Wednesday, 25 February 1987 Madam SPEAKER (Hon. Joan Child) took the chair at 10 a.m., and read prayers. Bill presented by Mr Kerin, and read a first time Mr KERIN(Werriwa-Minister for Primary Industry)(10.01) —I move: That the Bill be now read a second time. The purpose of this Bill is to amend section 15 of the Wheat Marketing Act 1984 to correct anomalies that have become apparent following advice from the Attorney General's Department. As it is currently drafted the Act provides for the determination of a guaranteed minimum price -GMP-for Australian standard white wheat-ASW-and other prescribed categories of wheat on a basis which was not intended by the Government, which is inconsistent with other sections of the Act and which would run counter to sound and broadly acceptable accounting procedures as currently used by the Australian Wheat Board. The current methodology adopted by the Australian Wheat Board for calculating the GMP for ASW wheat involves inclusion of the actual value of ASW wheat sales and an imputed value for sales of other categories of wheat on an ASW basis. This methodology has been employed by the Australian Wheat Board for both the 1984-85 and 1985-86 seasons. Advice from the Attorney-General's Department is that section 15 (2) of the Act, as it is currently drafted, only provides for the actual value of ASW wheat sales to be included in the calculation. However, the Government considers that the current methodology being used by the Australian Wheat Board is consistent with understandings reached with the Australian wheat industry at the time the current wheat marketing arrangements were formulated. While the current Act provides for the determination of GMP's for categories of wheat other than ASW the intention was to continue the practice of the Wheat Marketing Act 1979 under which a single pool based on ASW wheat would operate. The ASW GMP would therefore be the benchmark against which GMP's for other prescribed categories of wheat would be determined. If the methodology implied in the advice from the Attorney-General's Department were used it would involve a move away from this approach towards separate pools for separate categories. This was not the Government's intention and hence my proposal to amend section 15 of the Act to properly reflect the current methodology. Section 15 is also not consistent with sections 16 and 17 of the Act which provide for the calculation of the net pool return rate. This latter figure when compared with the GMP for ASW wheat determines the size of any underwriting commitment. It is also intended to amend the Act to clarify the treatment of interest on credit sales and income on investments. It is proposed that these items be included as revenue in the calculation of gross returns for ASW wheat. Pursuant to sub-section 15 (1) of the Act, I am required to determine and gazette the guaranteed minimum price for all prescribed categories of wheat by 1 March of each season. If such gazettal notice has not taken place, the Australian Wheat Board is not empowered to make the final advance payment to growers, which would, in the normal course of events, take place about two weeks into March. I have already indicated that there is the possibility of a payout under the underwriting arrangements for the 1986-87 pool. Any payout depends on exchange rates as well as export returns and so a precise figure cannot be fixed on government commitment until the pool closes in about three years time. The amendments themselves should not involve any additional Commonwealth Government costs, savings or revenue. The Australian Wheat Board is currently employing accounting procedures which would accord with the Act in its amended form. The Bill amends the current Commonwealth legislation so that it conforms with the Government intention, and with current methodology used by the Australian Wheat Board. It conforms with understandings and expectations of State governments and industry. Passage of this legislation this week will allow for the expeditious payment to growers of money owed to them. It will allow for the appropriate levels of payments. I commend this Bill to honourable members. I present the explanatory memorandum to this Bill. Madam SPEAKER —Does the House agree to the second reading of this Bill proceeding forthwith? There being no objection, it is so ordered. Mr HUNT(Gwydir)(10.06) —The Opposition will give ready passage to the Wheat Marketing Amendment Bill 1987 because of the circumstances at the present time. The Opposition will facilitate its passage through the Parliament because as the legislation now stands it would disadvantage the Australian wheat growers by somewhere between $1.40 and $1.50 a tonne, due to a flaw in the drafting of the existing legislation. I mention in passing that this legislation is being introduced at a very important time because today farmers in western New South Wales are suffering the ultimate indignity of having their tools of trade, that is, their tractors and machinery, sold by the finance companies that have repossessed the equipment. More than 100 items of machinery are expected to be auctioned today near Molong. They have been repossessed by the finance companies, most of which happen to be subsidiaries of the Australian banks. They are saying to the farmers: `Although we will not drive you off your land and you can stay on it we will take your tools of trade away from you'. The value of the equipment is estimated at between $1m and $2m. In many instances these farmers were advised two years ago to make the purchases, purchases designed to increase their productivity, efficiency and output. One case study was brought to my attention only yesterday by Mr O'Dea at Canowindra. He cites the case where a fellow bought a tractor for a purchase price of $30,000 three years ago. He has paid off $16,000. He could not meet the repayment this year because the interest rate had gone up from 19.5 per cent to 26 per cent. The item has been repossessed and the man was told that he still owes $40,000 on the tractor. That means that on a tractor worth $30,000 on which he has paid $16,000, he still owes $40,000. The tractor is likely to sell today for around $18,000, leaving a balance of $22,000, for which this farmer will be summonsed. It is hardly surprising to learn that there will be pickets at the sale today, especially in view of the threat of further sales if today's goes ahead. I give warning to this Parliament that if these sorts of actions continue to take place around the country areas, because of the crisis in which the farmers are finding themselves at present and because of the great crisis of confidence and anxiety among families-- Madam SPEAKER —Order! I remind the Deputy Leader of the National Party that this is a pretty restricted Bill. I have given him some latitude but I ask him now to attend to the Bill. Mr HUNT —This Bill is related to the wheat industry and it involves the payment of an extra $1.50 a tonne to the Australian wheatgrowers. I submit that we are giving early passage to this legislation and we will do everything we can to facilitate the passage of this Bill because of the critical situation facing Australian wheatgrowers. Nothing highlights it more than this disgraceful situation in central New South Wales. I think it would be a great pity if, in discussing this Bill and the plight of the farmers at present, this particular issue was not brought to the attention of this Parliament-and I do not know how else I am able to do it, with any reason. People are very disturbed indeed. It is for that reason that in discussing and giving support to this legislation to give it a speedy passage, I raise this issue. In other circumstances it may have been very hard to get the Opposition members, both in the Senate and in this House, to allow a piece of legislation to suddenly come into this House, as this Bill has this morning, without having had an airing in the Opposition's rooms. Madam SPEAKER —I will accept the reasons of the Deputy Leader of the National Party for so incorporating the backup argument. Mr HUNT —Thank you very much, Madam Speaker. I think that shows something of your compassion for people. Mr Simmons —Ha! Mr HUNT —The honourable member opposite should not laugh. I ask him not to laugh at a situation that is of great concern to many people. As one who represents a rural constituency, and as one who knows of four suicides in his home area in the last two or three months and another attempted suicide, I can assure the honourable member that I have never been more worried about the anxiety and the problems now affecting so many of our rural families. This piece of legislation is designed to correct an anomaly which has existed in legislation for two years. As the Minister for Primary Industry (Mr Kerin) has indicated, it was recently detected by the Attorney-General's Department. The purpose of this Bill is to ensure that Australian wheatgrowers do not lose $1.25 to $1.50 a tonne in their final wheat payment for the 1986-87 season. The Attorney-General's Department has advised that strict application of section 15 (2) of the Wheat Marketing Act 1984 would force the Australian Wheat Board to change its method of calculating pool payments. This would be contrary to the best interests of both the industry and the Board. Under current arrangements all payments are made through a pool based on the price of middle grade wheat, termed Australian standard white, with premiums for grades of higher quality and discounts on grades of quality lower than ASW. If section 15 (2) strictly applied, it would mean separate pools for each grade, it would be cumbersome, costly and against the wishes of the Australian Wheat Board and the industry-and certainly against their best interests. Separate pools would be a real problem as different sales are made at different times of the year into different markets. This could theoretically mean that a higher grade could attract a lower price than ASW grade due to market circumstances. Unless the amendment is carried, passed and enacted this week, the final season payments, which must be gazetted by 1 March, could be jeopardised. As the Opposition spokesman for primary industry for a long time, I have had to fight this Government in this House over the structure of farm legislation. Many problems could have been avoided had the Minister consulted the industry bodies properly. In recent times I have felt that the Minister was negotiating far better with industries. I refer to the wool industry. I have heard only good reports from the Australian Wool Corporation and the Chairman of the Wool Council of Australia of the extent to which the Minister and his Department have consulted with the wool industry. But it is unfortunate that this amendment is necessary at such a critical time. To some extent, I blame the Parliamentary Counsel, because obviously those who drafted the legislation are basically responsible for this difficulty. But I was staggered to find that yesterday the Department had not been in touch with the Grain Growers Council of Australia. Mr Ray Jeffries was contacted yesterday morning by my office and he had no knowledge whatsoever of this situation. I found that extraordinary. This anomaly was, after all, uncovered three weeks ago. Yet 24 hours before the legislation was due to come into this House-and there was a request that it be dealt with in a way which broke every procedure in the rule book-the industry was not aware of the change, although the Wheat Board was. The changes directly affect returns of about $1.25 a tonne, at a time when average wheat farmer incomes across Australia this year will be a miserable $1,200, on average, which of course is about 10 per cent of the average weekly wage. I recall the introduction of the parent Bill-the Wheat Marketing Amendment Bill-in this place. At that time the Minister introduced 13 amendments to his own legislation at 1.20 in the morning on the day of the debate. I think that was the time, Madam Speaker, when I called you Madam Fertiliser. There were so many Bills coming into the House at that time that I got totally confused, just as the whole place was confused. I think we ran out of gas. Mr Simmons —Like the National Party at the moment. Mr HUNT —No, the National Party of Australia is not running out of gas. Did the honourable member see the poll this morning? The National Party is going like a train. I recall the frustration of handling the Wheat Marketing Amendment Bill 1985. Eventually we gained Senate support for five amendments to the legislation. I recognise the pressure imposed on the Minister's office. I was in that situation for a number of years and I know the sorts of pressures. But if legislation affects the livelihood of people, especially in this case wheat growers, at a critical time his Department or his officers should take the time to talk with industry bodies. If the Minister cannot find time to do this, which is probable, somebody in his office or in the Department should be making the appropriate contacts. I think it is very unfortunate that the industry is feeling embattled, as it is at present, and getting the treatment that it is. I will never forget the spectacle of the Prime Minister (Mr Hawke) turfing the nation's top farm leader, Mr Ian McLachlan, out of his office just before Christmas. It was an incredible thing for the Prime Minister to do. He must have been tired. He must have been fed up with something. Surely, no human being would do that to another human being unless there was something really wrong. I do not know whether somebody had upset him. It may have been the Treasurer (Mr Keating) for all we know. But I feel sorry for Mr McLachlan, and farmers generally for having their leader thrown out of the office. It was incredible. I can never recall that happening to any leader of any organisation at any time during the term of the Fraser Government. Other changes in this Bill are minor. They include the clarification to include interest on credit sales and income from investments as revenue when calculating the gross returns for ASW wheat. More importantly, the legislation protects an income of $1.50 a tonne, or about $400 a year, to growers, while the Government continues to ignore other direct policy measures which are dragging thousands of wheat growers towards bankruptcy. Those two important areas of policy, of course, are domestic production costs and the external trade policy. I accept that the savage downturn in wheat grower fortunes today is due in part to both factors. This vital industry must be preserved. It is either the second or third-depending on the season-most important export revenue or foreign exchange earner. It has enormous potential to assist with recovery from the record trade deficits that we are experiencing at present. There is such a crisis that it is very important for the Government to keep input costs down. It was for that reason that I released a 14-point strategy, which I would like to table, if that is possible, with the leave of the Minister and the House. Madam SPEAKER —Is leave granted? Mr Kerin —If it is the same old stuff, there is no problem. Madam SPEAKER —Leave is granted. Mr HUNT —I say to the Minister that it is not the same old stuff. It is quite important stuff as a matter of fact. There would not be a wheat grower, even in the electorate of Calare, who would not agree that these points are very necessary if we are to have any benefits from this or any other legislation. The immediate injection of substantial additional funds to the rural