing the continents. They yield almost nine-tenths of the world's annual harvest of fish and shellfish. Countless minute plants drift in the waters, staining them green. Millions of tiny animals graze these floating pastures and in turn are eaten by the huge schools of prowling fish. Seabirds skim above the waves scooping up prey. On the seabed forests of undulating seaweed cling to the rocks and a host of creatures filter the water for food. Today we are dealing with how we can protect the complex ecosystems and food chains that exist in the seas and oceans surrounding this continent and for which we are therefore responsible. I use the word responsible deliberately. We should be clear in this place that we are stewards over these vast, beautiful and bountiful seas and oceans. We are stewards firstly to the people of Australia who have given us the power to develop the necessary laws in these areas. But ultimately I believe we are stewards to Almighty God, our Creator, to whom we are ultimately accountable, whether we believe it or not, for the care we take in both caring for and developing the resources of the seas around us. Indeed Madam Speaker, every day, prays in this House for such wisdom. Jacques Cousteau has suggested that one of the great conservation and resource questions before humanity today is: Can the sea help mankind survive? What is more, can it help man not only to survive but also to lead a full and rewarding life; in other words to live rather than to exist? Cousteau is, of course, referring to the still underutilised potential of the sea as a source of food, and high protein food in particular. This legislation is part of a continuing effort by this Parliament, under governments of both the Australian Labor Party and the coalition, to fulfil the responsibilities we have in terms of that stewardship of which I have spoken. It is part of an ongoing response to the questions which Cousteau and others have raised around the world. The Opposition has always supported the International Convention for the Prevention of Pollution from Ships, or MARPOL. In 1983 we supported legislation covering Convention annexes I and II, which covered oil and noxious liquids. Earlier this year legislation which increased coverage of this to Australia's territorial sea and coastal waters was also supported by the Opposition. This Bill will enable the remaining annexes III, IV and V to be implemented by complementary State, Commonwealth and Territory legislation. These annexes cover the discharge of sewage from Australian ships over 200 tonnes or carrying more than 10 people. They cover pollution from garbage and the dumping of synthetic ropes and fishing nets, and they deal with the responsibilities and liabilities of ship owners in regard to the pollution of our seas and oceans. The legislation also provides for the special protection of the Great Barrier Reef, and we are all very glad to hear that. The Opposition supports this legislation without hesitation. Its support reflects its deep and common sense approach to conservation in general and it shows that where the Government moves beyond the grandstanding or politically motivated conservation action of the type we have seen in regard to Tasmania and Kakadu of late, it will win bipartisan support. In my discussions on this Bill one interesting point was noted concerning the problem of sewage discharge, and I refer to it as my last comment on this policy area. It seems strange that we should be drafting legislation which establishes responsibilities, liabilities and substantial penalties for the discharge of sewage from ships when, the beaches and coastal waters in my own State regularly see the discharge of sewage whenever the unions choose to use raw sewage discharges through strike action to place pressure on the Government. In my final sentence I suggest quite strongly that to be consistent in this regard the Government should discuss liabilities and penalties in that situation with State Ministers as soon as possible. Mr RONALD EDWARDS(Stirling)(5.16) —We on this side of the House are pleased to see that the Opposition is supporting the Protection of the Sea Legislation Amendment Bill. As previous speakers have said, the matter of the protection of the marine environment is of concern to the Australian community at large. It is a truism that the marine environment is one that most Australians come to enjoy at some stage during their lives. It is also true that at this time of the year, when summer holidays are approaching, the marine environment represents the environment to which most people turn for their recreation. We at the national level have a responsibility to try to ensure that the decisions we make about the marine environment are those which have in mind the best interests of the Australian community. We recognise that the marine environment caters for a number of roles, and let me refer to them. For example, by definition the marine environment has a role in transport. In that sense it provides some degree of conflict between that role and other roles, but the transport role is quite central and significant and it has been a very historical role. The marine environment also provides a recreational role and a tourism role. Anyone listening to this debate would know that the role of tourism is central in the America's Cup which is presently being held off Fremantle in my home State of Western Australia. As I have indicated, the environment also provides that recreational role for people so they can go to the seaside and enjoy it. It also has a commercial role with respect to fishing, and fishing is of concern not only to those involved in that industry but also to those who enjoy the products of it. Where there are conflicting environmental roles of that nature, we will find that as a government we have to make decisions to try to resolve the difficulties and differences in those roles. It is in this context that, when debating the Protection of the Sea Legislation Amendment Bill and the ratification of the International Convention for the Prevention of Pollution from Ships, the MARPOL Convention, we, as a government and as a parliament-the Opposition is supporting this legislation-believe that certain protocols ought to be adhered to with respect to transport activity. Certain matters ought to be dealt with very severely if, for instance, people transgress in relation to that transport. The previous speaker, the honourable member for Macquarie (Mr Webster) was quite correct when he listed those issues. Very often we find that spills at sea or the results of other activities undertaken by people at sea have a detriment. In my own electorate of Stirling, which has the coastal beaches of Scarborough and Trigg, initially quite a bit of waste was washed up on to those beaches as a result of the America's Cup elimination trials. People have heard of the breeze called the `Fremantle Doctor' which is a prevailing south west wind. In fact there was an amount of material washed up on the beaches. I am pleased to say that the State Government and the Marine and Harbours Department were very alert to this, and when local residents raised this problem it was dealt with very effectively. The State Government, through its appropriate authorities, very sensibly deals with the potential for marine pollution. When there is a large spectator fleet and a larger number of competing yachts, it only follows that there is a potential for marine pollution. The State Government has very sensibly planned ahead in trying to cover that problem. We are more fortunate in Western Australia than people in Sydney, as we do not have the sewer outfall that is really a curse of life to surfers and to beach goers. Western Australia does not have that degree of sewer outfall into the ocean. That is an example that we in this place ought to bear in mind when we talk about marine pollution. Earlier this year there was a quite substantial oil spill in Western Australia. It occurred in July and resulted from a breakage of an oil pipeline. The Fremantle Port Authority, with the Marine and Harbours Department, had a real life situation to deal with. It turned out that with the use of mechanical booms to control the oil spill they were able to achieve success in mopping up the spill. In this case the authorities concerned, the BP and Shell oil companies, also acted responsibly; they recognised that they had a responsibility. We were more fortunate in this sense because we knew the source of the pollution and also because we had responsible authorities which were prepared to say, at the government and private levels, that we had a problem which should be dealt with. That is not always so straightforward when dealing with shipping that comes to and from the ports. That leads me back to the legislation. Very often there will be irresponsible masters of ships who are prepared to discharge pollutants into the ocean. In that sense we have an international arrangement which this legislation specifically addresses. When we talk to people who are affected by marine spills as we were with the spill in July in Western Australia, it is important to note that there was quick action and whilst the clean-up operation was bedevilled with fairly strong winds it ultimately resulted in a satisfactory resolution. The West Australian of Tuesday, 29 July, stated: As the clean-up operation continued in Fremantle yesterday, unpredictable northerly winds had made it difficult to control the slick that had escaped into Cockburn Sound. By late evening part of the slick measuring three kilometres long, a metre wide and five centimetres thick was washed up on Garden Island. People who have been involved with spills will recognise that what was on the beach was not just something that is like the oil that is normally used in motor vehicles; it is very tarry and sticky at that stage and very difficult to handle. With the development of what I refer to as detergents for cleaning up oil spills the public has the notion that if detergent is produced it will solve the problem. In fact, many environmentalists would argue quite convincingly that the detergents themselves can have a greater negative environmental impact than can the original oil spill. It does create a problem, and that is why I referred earlier to the fact that very often the use of mechanical booms is a more effective way of controlling marine oil spills in particular because oil floats in water and can be contained and gradually mopped up. It is an issue in which everyone in Australia, if I could use the term, has a vested interest because as I began to say at the outset the beaches represent the important recreational environment for so many people. It also happens that the beaches are washed by oceans that represent an important transport environment. We will find those conflicts of interest. This brings me to an important issue in this legislation; the question of drilling in sensitive areas. There is some concern in Western Australia at the moment about future oil drilling in oceanic environments. That is something of which the State Government is aware and of which we, at the national level, are certainly aware. It is an issue that the community must always be apprised of. We need to recognise that with many activities we undertake, be they mining activities in the case of oil drilling, be they transport activities in the case of shipping, or be they commercial activities in the case of fishing, there are side effects of which we have to be conscious. The crucial point about this legislation is that it says that this country has a responsibility in those respects and that we will honour that responsibility. In the context of this, it is important to say that both sides of Parliament recognise that this is an important issue. Many people in the community say that members of Federal Parliament spend a lot of time arguing with one another. It is proper that there should be argument and it is proper to point out that consensus and bipartisan support take place. It is taking place in the debate on this legislation. I close by saying that one of the great challenges we will face in the future in the marine environment is the continual need to make decisions between a variety of conflicting goals. The transport goal is one; the tourism goal is another. There has been considerable conflict over Scarborough Beach, which is a metropolitan beach in my electorate. There has been debate about developments there and about the need to boost the economy by having tourism projects. We will find that there will be continuing pressure. It is my view that debates such as this are very important and central because they draw to the public mind a realisation that we as a community have to make decisions, make choices and take stands about issues that we think are important. It is also my view that we tend to take our beaches for granted. We tend to assume that they will always be there. We tend to assume that they will always be in pristine conditions. It will not always be so unless we are careful and conscious of our duty of care towards the marine environment. This legislation specifies one aspect of that duty of care, but I think that is only part of it. The other part is that we as a community have a responsibility to ensure that we do not leave rubbish on the beach and that we treat the beaches with respect. It is one thing for the national Government to take legislative action and it is another for the community as a whole to recognise its responsibilities for its own area of activities; in this case the beaches. We will do our bit; we will pass legislation. We are saying to the transport industry that the legislation has an impact for it. We are also saying to the wider community to recognise that it has responsibility. Beaches are for everyone and are to be taken care of. We do not need crazy development or excessive development; we need a sensible responsibility by the community to that very important environment. I am pleased to commend this legislation to the House. Mr PETER MORRIS(Shortland-Minister for Transport)(5.28) —in reply-I thank those honourable members from both sides of the House who have participated in this debate. I refer to the honourable member for Murray (Mr Lloyd) and the honourable member for Macquarie (Mr Webster), and particularly the honourable member for Throsby (Mr Hollis), the honourable member for Grey (Mr O'Neil) and the honourable member for Stirling (Mr Ronald Edwards) for their positive and constructive contributions. It is a rare occasion that we have bipartisan approaches to legislation of this nature and it is to the benefit of the nation that we can find issues which can be approached in a bipartisan way particularly when looking at the value of the environment we are seeking to protect and its meaning and value in the future. There was one harsh note only that came from the honourable member for the Northern Territory (Mr Everingham). He maintained his usual negative approach while again demonstrating a capacity for inaccuracy. He claimed that the marine science and technologies grant scheme will be abolished in 1987. That is not correct. The Minister for Science (Mr Barry Jones), while regretting the small reduction that has occurred in this year's Budget allocation for marine science, has made it quite clear that the scheme will not be abolished in 1987. The Minister has advised me that he has received a number of letters complaining that he proposes to abolish the scheme. I repeat that he has made it quite clear that that is simply not correct. Obviously, all the misinformation which the honourable member for the Northern Territory has picked up has a common source. There are five annexes to the International Convention for Prevention of Pollution from Ships to which this Bill refers. Annex I covers oil and oily substances, annex II covers bulk chemical and noxious substances, annex III covers packaged substances, annex IV covers sewage and annex V covers garbage, including packing materials and dunnage. These terms often confuse those who try to understand the complex nature of this legislation. There are those among us who feel that the time being taken to enact this type of legislation-to reach international agreement on the conventions and then to implement the conventions-is far too long. Unfortunately, the complexity of the task is such that it takes a considerable amount of time, particularly when first we have to get the agreement of a sufficient number of nations to ratify the Convention, and secondly, in our case, we have to get complementary State and Federal legislation to enact the provisions of the Convention. So whilst some may be impatient, including me, we ask all those concerned to recognise the complexity of the task and the reasons that lie behind it taking so long. It is legislation of which the House can be proud. It will certainly provide us with the means to protect our marine environment, our valuable coastline and, most of all, the Great Barrier Reef. I thank honourable members who participated in the debate and have pleasure in commending the Bill to the House. Question resolved in the affirmative. Bill read a second time. Leave granted for third reading to be moved forthwith. Bill (on motion by Mr Peter Morris) read a third time. Debate resumed from 15 October, on motion by Mr Hurford: That the Bill be now read a second time. Mr ROBERT BROWN(Charlton)(5.33) —The purpose of the International Financial Institutions (Share Increase) Bill 1986 is to empower the Treasurer to make agreements on behalf of Australia to purchase, in the first instance, 815 additional shares of the capital stock of the International Bank for Reconstruction and Development and, secondly, 14,560 additional shares of the capital stock of the International Finance Corporation. These provisions relate to the Government's obligations under its membership of the World Bank group and, in particular, of the International Bank for Reconstruction and Development and the International Finance Corporation. The articles of the International Bank for Reconstruction and Development were drawn up in 1944 at the Bretton Woods Conference. Membership of the bank, which began operations a couple of years later, in 1946-47, is restricted to members of the International Monetary Fund which ratify the articles of the bank and accept the terms laid down by it. The purpose of establishing the International Bank for Reconstruction and Development, which became known as the World Bank, was to promote the international flow of capital for productive purposes and to assist in financing the rebuilding of nations that had been devastated in the Second World War. Lending for productive projects which will lead to economic growth in its less developed member countries is now the bank's main objective. The bank is also attempting to increase the proportion of its lending which directly assists the poorest people in the developing countries. As at 31 March this year, effective loans by the World Bank totalled $US89,084m-a very substantial amount. The authorised capital stock of the bank, which was originally $US10,000m, was successively increased to $41,016m in 1978. A doubling of the authorised capital to the equivalent of 70,500 million special drawing rights was approved in 1979. A further capital increase to accommodate the People's Republic of China brought the authorised capital to SDR71,650m when the People's Republic of China became a member. The authorised capital at present stands at $US71,650m. The members' capital subscriptions are divided into three parts which are relevant to understanding the nature of the contribution which Australia will be making. One per cent of the total authorised capital is payable by member countries in gold or US dollars. Nine per cent is payable in the member's own currency. Ninety per cent, which has not been paid, may be called up when required. So when we talk in terms of the total monetary commitment of member countries of the World Bank we need to keep in mind that 90 per cent of its total authorised capital has not been called up and would be called up only when and if required. The bank obtains most of its funds from borrowing on international capital markets. In effect, it uses its callable capital-that is, the capital which member countries undertake to subscribe-as its security. As at 31 March this year the bank had outstanding borrowings which totalled almost $US67,000m. Membership of the IBRD at present stands at 149, representing countries at all levels of development throughout the world. The second element of this legislation is to provide, as I indicated, for Australia to purchase 14,500 additional shares in the capital stock of the International Finance Corporation. It is apparent that the purpose of doing this is not only to build up the authorised capital of these international institutions but also to increase their capacity to borrow money using the approved capital at call as security. The International Finance Corporation was established in 1956 and became a specialised agency of the United Nations in the following year. Although it is affiliated with the International Bank for Reconstruction and Development, it has a separate legal entity and its capital is entirely separate from that of the bank. It borrows most of its funds for relending from the IBRD. In 1977 it expanded its operations into more developing member countries, particularly the lower income countries, and into new sectors such as agribusiness, energy and minerals. At 31 March this year investments by the IFC totalled $42,364m in 74 countries. The IFC is empowered to invest in productive private or partly governmental enterprises in association with private investors, and without government guarantee of repayment in cases where sufficient private capital is not available on reasonable terms, and to serve as a clearing house to bring together investment opportunities, private capital-both foreign and domestic-and experienced management. Its special purpose is to promote the growth of the private sector and to assist productive private enterprises in its developing member countries where such enterprises can advance economic development. The membership of the IFC stands at 127. Australia is entitled to subscribe to 745 shares under the special capital increase and to 70 shares under the increase in certain subscriptions-that is, a total of 815 shares-to the IBRD. Those shares are valued at $US98.32m. In practice, as I indicated, the callable capital of the bank-I do not think that it has ever been called-serves as security for the extensive borrowing operations of the World Bank on world capital markets. There is also agreement for the purchase of those additional shares of capital stock of the International Finance Corporation. In relation to this, its represents a doubling of the authorised capital stock from the $650m which had been approved in 1977. Under the resolution which gives effect to these changes Australia is entitled to subscribe to a maximum of about 14,500 shares. The subscription price per share is $US1,000. Australia would be required to pay 40 per cent of the subscription price at the time the shares are subscribed with the balance to be paid in three annual instalments of 20 per cent by 1 February 1990. As I indicated, the purpose in this exercise is simply to make it possible for Australia to acknowledge and act according to the responsibilities which we undertook when we became a member country of both those institutions. More recently, the problem of world debt which faces many less developed and developing countries has attracted the attention not only of international financial institutions but also of national governments of varying levels of development throughout the world and international agencies. They have been sometimes of very crushing importance to the developing countries. Many of these developing countries have attempted to correct their external imbalance by stifling domestic activity, economic growth and employment and hence stifling domestic demand because they have become aware that it is necessary for them not only to reduce the demand which they make upon the resources of other more developed countries but also to increase their capacity to export in order to earn the foreign currency which is necessary for them to participate in turn in world commercial activities. That problem faced by these developing countries has sometimes been of an extent which threatens to upset the balance of the world monetary system and the relationships among various countries. These developing countries have also been confronted with high levels of protectionism within the European Economic Community and North America. By 1984 the level of real growth in those developed countries which had also gone through the experience of stifling domestic demand to maintain an appropriate external balance reached almost 5 per cent. That level of real economic growth should be the target and it should prove possible to maintain it. Unfortunately, it has not been maintained. Australia is one developed country which has experienced those same types of difficulties and problems. We are in the process of gearing back, as a result of deliberate Government policy, the rate of economic development to ensure that it is more in accord with that of overseas countries and will not have the effect of increasing Australia's domestic demand on the resources available. Hopefully it will also have the effect of releasing resources to make it possible for Australia to export more. Of course, the difficulty is that those changes are not happening quickly enough. This lies at the basis of many of the problems that we are experiencing at present. It is not only developing countries in connection with their international financial obligations which have been in difficulties as a result of protectionism in Europe and North America, but also countries such as Australia which depend almost exclusively and increasingly on the large bulk commodity items-raw materials, minerals, energy resources and primary products such as wheat, wool, meat and sugar. Developed countries should be major markets and should assist in the export capacity of developed and developing countries to protect their own industries. It is interesting to note that in 1984-I suppose that in 1985 the figure would have been greater and in 1986, this year, perhaps even greater again-the European Community spent $23,000m in agricultural subsidies. This type of approach, combined with what has become known as the green revolution which has made it possible for developing countries which at one time were net importers of grain and foodstuffs to become net exporters, means to a very large extent that the world at the moment has literally mountains of grain and various types of agricultural products. From the point of view of the Economic Community and North America it may be desirable to achieve self-sufficiency but in the European Community that has meant that that bloc has become a massive holder and exporter of subsidised products, especially grain, sugar, dairy products and beef. All these forms of imbalance among the developing and developed countries and the way those imbalances have been allowed to persist without adequate responses being made available within the developed or developing countries have resulted finally in a massive transfer of wealth not from the developed countries to the developing or less developed countries but in the opposite direction. To some extent again this has been the experience of Australia. The developing countries have experienced a significant downturn in their terms of trade. They have experienced a dramatic fall in and collapse of their commodity prices with the result that non-oil commodity prices this year, for example, will fall by another 18 per cent. This follows after those very dramatic falls in bulk commodity prices throughout the world over the last couple of years. The current