adjustment scheme to extend the interest rate and debt adjustment scheme is required. Mr Kerin —I rise on a point of order, Madam Speaker. I do not mind incorporation, but this is not a chance for a policy speech. It is a very narrow amendment. Madam SPEAKER —The Minister has a point. The Chair has given some latitude to the Deputy Leader of the National Party to explain the background to the problems of the wheat farmers. I suggest that he not continue to read his points of policy to the House. Mr HUNT —I would like to table it and also to have it incorporated in Hansard. Madam SPEAKER —I regret that it does not fall within the guidelines for incorporation into Hansard, but the honourable member has leave to table it. Mr HUNT —What are the guidelines, Madam Speaker? Could you explain them? Madam SPEAKER —The guidelines are that the material cannot be easily read into Hansard. It would be a diagram or graph. Mr HUNT —It is not a graph. May I show it to you, Madam Speaker? Madam SPEAKER —Yes. A graph or a list of tables can be incorporated but something that can be easily read at the table cannot be incorporated. This is a narrow Bill in which this document does not belong and the honourable member cannot have it incorporated into Hansard as it does not fall within the guidelines. Mr HUNT —It is very unfortunate, Madam Speaker, and the Standing Orders need to be changed. I am sad that this cannot be incorporated, but I respect your ruling. I cannot leave this very important subject or legislation without once again appealing to the Minister for Primary Industry, who seems to have a perpetual grin on his face-I do not know what he is laughing at; I certainly hope that he is not laughing at the problems of the Australian wheat growers or at his own misdemeanours or mistakes in respect of this legislation. I hope that he will explain when he responds what he is laughing at. In fact, he is making us all laugh. This is a serious matter, and the industry for which he has a direct parliamentary responsibility as Minister is in dire difficulties. This piece of legislation indicates the shabby way in which the industry has been treated over a period of time. I can assure the House that people in the industry feel very upset at their own circumstances. No industry needs this $1 a tonne more than this industry at present. No industry needs relief from high interest rates more than this one. The average debt load on wheat farmers is about $200,000 and they will need that money as quickly as possible. No group of people need this type of legislation more than they do at the moment. The legislation must be given a speedy passage because the anomaly it deals with would deny them receipt of this important consideration. I conclude by saying that it is vital once again for the Prime Minister to turn his attention to the need to send an all-party delegation to Washington to the Congress. I do not know that the Minister is seized with the importance of or necessity for such a trip, but the delegation's trip to Washington last year was very successful. I think that an all-party delegation needs to go back there because of the moves in Congress at present. I understand that there is a piece of legislation, which has the number S310 attaching to it, which is supported by five Democrat senators and which seeks to extend the export enhancement program to all wheat markets around the world. If they succeed in gaining sufficient congressional support for S310, there is not the slightest doubt that this will have a very serious effect on our commodity prices and will depress wheat market prices even further than they are depressed at present. It is very important that we use every measure at our disposal to try to ensure that the Congress in Washington does not take an action that could cause further destruction to the livelihoods of Australian farm families who are so dependent on wheat as a source of income. Once again, I urge the Government to consider that. The Prime Minister has written to me and indicated that he is of a mind to send a further delegation back to Washington. The timing will be a matter for him and his Government. I urge the Department of Primary Industry and our mission in Washington to watch and monitor this very closely so that legislation does not enter the Congress before we have had an opportunity to talk face to face with the congressmen at Capitol Hill. I do not think that we would be successful in having legislation withdrawn once again. We were last time, but I do not think the Congress would move to remove legislation once it had been introduced. I am sure that we will have an opportunity to put our case before Congress takes the final action. I repeat that a lot needs to be done to overcome the great problems confronting this industry. Certainly, fuel is a case in point. We tax fuel far too much in this country. All those input charges over which the Government has control-fuel, tariffs on machinery, spare parts, chemicals and so on-must be removed as a matter of urgency, otherwise we will place the wheat growers in a position where they are competing not only with the treasuries of the European Economic Community and the United States, but also are battling against the costs that are imposed on them. The Opposition regrets that this legislation is necessary at this time and assures the Government that it will endeavour to give the Bill speedy passage, both in this place and in the Senate. Madam SPEAKER —Before I call the next speaker I should explain to the Deputy Leader of the National Party that some years ago members were producing voluminous speeches and when they ran out of time they were asking for the balance to be incorporated in Hansard. The Speaker at the time determined that the speech could be incorporated only if it were incapable of being read. That is one of the decisions made by my predecessors that I endorse. Mr O'NEIL(Grey)(10.28) —I wish to speak briefly on the Wheat Marketing Amendment Bill, which obviously has the support of both sides of the House. I am delighted to see that. The Deputy Leader of the National Party, the honourable member for Gwydir (Mr Hunt), quite correctly raised some of the problems within the rural industry. I congratulate him, along with other members of the joint party committee that went to Washington to try to overcome some of the problems that we have on the world scene. There is no doubt at all that what is happening in the wheat industry today spells a net loss of income for Australia and will place more pressure on our balance of trade and fundamental economic problems. It is of imperative importance that we end this global trade war. The Deputy Leader of the National Party raised the matter of another delegation going to Washington. I point out that there was no sense in going to Washington in January as the Congress was not in session. In the first two weeks in February the Minister for Primary Industry (Mr Kerin) was overseas attending a trade meeting. In the second two weeks in February Mr John Dawkins, the Minister for Trade, is in Washington in the United States speaking to the Administration and to Congress. I understand that they have had a range of advice, and it is an ongoing issue and not a crisis. When the timing is right we will certainly contemplate another delegation having discussions with the Americans. I think it is very important that we have a very strong rapport with our allies to combat the obvious problem that we have regarding the wheat industry. The tragedy is that the Australian wheat industry is highly efficient. Last year Australian armers grew wheat for $1.48 a bushel while United States farmers enjoyed a return of $4.48 and the Europeans received $6.65 a bushel. The Australian farmers carried interest and inflation rates several orders of magnitude greater than those in the United States and the European Economic Community. Obviously the Australian primary producers are the most economic in the world. It is certainly not right that the protectionism that the European Community and the Americans are providing for inefficient industry should be allowed to continue. I am well aware of the problems in primary industry. Undoubtedly, my colleague the honourable member for Calare (Mr Simmons) will expand on those problems later in this debate. The Prime Minister (Mr Hawke) has taken a constructive role in relation to some of the difficulties within primary industry and has set up the Prime Minister's country task force which, under the very able chairmanship of the honourable member for McMillan (Mr Cunningham), goes out to regional and rural areas to meet first hand with the farmers and people in those areas to find out the difficulties, to listen and take on board those problems and relay them directly to the Prime Minister. This is a positive contribution because it cuts through bureaucratic red tape. Early next month the first of many reports from the Prime Minister's country task force will be tabled. On 2 and 3 March, I am pleased to say, the Prime Minister's country task force will be going into my electorate of Grey. Mr Peter Fisher —You had better be careful. Mr Ian Cameron —You would be better off to have Joh. Mr O'NEIL —It is a sad thing that the Opposition does not give this task force the support that it duly deserves because we intend talking to farmers and other people in regional areas with obvious difficulties-in Port Lincoln, Ceduna and Port Augusta-and taking on board some of the obvious difficulties that the people in regional and rural areas face today. There is no doubt that this Government has done all in its power to alleviate some of those problems. The Opposition did not have the guts to float the dollar, which has been of tremendous benefit to people in outback areas in particular and which has really given us the edge in trade. Some of the more thinking people in rural Australia are pleased to have discussions with this Government on those difficulties. Barry Cunningham, the chairman of the Prime Minister's country task force, has been all over Australia. I commend that committee in that it has spent many long hours listening to and having fruitful dialogue with people all over this great nation to see what we can do to overcome those obvious difficulties. I am sure that when this task force goes to the electorate of Grey we also will get some constructive and objective response to our visit and be able to report directly to the Prime Minister. There is no doubt that on this side of the House we are very fortunate in having a Minister for Primary Industry, John Kerin, who is very able and very caring. I must say to people like me, who have had no rural background as far as primary industry is concerned, that the Minister has been very helpful in assisting me to become aware of the difficulties of farmers. I just cannot thank him enough for the time that he and his officers have spent, along with the honourable member for McMillan and the members of the task force, in our effort to make the Government aware of the problems. So briefly, I am pleased to acknowledge the efforts of the Government's country task force. I acknowledge the tremendous effort that is being put in by members of that group. I look forward to fruitful discussions in my electorate on 2 and 3 March with farmers and other people in regional areas, so that we can come forward with a constructive report to help those people who obviously need our support. Mr ANDREW(Wakefield)(10.36) —I am pleased to have this opportunity to follow my neighbouring electorate colleague, the honour- able member for Grey (Mr O'Neil), in participating in this debate on an anomaly in the Wheat Marketing Act. Ironically, I ran into many of the problems to which he alluded when I was at a clearing sale in the north of my electorate, not all that far from my boundary with the honourable member for Grey. No doubt the paddocks of some of the wheat farmers in his electorate run into my electorate and vice versa. So he, too, ought to be familiar with the sort of conversation that I had when speaking to wheat farmers at a clearing sale in the north of my electorate. There I was, at a clearing sale just north of the town of Clare, in part of the premium wheat growing area of South Australia, faced by farmers who were desperate. The most desperate of them were aged somewhere between 25 and 40 and had young families and young farms. Those farms were not paid for, and the farmers were substantially in debt. These young men, accustomed to dealing with all sorts of adversities, accustomed to harvesting under the sorts of conditions that people used to air-conditioning would not tolerate, were at the point of tears as they described to me their financial plight, because they saw their farms disappearing over the horizon. These are days of desperation in the wheat growing areas of Australia. We have to face the simple unpalatable truth that this year 23,000 of the 40,000 grain farmers in Australia will operate their properties at a personal loss. I use the term `personal loss' because I am talking about the fact that they will not have enough income to meet any of their domestic requirements. Every wheat farmer will run his property at a real loss; no one will make a realistic return on his investment. But ignoring that, 23,000 farmers will run their properties at what I call a personal or domestic loss. So we have come into the House this morning to look at a Bill-the Wheat Marketing Amendment Bill-that helps to address an anomaly which if not addressed would further disadvantage the wheat farmers of Australia. For the information of those who are listening to this debate, under the Wheat Marketing Act all wheat is pooled for a price that is determined by what is called ASW-Australian standard white-which represents the normal range. The price set, should underwriting arrangements be necessary, is determined by ASW in this mid-range of the pools. Any primary producer who produces any products in any sort of co-operative system will be familiar with pooling. Pooling involves taking products that are harvested at a range of times over a harvest period, or having a range of quality or a range of sizes, and agreeing to feed that range into a market and pool the market returns. Under the Wheat Marketing Act, the ASW has been the benchmark on which the price for wheat has been determined. However, under amendments to that Act which were brought into the House in 1984 we have discovered, as a result of the interpretation of the Attorney-General (Mr Lionel Bowen), that the strict application of section 15, Part II, of the Wheat Marketing Act 1984 would result in there being a requirement for us to move away from ASW as the benchmark into separate pools for separate varieties. It is believed that this move would disadvantage farmers somewhere between $1.25 and $1.50 a tonne. So this legislation has come into the House in order to allow that disadvantage to be corrected and that anomaly to be addressed. Of course, the Opposition is happy to facilitate this legislation because the Opposition is acutely aware of the dilemma currently facing not only all Australian primary producers but particularly Australian grain growers and, most acutely, Australian wheat growers. It may be said by some that $1 or $1.50 a tonne really is-if honourable members will pardon the pun-chickenfeed, and I would agree. But if a person has a negative income or is one of the many farmers alluded to by the honourable member for Gwydir (Mr Hunt) whose income will be less than $1,200, frankly, the $1 or $1.50 a tonne addresses some of the immediate needs that he is facing. Hence the Opposition is willing not only to support this legislation but also to facilitate its rapid passage. The honourable member for Grey came into the House and commended the Opposition for its preparedness to support the Wheat Marketing Amendment Bill. Quite frankly, I would like to say to the honourable member for Grey that the Opposition is even more acutely aware than he is of the desperate need for this legislation to be passed and of the urgency with which it must be passed. The honourable member for Grey came into the House and commended the Government for the implementation of its country task force. He said that the country task force has been prepared to move all round Australia to listen to farmers. I can think of few offences greater than being prepared merely to listen. Of course, one would be not to listen at all. But to listen and do nothing is to suggest to farmers that they can be merely dismissed. Quite frankly, the honourable member for Grey is welcome to his country task force in his electorate of Grey. I hope that it keeps well clear of the electorate of Wakefield. What farmers want is not someone to listen to them but someone to take some action to address the problems that they are facing. All we have heard from the Government is that the problems are in the world economic scene and so they cannot be handled. I wish it were true, but it simply is not. Do honourable members know that the major problem facing my grain growers right now is not that the wheat cheque will not be what it ought to be, but simply that interest rates are bleeding them dry. Of course, the fall in the wheat cheque will embarrass them this year when that wheat cheque would have been used not only to fund the expenses that they incurred in growing the crop but to prepare them for next year's crop as well. But up to this point the farmers in Wakefield and the farmers across Australia are being affected more by this Government's domestic policies and the consequent interest rates than they are by the world trading scene. It is meaningless for the country task force to wander around Australia offering platitudes and little else when what Australian farmers want is a cost of production climate in which they find themselves positively addressed. I think the real indictment of what has happened to grain growers across Australia is that the fall in incomes has coincided not only with the election of the Hawke Government but also with what have been climatically good years. It is true that things were not easy in the last 18 months of the Fraser Administration but that was in the face of a drought such as the nation had never known before. For the last four years across the nation we have had comparatively good years and from a farming point of view the economic environment has got increasingly worse. Since 1981 the fertiliser usage on Australian farms has fallen by 23 per cent in spite of good climatic years and in spite of a growing acreage sown. What does that tell us? It tells us that we have a nation full of farmers who are so poor that they cannot afford to buy the fertiliser they need to sow their crops and so they are cutting back in the very area in which they ought to be expanding. We are using up the reservoir of nutrients that is part of the Australian farming scene. It tells us that we are running down the soil, running down the credit balance that we ought to have in the soil bank and so we are effectively pledging future generations into soil bankruptcy. That is the sort of serious matter that ought to be addressed by the country task force, not the mere tripping around Australia on some junket that mouths platitudes to try to placate frustrated and desperate wheat farmers. I recognise that the legislation before the House is the result of an anomaly that has occurred for which, as the honourable member for Gwydir has said, we do not apportion total blame on to the Minister for Primary Industry (Mr Kerin). However, we are frustrated and annoyed to discover that the grain growers of Australia were not informed of this debate until the honourable member for Gwydir notified them. Some more commitment to the grain growers of Australia, some more commitment to our domestic demise, some more commitment to addressing the problem of interest rates would go a great deal further to helping us be a little more productive and helping the exporters of Australia to address our balance of payments deficit. Mr CAMPBELL(Kalgoorlie)(10.47) —The Wheat Marketing Amendment Bill has the support of both sides of the House and there is very little that one can say. It is an important measure; it should be rushed through. For that reason I have been asked to keep my words to a minimum so that this Bill can get into the Senate. If honourable members opposite really care about the passage of this Bill and the beneficial effect it will have on farmers, they too will keep their words to a minimum. I want to comment on a couple of things that the honourable member for Gwydir (Mr Hunt) said because I think I understand the rural problem very well. The highest level of farm debt in Australia is in the electorate of Kalgoorlie. However, the problem is not a universal one for farmers. Some of the larger farmers in my electorate have told me that this year is their best year ever. They have made more money this year than they have ever made. Quite clearly, the problems relating to farmers are not universal problems. I have brought up this matter before. The farmers who are in debt are a band which I put at about 10 per cent of wheat farmers. They constitute young people who went into farming undercapitalised; they constitute the more adventurous farmer, the farmer who took often professional advice, often advice from banks and borrowed. In the climate in which they undertook this borrowing it was the sensible and correct thing to do. The honourable member for Gwydir mentioned the disregard that banks have for farmers. I, too, would like to voice that sentiment as I have done on many occasions. I think the performance of the banking industry in this country in respect of farmers has been abysmal. It may be that had the National Party and the Liberal Party, when they occupied the Government benches in this House, legislated as has been done in the United Kingdom to stop banks owning hire purchase companies we may have got some competition into this area so that farmers would have had better opportunity. I would also like to mention the performance of some stock companies. As a pastoralist for many years I can say that when things got tough in the industry I saw Elders Smith walk away from the pastoral industry. It makes me quite sick to see it advertising today as it tries once more to ingratiate itself with one sector of the rural industry that is doing quite well. The honourable member for Gwydir also touched on Ian McLachlan. The truth of the matter is that interest rates have been the main domestic problem for farmers apart from the international markets over which we have very little control. Yet the National Farmers Federation, under the leadership of Ian McLachlan, has led a virulent campaign trying to involve farmers as the foot soldiers of the New Right to carry arguments on matters such as fringe benefits and capital gains. Fringe benefits and capital gains have no relevance to the farmers who are in trouble. Many of them have told me that they have no fringe benefits and that they do not expect any capital gains, that interest rates were the answer. Yet when I took forward a proposal that would have given interest rate concessions to a band of farmers it was rejected out of hand by the National Farmers Federation and the National Party because they said that all interest subsidies had to be across the board. It is quite clear that many farmers did not need interest subsidies and should not have had them. They should have been targeted and I believe that they should still be targeted. The honourable member for Gwydir started on his 14-point plan. Frankly, I am sorry he did not get to elucidate it. His first point was about more money. The rural adjustment schemes are awash with money; there is money to burn. The trouble is that the criteria are too high, too tight, and that is what needs to be addressed. If the honourable member for Gwydir does not understand that, I suggest that his understanding is indeed superficial. He also mentioned that Mr McLachlan got thrown out of his meeting with the Prime Minister (Mr Hawke). Anyone who behaves as crassly and as rudely as McLachlan should certainly have been thrown out and I would have had great pleasure in doing it personally. One of the things we have had from this Opposition over the years is a sycophantic adherence to, an almost adoration of, the United States of America. The truth is that super-powers will always do what they perceive to be in their own short term interests. In that respect the United States is absolutely no different from Russia or anyone else throughout history. It is nonsense to suggest that we will get any special privileges from America. Sure, we should be in there fighting very hard for everything we can retain but I fear that it will be a rear-guard action. We must look for alternatives. Wheat farmers will come under attack from high yielding varieties grown in wetter conditions. I think we will see a drift of wheat production to higher rainfall areas. We must look at other alternatives and in this respect I must commend the Minister for Agriculture in Western Australia who, I think more than any other State Minister for Agriculture, has addressed himself to the problems and challenges of alternative crops. Already we are seeing farmers turning to peas and lupins where appropriate and there are other alternatives. Mr Hawker —Tell us about emus. Mr CAMPBELL —I thank the honourable member for mentioning that; it was one of the things I had forgotten. Emus are an enormous potential for the use of wheat. If we were to have in Australia an industry comparable with that at Oudtshoorn in South Africa which has 120,000 emus, we would be looking at a consumption of something like 100,000 tonnes of wheat a year. Second grade wheat would be concentrated in the areas of those farmers who today are perhaps under more stress. Mr Peter Fisher —What about the greenies? Mr CAMPBELL —I am glad that the honourable member mentioned the so-called greenies, the ignorant, urban, affluent, selfish people, the pseudo-conservationists who make up the environmental industry today. I think it is an industry that is very self-serving and it needs to be confronted by government. Other alternatives such as teatree oil have to be considered. Mr Ian Cameron —What about snake oil? Mr CAMPBELL —Snake oil is the province of the National Party, as the honourable member has already been told. However, I think there is some potential for emu oil and perhaps goanna oil. I have been asked to limit my remarks and I see the glances I am getting; so I will leave it at that point. In conclusion, I make the point that the industry is a vital industry to Australia and it must be given every possible assistance. I believe that farmers are now starting to face up to the problems of the changes that are being forced on the industry. The Australian farmer, who has a natural resilience, will survive. It will be a painful battle for many and I certainly sympathise greatly with them. Mr HAWKER(Wannon)(10.55) —I, too, would like to support the Wheat Marketing Amendment Bill brought in by the Minister for Primary Industry (Mr Kerin). As previous speakers have mentioned, the amount of $1.50 a tonne to a wheat farmer may on the surface not seem significant when farmers are receiving in excess of $100 a tonne but I assure all honourable members that, as the honourable member for Wakefield (Mr Andrew) and the Deputy Leader of the National Party (Mr Hunt) have already pointed out, wheat farmers are now desperate. They have seen returns falling year after year. Most wheat farmers are making a loss on their farms. Any amount of money that they receive is more than welcome. To them, it is certainly significant. To give some idea of the seriousness of the decline of wheat prices and the value of wheat, in 1984-85 the gross value of production of Australian wheat was of the order of $3.4 billion. It was Australia's biggest primary industry. In the coming year, 1986-87, we will see that gross value drop to around $2.5 billion-a very significant drop. It will have a significant impact on our balance of trade but more significant is the impact it is having on individual farmers. That is extremely serious. It is the human heartache, the suffering and the sheer desperation that some farmers find themselves in today that is the real down side of the serious decline in the price of wheat. The problem in the legislation was uncovered some three weeks ago but, as the Deputy Leader of the National Party has pointed out, until yesterday the Minister or his office had not even bothered to consult the Grain Growers Council of Australia which is the number one policy-making forum for farmers in this country. I find that quite staggering. In the short time available I say that I was very interested to hear the honourable member for Grey (Mr O'Neil) outline some of the major problems facing wheat farmers, apart from the fact that the world price is dropping. He pointed out that wheat farmers in other countries, such as in Europe and America, do not have to face the problems of wheat farmers in Australia, namely high inflation and high interest rates. It was very significant that this came from a member of the Government who admitted what really is one of the major problems facing farmers in particular and all agriculture in Australia. Mr Fife —They are crippling factors. Mr HAWKER —Indeed they are, as my colleague the honourable member for Hume has just pointed out. The high interest rates more than anything are sending farmers to the wall. I well recall a former leader of the Victorian Farmers and Graziers Association saying at the time of the 1982 drought: `We have got through this sort of thing before, but there is a major difference and that is the level of interest rates'. Interest rates have continued to stay up and in real terms they have gone even higher than they were then. It is little wonder that so many farmers today are in such a desperate situation. One point on which I really take offence is the comment by the honourable member for Kalgoorlie (Mr Campbell), who mentioned the leader of the National Farmers Federation, Mr McLachlan, and tried to suggest that he was not concerned about interest rates. I remind the honourable member for Kalgoorlie that that was the very reason that the leader of the National Farmers Federation tried to see the Prime Minister (Mr Hawke) before Christmas. It seems ironical that the honourable member should say that Mr McLachlan was not concerned about them. That was the very reason he came to see the Prime Minister-to point out the incredible damage that high interest rates were causing to farmers. Yet the Prime Minister would not even speak to him because after the Prime Minister had held up Mr McLachlan for some hours and when the Press had asked for a comment, he had given it. The Prime Minister immediately grabbed that excuse not to confront the reality from the leader of the National Farmers Federation about what the Government's policies are doing to primary industry. When the Prime Minister was the leader of the Australian Council of Trade Unions, did