account will improve for industrial countries by between $40,000m and $50,000m this year, not because of any increase in the volume of their exports but because of the reduction in the prices that they are paying for their imports of bulk commodities from an increasingly impoverished Third World-the developing and underdeveloped countries. All those terms relate to the same family of countries that are experiencing increasing and massive problems. The reduced relative demand for exports from those developing countries compared with those from developed countries has meant that the combined current account deficit of developing countries last year was about $19,000m. From $19 billion last year this year the figure is expected to be $50 billion, so the problem continues to grow. This brings about for developing countries a massive burden of debt servicing costs, with the result that in some of those countries the cost of servicing their foreign debts is in excess of the total amount they can expect to earn from their exports. It is no lack of effort on the part of these countries to produce and it is no lack of effort on the part of these countries to sell. They are selling the same quality and quantity and they are getting significantly less. At the same time the more sophisticated manufactured and processed goods which they depend upon buying from the developed countries have experienced a comparative price rise. It is rather appalling as a result of the free operation of these international market forces that circumstances should be set in train which have the effect of redirecting massive volumes of finance, massive volumes of resources and massive volumes of debt from the most impoverished countries to the most developed and affluent countries. There is a challenge before the international community. If it is to lay claim to any degree of international morality, the challenge lies before all countries, both as individual countries and as members of those international agencies, authorities and organisations within which they are associated and of which they are members, to face up to the realities of these circumstances and not to allow themselves to support, maintain and proclaim that the free operation of international market forces is sufficient to bring about a ready resolution to problems of that kind. Quite clearly the free operation of international market forces is not adequate and will never be adequate to bring about a resolution to difficulties of that kind. It should not be that the more affluent countries and the inhabitants of those countries find their own material welfare substantially elevated as a result of this massive transfer of resources, wealth, production and finance from less developed countries. Mr DEPUTY SPEAKER(Mr Ruddock) —Order! The honourable member's time has expired. Mr CARLTON(Mackellar)(5.32) —I could hardly believe my ears for the last five minutes or so of the peroration of the honourable member for Charlton (Mr Robert Brown). I have never heard such an extraordinary contradiction in my life. The reason why the underdeveloped countries have got into such trouble and have such massive debt problems is, firstly, that in a lot of cases their internal economies have not encouraged free enterprise. The countries that have encouraged market forces and free enterprise within their own countries have done better than those that have had centrally controlled economies. I think that Mr Julius Nyerere's control of Tanzania's economy over 20 years was a means of impoverishing that economy which would not have happened otherwise. Economies which have had internal arrangements which are more conducive to private investment and competitive enterprise have been more successful. That has been a reason for some of these countries not doing so well and the second reason is not the free international flow of market forces, as the honourable member said, but the protectionist policies of developed countries. The honourable member has the hide to come in here and tell us that these impoverished Third World countries are in difficulty when he, as the chairman of his own Party's economics committee, put up an extraordinary plan only a few months ago for physical controls on imports. That would have a direct effect on the economics of the less developed countries. I was not going to enter into a debate on international economic forces, or the free international flow of market forces that the honourable member was talking about, but I could not let that unbelievable piffle pass unremarked. I have much pleasure in announcing that the Opposition supports the Government in respect of the International Financial Institutions (Share Increase) Bill 1986. It gives me great pleasure on occasions to support the Government's measures, particularly when the Minister for Immigration and Ethnic Affairs and Minister Assisting the Treasurer (Mr Hurford) is at the table, and not his boss. That is one of those nice little things that happen in this place from time to time. I will not delay the House very long, but just to make it clear what it is we are agreeing to, in August 1984 the governors of the International Bank for Reconstruction and Development, which is part of the World Bank Group based in Washington, agreed to an increase in the authorised capital stock of $US7 billion. This was in parallel with an earlier action in 1983 of the International Monetary Fund, of which we are also a member, to expand the quotas for individual countries. That is a normal thing that happens. Normally the World Bank follows the IMF in increasing its capital or, in the case of the IMF, its quotas. In September 1984 the governors also allowed members whose shareholdings had suffered a relative decline to regain their earlier relative share. Australia is in that particular position. These two resolutions of the governors allowed the Bank to expand its borrowings on world markets. The Bank had been set up to help the governments of the more advanced developing countries to borrow for productive purposes. The Bank borrows on world markets and then re-lends to these countries. Members of the IBRD are entitled but not obliged to take up the extra shares. Our total entitlement of 815 shares under the two provisions was $US98.32m, of which 91 1/4 per cent was to remain on call and 8.75 per cent, which is $US8.6m, was to be paid in. Ten per cent of that has to be paid in gold and United States dollars by 31 December 1986, which is $US0.86m from us, which we are going to pay once this Bill passes the Parliament, and the balance of $US7.74m, or $A12.29m roughly at current rates of exchange, will be paid in eight equal biennial instalments over five financial years commencing in 1986-87 at the exchange rate prevailing at the time the payments are made. The work of the IBRD is important in the South East Asian region. We do not automatically support proposals to provide funds or capital for international bodies. The Opposition examines each of these on its merits. There are some international bodies that might be highly suspect and they are matters which are the province of my colleague the shadow Minister for Foreign Affairs, the honourable member for Kooyong (Mr Peacock), who has conducted a policy review in these areas. In this particular area we regard the World Bank as one of the more established well-respected, useful institutions which do very useful work in developing countries, and that is why we support this particular measure. We wish we could say the same for all international institutions with which we are currently associated. The second affiliate of the World Bank included in this Bill, the International Finance Corporation, was established in 1956 to supplement the activities of the IBRD by providing finance and investment advice to private sector investors in developing countries. It is a much smaller operation. The IBRD had loans outstanding of $US105 billion in June 1986 and the International Finance Corporation had only $US2.4 billion outstanding, but those loans, of course, are to private developers in the developing countries. In this case the governors decided in December 1985 to authorise an increase in capital of $US650m, which doubled the capital of the IFC. Australia is entitled, but not obliged, to subscribe to an additional 14,560 shares at a cost of $US14.56m, all paid in in this case, first payment of $US5.824m to be made on 1 February 1987 plus three annual instalments of $US2.972 beginning in February 1988. The Opposition is pleased to support this measure and is hopeful that the work of those two institutions will materially assist in the development of countries at a less advanced stage of development than our own. Mr ROCHER(Curtin)(6.01) —In March last year and in the year before we legislated for Australia's further contribution to the International Development Association, the IDA. It is one of the arms of the World Bank. As I pointed out last year it, unlike the International Bank for Reconstruction and Development, the IBRD, is the provider of soft loans ostensibly to some of the less or least developed countries we set out to help as part of our multilateral efforts to give foreign aid. In the debate last year I questioned the wisdom of granting soft loans. The point needs to be stressed at the outset that because one of the international institutions in which these measures seek to increase Australia's shareholdings is the International Bank for Reconstruction and Development, the same doubts that I have voiced about the IDA do not necessarily apply to the IBRD. That is not to say that in the absence of vital information from the Government we should not give serious consideration to the proposals to increase Australia's shareholdings in either the IBRD or the International Finance Corporation, the IFC. First I make the point that there is no cost impact statement accompanying the explanatory memorandum. Certainly, with the resources at the Government's disposal it could have given fundamental information which, in the event, is lacking. It might be possible for me and others to project the all-up cost from figures and other information given, and only then subject to possible error because of the special provisions in the Bill as well as the vagaries of the value of the Australian dollar against the United States dollar. There is also provision for Australia to subscribe for some of its shares in gold but that alternative must be deemed highly improbable and not worth dwelling upon. Spelling out in clear and precise terms the cost implications of all legislation is but another of the solemn undertakings given by this Government which has gone by the board. It is just another broken promise in evidence on this occasion. Although one or two Ministers are notable exceptions, it is increasingly the case that the cost of proposed legislation is, unintentionally or otherwise, being kept from honourable members and therefore from the public. I come now to the core of the Bill as it affects the IBRD. It may be useful to note that it provides hard loans to member countries traditionally at or near commercial interest rates and on something approaching commercial terms. Where it has the need to borrow it usually borrows on commercial terms from the private capital market. Although we have been told that Australia voted to support the resolution of the International Monetary Fund which authorises an increase in capital for the IBRD, we have not been told the reasons. Why did we support the enabling IMF resolution? We are simply not told. In the second reading speech of the Minister Assisting the Treasurer (Mr Hurford) there is mention of the aim to restore the relative shareholdings of members as well as a restatement of the objectives of both the IBRD and the IFC. However, we are not told how or why increasing our shareholdings in either institution will serve our interests. In our formal foreign aid programs we can usually claim that our contributions serve our interests in either a general or a particular way, or both. There is nothing wrong with that although particular aid is questioned from time to time. In fairness to the Minister, he has stated that it is his belief, and therefore his Government's belief, that it is in our interest to continue to support these international institutions. The reasons he gives, however, do not go to the heart of the matter, or more accurately to the causative resolutions of the IMF and our support for them. It is safe to presume that the IMF resolution to increase the authorised capital stock of the IBRD by $US7 billion was passed only after discussion about whether there should be an injection of further capital or whether it should increase borrowings instead. After all, we know that the IBRD has previously borrowed heavily to be able in turn to lend. That is, after all, consistent with normal banking practice. In fact, we are advised that from 1947 to June 1986 the IBRD had lent a grand total of $US105 billion with an original capital stock of $10 billion. We do not know-we are not told-whether the total of $10 billion capital stock has been increased since 1947 but it seems to have been sufficient to cope with, along with borrowings from world capital markets, lending totalling $US105 billion to June 1986, or perhaps alternatively loans of that amount outstanding at that date. Even the current level of IBRD loans outstanding is not ascertainable from information and data accompanying the Bill. The Government says it is in Australia's best interests 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 IMF resolutions. But is it? Might it not be more in our interests to add the $US98.32m price for a further 815 shares in IBRD to our foreign aid vote over the same extended period that is to apply to the purchase of more stock? Let no one harbour the illusion that our contributions to IBRD are not in reality another form of foreign aid; they most certainly are. That being the case, it should at least be considered possible that direct, identifiable aid would serve Australia's interests better than channelling funds through an international institution and thus rendering our philanthropy anonymous in the hands of the recipient country. There appears to be nothing in the case stated by the Government to show that it might have deliberated along these lines. That is very surprising when we note how the Government rationalised reducing our foreign aid vote by $136m in real terms in its most recent Budget. Incidentally, the Opposition supported the need for expenditure cuts although with some real reservations about applying them so harshly to aid for Papua New Guinea instead of other recipients. As my distinguished colleague at the table, the honourable member for Kooyong (Mr Peacock), has noted, at a time when tough economic decisions are needed on the domestic front, no broad area of expenditure can or should go unaffected. It is a simple fact that our longer term ability to provide forms of special assistance and support to other nations depends on our own economic well-being. Even while we freely acknowledge that, the $US8.6m we will have to pay this year for new IBRD stock might be better used in Australia's national interests if it were granted in aid to Papua New Guinea. That $US8.6m translates into $A12m or $A13m. After all, we are not likely to see the money again in my lifetime, if ever. The same goes for the balance of just under $US90m to be paid over the next five financial years. That would arguably be better spent in aid to Papua New Guinea or in the South Pacific than it will be under these arrangements. In annexure A to the explanatory memorandum the member countries of IBRD are listed. There are 143 countries, of which Australia is but one. Alongside the name of each country is printed the number of shares for which it may subscribe. As with Australia, each country is entitled, but is not obliged, to take up a varying number of shares. Apart from losing some minute voting entitlement if others increased their holdings, there would have been no apparent disadvantage to Australia within the IBRD if we had decided not to subscribe voluntarily. So, let it be understood that there was, and is, no compulsion. We were in no way locked in. It must be also a reasonably safe bet that many of the countries listed will not accept the offer. Our entitlement to buy additional stock is the eighteenth largest of those of the 143 countries with entitlements. Among those countries with rights to buy more shares than Australia are Iran, Kuwait, Mexico, Nigeria, Saudi Arabia, and that current darling of the Australian Labor Party, Sweden. Will any of those countries-or, indeed, any of the other 142 countries-participate? We simply do not know, because we are not told. All of this brings me back to the point that we should question whether the Parliament has enough information to conclude whether the making of further contributions to the IBRD is the most effective way to channel our limited aid resources. We are talking about foreign aid. There is no apparent economic advantage to Australia and, indeed, none has been claimed or demonstrated by the Government. The charter of the IBRD is best expressed in Article 1 of its articles of agreement, which sets out: . . . to promote private foreign investment by means of guarantees or participation in loans and other investments made by private investors; and when private capital is not available on reasonable terms to supplement these private investments. Over the last seven years its lending has increased by 100 per cent to $US105 billion. It seems that there is not enough private capital available any longer on reasonable terms. The IBRD is therefore obliged to resort to capital raisings from member countries in a way that has not been apparent previously. Until June 1979 the major recipients of loans from this body were, in order, Brazil, Colombia, the Philippines, Yugoslavia and Mexico. At the time, those countries were ranked as either high or middle per capita income earners. They are not amongst the least developed countries and, in some cases, are competitors of unsubsidised, cost-efficient Australian commodities exports. Let not that fact be lost on anyone. IBRD development loans typically are over a period of 25 years, with the first five years a period of grace with regard to repayments of interest and principal. Of course, interest rates on loans vary according to the cost to the bank of borrowing. Given those few facts which the Government has not deigned to recite for the basic information of honourable members, perhaps understandably some concern exists about the future policy direction of the IBRD. Some of those doubts have been flagged by the United States House Appropriations Committee investigative staff report on international financing institutions. The Committee has found numerous shortcomings in the bank's policies. Today time does not permit me to canvass those short- comings. It may not even be necessary to do that. However, there is a formidable body of thought in the United States and elsewhere that has misgivings. That does not seem to have figured very highly in the information offered by the Government. That, in itself, is not necessarily important, except as an illustration of the paucity of information we have at our disposal in doing what I regard as our important work. One of the shortcomings in the bank's operations appears to be that it does not undertake surveillance of, or evaluate the effectiveness of, its loans in terms of its achievement of development goals. Allegations of the misuse of funds loaned by the IBRD abound, and there is at least some evidence to support a contention that the income share to the poorest 40 per cent in lesser or least developed countries has probably worsened. The other international financial institution which will benefit from the International Financial Institutions (Share Increase) Bill is the International Finance Corporation-the IFC. Established as it was in 1956, it has amongst its objectives the following: To further economic development by encouraging the growth of productive private enterprises in member countries, particularly in the less developed areas. A more specialised role, as described in an annual report, is this: . . . to mobilise private resources on commercial terms for development projects where a market-oriented approach is not only applicable but economically preferable and where they would not be undertaken in a timely or appropriate way without the Corporation's participation. In many ways the usefulness of the IFC is less questionable than that of the other international financial institutions to which we pay court in one way or another. On the other hand, for the purposes of meaningful debate, we again suffer from a lack of information about the real need for further shares. Australia is entitled to subscribe to a further 14,560 shares at $US1,000 each. The subscription price is also payable over a period, involving a deposit of 40 per cent followed by three annual increments of 20 per cent, the final payment becoming due on 1 February 1990. It needs to be said that the IFC is unique in the company of comparable international lending agencies. That is particularly because the IFC has the ability to make both equity and loan investments. It does not insist on recipient government guarantees on its loans, with normal maturity dates between seven and 12 years. At the most recent count, 123 nations were subscribing shareholders, of which 110 have entitlements to take up new and additional shares. Australia is but one, but it is distinguished from the majority in that it is once again a contributor and not a recipient. Australia has the eleventh highest entitlement of all the member nations to take up new capital stock in the IFC. Only one of the countries in the top 10 of proposed subscribers for new stock is in any way a recipient, as far as can be ascertained. That country is India. I have previously canvassed my views on that country's participation in the affairs of international financial institutions. I am content to refer anyone who is interested to the House of Representatives Hansard of 26 March 1985. As one of the youngest and smallest of the financial institutions affiliated with the World Bank and the International Monetary Fund, the IFC does not seem to have been subjected to the same critical scrutiny. If it has, the IFC has escaped criticism of the calibre levelled at others from time to time. That is probably due as much to the fact that it has not been bureaucratised to the extent to which other international lending institutions, including the IBRD, have been. However, the most likely reason that the IFC looks better when compared with the World Bank and its other affiliates is that it is bound to observe specific commercial operational practices. That is entirely commendable. In that context, it is instructive to note that the World Bank never foresaw the international debt crisis that now exists. That defect is despite the fact that the bank spent a hefty $US50m during the 1970s on a world development model that was supposed to project international development trends. In fact, nobody at the World Bank even programmed debt figures into the model until 1981. It transpired during the 1970s that many governments came to believe that the World Bank and its affiliates needed them as borrowers more than they needed the bank as the lender. The bank probably deserved that reaction from its customers because it seemed to bust a boiler in trying to peddle its wares. Because the coalition does not oppose this legislation, my remarks are intended to introduce the need for caution in continuing to subscribe our taxpayers' funds to institutions, the functions and efficacy of which may be outmoded. In particular, any Commonwealth government of the day should be ever alert to the possibility that money which is essentially part of our foreign aid effort might be better used. There must be always at least the possibility that we would be better off directing our humanitarian aid efforts bilaterally and pulling out of multilateral institutions where our interests may have to be sacrificed. Dr THEOPHANOUS(Calwell)(6.20) —The honourable member for Curtin (Mr Rocher) made some important points in his contribution but, unfortunately, he appeared to draw the wrong conclusion. He seemed to draw the conclusion that even though the Opposition will not oppose the International Financial Institutions (Share Increase) Bill he, personally, would like to see a re-evaluation of the whole issue of the contributions of Australia to the World Bank process. The problem with that is that it does not focus on what is the real difficulty. The real difficulty is that the World Bank needs to be restructured and its goals need to be reconsidered. However, one does not achieve that process, one does not achieve that situation, by withdrawing Australia from the World Bank process. What one has to do if one really wants to achieve a redirection of the activities of the World Bank is to get Australia and other nations involved in achieving that redirection. Why do I say that this is an important matter? It is an important matter because at the present time a major crisis is occurring in relation to the foreign debt of many Third World developing nations. There is an enormous financial crisis in these nations. Just to illustrate the point, a lot has been said about the emergency aid which was raised by Bob Geldof and many other people for Africa. One of the things that are not known, one of the things that have not been advertised, is that in the last 12 months Africa paid out four times as much money in debt repayments as it received in emergency aid. In other words, the debt burden of the African nations has crippled their capacity to use emergency aid effectively, to use that aid to rebuild Africa and, hopefully, to achieve a situation in which the starvation problem can be resolved. When we are faced with facts of that kind or when we are faced with facts about the crippling debt burden of Latin American countries or certain Asian countries there is a responsibility for the World Bank and other international organisations, such as the International Monetary Fund, to look sympathetically at the problem. The honourable member for Curtin mentioned that the World Bank is not achieving its goals at the present time. If that is the case what we need to do is ask: How can the World Bank and the IMF restructure their operations so that we can deal sympathetically with the problems of Third World nations? It is no good trying to pretend that a myth exists. Unfortunately, we have the rescheduling of debts, the further rescheduling of debts, a continual process of rescheduling of debts, but we have no recognition of the fact that these countries cannot pay even the interest on their debts. In that situation what is required is for us to bite the bullet and to consider the possibility of writing off the debts of the poorest nations. That is an important matter. The United Nations has tried to get something going along this path but it is still having difficulties because people fail to accept responsibility for the fact that the loans were made under terms and conditions which made it virtually impossible for the nations to repay their debts. We should not look at the matter in purely economic and financial terms; we have to look at it in human terms. In human terms it is an absolute tragedy for the Third World that this situation is continuing. The Government ought to continue to participate-as this Bill requires-in the World Bank process and to see whether we can get a more sympathetic hearing for the problems of the so-called south, the underdeveloped world. We hear a lot about the debate between the East and the West but we hear very little about the problems of the underdeveloped world and the massive poverty that exists there. There is not enough debate and discussion about this matter in the House. Dr Harry Edwards —And a big threat to peace as well. Dr THEOPHANOUS —As the honourable member mentions, many peace problems with which we are concerned-often we see them in terms of East and West-often stem from the extraordinary poverty which exists in many Third World countries, and there is no question about that. The world economy is going through a very serious transition process at the moment-there is no doubt about it-but what is happening? Selfishness has become the major consideration and we are reaching a situation in which the nations which are in a position to increase and to expand their economies, for example, Japan, West Germany and certain other European countries which could be importing more from the Third World and, incidentally, from Australia, are failing to do so. Why are they failing to do so? It is because they have a foolish policy, a beggar thy neighbour policy. They are refusing to expand their economies even though their currencies are overvalued, even though they have domestic surpluses and even though their people would increase their standards of living if greater imports and greater expansion of their economies were allowed. This is an extraordinarily selfish attitude on the part of the governments of Japan, West Germany and certain other European countries. We have to put pressure on those nations that are doing well, nations that can afford expansion, nations that can afford to assist the Third World through greater imports and greater capital investment. We are not reaching that situation. It is extraordinary when nations which have a very highly overvalued currency and such a potential for much greater growth in their domestic economies simply refuse to expand their economies and to assist their own people in improving their standards of living. Historically some nations have felt threatened about any policy of substantial growth. However, the Japanese economy can afford substantial expansion and if it does not expand and other economies do not expand the whole world economy will be in crisis. The nations that will feel this burden will be the underdeveloped and Third World nations. In addition, the United States economy has problems. The United States economy was supposed to expand but it failed to do so. All the predictions of the pick-up in the United States economy in the last year have not come true and that has had a very severe impact. We have seen the impact in Australia, with the imposition of very tough protection measures in the United States against our primary products-wheat and sugar. We will see a situation whereby the United States will subsidise its produce and not merely put up protective barriers against our produce. If it is true that the whole world economy is moving towards an increasingly protectionist position, as is happening with the European bloc, the Asian bloc and the United States, what will happen to the poorest nations? What will happen to the developing South? That is the crucial issue which we, the World Bank, the IMF and other bodies need to face and we need to talk more about these issues. Sitting suspended from 6.30 to 8 p.m. Dr THEOPHANOUS —Madam Speaker, we are debating the International Financial Institutions (Share Increases) Bill which seeks to increase Australia's contributions to the International Bank for Reconstruction and Development and the International Finance Corporation. Before the suspension of the sitting for dinner I was referring to some of the extremely serious problems of the Third World and the fact that there need to be substantial changes in the structure of the international finance system and, indeed, in the international trading system if we are to deal with the problems of the Third World and overcome the extreme problems of poverty which developing nations currently face. I referred, of course, to the huge debt repayments which these nations have to make and the fact that often they cannot even generate enough income to pay their interest bill on those debts. So we have the extraordinary situation where these nations are always going backwards, and they are going backwards at a very rapid pace. One of the reasons for this situation is the fact that for many years the international financial system has been structured so as to benefit the most powerful nations and the most wealthy nations. These nations have been able to influence currency values through the international financial system. They have been able to impose an economic value system which benefits especially the United States of America, Western Europe and Japan. In that kind of context we have had a situation in which the international monetary system is fundamentally mistaken and needs to be changed. That is a problem that the world, especially the so-called South or the poor world countries, faces. Of course, any attempt to reform the international monetary system, any attempt to reform the whole system of existing exchange values between countries, is itself confronted with resistance from the powerful group of so-called 10 nations which control the international monetary system. That is an extremely sad situation because in fact it is a shortsighted perception of their self-interest. If the situation continues as it is at present we will see increasing desperation on the part of the Third World nations which will manifest itself in a collapse of much of the world monetary and banking systems. Let us not kid ourselves about how serious this problem is. Of course, every time there has been a major crisis there has been a rescheduling of the debts of nations such as Mexico, Argentina and the Philippines. But we cannot continue along that path because eventually we will have a chaotic situation in respect of the whole meaning of money and the financial system. I urge the Government to play whatever role it possibly can in international forums to ensure that Australia takes a progressive and sympathetic view of the plight of developing nations. That is not only something that needs to be said in relation to the interests of those nations; it is also something that needs to be said in relation to our interests because we are in the peculiar positions that we share some of the interests of Third World nations. We share their concern about low commodity prices which are being paid by the so-called First World. We share their concern that prices of commodities have been forced down as a result of all kinds of conspiracies arranged by First World nations-the richer nations of the world. Those conspiracies have worked not only against the poor developing nations but also against Australia. We have heard a lot in this place about the deterioration of Australia's terms of trade. But we have not had much discussion about the causes of that phenomenon. The cause is the capacity of a small group of powerful industrialised nations to impose increasingly reduced prices for natural resources on which much of the developing world depends. We should not be providing a bit of aid here and a bit of aid there to developing countries. What we need to do is actively engage the countries of the Third World in such areas as industrialisation, production and the generation of value. We need to go out there and involve them in this process. We also need to open these countries up as markets for manufactured products, both products that they can manufacture themselves and products that are manufactured by other nations. If we do that we will be in a position to achieve a much better situation than the current crisis we face. Indeed, the current crisis is not only a crisis, as I said, of the financial system but increasingly it is a crisis in the trading system. World trade is being reduced because of increased protectionism, because countries are forming into blocs such as the European Economic Community. Countries are forming into blocs in Asia. They are also forming into blocs or working together in northern America. We are finding increasingly that the Australian nation is being cut out of those blocs. But we are not the only ones. Many nations poorer than Australia are also being cut out of this system and they are, therefore, becoming increasingly desperate. I would warn that this is not just an economic or financial matter. This is a matter which has repercussions in terms of world peace because if these nations become more desperate and if they become more impoverished there is the possibility that we will get increasing conflict between one Third World nation and another, and between nations of the Third World and nations of the First World. That conflict could lead to super-power conflict and have very serious repercussions for world peace. So I would urge the Government to look at not merely the support it has given the World Bank but, as I have already said, that it participates actively in the processes of the World Bank to ensure that the Bank's policies are humanitarian, that it looks sympathetically at the problems of the Third World and that those problems are resolved through genuine investment and genuine growth in Third World economies. Mr SHIPTON(Higgins)(8.09) —This debate on the International Financial Institutions (Share Increase) Bill has become a wide-ranging discussion about international economic trade matters, including the world's financial system, and I welcome that. The legislation comes before the House at a time of a trade war between the United States of America on the one hand, and the European bloc on the other-the countries of the European Economic Community. This Bill provides for Australia to increase capital funds to the International Bank for Reconstruction and Development and the International Finance Corporation. The major activity of the bank is to provide loans to developing member countries. These developing member countries are now the victims of the trade war between the United States on the one hand and Europe on the other. Australia is also caught in this trade war. Our major traditional agricultural exports are under threat. I believe the situation will deteriorate. It can only become worse and it will become an ever more massive problem than it already is for Australia. There is little we can do directly in Europe but I believe the time has come for a full frontal diplomatic and political campaign to be mounted and directed at Europe's policy makers, especially the members of the parliaments of the individual countries that make up the Common Market as well as the European Parliament itself. Deficits are increasing in many Third World and lesser developed countries as well as in Australia and the United States of America; they are apparently out of control. The two major problems in the United States are its trading and government deficits, and these two problems affect world trade and currency values. Trade and the resulting exchange rate effects are now a vitally imperative factor in international relations. Trade wars affect relations between countries. The effect on particular countries causes severe balance of trade problems and consequential balance of payments problems. These have a consequent effect on the value of currencies of particular countries. The Bretton Woods agreement on fixed exchange rates has broken down under these large imbalances created by the current situation in world trade. The imbalances in various countries' trade and capital flows are vitally affected by the trade wars. The effect on Third World and lesser developed countries is devastating. The dramatic falls in commodity prices have devastated their economies. The Third World producers, the lesser developed countries, have no chance to produce because, on the one hand, they are locked out of markets by the European Community and, on the other hand, products are dumped on their former customers' market, and Australia is also in that situation. So the less developed countries have no chance to sell products on the world markets and they are locked into a cycle of decline. As I have stated, the Australian economy is also affected and is in a state of decline. We are facing the greatest challenge of having to respond to a changed world. Our standard of living continues to fall. We may well ultimately be a recipient of a loan from these institutions if things continue as they are but this evening we are debating whether we should contribute capital to them. The countries of the European Community and the United States will regard our problems as irrelevant to their trading positions. I have already talked about my pessimism of Europe opening up. I think its surpluses will grow and it will become more isolationist. I also think there is a possibility that it will have the same common interest in relation to world trade as does the Soviet Union. On the other hand, the United States will fight this by dumping products on world markets, including traditional Australian markets and on the markets of the lesser developed countries. That is a challenge for the Third World and a challenge for Australia. Our challenge is one that we should be able to meet because we live in one of the most dynamic trading regions of the world, but we are failing to take advantage of it. We should adopt a `friends of the Pacific' approach. We should focus our attention on the Pacific and Asia. The area encompassing the western Pacific region, north and South East Asia and Australasia is the key to our trading future. However, it is frightening that we are becoming a less and less important trader in our immediate region. Our share of trade in the Western Pacific region is actually falling. This is dramatic and of concern because it is the most dynamic trading centre of the world. The countries of this region are enjoying enormous growth. Japan, Singapore, Hong Kong, South Korea and Taiwan are all enjoying enormous growth and relatively good free trading opportunities. We must not fail in the challenge; we must take up the opportunities. We need to be much more outward looking. We need to restructure our manufacturing industry. We need to go through a process of great structural change. We need to encourage the growth of the tourist industry in Australia, which has developed and which is maturing but which still has to be expanded. It has a great potential to be one of the economic saviours of the country. As the world trade crisis-which is addressed by the International Financial Institutions (Share Increase) Bill-deteriorates at the same time as these international banking institutions and organisations are raising capital and we are contributing to long term loans to developing Third World countries, and at the same time as the terms of trade for the Third World nations and for many countries, such as Australia, are deteriorating, there is a new international financial revolution taking place in many parts of the Western World. It is taking place in the most important Western economies. Financial deregulation is the name of the game. It is providing opportunities for growth and opportunities for countries to participate in the growth of the financial services sector, which is in itself dynamic. One of the tests of any Third World economy, indeed of any economy in regard to free trade and the encouragement of growth, is whether that economy prohibits foreign bank entry. The prohibition of foreign bank entry is one of the most blatant financial barriers. It is only in recent years that Australia has abandoned its prohibition on foreign bank entry but even now it is restrictive because only 16 banks are licensed to operate in Australia. However, I am pleased that Australia has entered the deregulated financial world and prohibitions of bank entry in the Western economy are becoming rarer. But bans do exist. They exist in most of the Third World countries which will be granted loans from the bank which is receiving capital as a result of this legislation being passed. The Soviet bloc of course is outside the free flow of bank entry and financial services. Most developing nations, except the most newly industrialised ones of Hong Kong, Singapore and Taiwan, I regret still have barriers to bank entry. Developing countries are blind to the fact that the entry of foreign banks and financial deregulation would help private sector investment in their economies. That is one of the matters that have not been raised in the debate this evening. The previous speaker, the honourable member for Calwell (Dr Theophanous), used very interesting language and said that the Third World had to participate in the process with the World Bank. I would say that is right if the Third World realised that it is only by the development of free market economies, by recognising the importance of the market-place in those economies and by recognising that international trade and finance are linked and that we need to have foreign bank entry that these countries can help themselves and can have economic growth and a future. I believe that is more important than the sorts of loans that are being discussed as a result of this legislation. I am not decrying those loans. I believe the World Bank and the financial institutions, which are the subject of this legislation, are very important. But the Third World and the lesser developed countries must realise that they must develop free market economies in order to have growth. The deregulation of financial markets is important if world trade and growth is to continue. In the time available to me this evening I would like to look at another aspect of international trade. I have talked about Australia having to take advantage of living in the Western Pacific region. We are really a platform in the western Pacific for north and South East Asia. As I said, we are failing to take advantage of this. I think we have to develop a greater financial and trading strategy. We need to understand that while the trade war continues-as I said the conditions continue to get worse between Europe on the one hand and the United States on the other-Japan and Germany, which are growth economies, and other European economies still invest their trade surpluses in the United States because the United States dollar is the world reserve currency. This may not continue to be the case. The United States is currently putting pressure on West Germany and Japan to stimulate their economies and to lower their interest rates so that they will hopefully import, when their economies are so stimulated, from the United States. I am a little pessimistic about that and think it is a little too simplistic and is unlikely to work because the United States has not been a long term traditional market for Europe. West Germany and Japan have not been long term traditional markets for United States manufacturers. That has to be taken into account when looking at the situation. I also note in passing that there has been a recent accord between the United States and Japan on the value of currency. Japan is a key to this region of the world. It is a key to the health, growth and the opening up of world trade. Australia has good trading relations and good relations generally with Japan. We have a responsibility to encourage Japan to be outward looking, to take imports, to lift barriers to imports and, over and above that, to encourage it to invest in Latin America. As I have said, the international financial strategy of the United States Government is to try to get Japan and West Germany to stimulate their economies to take more United States imports. That is likely to fail. When one looks at the historical position of United States in world trade one sees that the most important sectors for United States exports have been Canada-which has, again, turned inward looking and is engaging in its own trade war with the US-and South America which was a key market for United States exports and a healthy United States economy. Having painted that picture, I am brought back to Japan. As I said, we need to encourage Japan to be outward looking in terms of world trade, but we need to encourage the Japanese to invest their trade surpluses around the world, particularly in Latin America. If Japan invests its surpluses in Latin America it will create growth in South America, which will help the United States economy by a demand for goods because the United States is looked to as a traditional supplier, and it will also help the United States banking system which is under incredible pressure as a result of sovereign South American debt. Japan is a key and Australia has a very important role to play in explaining this to Japan and in encouraging it to invest its surpluses in Latin and South America. Australia has its own difficulties. I mentioned these-to encourage manufacturing industry to restructure. We need to encourage tourism in particular. The Minister for Sport, Recreation and Tourism (Mr John Brown) must not be complacent. He has even more work to do in the future. I refer to Australia taking advantage of participating in the financial revolution that is occurring around the world and the expanded financial services sector that is occurring as a result of financial deregulation in many Western countries. I read recently an interesting paper by Mr N. R. Clark, who is the Managing Director of the National Australia Bank Ltd, on the impact of international banking on competitiveness. A summary of that states: This paper argues that Australian banks are operating in an environment of rapid change- that is true- with explosive changes in international financial markets- that is true- driven by deregulation, emerging communications and technologies. Mr Clark goes on: . . . if the banks in Australia are to obtain the full benefits of deregulation and the capacity to compete with global banks- that is important- tax policies and the attitude of bank supervisors must not hinder our progress. That is a summary of his words. I will not deal with his comments on the attitude of bank supervisors as it is not relevant to this debate-that goes to prudential deregulation of banking-but I will go to the comments he makes about the capacity to compete with global banks. I think it is very important to note that such an important Australian banker as Mr Clark makes this point: Already Australia's taxation processes and currency are inimical to our off-shore competitive prospects. He points out that we still have a foreign tax credit system which threatens to inhibit our international competitiveness and an off-shore banking market will not get off the ground if it is taxed at 49 per cent compared to other markets at 10 per cent. So here we have the opportunity to participate in the financial services revolution that is going on in the world. Even more importantly we have the opportunity to participate in the western Pacific region of the world at a time when we are in the same time zone approximately as Hong Kong and Singapore, when the world is moving to 24-hour round the clock trading. We must not pass up the opportunity to participate in that expansion. We must not export the opportunity to participate in an off-shore currency and banking market by continuing with the current policy of taxing off-shore banking operations at 49 per cent. This Government needs, and this country needs to develop, policies that recognise that there are different tax regimes in the world. If Australian companies are to participate, particularly in the financial services sector, we have to create legitimate off-shore banking market units that are taxed at the same rate as their competitors. Financial deregulation and the world's financial revolution give us great opportunities. One such opportunity which I have talked about is the participation in the off-shore banking markets. We have the opportunity to participate in the financial growth of the western Pacific region. We must no pass up this opportunity; we must act, otherwise we will continue to become a Third World country. We will be donating capital to institutions which will be lending to Third World countries. We may end up borrowing back from ourselves if we are not careful. Dr HARRY EDWARDS(Berowra)(8.28) —The International Financial Institution (Share Increase) Bill, which authorises increases in Australia's contributions by way of further subscription to shares to the International Bank for Reconstruction and Development and the International Finance Corporation, raises the whole issue of Australia's international aid and development assistance program of which this is a part. Indeed, it raises the issues of the whole world's development assistance program. Australia's program took something of a beating from the Hawke Government in the last Budget. The total aid provision is $960.5m. Last year the provision was $1,031m so there has been a cut of 7 per cent in money terms, or some 12.8 per cent in real terms, that is, allowing for inflation. As a percentage of the gross national product, the 1986-87 provision is 0.39 per cent, the lowest for 20 years, if not ever, for this country. It was 0.46 per cent last year and over 0.5 per cent-half of one per cent-the year before. Australia did all but touch 0.6 per cent in the late 1960s. There has been a very serious deterioration in the aid and development assistance effort looked at in that way. As is well known, the target figure of the United Nations is 0.7 per cent. Australia is committed to achieving that figure but it has a long way to go. True, the average aid effort of the developed countries in 1985 was 0.35 per cent of their gross national product collectively. So at least our figure is above that. In being critical of the Hawke Government's aid provision, I am aware that there is far from universal support in the electorate for a large overseas aid effort by this country. Quite often we come up against a view in the electorate that charity begins at home, that there are more important priorities just down the road, that there is much to be done for our own poor and underprivileged in education, health, housing and so on. This view is perhaps reinforced in more recent times by the perception that the extent of the difficulties of developing countries has somehow diminished in recent years. That perception stems from the undoubted fact that the level of food production and the extent of food self-sufficiency have improved significantly in many developing countries, for example, in India-although certainly not in the developing countries of Africa. Some developing countries have become food exporters. Nevertheless, developing countries as a whole continue to be net importers of food. The basic economic factor is that, whereas industrial countries subsidise their farmers and, as a result, produce massive food surpluses, most developing countries tax their farmers in one form or another. Developing countries then are, as a whole, net importers of food; the extent of chronic malnutrition in developing countries is vast; and there are other dimensions of poverty. One thinks of health, infant mortality rates and so on. The impact of the so-called debt crisis, which the honourable member for Charlton (Mr Robert Brown) and the honourable member for Calwell (Dr Theophanous) referred to, which erupted in 1982, has been devastating for the more heavily indebted countries, such as Argentina, Brazil, Mexico and so on. We have had a taste of what it is like here, with our gross overseas debt, of Third World proportions under the policies of the Hawke Government, recently attaining the order of $90 billion. In 1985 Brazil's overseas debt was $107 billion and Mexico's overseas debt was $109 billion. There is no escaping the necessity and inevitability of tightening belts and of lower standards of living until we can adjust. That is what this country has to face. As net financial flows to the heavily indebted Third World countries contracted and turned negative, along with falls in commodity prices, investment in most of those countries fell. Some developing countries have seen an absolute contraction in their base of productive capital. The real gross domestic product of 17 major heavily indebted countries