he ever hesitate to give a Press conference before he went to speak to the Prime Minister of the day? I am sure there hardly would have been an occasion when he did not berate the government of the day and say: `We in the ACTU want this' and then talk to the Government and expect to be received and listened to. Yet when the boot was on the other foot, through reasons which partly were beyond the control of the leader of the National Farmers Federation, the Prime Minister used that excuse not even to bother to discuss the incredible damage that high interest rates are causing to the farming community. The problems of the wheat industry and the reasons why the amount of money involved in the amendment today is of such significance are well outlined by the Bureau of Agricultural Economics in its February review. In it we find that the average price for wheat from 1985-86 to the current year has dropped by 17.4 per cent. But worse still, we find that production is falling and is forecast to fall even further. Again, in the same Quarterly Review of Agriculture, we find that the forecast for production in 1987-88 is expected to drop by a further 17.8 per cent on what is already a declining crop. So the two things compound. We have a falling price and a falling acreage. The two are obviously leading to a very grave situation in which wheat growers are in extreme difficulties. Not only are the wheat growers' problems, on the human side, of concern but also this is a very grim warning to this Government that Australia's problems with the balance of payments will be further compounded by the fact that what was our greatest primary industry is now reeling under the pressure of external prices, high interest rates, high inflation, high fuel prices and now, falling production. Very grave problems will continue to arise. Whilst my colleague the honourable member for Wakefield has pointed out the problems facing young farmers, more than just young farmers will feel the pinch and many will find themselves in the desperate situation of having worked a property, having put their whole lifetime's effort into it, and ending up with absolutely nothing. I assure honourable members that that is a very grim and real prospect that is facing many farmers today. That is the human side and that is why I found it amazing when I listened to the honourable member for Grey bringing up the story about the country task force. Frankly, the country task force might be a good diversionary tactic put up by the back bench of the Government, but from what I have heard of the force, it is nothing more than hot air. It listens, speaks and makes all the right noises but it achieves and offers nothing. That is really not enough. The problems facing the wheat industry are far too serious to be treated in such a frivolous manner. It behoves the Government to face up to the real problems which, as I pointed out, are high interest rates, rising costs and rising inflation-particularly affecting fuel. I would also like to contrast the country task force, which is nothing more than a bit of a public relations exercise, with the real achievements of the all-party committee that went to the United States last year. I know that the Minister was a member of that committee and he made a very positive contribution. But it should also be recognised that the Deputy Leader of the National Party was the prime mover for that all-party delegation. He and he alone deserves the credit for the achievements of that all-party delegation. It was his efforts and those of my colleague the honour- able member for Hume (Mr Fife) as well as those of the Minister, which achieved what must have almost seemed like a miracle at the time, when the United States Government was on the verge of bringing in some Bills that would have absolutely devastated our wheat exports. I hope that the Minister will take on board the comments by the Deputy Leader of the National Party on this matter, because he has the experience of having achieved something. He suggests that while this tactic should not be overused, it has achieved something in the past and therefore should be considered at the appropriate time. When a high-powered delegation like this can be sent overseas to try to influence other governments, the Government should not hesitate to take up that opportunity. As time on this debate is limited, I would like to conclude where I started by saying that this amendment, which offers a relatively small payment to wheat growers, is extremely significant and extremely important to them, because we have desperate people, so desperate in fact that I think we could describe the wheat belt as a place that is full of heartache and despair and, unfortunately, a place in Australia that is now becoming the place of bankruptcy. Mr BEDDALL(Rankin)(11.05) —As a result of advice from the Attorney-General's Department, it is necessary to amend the Wheat Marketing Act of 1984. As it is currently drafted, the Act provides for the determination of a guaranteed minimum price for Australian standard white wheat and other prescribed categories of wheat on a basis which was not intended by the Government. This is inconsistent with other sections of the Act and it would run counter to the sound and broadly acceptable accounting procedures currently used by the Australian Wheat Board. The proposed amendment will permit the calculation of total pool returns. This is income from the sale of all categories of wheat and other revenue earned in the season. This will be compared with total costs in establishing the benchmark of a guaranteed minimum price for Australian standard white wheat. This Wheat Marketing Amendment Bill will remove an anomaly between sub-section 15 (2) and section 16 of the Act. The Bill specifies that for the purpose of calculating the gross return per tonne for Australian standard white wheat, account will be taken of the notional gross return for other categories of wheat had they been Australian standard white quality together with income from the investment of sales proceeds and interest received from the sale of wheat on credit. The amendment should not involve any additional Commonwealth government costs, savings or revenue. The Australian Labor Party in government has shown that it is quick to respond to the needs of the rural sector. The quick passage of this legislation is just another example of the importance of agriculture to the Australian economy. At times of difficulty for the Australian wheat farmer, the Government does not wish to compound those difficulties. The economic measures that this Government has introduced have limited the impact of the collapse in commodity prices on the Australian wheat farmer. Without the devaluation brought about by the floating exchange rate, Australian wheat farmers would not be able to sell their product at all on the world market. The over-valued dollar maintained by the Liberal-National Party coalition in government robbed Australian wheat farmers of years of prosperity which would have helped them to maintain a decent living standard until the world market recovers from this period of decline. As all honourable members are aware, agricultural prices move in cycles. The speedy passage of this legislation will ensure prompt payment to our wheat growers in difficult economic times. I congratulate the Minister for Primary Industry (Mr Kerin) on his speedy action to overcome the problem which has arisen. I am sure that all honourable members from both sides of the chamber will support this legislation. The honourable member for Wannon (Mr Hawker) mentioned earlier that he thought that the country task force of the Prime Minister (Mr Hawke) was some sort of public relations exercise. As a member of that task force, I say to him that the report of the task force will shortly be released, and I am sure that it will make interesting reading for him and that he will see the many achievements of the task force. As the task force has travelled throughout Australia, it has seen first hand the problems facing grain growers. Many of us who have grain growers in our electorates see these problems on a daily basis. I notice that I will be followed in this debate by the honourable member for Maranoa (Mr Ian Cameron), who has very many more grain growers in his electorate than I do in mine. But certainly in the Darling Downs area I see the problems facing my grain growers. The adjustment being forced on the Australian wheat farmers by the corruption of world wheat prices is one of the great social problems facing rural Australia. I therefore congratulate the Prime Minister, the Minister for Primary Industry and the Minister for Trade (Mr Dawkins) on the efforts that they have made on behalf of Australian wheat farmers. We must continue our efforts to convince the United States of America and the European Economic Community that a trade war based on agricultural subsidies is an economic madness. The honourable member for Wannon also mentioned the all-party delegation to the United States. It was an outstanding success, and I commend all members who took part in it for the bipartisan spirit that they adopted on behalf of Australian agriculture. Opposition members in their speeches have called for government assistance to the rural sector without specifically saying how that assistance should be given. The honourable member for Wakefield (Mr Andrew) made the revelation that interest rates are a problem for the rural sector. I inform the honourable member for Wakefield that interest rates are a problem for all Australians, and one of which the Government is fully conscious. If the parties that he represents in this place had addressed Australia's economic problems when in office, perhaps we would have a much more broadly based economy which would not now be undertaking such a painful adjustment. In order to facilitate this debate, I intend to limit my remarks to those I have just made. I commend the Bill to the House. Mr IAN CAMERON(Maranoa)(11.10) —As a wheat grower in Maranoa-and as a member of this Parliament, of course-I must say that I welcome the fact that a change will be made in the legislation to allow me to receive some more income. I can assure honourable members that it is very sorely needed. Having spoken to my bank manager this morning, it seems that he is as interested as I am in when the next wheat payment will be made. I took the liberty this morning of ringing Clinton Condon, the Chairman of the Australian Wheat Board, to have a chat with him and to see where we are at this minute with payments and the wheat situation generally. He informed me that the payment will be made as soon as this legislation is put through the Senate-on 1 March. Of course, all payments are now made by computer and it does not take long for the Wheat Board to rattle the cheques out to growers. As has already been indicated in this place, some of the cheques for payment will be for amounts of up to $20 a tonne for the quality wheats that are produced in my area, Maranoa, and in other parts of Australia. Of course, the payments vary, probably down to $6 or $7 a tonne. Unfortunately, a mistake was made in the drafting of the old legislation and this Wheat Marketing Amendment Bill is needed to make amends for that. I congratulate the honourable member for Gwydir (Mr Hunt) on his suggesting the bipartisan group that went to America to talk with Congress, with the great result that that visit to Washington had for the wheat industry. I would also like to congratulate the National Farmers Federation on having the good sense to set up a lobby group with some of the funds that it has raised through going around Australia with the bucket, so to speak. It has collected a lot of money, and I think that the fact that it has its own lobby group in Washington looking after farmers' interests is an excellent move. One wonders what our embassies do with these sorts of problems. They seem to be a bit slow in reacting. They are very bureaucratic, and they do not seem to be in a position to get straight at congressmen and their advisers to bring about some changes. So I wish the NFF every success in its endeavours in Washington and I would like to think that it might do the same thing in other parts of the world, particularly in Japan, for instance, in respect of our beef industry and the lobby that has to be continually operated to maintain our access to that market. I would like to welcome Ian McLachlan into this House. But before doing so, I would also like to commend the great Bjelke-Joh, if he is going to come here and give us a hand. He is one of the pioneer farmers from Kingaroy and he is on his way to Canberra. Ian McLachlan is trying to make his mind up. Although I do not always agree with everything he says, I can assure him that I would welcome him here to kick Hawke out of this chamber. The last time Ian McLachlan visited Parliament House he was not welcome, so I think he has no option but to come here as a member of this Parliament. Certainly we would welcome him to our side of politics to give us a hand to get rid of this Hawke Government that is crippling farmers across this nation. The sooner the Government goes the sooner we will get back on track and the sooner we will start to pull this country back into gear to stop the excessive spending-- Mr DEPUTY SPEAKER(Mr Mildren) —Order! The Chair is sometimes fairly tolerant of the honourable member for Maranoa and his diversions. I would, however, suggest that the Bill is fairly restrictive and I ask him to maintain relevance. Mr IAN CAMERON —Mr Deputy Speaker, I will do that. I would like to mention the fact that interest rates are one of the major things affecting the grain industry in Australia right now. I believe it is a nonsense the way some of the previous speakers on the Labor side of politics have suggested that floating the dollar has helped us. It has not. The dollar would have come down anyway, whether it was floated or not. What is happening now is that the Government is holding the dollar up. The dollar is not floating; the Government is holding it up. Those people that are paying the high interest rates are paying the difference in value for that policy. Unfortunately, those people are saddled with enormous daily expenses, running into thousands of dollars per day, in the higher interest rates that the Reserve Bank of Australia and the Hawke Labor Government are asking the farmers, the people who have had to borrow to keep producing, to meet. On the one hand they are being exhorted to help our trade balance, to produce the foodstuffs, and on the other hand they are being crippled by the insidious economic policies of this Labor Government. I am sorry that this debate is not being broadcast, because I like to talk to my constituents in Maranoa and to people in other parts of Australia. It is a great pity that the debate is not being broadcast. I say to those people that the sooner we get rid of this Labor Government, the sooner we farmers will get going. I must mention the grain handling inquiry. Hopefully, it will do some good, particularly in New South Wales. The grain handling facilities under the Labor Government in New South Wales are an abomination and ought to be part of some private enterprise operation. I see that- Mr DEPUTY SPEAKER —Order! The honourable member for Maranoa has ignored the request from the Chair to be relevant to the Bill. Mr IAN CAMERON —Well, it is to do with wheat. Mr DEPUTY SPEAKER —The Chair is rapidly running out of tolerance. Mr IAN CAMERON —Aha! Mr Deputy Speaker, you must understand that