fell by an average of 0.3 per cent a year from 1981 to 1985. Real incomes fell even faster, so millions of poor people in those countries have become poorer still, putting great political strain on the governments of those countries. So, contrary to the view that the problem has diminished, there is a tremendous problem in the Third World, the so-called South. Overall, countries such as Australia have an important obligation and, indeed, a national interest in aid and developing programs. In humanitarian terms, that begins with the injunction of Christ that `of those to whom much is given much will be expected'? As has been stated by other speakers, it is important that the international aid and development effort is also significant in respect of preserving world peace. As former American President Carter said, one cannot have a peaceful world one-third rich and two-thirds hungry. The fact is that the circumstances of underdevelopment, the poverty of the South vis-a-vis the relatively rich North, exacerbated in many cases by great power interventions, are a potential source of conflict with the possibility-almost as great as that inherent in the tensions between East and West-of escalating to a world conflict. What is at stake are not only humanitarian concerns, but no less an objective than world peace. There is the further factor of the mutual economic interest of both the donor countries and the recipient countries, the developing countries. There is a great and increasing mutual dependence between the developed and the developing countries which means that it is in our straight out, long term economic interest to mount a significant development and aid effort. I referred a while ago to the problem of Third World debt and the plight of indebted countries. During the deep world recession of 1980-82 there can be little doubt that had it not been for the massive deficit financed spending, so to speak, of the developing world during that period-in this way the developing countries provide a large market for the products of developed countries, just as the developed countries provide markets for the developing countries; there is a mutual interdependence-the extent of the decline in world economic activity would have been greater and the level of unemployment in the developed countries, which was very significant, would have been higher still. So it was the purchasing by the developing world-admittedly financed by massive borrowing-which held up world economic activity to the extent that it was held up during that period. That points to the importance of making a rational, concerted effort to cope with the debt situation-an internationally co-ordinated effort to stretch out the debt of the developing countries and to reduce interest rates on their borrowings. I have no illusions but that the ultimate cost of that will be borne by Western taxpayers as that operation is put into effect and bank debts are taken over as government bonds and so on. It would amount to an additional involuntary transfer to the less developed countries. I believe that in the long run these transfers have to be vastly increased on what is their present level, so I do not necessarily disapprove of such an additional transfer. Again I stress that there is a good deal of mutual benefit in the procedure. It is not just a soft-headed, charitable outlook to say that eventually we will have to get down to the job of dealing with the problem, substantially in terms of so-called `debt forgiveness'. I am appealing to the Australian electorate to support the Parliament, which, in effect, is supporting this measure. We need political support in this area. The North-South imbalance is a problem of quite massive proportions. It can be tackled only by governments, major institutions or large scale private sector activity in terms of the large scale level of lending which we have seen in recent years-plus the right policies in the countries concerned. I stress that point, and in so doing I do not in any way belittle the contributions in this area by voluntary organisations, such as World Vision, the Freedom from Hunger Campaign- Mr Webster —An excellent organisation. Dr HARRY EDWARDS —An excellent organisation, as my colleague says. There is also the Maranatha Trust, an organisation I am proud to be associated with, and so on. They all do great work. They are also of the utmost importance in the context of the need to mobilise political opinion in this country in support of Australia's official aid effort. As I said, the magnitude of attempting to rectify the imbalance between the relatively rich North and the poor South is such that only governments and large scale commercial activity can come up with the resources on the necessary scale. It is good to see the extent of bipartisan support for this measure tonight as part of the country's aid and development effort. This Bill proposes support for the International Bank for Reconstruction and Development and the International Finance Corporation which are effective and efficient institutions, by and large, for the provision of development aid. If aid is to be given it has to be the right sort of help. If money is spent to build four-lane highway through a jungle joining nowhere to nowhere, as has happened, aid or development assistance can become a joke. The bureaucrats who administer it cannot be trusted, and so the attitude develops that it is better not to give the aid at all. It is increasingly true in the activities of the institutions we are supporting today that aid and development money is given in ways that can help private enterprise. And there is an increasing tendency in the sort of policy discussions that go along with aid negotiations to focus increasingly on the need for free market prices, trade liberalisation and a friendly commercial environment for foreign companies and investors-which are important in the basic strengthening of the countries private sectors. The aid has to be in the right form and it also has to go in the right directions. It is entirely proper for the Australian aid and development effort to focus particularly on developing countries in our neighbourhood and to be framed with Australian economic and political interests firmly in sight. The Government has seen fit to cut back the program this year, as I have already said. Whether the reallocation of funds will best serve our trading and general standing in the Asia-Pacific region is a question. It was explored by my colleague the honourable member for Curtin (Mr Rocher). For example, it is true that aid to the South Pacific region was cut by 9 per cent to $54m in the last Budget. Within a total appropriation of nearly $1 billion, as I said earlier, the case for a substantially higher allocation to the newly emergent island nations of the Pacific is very strong, particularly in the face of United States reluctance to accede to the request by 11 South Pacific nations for an annual $20m for tuna fishing rights, and on the other hand the expanding Soviet presence and specific initiatives in the region. Here there is a great opportunity. The human and political usefulness of development and educational aid to these small nations in the South Pacific is enormous. It compares more than favourably with the hardly visible useful results from the support we give to a whole range of United Nations agencies. I conclude by referring to a point raised by the honourable member for Calwell, who talked of East-West rivalry and the massive expenditure on armaments. That has a fairly direct impact on development aid. But while a very large proportion of total military spending is by the super-powers, it is not confined to them. The complexity, challenge and utter frustration in this whole area before the House tonight is quite graphically underlined by the statistics of the non-oil developing countries which are generally the poorest. They put more money into military spending than education, health and welfare put together. That latter sum, coincidentally, is about equal to their development aid. I repeat that this underlines the complexity and frustration of this matter but it is not easy to say what should be done. It would be nice to have a formula which linked the receipt of aid and development assistance with a decrease in spending on arms in those countries. The Germans tried something like that a few years back in some Latin American countries. But by and large that is pretty Utopian-something of a dream world. What is important is that this apparently perverse outcome to which I referred should not lead us to curtail the sorts of activities, actions, and the provision of funds that we are debating tonight. We certainly have to work in that direction. Simultaneously we have to work in the direction of negotiation for arms control and disarmament. We have to continue with great purpose on both these fronts in the interests of the adequate development of the world economy, and the preservation of world peace. Question resolved in the affirmative. Bill read a second time. Message from the Governor-General recommending appropriation announced. Leave granted for third reading to be moved forthwith. Bill (on motion by Mr John Brown) read a third time. Debate resumed from 15 October, on motion by Mr Hurford: That the Bill be now read a second time. Mr DEPUTY SPEAKER(Mr Mountford) —Is it the wish of the House to debate the Taxation Laws Amendment Bill (No. 4) with the Australian Capital Territory Stamp Duty Amendment Bill, the Australian Capital Territory Tax (Transfers of Marketable Securities) Bill and the Sales Tax (Exemptions and Classifications) Amendment Bill (No. 2)? There being no objection, the Chair will allow that course to be followed. Mr CARLTON(Mackellar)(8.47) —Once again we are considering tax Bills. We consider tax legislation almost every day of the week that we debate. Since the statement by the Treasurer (Mr Keating) last September on the reform of the Australian taxation system, which is called RATS, when the tax Act contained about 1,100 pages, the Act has now grown to close to 2,000 pages. We have had an additional 900 pages of taxation legislation since last September. I understood that one of the aims of the Government was to simplify the taxation system, to make it more possible for taxpayers to understand their liabilities and for their advisers easily to understand the legislation. In the history of this country we have never had more complicated, more detailed or more extensive legislation than we have had over the last few months. Nevertheless, at each point we must examine the legislation and see whether it advances the cause of Australia or whether it merely extends an already overextended bureaucracy with more intrusion into the lives of ordinary citizens and an increasing tax burden on everybody. Of course, the last point is the most important. It would not be necessary to introduce fringe benefits taxes, capital gains taxes, foreign tax credit systems, resource rental taxes, non-deduction of entertainment expenses and all the various additions to the taxation system if it were not for the insatiable demands of this Government for additional and unnecessary public expenditure. That really is the bottom line, that this Government has extended over its four years Commonwealth expenditures on average by 4 per cent per annum after inflation. That is twice the rate of increase of the previous Fraser Government over its seven years in office. It has even extended the taxation take to 25.5 per cent of the national product of this country, whereas it had promised in the last election campaign that it would not increase the percentage of the national product taken through taxation beyond 25 per cent. It has extended that to 25.5 per cent, which in current terms is equivalent to about an additional $1,400m, which, incidentally, is about twice the income it expects to get from the notorious fringe benefits tax. In other words, if this Government had managed to keep its promise of the last election campaign-- Mr Martin —What about the Bills that are before us now? Mr CARLTON —The honourable member for Macarthur wishes to dispute that promise made by the Prime Minister (Mr Hawke) to maintain the taxation-- Mr Martin —I am talking about the Bills that are here now. Mr CARLTON —I am coming to the Taxation Laws Amendment Bill (No. 4) 1986. If the honourable member for Macarthur will wait a moment, I am coming to the Bill and I will come to it in full measure. It is perfectly legitimate for the Opposition to point out that in the last election the honourable member for Macarthur stood behind the Prime Minister in his promise under the trilogy to maintain taxation within 25 per cent of our national product; it is now 25.5 per cent. The honourable member for Macarthur bears with the Prime Minister the burden of that broken promise. The cost of that is $1,400m in additional taxation revenues, which is, as an example, twice the amount of money that the fringe benefits tax is expected to bring in in a full year. That is a measure of the failure of this Government to meet its promises and it is a measure of its profligacy with the money of ordinary citizens. Let me go to the various provisions of this Bill. I will deal with some of them fairly quickly because we have a number of Bills taken together. The first one I want to touch on briefly is the change in provisional tax that applies to partnerships and trusts. Partnerships and trusts were able to vary the pattern of their distribution of benefits to partners or beneficiaries to reduce their provisional tax payable in alternate years. They could vary the pattern of distribution from one year to another, but this is restricted under the proposed legislation. This is all very well. The intention of the provision is to prevent changes in the distribution of benefits from partnerships or trusts in order to minimise taxation, and it is a legitimate objective of the Government to do that. The only question I have in this case is what is the retrospective nature of this provision because the timing of it is such that a number of arrangements would have already been made which will be affected by this provision. People will not have time to rearrange their affairs before this provision comes into effect and therefore there is, indeed, a retrospective element in this particular change. I draw attention to that and I ask the Minister whether or not the Government has considered the fact that various arrangements made under partnerships or trusts that were made before the announcements might be affected in a retrospective way by this and whether the Government has any intention of dealing with that situation. The next matter I come to is changes in the capital gains tax. The capital gains tax is one of the major measures within the statement of so-called reforms made by the Treasurer in September last year. It is a measure which has caused considerable controversy. It is a measure which, although announced on 19 September last year, was not introduced into the House until May. When it was introduced I drew to the attention of the House that there was no explanatory memorandum made available by the Treasurer on the Thursday night the Bill was introduced. I managed to get a draft copy of the explanatory memorandum on the Sunday following the Thursday night on which the Bill was introduced. From memory, it had to be debated on the Tuesday or Wednesday and it was not until the summing-up of the debate by the Minister for Immigration and Ethnic Affairs and Minister Assisting the Treasurer (Mr Hurford)-I point out that the Treasurer did not deign to come into the House to reply-that the explanatory memorandum was made generally available to members. For a measure which encompassed 103 pages of legislation, an explanatory memorandum which was 155 pages when it ultimately appeared, a booklet subsequently produced for advice to taxpayers of 65 pages and tax rulings and Press releases amounting to some 19 pages it was an absolute scandal that, firstly, after eight months the Treasurer was not able to produce an explanatory memorandum to the House for proper debate in this House, and that, secondly, he did not deign to come into the House to answer the various questions raised by the Opposition about the capital gains tax and also that he refused point blank to answer any questions in the House about it. I remind honourable members that on 15 October 1986 in Hansard at page 2033 the Treasurer said: . . . we will answer the questions when the Opposition decides to support the tax. In answer to a question from my friend the honourable member for O'Connor (Mr Tuckey), he went on to say: When the Opposition comes to the point of tax decency we will answer all its questions. The Treasurer had also refused the Opposition briefings on these tax matters until I raised in the House the fact that these briefings had been denied, which was against previous practice. I can only repeat in the House tonight that the arrogance of the Treasurer and his view about the democratic proceedings of this House are really unparalleled in the history of Treasurers of this country. No previous Treasurer has treated this House with such contempt. It is just unbelievable that he would deny the Opposition briefings by officers of the Australian Taxation Office on Bills until challenged publicly in the House, and then give most unsatisfactory briefings at times which were inconvenient. It is most extraordinary that he would refuse to answer questions in the House on the grounds that the Opposition did not support the measure, yet all these things are recorded in Hansard. If he has managed to get away with this for so long it is only because he has managed to mesmerise a whole lot of people in the community up to a point, but he certainly will get his comeuppance in these matters. I give an undertaking to this House that when I take over that particular role after the next election I will not behave in that manner. I will behave in a decent manner and I will actually be very ready indeed to have members of the Opposition briefed on taxation measures and be prepared, within the limits of what information is available to me at the time, to give adequate and satisfactory answers to the House. The predominance of this Parliament in the legislative process should not be challenged and it is quite impossible and improper that the Treasurer should behave in that particular way. In this particular matter he said for many months that the capital gains tax, like the fringe benefits tax, was perfect, but everybody in the community knew that it was not. For months people were subject to its provisions without knowing even what its provisions were. Indeed, some people actually paid capital gains tax before the Bill had been brought in. The Bill applied from 19 September last year but it was not brought into the Parliament until May this year, so a number of people had incurred taxation liabilities in the intervening period without knowing the detail of the legislation. Whenever the Treasurer deigned to partly answer a question on this matter, he said: `Well, it was clear in my statement of 19 September'. It was anything but clear. Of course, we realised that when in May we got this Bill of 103 pages of immense complexity. It was left to a businessman to pick out one of the most extraordinary bungles in the whole measure. In an article in the Australian of 16 July 1986 is a reference to the problem of options issued by companies. I quote from an article by Bryan Frith in the Australian of that date, in which he said: Australia's leading companies face an unexpected tax bill of almost $100m because of a bungle in the drafting of the capital gains tax on option issues. Capital raisings were intended to be exempt from the tax. But the drafting of the legislation stated only that the issue of shares by companies would be exempt. It did not extend to cover capital raised by securities other than shares, such as options. CSR Ltd's recent decision to call off its proposed $62 1/2m options issue because of the capital gains tax legislation has turned out to be only the tip of the iceberg. More than 20 companies have already made options issues since last September when a capital gains tax was foreshadowed. The amounts raised total almost $200m which, on a 49 per cent tax rate, would give the companies a tax bill of almost $100m. I interpose here that the Treasurer estimated that this tax would raise only $25m after five years. Yet with the actual legislation as drafted the Government would have raised $100m within a few months. The article continued: This is an unintended effect- I give Mr Frith credit for use of the word `unintended' well before the Prime Minister used it in relation to the fringe benefits tax- of the recently enacted capital gains tax legislation. When the tax was foreshadowed it was estimated that it would raise only $5m in the first year, rising to $25m after five years. The article went on: The problem was discovered by Mr Strauss- that is, Mr Strauss of Bridge Oil Ltd- when he was pouring over the Act. He noted the reference to shares only and inquired of his company's solicitors if that could mean options would not be exempt and therefore liable for capital gains tax. Bridge recently raised $23.26m through an issue of 155.1 million options at 15c each. The advice he received was that the option right to take up shares at a specified price would be regarded under the legislation as a `deemed asset' and the issue of the options would trigger a sale of that asset. After eight months of preparation of this legislation it was found by Mr Strauss, a businessman, that there was a total bungle in this matter and an unintended consequence had been written into the Act which meant that it would have raised almost $100m in one year versus $5m in the first year and $25m after five years. The Bill we are dealing with tonight seeks to correct this anomaly or unintended consequence. I wish to raise another matter. I ask the Treasurer to reply if he has the slightest interest in the Bill and manages to come in at the end of the debate or sends the Minister Assisting the Treasurer in to reply or sends a message via the honourable member for Parramatta, the Minister for Sport, Recreation and Tourism (Mr John Brown). I refer to clause 31, which extends the operation of the capital gains tax vis-a-vis joint tenants so that for a surviving proprietor the effective date of acquisition by the survivor of the deceased's share is the date of acquisition by the deceased and under the current Act the date of acquisition is the date of death of the deceased joint tenant. I want some advice from the Treasurer as to why that change is being made and whether it disadvantages the people involved in such a transaction. I look forward to some explanation of that. I now go on to the introduction of a $200 charge on people who wish to query their tax returns. At the moment, before this legislation goes through, it costs $2 to lodge an appeal against a decision by the Commissioner of Taxation. Under this piece of legislation a filing fee of $200 will be required for applications to the Administrative Appeals Tribunal for appeals which would previously have gone to the Taxation boards of review at a cost of $2. This is an example of the Government being taken in by the senior boardroom mentality of the Treasurer. The recommendation obviously has been made to reduce very severely the number of appeals. Certainly this measure has raised a storm of objections from the Australian Taxpayers Association, the various tax institutes, chartered accountants representing people in these matters and the general public. It is pretty unusual to get an increase of a charge multiplying the original charge by 100. Mr White —Even for this Government. Mr CARLTON —It is fairly unusual even in legislation by this Government. This $200 fee-notwithstanding that it is refundable in cases in which the appeal is successful-obviously represents a clear disincentive for small taxpayers, who must make a $200 punt for a doubtful small return. Taxpayers may have to wait for up to three years before their appeal is concluded and the $200 fee is refunded. It is clear that the intention in imposing the fee is to discourage taxpayers from using the appeal process to delay the payment of tax. However, given that there might be some valid reason for that, the fee of $200 is clearly excessive. We have received a number of representations on this matter, as no doubt have Government members. I see that the honourable member for Macarthur (Mr Martin) is gearing himself for the debate. I would be interested to hear the honourable member defend the one hundred-fold increase in the charge. Mr John Brown —He will do it brilliantly. Mr CARLTON —The Minister for Sport, Recreation and Tourism says that he will do it well and he associates himself with the defence of the $200 fee. Mr John Brown —Absolutely. Mr CARLTON —Let us see what he says after I have had a few further things to say. Mr Reith —I wonder whether he will defend taxing people's family homes as well. Mr CARLTON —He obviously will because he supports the Government's capital gains tax, which does tax people's family homes. Indeed, if anybody in the community wants to know exactly how the family home will be taxed under the capital gains tax he should send a letter to the honourable member for Flinders (Mr Reith), who will give him a very clear indication by return post as to in which circumstances the family home is taxable. I understand from the honourable member for Flinders, who has done research into this matter, that there are about 20 different circumstances under which the family home is taxable under the capital gains tax. Later tonight the honourable member for Flinders will indicate this. If anybody who is listening to the broadcast wants to go into greater detail he does not even have to send a reply paid envelope to the honourable member for Flinders; he will receive from the honourable member the examples and will be asked to beware. I would like to quote from a letter I have received from Mr Bullock, the President of the Taxpayers Association of New South Wales, on the $200 impost for applications to the Administrative Appeals Tribunal. If anybody wishes to appeal against the decision of the Taxation Commissioner he now has to pay $200 instead of $2, irrespective of the size of the claim. That is the key point I make. I am not worried about a big business or anybody with a pretty big claim having to pay $200 because that would be regarded as a respectable business expense. I am really having a go about this on behalf of the small taxpayer or the small business person, partnership or whatever. I will give some indication of why that impost is a great difficulty for such people. The Taxpayers Association of New South Wales says this: This Association takes strong objection to the recent decision to impose a $200 fee (with or without the possibility of its refund) payable by a taxpayer to have an objection against an income tax assessment referred to the Taxation Division of an Administration Appeals Tribunal. If this decision is allowed to stand, it will result in a sorry state for taxpayers particularly those who object against assessments and their objection has been arbitrarily disallowed. Such a taxpayer would be faced with the dilemma-is the payment of a relatively considerable fee worthwhile because of the amount of tax involved or should he not proceed with the objection and allow Taxation Office bureaucracy to over ride justice. The vast majority of taxpayers have had, at some time, adjustments made to their returns of income. In some cases they were probably correct and proper but, too many times, it is apparent that they have been made in an arbitrary fashion by inexperienced or zealous Taxation Officers. I suggest that we have all had examples of these brought to our attention in our electorate offices. The letter continues: That many are inexperienced has