the grain handling inquiry is to do with grain-wheat, sorghum, barley, rice, you name it. You should ask the Minister for Primary Industry (Mr Kerin) about it. He set up the inquiry. Jim McColl, the chairman, and other members are going around the country. They have just been to Maranoa. Many growers have made suggestions to the inquiry. I think it is a good idea. I only hope that it brings some decent, constructive comments back to the Minister so that he may make some recommendations and take some action. I do not know how he will get on with his State colleagues, because the railways, basically, are run by State governments. Maybe we should get rid of the Labor Government in New South Wales. Mr Hunt —It would be a good start. Mr IAN CAMERON —It would be a good start. That might do some good. Mr Brumby —The Government in Queensland. Mr IAN CAMERON —I tell the honourable member that there is no way in the world anyone will get rid of the Government in Queensland. The Queensland Government will get rid of this Government in Canberra. The Joh factor will put it out of office so quickly that it will not know what hit it. Mr DEPUTY SPEAKER —Order! The honourable member for Maranoa-- Mr IAN CAMERON —Mr Deputy Speaker, I have much pleasure in supporting this Bill- Mr DEPUTY SPEAKER —Order! The honourable member for Maranoa will resume his seat. Mr IAN CAMERON —Because of the restrictions of time I will sit down. Mr DEPUTY SPEAKER —Order! I ask the honourable member to resume his seat. The honourable member for Maranoa is consistently ignoring the Chair. Mr IAN CAMERON —I have finished. Mr DEPUTY SPEAKER —I ask the honourable member for Maranoa not to argue with the Chair. Mr IAN CAMERON —Mr Deputy Speaker, we on this side of the House support the Bill. As a grain grower, I am looking forward to the actual proceeds, and I have finished speaking. Mr DEPUTY SPEAKER —Order! I ask the honourable member for Maranoa to resume his seat or he will be warned. Mr BRUMBY(Bendigo)(11.18) —The honourable member for Maranoa (Mr Ian Cameron) always makes a colourful contribution to debates in this House. Of course, he is a prominent member of the National Party of Australia. But I doubt whether he will be here after the next election. If one looks at the great march of the great Premier of Queensland to this House, it is fairly obvious that some sort of discussions have been held and arrangements have been made. I would not be surprised if the honourable member for Maranoa moved aside and made his seat available to the Premier of Queensland so that he can come to this House. Mr Peter Fisher —Mr Deputy Speaker, I raise a point of order. In view of your ruling against the honourable member for Maranoa, what on earth has this to do with the wheat Bill? Mr DEPUTY SPEAKER —The honourable member will resume his seat. Mr BRUMBY —This is particularly relevant to the Wheat Marketing Amendment Bill 1987, Mr Deputy Speaker, because-- Mr Ian Cameron —On a point of order, Mr Deputy Speaker: I represent all the constituents of Maranoa, not just the wheat growers. I do it very well, and I do not expect my name to be used in vain in this House. Mr DEPUTY SPEAKER —Order! The honourable member for Maranoa will resume his seat. There is no point of order. Mr BRUMBY —Thank you, Mr Deputy Speaker. We are debating wheat legislation. A further comment has been made by the honourable member for Maranoa about his representation of all members of his electorate other than just wheat growers. If one looks through the file of the honourable member for Maranoa, and all of the Press releases he has issued over the last few years, one will find that the only issues on which he indicates any concern-- Mr Ian Cameron —On a point of order, Mr Deputy Speaker: What does this have to do with the wheat industry? Mr DEPUTY SPEAKER —Order! The honourable member for Bendigo will resume his seat. I call the honourable member for Maranoa on a point of order. It had better not be frivolous. Mr Ian Cameron —Mr Deputy Speaker, I would like your interpretation of what my situation in my electorate has to do with the wheat industry. Mr DEPUTY SPEAKER —Order! There is no point of order. The honourable member for Bendigo will remain relevant to the Bill. Mr BRUMBY —I am being distracted by all the interjections, Mr Deputy Speaker. This is an important measure. I am pleased that it has the support of members on both sides of the House. I am equally pleased that the Minister for Primary Industry (Mr Kerin) has been able to bring this legislation in at such short notice, following legal advice from the Attorney-General's Department. It is worth placing on the record that this Government, through its policies, underwrites 95 per cent of net wheat returns through the guaranteed minimum price for Australian standard white wheat. In calculating that guaranteed minimum price, the estimated return from the current season and returns from the lowest two of the previous three seasons are used. By dropping the high priced year, the scheme moves, in a sense, in the direction of what we call potholing, with the emphasis on offsetting sudden short term price falls. In the longer term, of course, this mechanism still allows market signals to come through very clearly to wheat growers. It must be said-and I want to place it on the record-that while this Government and the National Farmers Federation are not really in the business of promoting or advocating subsidies for primary production in Australia the fact is that an underwriting mechanism which guarantees a price at a time when international prices are falling is, in a sense, a direct subsidy to those producers. It provides them with assistance when the international price has fallen. If one looks at the sort of money that can be talked about through this mechanism, one can talk about hundreds of millions of dollars in terms of underwriting assistance or subsidy-call it what you will-which is being made available to wheat growers. Mr Peter Fisher —At the moment it is not. Mr BRUMBY —That is the potential. I think that is the word I used. So this is important legislation. It will be of benefit to wheat growers throughout Australia, who because of falling international prices have, of course, experienced very difficult times. The short term outlook for wheat internationally is not a promising one. Prices are expected to remain low through 1987. The Bureau of Agricultural Economics suggests that prices beyond 1987 will depend on world stockpiles. This Government has been particularly active and aggressive in the international scene in trying to bring some sense to world agricultural production. We have achieved for the first time the listing of agricultural discussions at General Agreement on Tariffs and Trade talks. That is a great achievement, primarily at the initiative of this Government-the Minister for Trade (Mr Dawkins), the Minister for Primary Industry and, of course, the Prime Minister (Mr Hawke). There is an urgent need throughout the developed and, indeed, underdeveloped world for some controls to be placed on world levels of production in so many of our agricultural products. It is sheer lunacy for any country to pay massive subsidies-and I am not talking about potholing schemes-for continued production of food into bunkers and storage. This legislation provides some short term support for our wheat farmers. I support it fully. I am pleased that it has bipartisan support in this House. Mr McARTHUR(Corangamite)(11.24) —I must admit that I am surprised at the speed with which this Wheat Marketing Amendment Bill 1987 has been presented to the House. But I am happy to support the passage of the Bill through the House. May I report the state of the wheat industry as I see it, having heard the remarks of Mr Raice, the General Manager of the Australian Wheat Board, at the Bureau of Agricultural Economics conference in January, when he said that the market for wheat is as bleak as it has been at any other time in recent memory. The past year has not been easy for anyone involved in the wheat industry. Reduced import demand, increased world stocks and expanded export subsidies have placed downward pressures on prices. Until the 1986-87 harvest the declining United States-Australian dollar exchange rate has given Australian growers some protection from the full impact of depressed prices. However, with stabilisation and a strengthened exchange rate, Australian dollar returns for wheat will decline further. The 1986-87 Australian guaranteed minimum price for Australian standard white is nearly $20 a tonne lower than that for 1985-86, at about $130 a tonne. It is worth looking at the decline in the total value of production in the wheat industry, from 1983-84 at $3.4 billion down to an estimated figure for 1986-87 of $2.4 billion-some 15 per cent of rural production output. As to the guaranteed minimum price, I support the general concept in that the price is oriented towards the market trend. It takes the lowest gross pool returns of the last three years, the expected gross return for the current year, with pool costs deducted and multiplied by 0.95. At least it has a relationship to the market price. The prices in Australian terms have declined quite dramatically for Australian farmers from $183 in 1984-85 to $175 in 1985-86, and it is estimated in this year 1986-87 to go down to $144. That is without taking off the cost of handling and interest. Looking at the price of $144 and the average charges of about $54, this reduces the price in Australian dollar terms to about $94 or $90 at the farm gate. All wheat growers are very concerned that their final price is much lower, firstly because of world trade conditions, and secondly because of the high cost of handling charges and other costs. I compliment the Government on setting up the inquiry under Mr McColl to look into the handling, storage and transport of grain in Australia. There are monopoly positions by the grain handling authorities and farmers will look forward to the Commission exposing some of the problems. I support the Government in bringing that inquiry forward. The world stock situation has made the position of the Australian farmer very difficult. In 1980-81 there were about 96 million tonnes of wheat in world stocks and in 1986-87 there are now 171 million tonnes. That is the basic problem that faces Australian wheat growers in the world markets-that stocks are at such a high level. The European Economic Community has been blamed for a number of our problems. It is prepared to sell its wheat at 20 per cent to 40 per cent below world prices, and is prepared to dump any surplus production on the world market. One of the other factors of the productive performance of the EEC is that it has very high yields of some six tonnes per hectare compared to 1.5 tonnes per hectare in Australia. In the United States the cost to revenue of $30 billion paid to wheat growers in America means that the Government there is now paying wheat growers not to produce. The United States has got itself into great difficulties by its farm policies, but I support the Deputy Leader of the National Party (Mr Hunt) in initiating an all-party delegation to the United States Congress to draw the American electorate's attention to the problem in world terms when United States farmers are being encouraged to produce well above the cost of production. One of the major problems facing Australian wheat growers arises from the present high interest rates. Interest rates in November 1984 in respect of smaller overdrafts were 14.5 per cent. Since the Hawke Government was elected smaller overdraft rates have risen to 20.5 per cent. Although the Government claims that it has no control over interest rates, we on this side of the House know that in current circumstances wheat growers are facing tremendous problems, and the level of interest rates is one of them. If one draws international comparisons with other wheat growers and other exporting industrialised nations, one sees that Japan has an interest rate of 3.8 per cent, West Germany 7.5 per cent, France, another very productive wheat country, 9.5 per cent, Canada, again another important wheat producer, 9.3 per cent, and the United States of America 7.3 per cent. When one compares those interest rates with Australia's 18.3 per cent, one sees another great disadvantage accruing to our wheat growers. That does not take into account the possibility of drought in the next season. I commend the Bill and lend the Opposition's support to the guaranteed minimum price procedure. I only hope that the Australian Wheat Board can get its accounting procedures in order and that the Minister can organise his Department in a better manner so that legislation will not be rushed through the Parliament on the next occasion. Question resolved in the affirmative. Bill read a second time. Message from the Governor-General recommending appropriation announced. The Bill. Mr KERIN(Werriwa-Minister for Primary Industry)(11.33) —I move: Clause 2, page 1, omit the clause, substitute the following clause: Commencement ``2. This Act shall be deemed to have come into operation on 27 February 1987.''. The reason for this further amendment is that it is essential, for legal reasons, that we get this legislation through both Houses by 1 March. This House cannot predict entirely what course the Senate will take and it is absolutely essential for me to make a proclamation under the Act before 1 March regardless of whether it gets through the Senate. I hope that it will get through the Senate, but this amendment will put the matter beyond doubt. I should like to say a few words on what arose from the debate on the Bill. As most honourable members who contributed to the debate said, the wheat industry and associated grains such as barley and rice-rice for a slightly different reason from wheat-are the industries most affected at present by the collapse in world prices and the corruption of world markets. If I could give an example, the last sale of wheat I heard of to the Union of Soviet Socialist Republics was at $US75 a tonne from the European Commission, and the export subsidy, or restitution as the EC calls it, was $US168 a tonne. It probably paid farmers $US200 to $US300 to grow the stuff in the first place. The export enhancement program and export restitutions are certainly bringing the price down, but we should also recognise that the United States loan rate and the Secretary's discretion of 15 per cent a year, which has now been exercised for two years, is just as effective in bringing the loan rate down. But in a market with an enormous stock overhang-the United States has two and a half years of grain stocks in store-the combined effect of all this is disastrous. That is why we are focusing on the price adjustment gap and that is why we recognise that President Reagan's move to cut the target prices by 10 per cent a year to narrow the price adjustment gap is so important. The wheat industry is in desperate shape. Of course some farmers will go to other crops as most wheat farms are mixed enterprises. This is not so much the case in Western Australia, but it certainly applies in the wheat belt in New South Wales and Victoria. Some farmers will swing to sheep if they can and some will engage in other enterprises. As honourable members have commented, about 50 per cent of the farm sector now has quite high levels of debt and 12 1/2 per cent of that sector-according to the latest Bureau of Agricultural Economics figures-has very high debt. Only the cotton industry's debts exceed those of the wheat industry. These amendments all relate to the Wheat Marketing Act 1984 when the Government decided to go for 95 per cent net underwriting. That was a very generous move by the Government. The previous 95 per cent net underwriting under the 1979 Act was against a background of the United States loan rate then effectively holding up the world price for wheat and there was absolutely no risk of a payout. Also, world rates of inflation were relatively high, and again, there was absolutely no risk of a payout. Additionally, this Government gave the Australian Wheat Board the chance to borrow overseas and finance the crop at lower rates of interest. Now it borrows something like $1,200m a year. Since that measure was introduced the Wheat Board has been saved literally hundreds of millions of dollars. We are looking at a payout of about $200m in underwriting. The honourable member for Bendigo (Mr Brumby) says that this is technically a subsidy. That is true, but I would insist that is not a production subsidy or an export subsidy as there will be no payout in 1989-90. That puts it in rather a different position from that described by the United States agricultural attache at the Embassy here in Canberra. A couple of other matters were raised. Before myths become facts I will mention this question of no consultation with the Grains Council of Australia. The Bill went through the legislative committee of Cabinet only this week. The honourable member for Gwydir (Mr Hunt) rang the Grains Council and then my Department had discussions with Mr Eakin who formerly worked for the Department of Primary Industry. Quite apart from the pressure of work, we felt that there was simply no need to cause the wheat industry concern. I only became aware of this when I was overseas and I received a phone call from Clinton Condon. I had to take action while I was overseas in order to get this matter rectified rather quickly. Some people have said a lot about the all-party mission to the United States. I am not really in the business of working out who takes credit for what. The team worked together well over there; there are no two ways about that. The Minister for Trade (Mr Dawkins) suggested this quite a long time before I heard about it from the honourable member for Gwydir but perhaps it was an idea of the honourable member for Gwydir before I heard about it. I think it is nonsense to talk about that, but the very important thing about the mission was that at the time it was impeccable. The half-hour during which we met with the key Foreign Affairs Committee before its members went into the Congress itself was absolutely the crunch time. Again, I say in relation to any other visits to the United States, the timing must be impeccable. We must give this careful consideration. The Minister for Trade is over there now. The United States Ambassador has been over there recently, as has a lobbyist from the Australian Meat and Livestock Corporation. An officer from my Department, Mr Tim Mackey, is there and my Department is in almost daily telephone contact with him. Frances Cassidy, another officer from my Department, is with Mr Dawkins in Washington now. She was the agricultural attache there for three years, so we are mapping the matter very carefully indeed. At present a trade Bill is on the floor of the Congress. This is a very general Bill, but it would cause us concern. It will be processed through the various committees and when the timing is right we will take a decision on what we should do. A marketing loan for wheat-and I think that the honourable member for Gwydir adverted to this in his comments-causes a different problem in terms of dealing with that. While the Secretary has the 15 per cent discretion in the loan rate, that will push the price of wheat down and a marketing loan will become almost academic from an arithmetical point of view. We must put pressure on the United States Administration and key people in the Congress-and Mr Dawkins is doing this-to adopt President Reagan's proposal for the target price. That proposal will take the target price down by 10 per cent in each of the next three years. These matters need careful consideration and I think we will need to jump into a plane at quite short notice if it is thought that an all-party delegation or just straight ministerial intervention is needed. The Prime Minister (Mr Hawke) has written to the honourable member for Gwydir. The question of another delegation is something that we have not put out of our minds at all, but again I stress that the timing must be impeccable. Mr PETER FISHER(Mallee)(11.36) —I support this amendment to the Wheat Marketing Amendment Bill which, as has been explained to the Committee, corrects an anomaly within the system of calculating payments by the Australian Wheat Board to growers for the 1986-87 season. Yesterday in the town of Sea Lake in my electorate in the Victorian Mallee some 400 people met to discuss their future in the wheat industry and the arrangements that exist at present within the Rural Finance Commission to assist them through their present difficulties. Therefore, this amendment is both timely and terribly important. I understand that the anomaly has come to light against a background of the likelihood of significant payments having to be made under the wheat underwriting arrangements. Suggestions were made through the Attorney-General's Department that would have been cumbersome and unfair. Therefore I support this amendment. It should be noted that the problem exists because some grades of wheat are sold earlier in the season than others and with price movements in various markets throughout the year, it was conceivable that a higher grade of wheat could attract a lower return than Australian standard white-an anomaly which could prove very costly to many growers and which would have been contrary to the spirit of the Wheat Marketing Act. Advice was received from the Australian Wheat Board that unless this technical change was made, final payments over the 1986-87 season would be determined so that growers would lose from $1.25 a tonne to $1.50 a tonne. We should recognise that the usual advance pool payment of 90 per cent of the guaranteed minimum price has already been made in the season and the final payment of about 10 per cent, with any late adjustments, is due to be gazetted by 1 March. That is why the Government introduced this emergency legislation so rapidly and why it is necessary that it should pass so quickly. This season the guaranteed minimum price for wheat is about $130 a tonne of which about $117 per tonne has already been forwarded. Therefore the legislation will affect the payment of the remaining $13 a tonne or so which, with final adjustments, may be as high as $20 a tonne. This legislation is being passed at a time when a very high proportion of Australian wheat growers are considered to be at risk and I believe that there should be no impediment to the payment of this final amount. I do not wish to delay the Committee but the Minister for Primary Industry (Mr Kerin) has commented on the attempts being made overseas to change some of the world's corrupt trading practices. I acknowledge the work that is being done by an all-party group from the Parliament and also by the Government in trying to talk some sense into overseas governments about changing some of their subsidisation practices, protection measures and corrupt trading practices. However, I cannot let this moment pass without saying very briefly that this is not the total reason for the problems that our agricultural industries face. I wonder whether honourable members realise that a wheat grower in the central Mallee in my electorate loses 36 per cent of his gross returns in freight and handling charges alone. From the rest of his returns he has to pay all other production costs, interest charges and, if possible, provide a living for his family. So governments here do have a responsibility to try to correct some of the problems that exist in agriculture in this country through the high cost structure. As the Minister is visiting my constituency next week, I also wish to point out to him that I believe major changes will be necessary to the rural adjustment scheme and the legislation under which the guidelines are set there. I believe that this legislation must be changed, arrangements must be more flexible and viability or eligibility must not be determined on the amount of money available. Viability should be based not solely on the debt equity approach but on the productive potential of each individual. It has to be even-handed and it has to be fair, and I believe that the guidelines that were changed in July 1985 do not allow the rural adjustment scheme to be administered fairly, particularly in regard to the need for long term low interest loans. I support this legislation. Mr SHARP(Gilmore)(11.45) —I am pleased to rise today to support this amendment for two reasons. Firstly, it sorts out the anomaly which has been highlighted by the Minister for Primary Industry (Mr Kerin), and, secondly, it gives us in the Federal Parliament the opportunity to point out some of the problems under which the wheat industry is currently suffering. Many members have already spoken today of how their areas are affected by the wheat industry downturn. The DEPUTY CHAIRMAN(Mr Mildren) —Order! If the honourable member wanted to address the wheat industry in general, as he has just said, he probably should have done that in the second reading debate rather than in the Committee stage of the Bill. Mr Hunt —There has been a bit of flexibility. The DEPUTY CHAIRMAN —I do not need any assistance from the Deputy Leader of the National Party. Some latitude has been allowed in the Committee stage, but I will not allow the honourable member for Gilmore to launch into a general debate on the wheat industry. Mr SHARP —Thank you, Mr Deputy Chairman. I will just say that the amendment that has been put before the House in Committee today will certainly give some added income to the wheat growers in the electorate of Gilmore, and that added income will be of great benefit to them. For the House to understand fully the benefit that the wheat growers will acquire from this amendment they have to understand that the wheat industry is in a state of disaster, and it is well documented in newspapers in the electorate, such as the Cowra Guardian, the Town and Country magazine and so forth. It is interesting that the Minister for Primary Industry will be going to Cowra in a couple of weeks-he will be very welcome there-to see how the industry's downfall is affecting the economies of towns such as Cowra, Young and Boorowa. It is necessary for this House to understand that this amendment will provide extra income to the wheat growers who so desperately need it. They could get extra income if there were a move on behalf of this Government to reduce such things as interest rates. Mr Deputy Chairman, I am sure you are aware of the burden that interest rates really impose not only on wheat growers but also on every Australian today. Interest rates, the price of fuel-- The DEPUTY CHAIRMAN —Order! We will not have a wide ranging debate on interest rates, either. The honourable member for Gilmore will keep to the amendment or resume his seat. Mr SHARP —Thank you, Mr Deputy Chairman. I always like your guidance and support in these matters. The amendment that is before the Chamber, as I have said, will provide much needed additional income to the wheat growers in the electorate of Gilmore. The much needed income from this amendment will help to ease the burden that this Government is placing upon wheat growers through the excessively high fuel excises, which mean that the average consumer of fuel in my part of the world is paying some 20c per litre in taxes to the Federal Government. The DEPUTY CHAIRMAN —Order! Whilst I am appreciating the creativity of the honour- able member for Gilmore, he might address himself not to the extra income of wheat growers but to the specifics of the changing of the date on which the Bill will come into operation. Mr SHARP —Thank you, Mr Deputy Chairman. The importance of the amendment before the House today is that the much needed additional income for wheat growers in my part of the world will be provided much earlier than it would otherwise have been. This will really help to lift some of the economic problems that exist in my electorate. Wheat farmers in my electorate are going broke. One of my neighbours up the road from my home town of Young recently had to walk off his property-the bank put him off-because his wheat cheques have not been sufficient to meet his expenses. As a consequence, I am happy to support this Bill and this amendment because I can see that it will help to lift the economic burden that this Government is imposing on wheat growers in the Young, Cowra and Boorowa districts of the electorate of Gilmore. Amendment agreed to. Bill, as amended, agreed to. Bill reported with an amendment; report-by leave-adopted. Bill (on motion by Mr Kerin)-by leave-read a third time. Debate resumed from 18 February, on motion by Mr Lionel Bowen: That the Bill be now read a second time. Mr SPENDER(North Sydney)(11.51) —The Opposition supports the Australian Stock Exchange and National Guarantee Fund Bill 1987, the main purpose of which is twofold. In the first place it is to provide legislative support for the reorganisation of stock exchanges in Australia into a single national stock exchange, the Australian Stock Exchange Ltd, with each of the six capital city exchanges as its subsidiaries. The State subsidiaries will remain wholly responsible for the second board, options and the futures. The second purpose of the Bill is to create a national guarantee fund, made up of the pooled assets of existing fidelity funds operated by the separate capital city exchanges, to provide protection to investors in respect of failure of contracting parties to meet their transaction obligations or in respect of dealer insolvency. The Bill has been sought by the Australian stock exchanges which need to be in the front, particularly in the parlous economic circumstances that this Government has wished on this nation, of trading activities in Australian shares. In the report of the Sydney Stock Exchange Ltd for 1986 the Chairman, Mr Bain, points out that it is intended by the exchanges that there shall be a national development fund which is expected to be available to pay for the majority of the capital costs of major projects such as the national clearing house and settlement system and the automated screen trading system. The reasons that the stock exchanges need to be at the forefront are all too obvious. The economic circumstances of this country are known, and any business that we can claw back from overseas will make some change, albeit small, to the devastating economic circumstances of this country. Whilst on the subject of the general purposes of the Bill and now that the Attorney-General (Mr Lionel Bowen) is in the House, I should like to bring to the honourable gentleman's attention a matter that has been raised with me by the Executive Director of the Australian Associated Stock Exchanges. He points out that proposed new section 122W, sub-section (2), does not reflect the exchanges' preferred position. He goes on to say this: In layman's language, sub-section (2) (c) & (d) should be amended to provide that the total of the amounts paid out of the Fund in connection with the claim or claims are not to exceed $50,000- here, of course, he is referring to fidelity fund