been freely admitted by senior officers of the Taxation Office. Up to a few weeks ago, the referring of an objection to a Board of Review required a payment of $2. That fee was abolished and is now to be replaced by the 1imposition of $200 to a like body. It is sad that many taxation assessors are both inexperienced and are revenue minded with little regard to fairness to a taxpayer. With the knowledge that ``it will not be worthwhile for a taxpayer to pay $200 for an objection to be proceeded with'', this type of Officer will probably take autocratic action and, in effect, be the final arbitrator of the objection. Such a position cannot be allowed to remain. If it does it will be the death-knell, in a practical sense, of the small taxpayer's right to fairness. Our members have repeatedly observed- I am talking about the Taxpayers Association of New South Wales, from whose letter I am quoting- that objections have been perfunctorily disallowed and only when application is made for reference to a Board of Review is the objection considered properly and in many cases then allowed. Perhaps a small fee could apply only when the amount of tax in dispute is in excess of $2,000, but overall this Association feels that justice to taxpayers will arise only if the relatively high fee of $200 is not imposed. Justice, particularly to small taxpayers, must be done and be seen to be done. That is a letter from Mr Don Bullock, the President of the Taxpayers Association of New South Wales, to the Treasurer. He was kind enough to send me a copy. I have also had a letter from a firm of chartered accountants in Malvern which deals with returns from relatively small taxpayers. The letter states that it is a firm of chartered accountants managing the financial and taxation affairs of a large group of clients. It expresses concern about the increase in the fee to $200. The letter reads: In cases where the amount of tax in dispute is small any further referral will now be financially important for a number of clients. This position does not foster any feelings of justice being administered. . . . . This fee appears to be aimed at the removal of the legal rights for a large group of the community who are ``small'' taxpayers. In the case of a dispute over the disallowance of a small expense item in a husband and wife partnership, to pursue the matter beyond the objection level will cost each partner $200, that is $400m in respect of one item in dispute. If the honourable member for Macarthur intends to speak in relation to this matter, I would ask him to justify a partnership of husband and wife having to pay $400 to lodge an objection against a relatively small disparity. Perhaps the honourable member could explain why that is a good idea. The firm of chartered accountants goes on to say: The Australian Taxation Office has an approach in certain cases where a dispute is likely, to issue assessments not only to the head trust, but also any subsidiary trust and subsequent beneficiaries of these trusts. That is, the same income is being assessed three times or possibly even more. Because of the contentious nature of the matters in dispute, objections are being automatically disallowed. Therefore each decision must be referred to the Administrative Appeals Tribunal at a cost of $200. In one recent case in this office, where objections are being disallowed, the cost of referral of the matter will be $25,000, in respect of one item in dispute. This cost is in addition to legal costs etc. The effect may possibly be that all legal rights of the taxpayers involved to defend a bona-fide commercial transaction may be removed. That is a matter which the Government must answer. I raised it previously in a debate in this House. I got a thoroughly unsatisfactory response from the Minister Assisting the Treasurer. I believe that the Treasurer ought to come into the House and give an explanation on this matter. Mr Hurford —I have come in to listen to you. Mr CARLTON —I am grateful once again that the Minister Assisting the Treasurer is present. But I am becoming increasingly uncertain as to the leverage which the Minister has in regard to the Treasurer. I am beginning to worry about whether the Minister, who so often has to come into the House to represent the Treasurer, who treats the House with total contempt, is looked upon by the Treasurer with any more sense of regard than the Treasurer has for Senator Richardson. That is beginning to worry me. Nice chaps get beaten up by people like the Treasurer. I have also a letter from a firm of chartered accountants in the Australian Capital Territory. The Minister for Housing and Construction (Mr West), who represents an electorate in Wollongong and who is concerned about small taxpayers, partnerships and so on, would be concerned about this matter. The letter states: It appears to me that the referral fee is particularly going to disadvantage those persons in the lower income group. By this I mean that it will not be worthwhile referring the matter to the Administrative Appeals Tribunal if the value of the tax involved is less than $200. A person who is in the lower income group and paying tax at the rate of 24.42 cents in the dollar will be most severely disadvantaged. The disallowance which represents an amount of $200 in tax in this particular case is $819. So, in regard to somebody who is paying tax at the rate of 24c in the dollar, the $200 tax would relate to a claim of $819. Such a person would be prejudiced in this matter and would regard it as not worth his while to proceed. I think that is disgraceful. Anybody who represented the area which is represented by the Minister for Housing and Construction would be particularly worried about this matter. The letter continues: On the other hand, a person paying tax at the highest rate, namely 57.08 cents in the dollar need only have a disallowance of $350 in claims to equal the $200 in tax. The idea of referring a taxation objection disallowance to the Board of Review (now the Administrative Appeals Tribunal) was to provide a cheap and inexpensive way for a taxpayer to have a person or persons outside the taxation office review their objection. Now this is not possible without a particular financial penalty. All I can say in regard to this quite complex series of measures is that it is yet another series of Bills which add to the 1,000 or so pages of additional taxation legislation that this Government has introduced. All of these measures are there for one purpose-that is, to raise more money from the overburdened taxpayer. They are there because the Government has spent too much on things on which it should not have spent taxpayers' money. That is the bottom line: Too much spent, too much tax. Mr MARTIN(Macarthur)(9.18) —As is usual in a debate on anything dealing with the Australian taxation system, we seem to hear the same diatribe from the honourable member for Mackellar (Mr Carlton) who claims, in talking about the reform of the Australian tax system, that this Government is complicating the system and introducing legislation which amounts to mountains of pages and reams of material that people have to read in order to understand it. The honourable member, during his discourse, made reference to the fact that I stood behind the Prime Minister (Mr Hawke) when he made promises about reforming the Australian tax system-the RATS system, as he called it. I place on the record that I am proud to stand behind that particular commitment and the reform of the Australian tax system. I tell honourable members opposite that the rats in the system came from their side. I refer to the rorting of the Australian tax system, which came about when the Opposition and its cronies, when they were in government, failed to grasp the nettle and failed to introduce any fairness in the tax system. It continued along its way of protecting the rorters of the system throughout the taxation area. The basic premise that we are faced with is that this Government is committed to creating a fair tax system in which everyone pays his or her fair share of tax. The range of opportunities and measures that we have introduced have contributed greatly to making the system much fairer. It must also be pointed out by way of introduction why these measures were necessary. The honourable member for Mackellar claimed that we were feeding some insatiable desire for funds so that we could continue along the road of public expenditure. That is absolute nonsense. Of course this was done so that the tax cuts, which will come into effect on 1 December and 1 July next year, will be neutralised in revenue terms. That is exactly what this Government is about. This is the way the tax changes should have been made long ago when those opposite were in power and had the opportunity to make them. Did they do it? No, they did not. The honourable member for Mackellar went through a range of different matters in his discourse. He talked about provisional tax and I was very pleased to hear him say that he was quite happy to accept the changes that would be made by the Taxation Laws Amendment Bill (No. 4) in the area of provisional tax. If the legislation stopped the rorting or someone not paying his fair share of tax he was quite in favour of it. I endorse those sentiments 100 per cent. The Bill is aiming to give effect to a Budget decision that the Government had taken to amend the income tax law to overcome arrangements for the avoidance of provisional tax. What has happened in the past is that there has been an avoidance by people paying provisional tax. From year to year there has been a manipulation in the distribution of net income of closely held partnerships or trust estates between partners and beneficiaries. Through this rorting of the system people have been able to get away with not paying a fair share of taxation and, of course, the burden has always fallen on those people who are least able to pay. This Government has taken measures which 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-of course that measure is defined in the Bill before us tonight-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. So this legislation is cleaning up the tax system. Once again it is an opportunity for this Government, and rightly so, to clean up the tax system and to make it fairer all round. The honourable member for Mackellar also raised the question of retrospectivity. From my reading of the Bill-I certainly stand corrected by those who have framed it-it would appear that it is a one-off measure that will raise revenue in 1986-87. So retrospectivity is not an issue and therefore I would assume that those opposite-where have they all gone?-would support this part of the legislation and, I would hope, the rest of it. Mention was also made about the capital gains tax. Of course the same old things are dredged up when the capital gains tax, the fringe benefits tax or any of the other measures we have introduced that will improve the fairness of the tax system are mentioned. Those opposite are out to protect their cronies-that is a very good word coming hot on the heels of the Queensland election-who have rorted the system and have protected the tax avoiders who have been in Australia under the stewardship of the coalition Government. We, as a Government committed to tax reform, have gone a long way down the track to affecting that matter. What is conveniently overlooked about the capital gains tax is that it is not, by western standards, a very harsh tax. It makes allowance for discounting for inflationary effects and it raises a number of other issues that indicate that the tax, as a collection of capital, is not a particularly harsh one and that is an important point to make. Once again the honourable member for Mackellar whinged about the fact that the advisers of the Treasurer (Mr Keating) did not brief the Opposition. He went on to say that when the offer was made it was somehow inconvenient to those opposite. I say to that: So what and bad luck. If the offer is made for the Opposition to get a briefing on a piece of legislation and if it thinks it is important enough, it will be there no matter what happens. A measured response was also given to the question of tribunal and court fees. The honourable member for Mackellar talked at length about the appeal fee, the $200 filing fee. He quoted from a number of letters from accountants who were whingeing on behalf of their constituent groups. They said: `It is really too bad that we will have to pay all this money and something has to be done'. I am amazed that the accountancy lobby in general voter land is so concerned about its clients. One would have thought that accountants would love the opportunity to lodge appeals on behalf of their clients, to think about the little extra money that would spin their way. I am pleased to see that the accountants have a conscience streak. I have taken on board the information the honourable member for Mackellar brought to this House tonight about how concerned accountants are for their own little taxpayers. Have I been the only one who has picked up the point that the honourable member for Mackellar seems to miss a lot of points about what the Government is doing? He seems to miss everything that we are doing. He has not had enough explanations; the Treasurer was not available to tell him something; there was no explanatory memorandum and, of course, without that he cannot understand what is going on. Mr Robert Brown —No, you are right. Mr MARTIN —I thought that because when tax is paid by the normal people who pay their tax, they put in their tax return. It is processed and if the taxpayer is dissatisfied with the assessment he can lodge an objection, but did the honourable member for Mackellar mention that? Mr Robert Brown —No, he did not. Mr MARTIN —Did he mention that there is no fee for an objection? Mr Robert Brown —No. Mr MARTIN —I am glad that the honourable member for Charlton can confirm that because I listened to everything the honourable member for Mackellar said in the half hour that he was on his feet and he did not say that once. He deliberately left out that point. He then went on to ask: What about the $200 fee? That arises if a person is still dissatisfied with the objection. If a person, having gone down one road, is not happy with the assessor and the Commissioner of Taxation's ruling, he can appeal and at that stage a $200 fee is appropriate. Why not? Time and time again we hear honourable member's opposite whinge about government expenditure and giving away things for free. Let me say this: If having gone down the objection road and if that has not satisfied some people-obviously one suspects that fairly large amounts are involved; I am not talking about the small taxpayers whom the honourable member for Mackellar would have us believe are worried about this legislation-such people would lodge $200. What the honourable member for Mackellar did not say was that if an appeal is successful the appeal fee is refunded. I cannot see anything fairer than that in the system. It comes back to the basic point we on this side raise and that is that all of these measures are designed to improve the fairness of the system, to get people to pay their fair share of taxation and not to promote the rorts and ramps that have been operative in this country for far too long. Today in Question Time in a number of questions on taxation issues those opposite expressed the view that once again this Government had not done anything, that opportunities were available in the past to use obscure parts of the legislation to pick up some rorts in the system. The Treasurer clearly indicated, as did the Prime Minister (Mr Hawke), that there are sections in the Income Tax Assessment Act, for example section 26 (e), that have always been there but were never used by those opposite. Did the great champion of fairness in taxation, the former Treasurer, the honourable member for Bennelong (Mr Howard), use it? No. Why not? It was because it was too hard, it could not be done, it was complex. Yet the honourable member for Mackellar said that the legislation this Government is introducing is too complex, that he cannot understand it. Those on this side seem to be able to comprehend it; those people in the electorate of Cunningham to whom the honourable member for Mackellar referred and those in the adjoining seat of Macarthur in Wollongong seem to understand it because there have not been too many whinges or complaints about the legislation we have introduced to make the tax system fairer. I think I can speak on behalf of the Minister for Housing and Construction (Mr West) who is at the table. I do not know of too many people from Wollongong who have whinged about the fairness we are trying to inject into the system. I think a comment was also made by the Prime Minister which is very relevant to this whole debate and that is that this Government would be pleased to fight the next election on the tax policies of this Government. I stand right behind that statement because when will we find out what are the Opposition's policies on these issues? Will the Opposition keep them under wraps until the day after the election and say: `This is what we would have done had we had the opportunity to give it to you'. Where are the Opposition's policies on taxation? The shadow Treasurer, the honourable member for Mackellar, rants and raves about this stuff. He said `It is all no good' or `We support this part if it is not retrospective and maybe we will not support that because some of our colleagues who are accountants will not like it'. However, does he offer any alternatives? Has anybody in this House heard an alternative from the alternative Treasurer? Mr Robert Brown —No. Mr MARTIN —No. Has anyone in this House heard an alternative from the alternative Prime Minister? Mr Robert Brown —No. Mr MARTIN —No. We have been waiting for two years and not one statement has been made on taxation. We are waiting with bated breath. I am particularly waiting for the honourable member for Flinders (Mr Reith), who gave me some papers that will form the basis of his contribution to this debate. I am waiting with bated breath to hear what he will say and for him to tell me how he and his Party will stop the rorts in the system, how his cronies have benefited over the years and what he will do to make the tax system any fairer than this Government has been able to make it. These Bills will go down that road to improve the system, to make it fairer, and we are very pleased to see them in here. Mr REITH(Flinders)(9.30) —Let me say right from the outset that when we return to government after the next election we will put a stop to the Labor Government's legislation to tax people's family homes. That is the first thing we will be doing. Is it not interesting that we had lots of interjections from the other side of the House when the honourable member for Mackellar (Mr Carlton) made the point that there are at least 20 circumstances in which family homes are subject to tax? But did we hear any defence of those provisions from the honourable member for Macarthur (Mr Martin)? We heard none whatsoever. The honourable member talked about the rates of tax payable on capital gains under this legislation which has been introduced as part of the tax reform package. The fact is that we have some of the highest rates of capital gains tax in the world because all capital gains are taxed at the marginal rate. When everybody else is trying to drop capital gains tax because it is seen as a disincentive to capital formation and employment we are introducing it. The Taxation Laws Amendment Bill (No. 4) introduces a number of amendments to taxation laws. As honourable members will have gathered from my remarks, I will be concentrating on those sections of the taxation laws which relate to the capital gains tax. Capital gains tax has been the subject of a lot of debate in Australian politics in the last few years. Conventional wisdom is that Malcolm Fraser ensured a coalition victory in 1980 when he ran some advertisements which suggested that Labor would tax people's homes. In 1983 the Prime Minister (Mr Hawke) told us that there would be no capital gains tax. In 1984 the then Leader of the Opposition predicted that as sure as night follows day, Labor would introduce a capital gains tax. Well, Malcolm Fraser was right when he said that under Labor one's money would be safer under the bed. He was also right when he said in the Liberal Party advertisements in the 1980 campaign: Labor is committed to a new tax which would hit middle income earners just as violently as the wealthy. This so-called wealth tax would steal the savings of people who through superannuation, insurance policies and small investments have attempted to provide for their old age or their children. It would attack hundreds of thousands of Australian families who own modest homes which have risen in value. That is absolutely right. He also said-and I quote selectively: If you sell your house to buy another then you would pay a capital gains tax on that. As I will show tonight, that is also true. He also said: Don't be taken in by the way Labor glosses over its commitments to new taxes. He asked: After all, where else would they get the money for all their schemes. Malcolm Fraser was dead right-Labor is taxing people's family homes. When people wake up to what is going on there will be a revolt in this country which will make the uprising on the fringe benefits tax look like a Sunday school picnic. The question in that advertisement headed `Where else would they get the money?' was particularly accurate. The Government said in September 1985 when legislation as brought down and on other occasions: `Look, do not worry about this capital gains tax. It is going to bring in only $25m. It is absolutely harmless'. In fact, the Government could not even predict in the Budget Papers what the figure would be. Let me contrast that with what was said in a letter that the Treasurer (Mr Keating) sent to his colleagues for their consideration at the Australian Labor Party's National Conference in Hobart this year. What was his prediction about how much the capital gains tax would bring in? He predicted that it would bring in $300m. So publicly he says $25m and privately he says $300m. I ask the people of Australia to make up their own minds which of those two figures they would be more likely to believe. This Bill was introduced in a great hurry. Nobody had a chance to read the fine print. As with all of Labor's tax legislation, it is incredibly complex, which might explain the honourable member for Macarthur's lack of understanding of it. Within weeks it became apparent that the Government had made a monumental blunder and that the tax was going to catch a whole lot of situations that the Government claimed were never intended. This Bill attempts to rectify the situation of just one of those circumstances-that related to options. Contrary to the statement that the tax would bring in only $25m, we found out a few weeks after the introduction of the Bill that in fact it would bring in something like $100m just for that one item of options alone. How the Minister in his second reading speech on these amendments could say that the amendments are not expected to have any significant effect on revenue is absolutely news to me. They are going to have a very significant impact on revenue and potential revenue. Of course, that will put an end to a windfall gain of $100m that the Government was going to receive. There is no doubt that the capital gains tax legislation before us tonight represents capital gains tax mark 2. There is also no doubt in my mind that this will be the first of very many more amendments to Labor's capital gains tax. It is so complicated that very few people really understand it. I have received a copy of a paper that Professor Parsons of the law faculty of Sydney University gave to a recent conference in Victoria. I am told that Professor Parsons is an acknowledged authority on taxation matters. That paper did not receive much publicity because not even the Press can understand the complexities of Labor's capital gains tax legislation. But some of the professor's comments give an indication of the problem which is still to be addressed. I have plucked out some parts of what he said in that paper, and I will quote them selectively. He said, amongst other things: The operation of the tax is haphazard . . . Grand ironies in the tax reform legislation of recent months will be found in the capital gains tax provisions . . . In these and other of its provisions the capital gains tax legislation enters on a rogue operation . . . The prospect is thus opened of the allowance of an expense in determining a net capital gain or loss and the allowance of the same expense as a deduction against assessable income. He also said: Problems in the application of the definition of costbase must arise. Lastly he said: Some attempts are made in the specific provisions of Part 111 (a) relating to trusts but they are sadly inadequate. This is a damning indictment of the drafting of Labor's capital gains tax legislation. Just a couple of months after bringing in its legislation the Government is very much on the back foot in introducing these amendments. The amendments do not go nearly far enough and the Government should pinch another one of the Opposition's policies and proceed to abolish this tax lock stock and barrel. I turn now to the specific provisions of the legislation. The effect of clause 31 is to define the basis upon which a capital gain is to be calculated. Let us take a simple example-the case of Mr and Mrs Smith who have been using part of their family home as a study or an office. They acquired the property after September 1985 and they have been claiming part of their electricity bill off their business-a fairly standard sort of situation likely to affect tens of thousands of Australians. Under those circumstances, Mr and Mrs Smith's home is subject to Labor's capital gains tax. Mr Lloyd —Do you think that is intended or unintended? Mr REITH —There is no doubt that it is intended because I have received a letter from the Commissioner of Taxation today which confirms that it is in fact an intended consequence of Labor's capital gains tax. Let us return to the example of Mr and Mrs Smith and assume that Mr Smith unfortunately dies. Mrs Smith would automatically become the owner of Mr Smith's half share. This is a very standard transaction. Mrs Smith decides to sell the home because it has unhappy memories for her, and most of the children have left home. When it comes to calculating the capital gains tax on the share that she has inherited the tax then will be calculated on the basis of the value of the house when it was purchased by them as a couple. In other words, the cost basis will include his half share of the date of the purchase. Under the legislation as it is prior to amendment, the date of acquisition-on my reading of the Bill-of that half share would be the date of death. The amendment, therefore, extends the operation of the capital gains tax. If that all sounds complicated, let me put it in simpler terms. This increases the tax liability on jointly held assets by widows and widowers. The Opposition is opposed to taxing family homes. Clause 36 relates to situations where, for reasons outside a person's control, he or she has to sell a property. Under the capital gains tax legislation all properties owned prior to 19 September 1985 are tax exempt. Basically the law says that if someone is forced to sell a property and buy another one, that person will continue to get the exemption on the new asset. I think that is only fair and it is in fact recognised in the legislation. The trouble is that the terms of section 160zzk are very narrow. The amendment in clause 36 gives a person more time to meet the narrow criteria which must be met to obtain that roll over exemption. It is fair enough that if a property is compulsorily acquired-if the property was owned