claims- where the claim is in respect of loss of money, and in any other case, 14 per cent of the minimum value of the assets of the fund at the date the dealer became insolvent. He then states the exchanges' preferred position, which is this: . . . to have a limit of $50,000 on claims by one person for loss of money- `for loss of money', I repeat- but to allow greater recovery for loss of property other than money. For these claims- that is, loss of property claims other than loss of money- the Exchange would prefer to extend the cover from $50,000 per claim to a maximum of 14 per cent of the minimum value of the assets of the fund which normally would be greater than $50,000. This will increase the degree of protection afforded investors. Mr Coppel, the Executive Director, has informed me that this change in the legislation has not been included because of time pressure, rather than any policy objection by the Government. I take this opportunity to bring it to the attention of the Attorney-General since I should have thought that he would want increased, rather than diminished, investor protection. The purpose of the point made by Mr Coppel is to increase investor protection. I should like to say something briefly about the origins of the stock exchange. Those origins go back centuries to the pooling of resources and the sharing of risk and profits. The earliest recorded company which raised funds on what was called the joint stock principle was the Muscovy company in 1555. The great attraction of the joint stock principle was that shares could be easily traded and investors could turn investments back into cash when they wished to do so with the hope of a profit and the risk of a loss. Originally, in those less rushed times, business was carried out in London coffee-houses. Official blessing of the kind of market that we now have, and which was established so many years ago, came towards the end of the seventeenth century when the British Government sought to raise capital by issuing its own securities. Hence, that calamity, the national debt, was born. Despite the immense changes in circumstances and techniques since the sixteenth century, the basic purposes of the stock market remain the same. Stated in somewhat greater detail, they are these: The market provides liquidity for investors. It provides the means to mobilise savings to finance new investment and to supply finance to companies or public authorities which need it, or want it, whether they need it or not. It provides, through its formal structure, an exchange, working within a framework of rules and duties recognised and enforced by law-a framework which is provided for, amongst other purposes, giving effect to the monetary policies of governments. It also provides, significantly these days, a source of foreign earnings. Australia's parlous economic circumstances are only too well known. The Treasurer (Mr Keating), until his famous telephone call from his kitchen in May of last year, was fond of telling us that the Government was on course, and so was the economy. I do not know what it was on course for. Perhaps it was for the large iceberg that it appears to have struck. We now have an annual deficit on our accounts with overseas countries of over $14 billion-just on 6 per cent of our gross domestic product. We have a gross overseas debt of $100 billion. We have the need, by whatever means and in all fields, to improve our competitive edge. We truly live in a global market. This has been said again and again, and it is a truth that we must never lose sight of. The internationalisation of markets is irreversible. It must be our objective as a nation to get as big a slice of that market as we can. The need for getting as big a slice as we can is starkly underlined by the morass in which we presently find ourselves. Some member firms of Australian stock exchanges estimate that between 30 and 50 per cent of potential business is going overseas in the trade of Australian securities-for example to London-or for investment in overseas securities. Whatever the exchanges or the private sector can do to recapture any part of the overseas market will be a net gain to Australia. The fundamental lesson, whether one looks to the exchanges and the market in shares and other securities or elsewhere in Australia, is the same. The answer is to be found not in governments but in ourselves. The Government is not, we regret to say, on target, since I do not think we on this side of the table would say that the Government's target was the destruction of the Australian economy. It is not. Because it is not, and because of the failure in government policy, the obvious conclusion is that the greater the failure the greater is the burden on the private sector through its energies and expertise to help make good that failure. In supporting the Government's legislation, we would add the obvious rider that it is necessary to monitor the operation of legislation of this kind. I doubt that the Attorney-General would disagree with that proposition. The Bill contains over 80 proposed new sections to the Securities Industry Act. It also contains amendments to the Companies (Acquisition of Shares) Act 1980, the Companies Act 1981, the Companies and Securities (Interpretation and Miscellaneous Provisions) Act 1980 and the National Companies and Securities Commission Act 1979. I do not wish to be unnecessarily critical of those who have the responsibility for drafting such difficult legislation. I will not be critical of them. But, I will say this: We must at all times seek to express our laws as simply as possible. I know that the aim of simplicity is one which frequently cannot be accomplished because of the nature of the subject matter that laws deal with, but I think that all too often, in preparing legislation, we tend to be overtechnical and overdetailed rather than to strive for simplicity. Overtechnicality and overdetail does not produce the benefits of the savings in time and cost that well drafted, clearly expressed legislation can produce. That said, I simply repeat the need for this country to give whatever advantages we can to those who compete in foreign markets. The stock exchanges do so. The exchanges wish this legislation to be in place by 1 April because there are certain authorisations given by the Trade Practices Commission which expire on 31 March. We support that objective and we support the Government's legislation. I hope that the Attorney-General will take into account the two comments of a non-partisan nature which I made-namely, first, the concern raised by the Executive Director of the Australian Associated Stock Exchanges; and, secondly, the need to monitor the operation of the legislation and to strive for simplicity at all times in legislation. Mr ROBERT BROWN(Charlton)(12.04) —The Australian Stock Exchange and National Guarantee Fund Bill 1987 that we are considering has two essential purposes. The first is to provide legislative support for a reorganisation of stock exchanges in Australia to establish a single national stock exchange which will be known as the Australian Stock Exchange Ltd-or as the abbreviation `ASX Ltd'-with each of the six current capital city exchanges as its subsidiaries. The second purpose is to create a national guarantee fund which will consist of the pooled assets of the existing fidelity funds operated by the separate capital city exchanges and will provide, in the process, greater protection to investors in respect of failure of contracting parties to meet their transaction obligations or in respect of dealer insolvency. The Attorney-General (Mr Lionel Bowen) has indicated that the Bill has met with the approval of the Ministerial Council for Companies and Securities. In addition, I think it is important to understand that the initiative for these changes came from the stock exchange itself and from participants in stock exchanges throughout Australia. I will have more to say about that shortly. In general, the advantages of these proposals are that the share market investors will benefit from the contract guarantee and the insolvency provision of the Guarantee Fund. The capital market is expected to become more efficient; it almost certainly will. It will become more co-ordinated, it will become more centralised and it will become more capable of doing, at a national level, the types of things that are expected of a highly organised, efficient, integrated, co-ordinated stock exchange system of the kind that this legislation will put into place. It will also ensure the allocation of excess funds from the Guarantee Fund to national development purposes of the kind that have been outlined. The Australian Stock Exchange Ltd will be incorporated in the Australian Capital Territory by this Bill and will be deemed to be a body corporate limited by guarantee under the Companies Act 1981. The existing capital city exchanges will become its wholly owned subsidiaries and the members of those exchanges will cease their membership and become members of this new national body. ASX Ltd will be responsible for listing, and all listing on the main board will be a listing on ASX Ltd. Accordingly, listing agreements will be between ASX Ltd and the listed company. It has been indicated by other honourable members as well that the State subsidiaries will remain wholly responsible for their second board, options and futures markets. The second main provision of the legislation is the establishment of the National Guarantee Fund. The main features of that aspect of the Bill are to establish the National Guarantee Fund to replace existing fidelity funds maintained by each capital city stock exchange and to transfer all the assets and liabilities of those existing fidelity funds to the new National Guarantee Fund. The essential differences between the protection under the National Guarantee Fund and that which is available under the existing fidelity fund arrangements are that a person's right to make a claim on the Guarantee Fund will not depend on proof of defalcation or fraud by a broker, there will be one central fund rather than six separate funds, and a person will be able to claim directly against the Guarantee Fund in respect of a dealer insolvency. I think this legislation and the purposes to which it seeks to give effect will probably be the most important changes that have taken place in the capacity of the Australian Stock Exchange mechanisms since the stock exchanges first started to operate in the original Australian colonies. In December 1985 a very historic meeting took place in Sydney at which the boards and the committees of all six Australian stock exchanges agreed to the formation of a single national exchange. This agreement was subsequently ratified by the membership of all exchanges and, as I have indicated, it was subsequently endorsed by the Ministerial Council-the representatives of the Attorneys-General of each of the six Australian States, together with the Attorney-General of the Commonwealth. This legislation now gives effect to those background developments. The proposals, once accepted by the exchanges, were then strongly supported by the regulatory authorities, whose ready co-operation has made it possible to plan with confidence for the establishment of ASX early in this current year. It is confidently expected that the establishment of ASX will gradually eliminate parochial rivalries that have hampered effective decision making in the securities industry for many years. The new structure is also expected to operate more efficiently and to provide a strong and unified presence in an effort to develop essential new systems and to ensure that the market for Australian securities remains, as far as possible, within this country. The honourable member for North Sydney (Mr Spender), in leading for the Opposition, drew attention to the tremendous importance that that has for Australia's role in world financial, stock and security trading arrangements and the necessity for Australia to claw back into its own mechanisms those transactions which have been lost to Australia-I think the figure that was given was something between 30 per cent and 50 per cent of the transactions that are now being conducted through the exchanges of London and New York in particular-and which can and should be conducted through the exchanges in Australia. The Bill is essentially the same as the one which the Attorney-General introduced at the end of the last session of Parliament. The Australian Associated Stock Exchanges approved the introduction of the previous Bill into this Parliament at the earliest possible opportunity. Its primary concern in pressing for an early introduction and passage of the Bill in the current session is that the Trade Practices Commission's authorisation for a number of the existing stock exchange practices expires on 31 March 1987. So there is relatively very little time left for this legislation to be put into place. The Commission identified these practices as being anti-competitive and refused to authorise them beyond 31 March this year. The new articles of association for the single national exchange to be established by the Bill address these areas of Trade Practices Commission concern. The background to that issue is that in September 1982 the Trade Practices Commission denied authorisation to rules of the Australian Associated Stock Exchanges which fixed brokerage rates, restricted entry to membership of the stock exchanges, prevented incorporation of stock brokers and otherwise restricted their activities. To enable the Australian Associated Stock Exchanges, the AASE, to make the necessary changes to its arrangements with the minimum of dislocation to the industry, interim authorisation was granted until 1 April 1984. That was subsequently extended for another three years and, of course, that time lapses at the end of March this year. The amended rules for which the AASE sought authorisation were amendments to its articles of association providing for the incorporation of stock brokers, providing for a non-member shareholding of 50 per cent, and allowing other financial intermediaries to hold shares in stockbroking companies. On 4 October 1984 the Commission, granted final authorisation. I quote from the eleventh annual report, that for 1984-85: The authorisation of the amended Article is to run until 1 April 1987, when it will lapse. The Commission went on to say: The Commission accepted that there was public benefit in a staged removal of restrictions and found that the AASE had taken a substantial step towards removing barriers to entry to the stockbroking industry. The Commission noted that the removal of fixed commission rates in April 1984 had already resulted in a substantial increase in competition, and that since corporate membership had become possible in July 1984, a number of stock broking firms had become incorporated and several had announced links with other financial intermediaries, particularly banks. That is representative of some of the more important changes which are taking place within the structure, the operation and the administration of the stock exchange system in Australia. The impetus for change to the structure of the major Australian stock exchanges, as I indicated earlier, came from the stock exchanges themselves. One of the major developments in Australia and throughout the world's capital and securities markets has been the trend towards the internationalisation of securities markets. This has been stimulated by technological advances in communication and by the increasing sophistication