before September 1985-because of circumstances beyond a person's control and he moves into a new place, that new place will also be exempt. The provision that the acquisition be by compulsion is a very narrow limitation on that roll over clause. Take the case of the Commonwealth, which has a policy of acquiring properties under what it calls acquisition by agreement. The Commonwealth is, for example, following that policy with the acquisition of properties for the extension of Sydney Airport, and there are about 250 properties in that one case. In those situations the acquisition is not compulsory and therefore those people will all lose the benefit of the roll over provision in the capital gains tax legislation. It is ironic, is it not, that the Government claims to make fair provision for people whose property is being compulsorily acquired and yet another government department, by its policies and by its actions, in fact negates the roll over provision in the capital gains tax legislation? In the last 10 sitting days we saw the Treasurer dodging and weaving on questions of the capital gains tax. But it has not only been in the last couple of weeks that he has done that because on 17 July I wrote to him on behalf of some constituents of mine who had a gun at their heads and who were forced to sell properties. I pointed out to him the narrowness of the criteria as they related to them. I still have had no response. If the Treasurer is taking some notice of the contributions made in this debate I hope that a response in relation to those people whom I represent will be forthcoming much sooner than it might otherwise have been. Since the enactment of the capital gains tax legislation I have prepared a list of 20 circumstances in which the family home is subject to a capital gains tax. A moment ago I mentioned one of them. Clause 37 of this amending Bill, which we are debating today, removes one situation which I have to confess I had not foreseen. In fact although there were 21 the Government will remove one; so we now have 20. When the legislation was rushed through the Parliament the Government made a mistake. Again take the situation of Mr and Mrs Smith owning the family home. Assume that Mr Smith dies and leaves the property to his only child and the property from the date of death becomes subject to the capital gains tax even if the only child is the sole beneficiary and has lived in the house as his permanent home. The problem is that the exemption requires Mrs Smith to continue living in the house until the point in time at which the child becomes the legal owner of the house. That is as I understand it. I attempted to clarify it but there was no opportunity for me to do so. But I would still like clarification on that because it is very relevant to the interpretation of that clause. The document refers to this as a technical deficiency. On my reading of it that is a very generous definition of the term and of the use of the English language. There are many other technical deficiencies in this legislation which have not yet been addressed and in the few minutes available to me I want to give some examples. Take the very common situation where somebody sees a house which he likes and decides to purchase it and in fact does purchase it. That person then signs a contract but takes longer than three months to sell his old place. For every day that it takes him longer than the three months to sell the old place, he will pay a capital gains tax. I ask honourable members on the other side, when they contribute to this debate, to give us some justification for taxing people's family homes in that instance. The Australian Labor Party has a deliberate policy of high interest rates. If someone buys a new home and if it takes him longer to sell his old home he could be paying pretty high bridging finance. Most people in that situation would, if they had the opportunity, rent out the old place until it was sold. But as soon as they do that, for the whole time that the property is rented, that house, that family home, is subject to Labor's capital gains tax. Take another situation: Say the local road construction authority in metropolitan Melbourne or Sydney decides to widen the street and take four or five feet off the frontage of a person's property. When it takes that property by compulsory acquisition the compensation received will be subject to Labor's capital gains tax. It gives with one hand and takes with another. In my electorate many people like to buy residential allotments in rural areas. Ten-acre blocks are very popular and are often zoned rural-residential and can be used only for residential purposes. If someone buys a block which is in excess of 2 hectares, which is about five acres, the land in excess of that five acres will be subject to Labor's capital gains tax, even though it may be used for purely private purposes, such as grazing the kids' ponies. Is that fair? Is that an encouragement to people to live in the country and enjoy a country life? No, it is not; it is another example of Labor taxing people's family homes. Under Labor's capital gains tax the Government will let someone claim an exemption for his principal home even though that person is temporarily absent from the home. That sounds fine, but the exemption is available only if that person, when he returns home, writes to the Commissioner of Taxation. A person must write to the Commissioner as a precondition for his not taxing the family home. The Treasurer has shown clearly in the Parliament in the last few weeks that he is not too well versed in the operation of the capital gains tax or the fringe benefits tax for that matter. If he does not know the law, how on earth can he expect ordinary Australians to understand the complexity of Labor's tax laws so that they can avoid paying a capital gains tax on their family homes? I turn to clause 37 of the Bill under discussion. If the beneficiary of an estate inherits a dwelling that is the principal residence of the deceased, no capital gains tax will be payable if the property is disposed of within 12 months. If, as the beneficiary, that person does not use the home as the principal place of residence and if the sale of the property is delayed beyond this time limit of 12 months, the tax will be payable. Anybody who knows anything about legal affairs knows that to finalise an estate often takes longer than 12 months. Why, in those circumstances, should people be subject to Labor's capital gains tax on their family homes? Let me give honourable members this one last example, which has been confirmed to me today in writing by the Commissioner of Taxation. This is again a very common situation of a person who buys a home and before he moves into that home he decides to renovate it, but it takes some time because builders and plumbers can be a bit slow when someone is in a hurry to move in. For the whole of the time that it takes that person to have the property renovated, and before he moves into it, his home will be subject to Labor's capital gains tax. This Government says it brought this tax in to get stuck into the tax cheats and the people who avoid tax. But are ordinary Australians, who fail to notify the Tax Commissioner that they have returned home, tax cheats? Are young couples, who buy a block of land and who are forced to move home within 12 months after erecting a house on their block and who then have to pay a capital gains tax, tax cheats and tax avoiders? Are the people in my electorate who want to live on a 10-acre block tax cheats because they simply chose to live in a semi-rural environment to bring up their children? This Government claims to support home ownership in this country, but the fact is that wherever we turn, Labor will be there with its hands in our pockets, subjecting our family homes to its capital gains tax. Mr West —Nonsense! Mr REITH —The Minister says that it is nonsense. The reality is that the Minister for Housing and Construction has not got a clue. The thousands of people who receive the $4,000 or $5,000 home loan assistance grant from his Government will also find his Government taxing their family homes. Mr DEPUTY SPEAKER(Mr Ruddock) —Order! The honourable member's time has expired. Mr CUNNINGHAM(McMillan)(9.50) —I support the Taxation Laws Amendment Bill (No. 4), the Australian Capital Territory Stamp Duty Amendment Bill, the Australian Capital Territory Tax (Transfers of Marketable Securities) Bill and the Sales Tax (Exemptions and Classifications) Amendment Bill (No. 2). We have just heard from the honourable member for Flinders (Mr Reith) about his favourite topic which appears to be the defence of those people who sought to make profits or capital gains outside the system where they were not required to pay any tax. It appears to me that the honourable member for Flinders has a real fetish for defending those in the community who do not wish to pay their share of tax as the majority of the community do. He has raised some very spurious claims tonight in this debate. Mr Reith —I will give you the letters from the Tax Commissioner. Mr CUNNINGHAM —I also have the letter from the Commissioner of Taxation addressed to Mr P. K. Reith, MP, Parliament House, Canberra. I noticed that the honourable member did not use one quote in his speech from the answers given to him by the second Commissioner. He selectively chose words and placed them in a context in order to create the impression that the family home would be taxed. I will deal with that in a moment. There is every reason why we had to have a taxation reform package introduced in this Parliament. There is every reason why on 1 December this year and 1 July next year we will see cuts in income tax rates of 60c in the dollar down to 49c and from 46c down to 40c. It is a legacy of seven years of conservative rule whereby, in that time, every possible method was adopted to avoid paying those rates of 46c and 60c in the dollar. In fact, many of the tax reform measures have been necessarily put into place to combat some very shifty footwork by some of our very zealous accountants working on behalf of those in the community who did not feel that they should be paying 46c or 60c in the dollar if they could possibly avoid it. We cannot blame people for finding the legal means of paying the minimum amount of tax. It is an accepted past time in Australia for most Australians to be able to say honestly and clearly that if they can find a legal means of avoiding tax why not do so. At times it could be morally said that perhaps some of the methods that have been developed within the laws of the country were not necessarily the intention of the law, but certainly they were not outside the law so I do not condemn those people who have used those methods. But I do condemn those who for that seven year period controlled the Treasury benches and who never at any stage took on the issue of tax reform. They knew that the 46c and the 60c in the dollar issue was impacting on more and more people in the community as inflation was pushing the wage levels up and as money values were deteriorating. Very quickly we found that many people in Australia on ordinary wages were moving into the 46c and 60c area. But nothing was done to overcome that problem. We saw the greatest growth industry in Australia, the tax evasion and avoidance industry which has flourished for many years. It has taken the Hawke Government with the Treasurer (Mr Keating) to have the courage to have a go at this issue and to put back into the taxation system fairness and equity. These Bills before the House certainly are designed to do just that. The honourable member for Flinders certainly was drawing a long bow at times in trying to justify his support for abolishing the capital gains tax. Whilst the Opposition may say that the taxation levels are too high and that they should be reduced we know that it did nothing about it-it certainly has no policy which designates, even now, what it would do in the 60c or 46c area. It is now law in this country, passed by this Parliament, that those tax rates will be coming down, yet we still do not hear from the Opposition any method which it claims will make the tax system much fairer and more equitable. We have in the debate in Australia a process of attacking packages in the taxation reform. Packages such as the capital gains tax and the fringe benefits tax are major issues when they are only part of a reform package. I am positive from my experience of moving around Australia with the task force of the Prime Minister (Mr Hawke) that the message getting through loud and clear is that the hollowness of the campaign against those tax measures is being overcome by the knowledge of many in the community that their tax cuts on 1 December will come through, that further tax cuts on 1 July will come through, and that many of the people who will be paying the extra tax under the FBT and, if necessary, under the capital gains tax, will have that tax adjusted in their taxation liability, except in those areas in the capital gains tax where people have to pay a share that they did not have to pay before. We are seeing a massive turnover in shares on the Australian share market. Today the buying and selling of shares on the Australian market over time will be taxed. Those people who are making profits will have to pay their fair share of tax. What the honourable member for Flinders did not mention in the debate when he tried to make out that the private home would be taxed-I challenge him on nearly every point he made in relation to the private home-was that the private home would no longer be a private home. He gave a reason why it would no longer be a private home; because somebody would be running a business from that private home, a business such as a doctors surgery from some part of the residence, and seeks, as a business, to make a taxation claim for the electricity charges, the renovations, and the repairs. Once that portion of the residence is designated as a business, and since the date of the announcement of the capital gains tax, why should any person running a business be entitled to make taxation claims on the one hand and expect not to be taxed under the capital gains tax or the fringe benefits tax on that very same principle? It is a principle we do not hear in this debate at present around Australia. We hear much from small business so-called leaders and representatives. We hear much from the honourable member for Flinders and the honourable member for Gippsland (Mr McGauran) who defend those in the community who want to have a taxation claim against the Tax Commissioner. They want it all back on the one hand but they do not want to declare any income from the business on the other which should show up on the credit record and be taxed. The tax reform package that this Government is bringing in will show through in the long run when people realise that the tax reform is a real reform. I will give the House a couple of examples of some of those things that have been put forward. For instance, if Mr and Mrs Smith-as has been quoted by the honourable member for Flinders-rent a home or a private dwelling to another person, for example an only child, and that only child also has a private residence of his own, and the second residence is rented for a business purpose, the minute it is rented one can bet that the accountant will be making claims at the end of the year for any expenses because they are running it as a business. Yet the honourable member for Flinders seems to believe that because it was a family home, but no longer is such because of the circumstances, somehow we are taxing a private home. It was a private home, but the day that it changed its use and became a residence for business use it was no longer a private home. The day that the Taxation Commissioner has claims against him for repairs, expenses and the running of that home as a business, the circumstances have automatically changed. The other measure the honourable member did not talk about was that it has to be on the real profit. The fact that someone sells a property at an inflated gain in money terms does not necessarily mean that that amount of money will be subject to tax. It is a fair and equitable tax system based on a person making a business decision to make a profit, and any profit in this country should be taxed just as those in the community pay their taxes where their profits are clear and in the open. A capital gain in those areas certainly should be taxed. I fully support that measure in the Bill. What I despise at the moment is the campaign being waged by the Opposition, an Opposition which has no taxation policies-- Mr Gear —None at all. Mr CUNNINGHAM —It has none at all. It has a list of promises-so long that one cannot put them on one page-of what it claims it will do if it is given the opportunity. Mr Gear —They are gunnas. Mr CUNNINGHAM —Opposition members are gunnas. They are gunna do this and gunna do that. They talk of millions here and millions there but they do not say anything about where they would collect any of these funds. Mr Hollis —Where is the money coming from? Mr CUNNINGHAM —Where will the money come from? The Opposition is claiming that it will put back billions of dollars into the coffers and that there will be no capital gains tax, which will go lock, stock and barrel, and no fringe benefits tax, which will also go lock, stock and barrel. The barrel is going to be very empty if the Opposition ever gets the opportunity to put a policy into practice. For the first time in many years those in the community whom the Opposition supports will have to carry their weight and pay their way as other taxpayers have done. In this Budget, $22,700m will be collected from pay as you earn taxpayers to be used for our hospitals, roads and schools and the welfare and health of the nation. Under the tax reform package we will collect between $500m and $700m just in fringe benefits tax. The sum of $4,500m will go back, as tax cuts, to the pay as you earn taxpayers who have paid the $22,700m. It will be the first time in many years that many people will pay their fair share of tax on the capital gains-the real profit-they have been making and on the fringe benefits they have been getting. I fully support the legislation and the reforms this Government has brought before the Parliament. I challenge Opposition members who keep saying that, lock, stock and barrel, they will throw out this measure and that measure but that they will give concessions here and concessions there. Never before have I heard so many words spoken or seen so much effort put in to support so few people who seem to believe that they have a divine right to the benefits of this country but also a divine right not to pay their fair share for the roads, hospitals and other amenities which other Australians, the PAYE taxpayers, are forking out for, to the tune of $22,500m. It is time the Opposition came clean on the issue of tax reform. It is time its members stopped bleating around the country and getting behind people who have decided that they will find ways and means of not paying their 46c or 60c in the dollar. It is not the lower income people we are talking about. It is those in the 46c to 60c tax bracket who have decided that they do not want to pay. I do not deny that those tax rates are too high. They should have been fixed 10 years ago. The Opposition had its opportunity in its seven years of government to introduce some tax reform and it did nothing. We have here a tax reform package which will reduce the 46c and 60c tax rates, which are a legacy of the conservative Government. The law has passed. The bank managers who are worried at the moment that they will have to pay something like $20 or $30 rent for the houses they have had free for years will be getting a tax cut on 1 December and a follow-up tax cut on 1 July next year. They will come out exactly where they started. For the $20 in rent they will have to pay they will probably get about $20 back in tax cuts. Then there will be nothing for the Opposition to go to the people with. It is time the Opposition knuckled down and came up with some real policies. I give the Opposition one warning. It will have nothing to fly with come six months time, because the people it is now depending on to support it will see through it as the people whom I have been meeting in the last two or three months out in the country have seen through it. I fully support the tax reform measures before the House. Mr ADERMANN(Fairfax)(10.04) —We are debating cognately four taxation measures: The Taxation Laws Amendment Bill (No. 4) 1986, the Australian Capital Territory Stamp Duty Amendment Bill 1986, the Australian Capital Territory Tax (Transfers of Marketable Securities) Bill 1986 and the Sales Tax (Exemption and Classifications) Amendment Bill (No. 2) 1986. In the time I have I will concentrate on the first of those Bills. In addressing my remarks to the Taxation Laws Amendment Bill (No. 4) 1986 I refer firstly to the provision of a $200 filing fee for applications to the Administrative Appeals Tribunal to review certain decisions of the Commissioner of Taxation. I take the strongest exception to a number of aspects of this legislation. Let me remind the House that I sought to have recorded my opposition to the termination of the operation of the taxation boards of review and the direction of those appeals to the Administrative Appeals Tribunal. As I recall it, the honourable member for Groom (Mr McVeigh) also sought to have his opposition specifically recorded. I am sorry that the Minister Assisting the Treasurer, the Minister for Immigration and Ethnic Affairs (Mr Hurford), is not in the House tonight, because he contested much of what I then said and I have been proved correct. This Bill has now confirmed the validity of the criticism and concern which I then expressed and calls into question whether the rights and opportunities of a taxpayer in dispute with the Commissioner to appeal and contest decisions he deems unfair are of any value at all. Let me illustrate how this Bill, with its filing fee, is another curtailment of those rights. In reference to a taxpayer's right of appeal let me say-and I say it in great sorrow-that I have never before, in a very long professional association with the Australian Taxation Office, found the Office to be as arrogant, unhelpful and unresponsive as it is now. It simply does not answer inquiries from taxpayers and tax agents. To get a reply in a reasonable time is impossible. Yet it issues its own demands and ruthlessly demands immediate response and compliance under threat of legal action. As a Federal member, when I raise an issue I get-most, but not all, of the time-prompt answers and responses. But a simple request put forward recently took 10 months to elicit an answer. More often than not my involvement is sought by constituents because of their frustration and unsympathetic treatment. I know that the Office can never expect to be the most popular arm of government, but it is a matter of real concern that almost universally among taxpayers and practitioners the Taxation Office is regarded as more and more arrogant and dictatorial. More and more it ignores urgent requests for advice and guidance and more and more it is unwilling to have any regard at all for the rights of taxpayers. Whilst I appreciate the access I have as a member of parliament, the tragedy is that practitioners and taxpayers become so frustrated that the only way they can get any consideration and response is to involve their Federal member. More and more of the constituents I see and more and more of the representations I am called upon to make involve such disputes and problems with the Taxation Office. I hope that what I say will be taken seriously and that this complete breakdown in good will and public relations which is attributable to the attitudes of the Tax Office will be seriously addressed and urgently remedied. The filing fee is another impediment being placed in the way of taxpayers who seek to contest a decision of the Commissioner. Taxpayers who have asked the Commissioner for reconsideration and who have sought reference to a board of review are today receiving amended assessments relating to returns as far back as 1979 and 1980. The amendments include all sorts of additional interest and penalties; yet the Tax Office, which can string out decisions over such an inordinate length of time, will not extend by a single day the short period prescribed under the Income Tax Assessment Act for a taxpayer to lodge an appeal. I have found evidence of that. I have seen that peremptory action time and time again. I ask whether under any objective judgment in a democratic nation this has any similitude to justice or fair play. What is the response of the Taxation Office and the Government to the complaints? Firstly, the Office delayed referring appeals to the boards of reviews. The delays in having appeals heard were due not only to the number of appeals but equally to the unwillingness of the Office even to refer them to the boards of review. I have said before and I say again that the removal of the boards of review was justified on grounds which do not stand scrutiny. It was a decision which most seriously reduced the rights and opportunities of a taxpayer to appeal. Further, I have said before and I say again that the expertise and experience of the boards of review and their proven record should not have been jettisoned. In my view it was a further aggregation of power to the Australian Taxation Office and a serious further impediment to a taxpayer who is aggrieved. The process of appeal was complicated and made less understandable and also less accessible. Having removed the boards of review which for a $2 deposit would consider an appeal, this Bill provides for a filing fee of $200 for applications to the Administrative Appeals Tribunal. The huge delays, the demands, the writs and the attitudes of the Australian Taxation Office have placed taxpayers in an untenable position. Unresolved disputes over returns six or seven years old have meant that a taxpayer does not know the status of subsequent returns. He does not know whether he has to restructure his whole affairs. He does not know where he stands. Is this an unfair and insidious process of attrition? Is it a way of enforcing a decision without even the possibility of independent adjudication? Can a taxpayer insist on his rights when he contemplates the delay and the procedures confronting him and when he considers that if he insists on his legal rights he can face bankruptcy and ruin? If it is the fault of the Government denying the department personnel and facilities to remedy this situation I call on the Government to remedy without delay these deficiencies. How on earth in the light of this very real and accurate scenario which I have outlined can the Government justify now this huge increase in filing fee from $2 to $200. Mr Cobb —It can't. Mr ADERMANN —It cannot. How can any ordinary taxpayer who has been assured that he has rights and opportunities to appeal against what he perceives to be an unfair decision possibly have any confidence in those assurances? Quite the reverse applies. He has found it almost impossible to have appeals heard. In addition to all the threats, demands, writs and penalties he has to find the substantial sum of $200 to even commence the process. There is absolutely no way in the world that the Government can possibly claim that it is facilitating the taxpayers' opportunity and rights of appeal. This increase most certainly is not only a disincentive but can be an absolute bar to the opportunity to appeal. This simply means that taxpayers and practitioners who have already been dismayed and frustrated in effect are being ignored. They are being told that it is indecent and unpatriotic to have the temerity to call into question any decision of the Commissioner of Taxation. They are being told that if they have the audacity to believe that they have been unjustly or unfairly dealt with and want to query that treatment they will be slugged a large sum of money if they want to pursue their democratic rights. The arrogance and delays of which I spoke are being rewarded and the aggrieved are being penalised. The whole matter of taxation justice and the whole credibility of the so-called rights of appeal certainly warrant very serious consideration. The appeal process which in so many ways has already become unwieldy, inaccessible and even farcical is now being further eroded and discouraged. If the $200 filing fee were a step which would unravel this unholy mess I could give it some support, but it is not. It will simply reinforce the dictatorial attitudes and unsympathetic treatment which the taxpayer has to endure. It will make his despair at ever getting some assistance and redress even deeper. For that reason I condemn and completely oppose this increase as vehemently and justifiably as I opposed the dismantling of the taxation boards of review. The injustice of imposing this filing fee is not redressed by the provision that the fee will be refunded if the appeal is successful. The up-front demand for the $200, the delays and inconvenience while waiting for the appeal to be heard, the fear of penalties which may be incurred if the appeal is unsuccessful and the taxpayer cannot afford to proceed to the courts, simply mean that the ordinary aggrieved taxpayer will be deterred from appealing. Only the affluent will use this procedure. The ordinary little Australian whom this Government professes to consider is just ignored and wiped off. Recently, I was very concerned, surprised and disappointed to see remarks by the Commissioner of Taxation in the media. He came into a political debate with comments that he ought not to have made and which have led to further political debate. I was distressed about that. I intend to leave the matter there because in this House I never have made and never will make a personal attack on any person under the privilege of Parliament who has not the right to defend himself in this place. But I was very disappointed and distressed to see those remarks made publicly. I have never been happy about the decision-- Debate interrupted. Mr DEPUTY SPEAKER(Mr Mildren) —Order! It being 10.15 p.m., I propose the question: That the House do now adjourn. Mr TIM FISCHER(Farrer)(10.15) —I rise again in relation to the Australian War Memorial. A few short hours ago in the Senate the Minister for Veterans' Affairs (Senator Gietzelt) tabled a report by Mr K. N. Jones, AO, CBE, inquiring into the Australian War Memorial. The Minister, when tabling the report, made a highly selective comment in relation to the report. Indeed, may I tell the House that he completely ignored the fundamental finding which says: I cannot conclude from this Inquiry that there exists misbehaviour by the Director in the terms of Section 24 (1) of the AWM Act as I understand that provision. Of course, section 24 (1) is of crucial interest. It is headed `Termination of appointment'. It states: The Governor-General may terminate the appointment of the Director by reason of the misbehaviour or physical or mental incapacity of the Director. I am pleased to see that the Minister for Arts, Heritage and Environment (Mr Cohen) is in the chamber because he was a previous Minister with some expertise on this great national institution, the Australian War Memorial. We have a situation in which the Minister for Veterans' Affairs is continuing to pursue a vendetta against certain elements of the Australian War Memorial. He is continuing to pursue a game plan with the objective of creating some form of peace museum out of the Australian War Memorial and removing its independence. I tell the House clearly and categorically that the report provides no vehicle for the Minister to produce any amendments to take away the independence of the Australian War Memorial. Indeed, the report finds quite categorically-and I quote from Mr Jones: I am not persuaded that a statutory power of direction is essential to correct present difficulties. Later he says: I do not support the Minister's proposal for the appointment of the Secretary of his Department to the Council in the form in which it has been put forward . . . Indeed, the Minister cannot get up his game plan or maintain his vendetta in relation to the fundamental finding that Air Vice-Marshal Jim Flemming was found not to be guilty of any misbehaviour in relation to section 24 (1) of the Australian War Memorial Act. In dealing with the report I point out to the House that it was developed over a six-week period. It had reasonably comprehensive terms of reference but clearly a great deal more time was needed if there was to be a more comprehensive examination of all the problems relating to the Australian War Memorial and more specific recommendations arising out of the conclusions of such investigation. The honourable member for the Northern Territory (Mr Everingham), if the opportunity permits, will further highlight additional aspects in relation to the Australian War Memorial. I would like to focus on a couple of specific areas relating to this incredible saga of the Australian War Memorial. I am delighted that my activity as shadow Minister for Veterans' Affairs has brought about two or three of the terms of reference and several pages of comment in this official report. One of the key parts of the report relates to a staff bulletin which came into my possession and across the top of which I wrote `Reverse leak-with compliments Tim Fischer, MP' and arranged to have placed in the boxes of the Press gallery at Parliament House. I am delighted to tell the House that Mr Ken Jones has found that there is no evidence that the words `Reverse leak-with compliments Tim Fischer' were written by the Director because they were written by me as part of highlighting the second paragraph of the staff bulletin, which said that on Thursday, 22 May, at 2.30 p.m. as a result of a ministerial direction the Department would be holding a small function and the purpose of the function, inter alia, was for the Minister for Veterans' Affairs to introduce the new Veterans' Entitlements Bill due for proclamation that day. I say again in this House that the War Memorial should not have been used for such a function. I am interested to learn that an officer of the Minister whom I shall not name wrote to the Department saying that the Minister would like a ceremony arranged at the War Memorial. That constituted a misuse of the War Memorial and the coalition has been justified in the stand it has taken in relation to the Australian War Memorial. I will fight tooth and nail to obtain independence for the War Memorial. Mr DEPUTY SPEAKER(Mr Mildren) —Order! The honourable member's time has expired. Mr HOLLIS(Throsby)(10.20) —Today, 11 November, is a very significant day for a number of reasons. Traditionally, it is Remembrance Day-a day on which people in many parts of the world pause and reflect on the supreme sacrifice made by thousands upon thousands of men and women who have given their lives in pursuit of an ideal. On this day also people throughout the world, more than ever they have in the past, reflect too on the folly of war, and on the breakdowns in relationships between peoples and nations that lead to the ultimate of all struggles-bloody warfare. Remembrance Day is celebrated on 11 November because on this day in 1918 the hostilities of World War I came to an end. In its day, that war was described as the Great War-as the war to end all wars. As with other wars, the vast majority of its combatants went to war in the hope that their fellow countrymen and women might never again need to go to war. Many of them died in the expectation that their friends, families and children might never know what it is to be the victims of strife and warfare. In this year especially-the International Year of Peace-there is all the more incentive to reflect on these matters. Earlier tonight, a group of wonderful students from Kiama High School in my electorate of Throsby presented here in Parliament House a dramatic performance which explored these themes. Their presentation was viewed by some 40 members, senators and staff who received it most enthusiastically. What the students presented grew out of their research into the lives of two Australian soldiers killed in action in France during World War I. Their research began with two names on war memorials-the name Walter Farquharson found on the Kiama war memorial and the name Eric Tate inscribed on the war memorial in Kangaroo Valley. Walter Farquharson and Eric Tate are but two of the 56,000 Australian servicemen and women killed in action in World War I, and they are but two of the 29,000 Australians killed in that war's dreadful trench warfare in France and Belgium. The students of Kiama High School, through their research, and now through their dramatic presentation of that research, have made the names Walter Farquharson and Eric Tate live again. They have rescued them from relative obscurity. They are no longer simply names engraved on stone; they are flesh and blood people who left the warm circle of families and friends, never to return. The students of Kiama High have looked at the lives of these two brave soldiers. They have looked too at their families, friends and workmates; and they have looked at the Australian society in which they grew up, and which gave purpose and meaning to their lives. The students have now presented on many occasions the fruit of their research. Using photographic slides, music and narrative, they are able to present a wonderful and very moving account of these men and of the events that led to their deaths in the mud of France and Belgium. Walter Farquharson worked as a mailman at Kiama Post Office. He was well known and very popular. Among other activities, he was for a time the beach inspector at Kiama. In 1915, at the age of 24, he enlisted and left home. He fought at Gallipoli before being transferred to France, when he was killed at the age of 26 by an exploding shell. Eric Tate was a popular member of a Kangaroo Valley family renowned for its breeding of dairy cattle, an activity in which the young man took a keen interest. He too enlisted in 1915, and he too was killed at the age of 26 by an exploding shell. On this day, Remembrance Day, the words on our lips are `lest we forget'. Those of us who had the privilege to witness the dramatic presentation of the Kiama High students were, I know, deeply moved by the experience. Thanks to them, we are less likely to forget. Thanks to them, the words `lest we forget' take on fresh meaning. As the students reminded us, perhaps next time we pass a war memorial, that monument and what it signifies will take on a deeper meaning. I take this opportunity of publicly and sincerely thanking the students and teachers of Kiama High School for their wonderful, thought-provoking and moving presentation. I also take this opportunity to thank the members of this chamber who saw that presentation this evening. Mr EVERINGHAM(Northern Territory)(10.25) —On this evening of 11 November-Armistice Day-I rise to inform the House about the subversion of Australia's premier shrine to our nation's war dead, the Australian War Memorial. A small cadre of dishonest academics, employed by the War Memorial and entrusted with the history of Australians who paid the ultimate sacrifice, have betrayed that trust. They are the Memorial's Assistant Director of Research and Publications, Dr Michael McKernan; his deputy, Dr Margaret Browne; and his researcher, Mr Peter Stanley. Over the past three years or so, and under Dr McKernan's guiding hand, this troika conspired to turn the War Memorial bookshop into a centre for private profit. Dr McKernan redirected memorial staff into private research projects and waived or discounted research and reproduction fees on library photographic material, when he, his friends and business associates were involved in publishing ventures. Dr McKernan further used his high position to mislead, or totally ignore, the duly appointed War Memorial Council while salaried officers commissioned, wrote and profited from books ordered in large numbers by the War Memorial bookshop. Dr McKernan was responsible for the bookshop. He used the Memorial's research and publications committee to rubber stamp commercial decisions which would not have stood up in front of the War Memorial Council, had it known about them in full. Shortly after the present War Memorial Director, Air Vice-Marshal Flemming, took over in 1983 he officially queried Dr McKernan's activities. The good doctor assured the new Director that all was above board. Earlier this year the Director again had a look at Dr McKernan and some of his mates at the Memorial and found what looked to him like graft and corruption on a grand scale. He decided to investigate further. But McKernan and company have friends in high places. One is Mr Peter Hansen, the Senior Private Secretary to the Minister for Veterans' Affairs (Senator Gietzelt), who is responsible for the War Memorial. Mr Hansen had already ingratiated himself sufficiently to Dr McKernan and Peter Stanley to earn an acknowledgment in a book the Memorial staffers co-authored-Anzac Day-70 Years On. Delegations went back and forward between the War Memorial and the Minister's office. The Minister, Senator Arthur Gietzelt, whose staff, incidentally, draw the highest level of travel allowance outside the office of the Prime Minister and Cabinet, already incensed over the exposure of his own misuse of the War Memorial facilities for political purposes, became involved. Instead of investigating McKernan and company, the Minister mounted a highly public investigation into Air Vice-Marshal Flemming's administration. Of the 30 or so anomalies discovered by an inquiry by chartered accountants, Arthur Young and Co., I will cite two. Firstly, in February 1983, Sydney publisher and War Memorial publications adviser, Mr John Ferguson, wrote to Dr McKernan suggesting that the War Memorial co-operate in a series of books for children titled Australians at War. Dr McKernan did more than co-operate. He led the Memorial's research and publications committee to believe that the series would be written-and I quote-by `well known children's writers'. He then hired himself, disengaged himself after a query from the Director, and put in his wife and his deputy, Dr Margaret Browne, to write the series. He then authorised an extravagant print run through the War Memorial bookshop. Neither of these people are children's writers, let alone well-known ones. The Memorial's committee and governing council were never informed as to the identity of the authors. A total of 26,000 books of the series were stocked from May 1984 to February this year at a cost to the Memorial of $35,000. By the end of June a paltry 2,587 had been sold, leaving the Memorial considerably out of pocket, but leaving the McKernan and Browne households with handy amounts through author's fees and royalty payments. Secondly, we move to some private enterprise on the part of Dr McKernan's researcher, Peter Stanley. In February 1985 the research and publications committee approved expenditure of $63,000 for a Memorial guidebook. But neither it, nor the Council, realised it was endorsing a venture authored by Mr Stanley, in conjunction with the Sydney publisher, Mr John Ferguson, whom I mentioned earlier. Mr Stanley wrote the book A guide to the Australian War Memorial, and John Ferguson published it. Through Mr Stanley's boss, Dr McKernan, highest priority was given to requests for material from the photographic library, disrupting normal work. Even without the illegal use of the Memorial's facilities, that cost ran $6,200 over budget. The salaried staffer, Stanley, and the publications adviser, Ferguson, now have a total bill in to the War Memorial for $69,200. It gets worse. The 160-page glossy guidebook, authorised by Dr McKernan's protege, has never gone on public sale as 35 major mistakes have been discovered in the text. For example, on page 70 Mr Stanley had the wrong Australian battalion ambushed at Long Tan, the most celebrated and costly action by Australian troops in Vietnam. Mr DEPUTY SPEAKER(Mr Mildren) —Order! The honourable member's time has expired. Mrs KELLY(Canberra)(10.30) —The speech we have just heard from the honourable member for the Northern Territory (Mr Everingham) is so far removed from the reality of the findings made in the report on the Australian War Memorial as to make one wonder whether the honourable member was talking about a war memorial situated on another planet. He obviously had not read the report. If he had all those accusations, why did he not have them investigated with the matters dealt with in the report? The issues raised by the honourable member for the Northern Territory do not come up in the report that was tabled in this Parliament. It is about time the Opposition stopped pretending that it does not regard the Australian War Memorial as a political football. Tonight it used the Australian War Memorial as a political football. Instead of the fantasyland version of what the report found, let me take honourable members through this report and explain what the report actually said, not what the honourable member for the Northern Territory gave as his view of it. The report concluded that there are serious weaknesses in the management performance of the Director of the Australian War Memorial. It concluded that in a number of cases insufficient or misleading information had been given to the Minister for Veterans' Affairs (Senator Gietzelt), that this gave the Minister serious cause for concern and grounds to lack confidence in the advice he received from the Director. Whilst not finding that misbehaviour had occurred, the report drew the damning conclusion that the Director had displayed a less than satisfactory level of competence and carelessness in expression in circumstances when truthfulness was required. These findings and a number of others, some of which accept that the Director has made a significant contribution to the development of the Australian War Memorial, are now before the Australian War Memorial Council for consideration. I would have thought that a mature and fair-minded approach regarding the protection of the welfare of this great national institution would have demanded that the gross and obscene attempts to play political football now being made by an Opposition, which cares nothing for Australia's war dead but only for political gain, should stop immediately. It is essential that the Council take a careful and cautious look at where the administration of the Memorial stands. The sordid performance we have had from the honourable member for the Northern Territory will do nothing for this. Clearly, the findings made by Mr Jones raise serious difficulties for the Council. Mr Jones has found that the Director is less than competent to manage the Australian War Memorial. The Opposition has chosen to hang its hat on the narrow point that no misbehaviour has been found. It cares nothing about the lack of competence in administration which Mr Jones has found. One may gain an illustration of just how far removed from reality the honourable member's presentation of events relating to the Australian War Memorial is. In relation to the transfer of bank accounts of the War Memorial, Mr Jones has stated in the report: The Director was deficient in not carrying out his duties by not responding to specific advice from a senior officer or not recording the action he took following that advice. The Director gave false information about approaches to the four banks to the Executive Committee of the Australian War Memorial Council. The Director also gave the Minister for Arts, Heritage and Environment (Mr Cohen) false information on the question of consultation with the banks which he subsequently related to me in the Parliament in his written reply to the question I asked him. Let me say that as a member of Parliament who faithfully seeks to obtain information from Ministers for the purpose of representing the interests of my constituents I find it appalling that a senior public administrator should seek to mislead the Parliament in this way. Whilst there have been constant attempts to draw the Minister for Veterans' Affairs into the public debate on this matter, the Minister has been most restrained. He believes as I do that this is a very difficult situation for the Australian War Memorial. The report of Mr Jones vindicates the stand the Minister took on this matter. It found that all of the six instances of misleading material which the Minister referred to the inquiry were borne out. I deplore the comments the honourable member for the Northern Territory chose to make about Dr McKernan. Clearly, the remarks he made could only have come from a source close to the Director. As the officer responsible for the Research and Publications Branch of the Australian War Memorial, Dr McKernan's activities feature in the Jones report to nothing like the extent the Director's do. Why did the Director not take these matters up during the inquiry? Why were they not raised with the Council even earlier? If these allegations were established, does the Director not understand just how much more invidious his position is as the person responsible for day to day management? It would have been better for the honourable member for the Northern Territory had he not chosen to use this chamber to talk about an individual who has worked very hard in the interests of the War Memorial. Mr HODGMAN(Denison)(10.35) —Mr Deputy Speaker, in recent times I have become increasingly interested, as indeed have most members of this House and I think all Australians, in the law relating to tax. I want to discuss tonight a couple of provisions of the current Income Tax Assessment Act to see whether we can sort out precisely what they mean. I refer specifically to section 51a (3) of the Income Tax Assessment Act. Before I move on to that, I have been asked to read into Hansard some material which the honourable member for the Northern Territory (Mr Everingham) was unable to deliver because of time. I will deliver it if I may. It should be taken as a continuation of the remarks of the honourable member. Had time permitted, he would have said: `I wonder how the families of the 18 dead diggers from D Company, 6th Battalion would feel about that fundamental error. These are just two examples of a long list of activities which should concern any responsible Minister. But the Minister, Senator Gietzelt, is more interested in nailing Air Vice-Marshal Flemming, a man with 40 years of honourable service to his credit, than in pursuing those public servants who are war profiteering 14 years after the last angry shot. Since the Minister has damned Air Vice-Marshal Flemming by selective use of the report he tabled on the War Memorial in another place earlier tonight, I am curious to know why copies of the report are not generally available to honourable members'. Those are the remarks the honourable member for the Northern Territory wished to make but was unable to complete due to time. I return to section 51a (3) of the Income Tax Assessment Act and in particular the definition of living away from home allowance which I now read: `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 incurred by him if the allowances or benefit were not received, through- these words are important- having to live away from his usual place of abode in order to perform his duties as an employee. I have also been looking at section 82kt (1) which came into the Act as a result of legislation introduced into this Parliament by this Government and by the Treasurer, the honourable member for Blaxland (Mr Keating). That deals with the definition of `travel allowance'. It states: `travel allowance' means an allowance paid by an employer to an employee for the purpose of enabling the employee to incur, in respect of travel away from the employee's- these words are important- ordinary place of residence undertaken in the course of performing duties as an employee of the employer, outgoings in respect of accommodation, in respect of the purchase of food and drink, and in respect of expenditure incidental to the travel; That has been put on the statutes of this country by this Government and by the Treasurer. Section 51a refers to `usual place of abode' and section 82kt (1) refers to `ordinary place of residence'. Under the Freedom of Information Act I have obtained two documents from the Australian Taxation Office which I think are very interesting. One is Canberra Income Tax Circular Memorandum No. 821, J.199/1 dated 24 August 1962, so it stated the law in this country for 24 years. The other document is more recent. It is Taxation Ruling No. IT2117 dated 27 November 1984. It deals with the living away from home allowance of an electrical mechanic. He was carrying out work on the Wyong-Newcastle railway line. I have had a look at both these rulings and I am concerned that if a member of parliament were erroneously to state what was `his ordinary place of residence' or `his usual place of abode', whilst he would be entitled under the Remuneration Tribunal to receive his travel allowance, he may unwittingly breach both sections of the Income Tax Assessment Act and be liable to pay tax thereon. That is a matter which I think the Government should look at. This could involve any of us, senior or junior, from Prime Minister to Treasurer. I think it is a matter of very great importance, otherwise tax might be evaded. Mr DEPUTY SPEAKER(Mr Mildren) —Order! The honourable member's time has expired. Mr ROBERT BROWN(Charlton)(10.40) —A short time ago I expressed concern about the evidence which indicated that a fair amount of speculation in regard to the Australian dollar was taking place in the foreign exchange markets. I indicated that in June this year the amount of turnover of foreign exchange on those markets required to support legitimate transactions through the balance of payments would have represented something less than $500m for each trading day, but the actual amount of foreign exchange which went through those markets for each trading day was $17,000m. I was pleased that my comments directed some attention to this question. Since then some commentators have indicated some reasons why the amount of foreign exchange going through the foreign exchange markets would appear to exceed the amount needed to support legitimate transactions through the balance of payments. Reference has been made, for example, to what is known as the process of search, that is, the practice of large corporations and statutory authorities covering themselves when they have large one-way buying or selling orders to handle. There are other cases in which large institutions which have large parcels of a single currency to be exchanged, and the market knows that they are coming, boost the trade in relation to those transactions in order to disguise their tracks. There are examples of legitimate types of transactions of that kind through the foreign exchange market which help to explain the large volume of transactions. But it is interesting to note that there is also other evidence to support the sort of concern that I expressed on that earlier occasion. Australia, for example, ranks about twenty-third among exporting countries of the world. But Australia, in terms of Australian currency being traded, in comparison with the trade in the currencies of other countries is about sixth in the world. So, even on that count it is fairly significant. I refer, for example, to the United Kingdom and the amount of currency being traded in relation to the volume of currency which would need to be traded in order to support its foreign transactions. About 10 per cent of the total amount would be required. In Australia the figure is less than 3 per cent. That provides some evidence of that as well. I have also been joined by a fairly substantial ally in Mr John Fletcher, the General Manager of the Commonwealth Development Bank. Mr Fletcher has stated: The multinational bankers should never be underestimated in the lengths they will go and the dirty tactics they will employ in pursuing their profit objectives. The international money market makes a rugby pack look like play school. . . . The small people can't do it, it has to be the large operators . . . I would think it is the large overseas operators more than the Australian banks. They know they can manipulate the Australian exchange market because it is such a small market. I call it dirty tactics. They would call it speculation. In a very telling comment, Mr Fletcher, who apparently worked in Mexico at one stage during his banking activities, stated: First-hand, on-the-spot experience of what the international bankers did to Mexico when it was on its knees in early 1983 made me acutely aware of the dangers. He referred to them as bully boys. He stated: Those bullyboys' version of the golden rule is `whoever has the gold makes the rules'. Put another way, they believe that the rich nations should get richer and the poor nations can get poorer for all they care, shortsighted though that view is. I am pleased that Mr Fletcher has made comments which substantiate the concerns that I expressed with regard to manipulators in the foreign exchange markets. I am pleased that the Treasurer (Mr Keating) and the Reserve Bank made it clear, particularly during July and August, that we would not stand idly by and allow Australian economic stability to be disrupted by these manipulators, and that we would, if necessary, put a floor under the dollar. We did that. They turned their attention away from speculating in the Australian dollar. They turned their attention to gold, silver and equity investments as well, because they knew that the Australian Government was intervening actively to ensure that those things would not occur. Mr DEPUTY SPEAKER(Mr Mildren) —Order! The honourable gentleman's time has expired. Mr BURR(Lyons)(10.45) —I raise tonight the disgraceful and cynical attempt by the Prime Minister (Mr Hawke) to stop legitimate logging operations at Jackeys Marsh in my electorate. I want to bring to the attention of the House some of the facts surrounding that operation which will prove to any fair-minded person that the Tasmanian Government and the Tasmanian Premier were fully justified in giving authority for the logging operations in that area to continue. If I may enlighten the House, logging in that area has been conducted for at least the past 40 years. That is a fact that the Prime Minister has never disclosed in all of the statements that he has made. He did not disclose to the public or to the Parliament the fact that an environmental impact study was conducted for logging operations in that area during 1981-82. That study was concluded and made public in September of 1982. The Prime Minister did not disclose that the logging operations have continued since the tabling of that environmental impact statement and have been based on the recommendations of that EIS. Mr Hodgman —Shame on him. Mr BURR —As my colleague from Denison says, shame on the Prime Minister. The Prime Minister did not disclose that the memorandum of understanding between the State and Federal governments was also based on the recommendations of the EIS. In fact, both governments agreed that the recommendations of the EIS were appropriate and that, provided logging operations were conducted in accordance with the EIS, they would be quite legitimate. That has occurred since the EIS has been tabled. I point out to the House that, since that EIS was tabled, the company involved, Associated Pulp and Paper Mills Ltd, has continually over the last three years conducted logging operations in the Jackeys Marsh area. What is happening at the moment is not new. It is not a new forest area that all of a sudden an avaricious private company has moved into. That is not what is happening. That area has been logged continually over the last three years but the logging operations were suspended during the winter months of this year because of the wet weather when it was simply too boggy for the logging operations to continue. Now that we are moving into the summer months, the logging operations are being recommenced. That is what is happening. Mr Hodgman —It is normal. Mr BURR —That is normal practice, as my colleague from Denison has said. That is what is happening. But we are now seeing a very cynical Federal Government trying to use that operation for its own political purposes. What we have seen over the last few weeks is a statement from, I think, the Attorney-General (Mr Lionel Bowen) who threatened to withdraw the Tasmanian freight equalisation scheme if logging operations did not cease or if the Tasmanian Government did not take action to cease operations in that area. Mr Hodgman —Blackmail. Mr BURR —My colleague says that that is blackmail. I agree with him. We have also seen threats being made by the Federal Government to withdraw the woodchip export licences if logging operations do not cease in that area. We have to question the motives when the Prime Minister has suddenly become very concerned about environmental issues. Only last week the Prime Minister visited the electorate of my colleague the honourable member for the Northern Territory (Mr Everingham), and made his visit to Kakadu National Park. We must question why the Prime Minister is suddenly becoming concerned about environmental issues. What the Prime Minister is all about is holding an election in March of next year. The Prime Minister is desperate to drum up support from the environmental movement. We on this side of the House are fully aware that the Prime Minister has lost extensive support amongst the environmental movements because of actions that he has taken over uranium mining and other matters. What he is now doing is trying to curry support from the environmental movement and the activists within the environmental movement so that they will support and work for his campaign during the coming summer months. No exercise could be more cynical in political terms. I just hope that the people of Australia recognise the cynicism of the Prime Minister and recognise that he has no legitimacy in trying to stop the logging operations at Jackeys Marsh. Mr DEPUTY SPEAKER(Mr Mildren) —Order! The honourable member's time has expired. Mr MILTON(La Trobe)(10.50) —The so-called New Right, a politically conservative group of right wing political commentators, academics and business leaders, espouses a philosophy which is as old as democracy itself but it is the complete antithesis of democracy. Members of the New Right represent greed and power and the total aim of these people is to ensure that representatives of the weak and disadvantaged of this world are not represented in government. Labor governments have long represented the poorer sections of the community and whilst the Australian Labor Party is sometimes slow to respond to their needs, at least attempts are made at both Federal and State levels of government to redistribute the wealth of society for the benefit of those who lack the resources to help themselves. An examination of the aims of the New Right, and the apostles of the movement come in all guises, reveals its motives. It attacks the unions because they represent labour power and give organised workers the ability to gain an increasing share of the profits of industry which they alone create. It attacks public institutions because public enterprise does not provide profits for financiers and entrepreneurs. It espouses the cause of competition because it allows the strong to prevail over the weak and it sneers at co-operation as representing an unnecessary helping hand to those who are afraid to go it alone. Government services are abhorrent to the New Right because their provision means that taxes on the wealthy must be levied to provide the health, education and welfare services for people in poverty whom they consider are inferior. The New Right has been labelled as having fascist tendencies and there is no doubt that whilst it does not espouse militarist solutions it blames the union movement and the Labor Government for problems which are far more deep seated than its simplistic calls for market-force solutions and for small government. Fascists always use scapegoats and it is in this sense that in attacking the union movement the New Right is using fascist tactics. It is interesting that in the last issue of the Bulletin for 1985 an article was written by Peter Kelly headed: `Cunning Moonies Move to Control the New Right'. In the article Peter Kelly drew attention to the fact that followers of the Sun Mejung Moon's Unification Church had succeeded in gaining the support of right wing Australian academics for several of the Moonies' front organisations. These organisations stage conferences and seminars at which influential and prominent community members are given a public forum for their views. The audiences attracted to the forum then become the target for conversion to the Moonies' philosophy and for the exactment of financial contributions for the Moonies' cause. An organisation called the Professors World Peace Academy recently conducted a third annual conference on interdisciplinary approaches to peace. Two other organisations were also involved in organising the conference, namely, the Democratic Capitalist Tradition Research and Community Education Project and its parent body, Australians for Commonsense, Freedom and Responsibility-ACFR. Honourable members should notice the innocuous title of these organisations and also the conservatism of the people associated with ACFR which claims it preserves what is best in Western civilisation and publishes educational treatises accordingly. The ACFR consulting editors are all well known conservative writers, such as Professor Heinz Arndt, Lauchlan Chipman, John Frodsham, Warren Hogan, David Kemp and former politicians Bert Kelly, John Hyde and John Wheeldon and businessmen Hugh Morgan and Phil Scanlon. The President of ACFR is Professor Mark Cooray who is also a vice-president of the Professors World Peace Academy (Australia). The honourable member for Tangney (Mr Shack) wrote most enthusiastically about ACFR in his column in the Australian. He described ACFR as being concerned with democracy, the promotion of freedom and free enterprise, ever increasing taxes and other government charges and authoritarian trendyism and coercive utopianism. In other words, ACFR is concerned to attack all the means by which there can be any hope of redistributing wealth and power in our community to those most in need. To get back to the Bulletin, the article by Peter Kelly pointed out that it was the Moonies who were actually sponsoring the third annual conference on interdisciplinary approaches to peace through the Professors World Peace Academy and thus the ACFR was aiding and abetting the infamous Sun Mejung Moon Unification Church. Suffice to say that some of the right wing speakers, who had initially been attracted to the conference, drew a line at participating in a joint venture with the Moonies and declined to attend. One of the best critiques of the New Right was contained in a speech by the Minister for Trade (Mr Dawkins) given on Australia Day entitled: `The False Patriots of the New Right'. I commend the speech to all those people who are interested in unmasking the true aims of these people whose sole motive is narrow self-interest. Let me conclude by quoting from that speech: The contrast between ourselves and the New Right lies in the true meaning of consensus politics. The approach that encourages us to discuss our problems, to consider where we are as a country and where we want to go. The approach that is not content to apportion blame and identify scapegoats. The approach that searches for solutions, fosters agreement and encourages people to work together for their mutual well-being. Mr DEPUTY SPEAKER(Mr Mildren) —Order! The honourable member's time has expired. Mr COBB(Parkes)(10.55) —I am often intrigued in this chamber to hear one or two members of the Government object to being called `socialists', such as in the context of the expression `the Hawke Socialist Government'. Members of the Labor Party, after all, sign a pledge supporting socialism in the Party platform when they win pre-selection to stand as candidates for the Party. The Prime Minister (Mr Hawke) himself is even on record as having said in the 1970s: I believe that ultimately the welfare of the people of Australia will be best served when the means of production, distribution and exchange are removed from private ownership and are owned by the people. Karl Marx could not have put it better himself. Some Government members are prepared to admit that they are socialists, but only in the watered-down version of being `democratic socialists'. To me that is a contradictory term, like `hot ice' or `pregnant virginity'. But what also intrigues me is Government members' use such as we heard from the previous speaker-of words such as `fascist' or `nazi', which they sometimes use to label members of the Opposition who advocate philosophies or policies different from their own. I wonder whether Government members realise what `socialism' and `fascism' mean and that in many ways these two `isms' have very similar meanings. We all understand what communism is: It is where the state owns and controls everything, and everyone is supposed to receive the same wage. Communism, of course, is a particular variant of socialism. This is acknowledged in the fact that the world's main communist country, Russia, calls itself the Union of Soviet Socialist-I emphasise the word `Socialist'-Republics, the USSR. To Marx and Engels the words `communism' and `socialism' were synonymous; there was no distinction between them. In fact, all countries ruled at present by communist regimes describe themselves officially as socialist countries, not as communist countries. Communism and socialism are opposed to the freedom of the individual and so are classified as totalitarian. I mention these things because another `ism' that is also totalitarian in nature, and that is also a particular variant of socialism, is fascism. Fascism first appeared in Italy in 1922 under Mussolini, who incidentally was an ex-social democrat. Italian fascism actually began with a split in the ranks of Marxian socialism. In England, fascism emerged with an ex-Labour Party Minister, Oswald Mosley, a socialist, who created the British Union of Fascists. A special type of fascism also spread to Germany and was adopted by Adolf Hitler. Like the Italian brand, this type of fascism had a strong element of militarism in it and was called nazism. But make no mistake: German fascism was both totalitarian and socialist in nature. Adolf Hitler's Party was even called the German Socialist Labour Party and was regarded not only as anti-capitalist but also strongly socialist. In fact, its slogan encompassed its philosophy-namely, `the Commonwealth or State ranks above private profits'. This slogan implies that profit-making business harms the vital interests of the majority and that there should be public control over production and distribution. This, of course, is classic socialism and is the antithesis of what we in the coalition stand for. We strongly believe that an indispensable prerequisite of democracy and of the rights of individuals lies in economic freedom. If this is stripped away by the elements of compulsion contained in socialism, communism or fascism, we move towards a totalitarian state. So when the coalition advocates such policies as, say, voluntary unionism, because we believe in the rights of the individual rather than the individual having to be made subservient to the mob, and Labor members opposite call us fascists, they know not of what they are accusing us. Fascism is a totalitarian doctrine, just like socialism or communism. It is anti the individual and pro some type of dictatorship being in control. It is against everything we stand for but very similar to what the Labor Party stands for. So if Government members want to call us names, let them call us libertarians or free enterprisers. At least then they will be correct. Mr DEPUTY SPEAKER(Mr Mildren) —Order! It being 11 p.m., the debate is interrupted. Mr Holding —Mr Deputy Speaker, I require the debate to be extended. Mr DEPUTY SPEAKER —The debate may continue until 11.10 p.m. Mr HOLDING(Melbourne Ports-Minister for Aboriginal Affairs)(11.00) —I desire to enter the debate to answer some of the allegations made by the honourable member for Farrer (Mr Tim Fischer), who accused my colleague the Minister for Veterans' Affairs (Senator Gietzelt) of pursuing a vendetta against the Director of the Australian War Memorial. Without canvassing all the issues, because there are many to be considered, I simply say this: According to the report that has been provided to the Council, the Minister raised some six instances of concern which were based upon false information being provided to him by the Director. In all of those six instances the statements made by the Minister were found to be justified. I do not want to canvass that aspect any further other than to say that I think that in itself negates the assertion made by the honourable member for Farrer. I wish to draw the attention of all honourable members to one other matter and that is the finding that an answer provided by the Minister to a member of the House contained false information. Clearly it was deliberately false and known to be false. One of the most important aspects, indeed the only aspect upon which the Westminster system can operate, is that all honourable members are expected under all circumstances never ever deliberately to mislead the House. Where that occurs there are ample findings to suggest that that is a contempt, and has to be treated as a contempt, by any honourable member who engages in that practice. There are adequate precedents to show that the only honourable course a Minister who deliberately misleads the House or lies to the House must follow is to submit his resignation. That is a standard that has been-- Mr Blunt —Not many on your side. Mr HOLDING —I am trying to make a serious point because I think it is time that all members of this House were prepared to assert the prerogatives of this Parliament over the prerogatives of the bureaucracy, irrespective of who is in government. If a member on the other side in the course of his parliamentary duties addresses a question, particularly a question on notice to a Minister, the Minister is entitled to see that all of the resources of his Department are brought to bear so that that information is answered as accurately and as honestly as possible. Mr Shipton —And as quickly. Mr HOLDING —I agree with that. If in fact any public servant or any person holding a position of trust in respect of a Minister is possessed of information which is relevant to this House and to the member asking a question, knowingly, deliberately and dishonestly provides misinformation knowing that it is untrue, in my view, that also constitutes a gross contempt of this House. In my view, just as a Minister is called upon to account should he mislead the Parliament or any member of it, so too should anybody else. We are in a very odd situation. It has been suggested by the honourable member for Farrer-I know he has too much regard for the parliamentary institution to assert it seriously-that because of a level of political support that he might want to give for other reasons to a director of the war museum, he would be prepared to say: `Well, we will overlook it this time'. I want to go on the public record as saying that, so long as I am a Minister, if any public servant provides misinformation, knowing that it is false, as far as I am concerned, that public servant ought to be dismissed. Unless a Minister insists on that standard, the whole Westminster system falls into disrepute. Mr Tim Fischer —So you are calling for his dismissal? Mr HOLDING —No, that is a matter for the Council; it is a matter for the Minister who is directly responsible. I am asserting what my own position is. However, I believe it is an assertion which ought to command the support of every member of this House who believes, as I believe, in the efficacy and the integrity of the Westminster system. Mr DEPUTY SPEAKER —Order! The Minister's time has expired. Mr COHEN(Robertson-Minister for Arts, Heritage and Environment)(11.05) —I want to answer briefly the questions raised by the honourable member for Lyons (Mr Burr) because he is a member who has the respect of this House and is entitled to a rational and sensible reply. I was surprised at his outburst because it was not typical of the way he usually approaches such matters. He referred to the recent controversy over woodchipping in Tasmania. To give some background to this matter, the memorandum of understanding on Tasmanian woodchip exports establishes a process of consultation designed to promote the conservation and development of forests, ensuring that the industry operates efficiently while recognising proper environmental concerns. On 21 October this year the Australian Heritage Commission announced its decision to list Jackeys Marsh and Quamby Bluff on the National Estate Register. That decision triggered consideration of how National Estate values will be taken into account by the Tasmanian Forestry Commission. That point was acknowledged by Mr Gray himself in his telex to the Prime Minister (Mr Hawke) on 7 November, in which he referred to steps taken by the Tasmanian Forestry Commission under clause 27-namely, that the Forestry Commission has sought further advice on Register values. The fact is that the Tasmanian Forestry Commission did not seek that information until logging had recommenced in Jackeys Marsh. The Tasmanian Government has therefore authorised logging, and the possible destruction of National Estate values, before the process of discussion on how these values might be protected has had a chance to run its course. The Tasmanian Government's action is pre-emptive and highly provocative, and shows a blatant disregard for the environment. It is important to remember that the memorandum of understanding is an agreement reached between the two governments to develop a process of consultation so that logging can proceed in Tasmania while at the same time National Estate values are preserved. The National Estate values identified by the Heritage Commission include the diversity of plant communities, rare and threatened plant species, areas of outstanding aesthetic value, archaeological sites and rainforests. It is important, particularly in these early stages when we are developing this memorandum of understanding, when we are trying to work with the Tasmanian Government, the Tasmanian Forestry Commission and the Department of Primary Industry, including my colleague the Minister for Primary Industry (Mr Kerin), that we make sure that all the processes are gone through fairly carefully. The Prime Minister has now called upon the Premier to stop logging in the area until the process of consultation has been allowed to run its full course. A Commonwealth Advisory Committee on Tasmanian Forestry Operations has been appointed and it is due to report on Jackeys Marsh within three weeks. The Heritage Commission is expected to complete its detailed work on National Estate values within two weeks. We are asking Mr Gray to cease logging in the area while the process of consultation and dispute settlement outlined in the memorandum of understanding runs its course. We are asking him, particularly in these very early stages of negotiation, with this memorandum of understanding being a very new document, to make sure that we go through all the due processes before logging proceeds. That is all we are saying. I really think that the honourable member for Lyons and the Premier have gone off a little half-cocked and have not given this Government credit for trying to make this memorandum of understanding work. House adjourned at 11.10 p.m. The following papers were deemed to have been presented on 11 November 1986: Australian Citizenship Act-Regulations-Statutory Rules 1986, No. 306. Australian Meat and Live-stock Corporation Act-Orders-1986- MQ18/86-High Quality Beef to EEC-1987 Quota Administration Scheme. MQ19/86-Sheepmeat and/or Goatmeat to EEC-1987 Quota Administration Scheme. MQ20/86-Buffalo Meat to EEC-1987 Quota Administration Scheme. Bankruptcy Act-Rules-Statutory Rules 1986, No. 323. Compensation (Commonwealth Government Employees) Act-Regulations-Statutory Rules 1986, No. 308. Customs Act- Notice-1986-No. 11. Regulations-Statutory Rules 1986, No. 307. Defence Act-Determinations-1986- No. 64-Education Assistance Overseas. No. 65-Travelling Allowance and other allowances. No. 66-Intermediate Term Duty Living Allowance and other allowances. No. 67-Intermediate Term Duty Living Allowance and other allowances. Excise Act-Notice-1986-No. 21. Export Control Act-Regulations-Statutory Rules 1986, No. 313. Family Law Act-Regulation-Statutory Rules 1986, No. 322. Federal Court of Australia Act-Rules-Statutory Rules 1986, No. 324. First Home Owners Act-Regulation-Statutory Rules 1986, No. 312. Fisheries Act-Notice-No. 173. Grain Legumes Levy Act-Regulations-Statutory Rules 1986, Nos. 309, 321. Health Insurance Act-Regulations-Statutory Rules 1986, No. 318. Judiciary Act-Rules-Statutory Rules 1986, No. 305. Lands Acquisition Act- Land Acquired for Telecommunications Services-Ardlethan, NSW. Statements (3) of lands acquired by agreement authorised under sub-section 7 (1). Migration Act-Regulations-Statutory Rules 1986, No. 317. National Health Act-Regulations-Statutory Rules 1986, Nos. 319, 320. Navigation Act-Orders-1986- No. 13-Marine, Part 31. No. 14-Marine, Part 52. No. 15-Marine, Part 2. Papua New Guinea (Members of the Forces Benefits) Act-Regulations-Statutory Rules 1986, No. 316. Postal Services Act-Australian Postal Commission-By-laws-1986-Postal-Amendment-No. 3. Proclamation by His Excellency the Governor-General fixing 1 December 1986 as the day on which section 3 of the Australian Federal Police Amendment Act 1986 comes into operation. Public Service Act- Determinations-1986-Nos. 71, 75, 76, 77, 78, 79, 80, 81, 83. Regulations-Statutory Rules 1986, No. 314. Quarantine Act-Determination fixing fees pursuant to section 86E, dated 31 October 1986. Remuneration Tribunals Act-Remuneration Tribunal-Determination-1986/19-The Secretary to the Department of Territories and holders of public offices on other bodies. Seamen's War Pensions and Allowances Act-Regulations-Statutory Rules 1986, No. 315. Seat of Government (Administration) Act- Determinations listing fees and charges for purposes of- Health Authority Ordinance, dated 23 October 1986. Radiation Ordinance, dated 16 October 1986. Ordinances-1986- No. 66-Chiropractors Registration (Amendment). No. 67-Health Professions Boards (Elections) (Amendment). No. 68-Health Professions Boards (Procedures) (Amendment). No. 69-Betting (Totalizator Agency) (Amendment) (No. 2). No. 70-Coroners (Amendment). No. 71-Magistrates Court (Amendment) (No. 2). No. 72-Credit (Amendment) (No. 4). Regulation-1986-No. 24 (Motor Traffic Ordinance). States Grants (Petroleum Products) Act-Amendments of the schedules to the subsidy schemes in relation to the States, dated 16 October 1986. Superannuation Act-Regulations-Statutory Rules 1986, No. 311. Telecommunications Act-Australian Telecommunications Commission-By-laws-Telecommunications (Charging Zones and Charging Districts)-Amendment-No. 72. Trade Practices Act-Regulation-Statutory Rules 1986, No. 310. Veterans' Entitlements Act-Instruments approved by Minister to vary- Pharmaceutical Benefits Scheme, pursuant to sub-section 91 (2), dated 1 November 1986. Treatment Principles, pursuant to sub-section 90 (4), dated 1 November 1986 (2).