of investors in the management of their financial risks. In addition, a matter of more local and domestic concern was this Government's initiative in abolishing exchange controls. All of these changes have brought about greater competition from overseas exchanges. The point has been made that all of these proposed changes will have the effect of making the Australian stock exchange machinery more capable of holding that trade and bring it back from those other countries to which it has tended to gravitate far too quickly. Transactions have been going off-shore due to some of the difficulties that have existed in Australia in relation to the operation of our stock exchange structure. The fragmentation of the stock exchange between the six States has meant that they have not been co-ordinated, they have not been integrated. There has been an incapacity on their part to act nationally. It is obvious in light of the circumstances which exist internationally in relation to security trading that significantly enlarged resources are available for stock exchanges to do the types of things that are required of them. Increasingly those transactions have been going overseas. They have been going overseas because overseas exchanges are more efficient. Overseas exchanges generally are organised and operate on a national basis. Unfortunately, those transactions which have been going overseas have tended to be the larger transactions, those which we should be proving ourselves capable of handling here in Australia. Some transactions will always be conducted overseas. One of the main reasons for this is that we are in the southern hemisphere and, of course, the main market for securities is in the northern hemisphere. In addition, there are particular reasons why it is important that Australian stock exchanges go national, why they need a national structure. The first is a need to establish an automated trading mechanism to enable all brokers to deal in the same market and at the same time. Hitherto this has not been possible in Australia. As that becomes more integrated, better organised, better co-ordinated and more efficient it will also allow Australian security trading mechanisms to become linked into overseas mechanisms. That is all part of the internationalisation of these processes and it is all reflective of the need for Australia, a major commercial and trading nation of the world, to become integrated in security transactions as we have in relation to banking and general exchange movements. The second reason is that there is a need for the settlement and transfer system to be improved. Our system is simply old fashioned. I think some people have drawn attention to the fact that the worst system in the world is in Italy and the second worst is here. That is something to which we should be addressing our attention and concern. There is a need to speed up and to make more efficient the settlement and transfer system and this can be done only on a nationwide basis. Growing competition from overseas necessitates that those things be attended to. I know that this legislation represents a very commendable, co-operative effort between the Commonwealth and the States-through the Ministerial Council, through the stock exchanges and through their organisations. As I indicated earlier, the initiative for these changes came from the stock exchanges because they were aware of the deficiencies within which they were trying to operate. They were concerned about not only the importance of those matters to their own operations and the efficiency with which they could do the job that they have to do for their clients. They also had a realisation that they have a responsibility to Australia as a nation in relation to some of the considerations to which the honourable member for North Sydney drew attention. It is commendable to see the extent to which those parochial considerations, which for too long have hindered and impeded the efficiency of the Australian stock exchange mechanisms, are gradually being overcome. It is not easy to overcome them because, to a very large extent, they are built into the system. They have been an inherent part of the system. They can be clawed out as a result of this nationalisation in the sense of establishing a national structure for stock exchanges in Australia. In conclusion, I would like to mention something else. I hope that as a result of these changes the Commonwealth Government and the various State governments as well will do what they can to assist the national stock exchange body to improve the settlement and share registry system. There are a number of things that governments can do to assist the stock exchanges in this regard. Firstly, they can help the stock exchanges to achieve an understanding of and agreement about the best way to proceed. I know that the stock exchanges will be giving attention to that type of matter. Secondly, there is a need on the part of government to provide supporting legislation to give effect to changes of those kinds. Of course this legislation, which we are in the process of considering now, is an example of that. Thirdly, there is a need for the Government to encourage the parties to reach settlement quickly. These competing interests are hard to reconcile. One of the major difficulties at the present time is the operation of branch registries. All of these matters need to be given consideration by not only the industry but also government. We also need a continuation of the type of co-operative effort and concern which lies behind the legislation that we are in the process of considering. I have no doubt that the innovations, the changes, the improvements that are now being brought about, will continue. I endorse absolutely the comments that were made by the honourable member for North Sydney. Australia has a responsibility not only in relation to matters of this kind but also more generally, more widely, to bring back into Australia those types of things that have been escaping Australia and moving overseas. We will do that only when we establish within Australia the type of sophisticated, modern, co-ordinated and integrated mechanisms which are necessary to achieve those purposes. This type of legislation goes a long way down the track towards doing that. Mr RUDDOCK(Dundas)(12.24) —This is one of those remarkable occasions that occur quite frequently in the Parliament but are very rarely acknowledged and appreciated outside it. It is one of those occasions on which we are dealing with a Bill in respect of which the Opposition has stated that it has no opposition. It is also a result of deliberations involving the private sector and government-not just the Commonwealth Government but also governments of the States of Australia-through the system of a Ministerial Council. So we are dealing with a very important piece of legislation in which the areas of disagreement, if any, will be fairly narrow and in which it is important that people are able to see that there is a desire on the part of all members of parliament, no matter what their political background, to see operating an efficient Australian stock exchange, with appropriate guarantees for those people who invest through it. As was acknowledged in the speeches by the honourable member for North Sydney (Mr Spender) and the honourable member for Charlton (Mr Robert Brown) there is a need to ensure that here in Australia we are able to handle the important financial transactions efficiently and effectively on behalf of Australians and other investors. I have no doubt that if I mention the importance of ensuring that we have a stock exchange system through which people are confident to invest and trade, that would also be universally acknowledged. Further in the context of what is happening abroad, particularly in the United States of America where recently we have seen the spectre of insider trading, there is a desire on the part of all members of parliament, and presumably those people involved in the Stock Exchange, to ensure that charges of that sort cannot be laid at the door of the Australian system and that people will have confidence in it. The Australian Stock Exchange and National Guarantee Fund Bill is being discussed at a time when individual Australians are investing traditionally in stocks to a lesser extent than has been so in the past. There is a need to retain confidence in and knowledge of the system and further a willingness to invest in Australia and its future. This is best achieved through a system which enables people to own a part of the corporate structures that operate and for those investments to be not only in the form of institutional arrangements-in superannuation and insurance, which are a very important part of the funds available for investment in Australia-but also in the form of individuals investing their savings and being prepared to see that they have a part in Australia's future. So the purpose of this legislation is to provide legislative support for the reorganisation of stock exchanges and to provide a single national stock exchange. No doubt it will provide a system in which we will see more investment in Australian companies and securities. The legislation will also create a national guarantee fund, consisting of the pooled assets of existing fidelity funds operated by the separate stock exchanges which now exist. Hopefully, it will provide greater protection against the failure of contracting parties to meet their transaction obligations and any dealer, who is involved on an agency basis in buying and selling stocks and shares, who fails or becomes insolvent. As has been mentioned, these initiatives are important and the timeliness of them is important for the reasons mentioned by the honourable member for Charlton, in particular those relating to trade practices authorisation. Nevertheless, this should not discourage us from looking at the detail of the legislation and satisfying ourselves that it is appropriate and is without defect. The particular matters that I want to address relate to clauses of the legislation on which I would like the Attorney-General (Mr Lionel Bowen) to give me some assurance that there will not be any difficulties. I offer these comments in a constructive way in the context that I have had only a very short period to look at the legislation. No doubt, others in the community who may want to comment will not have had the opportunity to do so. In this legislation we have an arrangement where the Australian Stock Exchange Ltd is to be established. It is to incorporate the stock exchanges of Adelaide, Brisbane, Hobart, Melbourne, Perth and Sydney and to have certain additional functions and powers. Proposed new Part IIA, section 36E, prescribes: The memorandum of the Exchange is the proposed memorandum of the Exchange that AASE lodged with the Commission . . . The articles of the Exchange are the proposed articles of the Exchange that AASE lodged with the Commission before the relevant commencement. The memorandum and articles . . . shall be deemed to have been registered . . . in accordance with the Companies Act- (4) as from the relevant commencement, the proposed listing rules, and the proposed business rules, of the Exchange that AASE lodged with the Commission before the commencement shall be deemed for the purposes of a relevant Act to be rules made by the Exchange at that commencement under its articles. Certain business rules under which those people who buy and sell stocks and shares are deemed to have been approved will be the rules under which the Exchange will operate at its commencement. In proposed new section 122BC we find that arrangements are put in place for amendments to those business rules. This is the particular matter that I would like to raise with the Attorney-General. The proposed new section prescribes: Where an amendment is made- to the rules- by way of rescission, alteration or addition . . . the Corporation- the Stock Exchange- shall, forthwith after the making of the amendment, give written notice of the amendment to the- National Companies and Securities Commission. It will give a notice that will set out the text, the date upon which the amendment was made and an explanation of the purpose of the amendment. But a number of procedures have to follow thereafter. The first is: If the notice required to be given . . . is not given within 21 days after the amendment is made, the amendment ceases to have effect. Where the Commission receives a notice under this section, it shall forthwith send a copy . . . to each member of the Ministerial Council. The Ministerial Council may, within 28 days after the receipt by the Commission of a notice under this section, disallow the whole or a specified part of the amendment . . . Where the Ministerial Council disallows the whole or a part of an amendment to which a notice under this section relates, the Commission shall forthwith give notice of the disallowance to the Corporation and, upon receipt by the Corporation of the notice of disallowance, the amendment, to the extent of the disallowance, ceases to have effect. So we are faced with the situation in which these important business rules under which trading occurs might well be amended. Those amendments will be in place. The Commission may fail to take certain action within a specified time and then those amendments that were in place shall cease to operate; or a Ministerial council may disallow them in the same manner and form that we prescribe for regulations before the Parliament and they shall cease to have effect. It seems to me that the difficulty of that procedure for business rules which is likely to be put in place is that trading may well have occurred and certain decisions been made by dealers or in relation to scrip and other matters and one would find that the rules were later changed so that on disallowance they ceased to have effect. This procedure could lead to great uncertainty. A far better procedure would be for the implementation of rules not to operate immediately, but after the procedures have been completed. The spectre of rules being disallowed-unless there are very good reasons for their being able to operate immediately-ought not to occur. I raise that matter. I hope the Attorney-General will be able to satisfy me that these procedures will not give rise to difficulties or that there are good reasons for the difficulties if that is to be the case. It seemed to me, in the time that I have had to read the Bill, that that particular provision is likely to cause some difficulty in the future, particularly if there are to be significant changes to the business rules. One ought to be able to trade in securities in a situation of certainty. The other matter I want to raise relates to the settlement times, which I understand the Stock Exchange is endeavouring to ensure are reduced. It is also endeavouring to ensure that the Exchange itself is able to perform in a way which its clients and the clients of its dealers will find satisfactory. It is important I think, to recognise that the Stock Exchange has been endeavouring, through the procedures and systems that it has put in place, to reduce the settlement times, and that has, of course, put a great deal of work on not only the members of the exchanges themselves but also those companies which have their stocks and shares and other financial arrangements listed with the Stock Exchange. That means that the registries that those corporations have to operate have to turn around that paperwork, which is often quite complex and difficult, in a very short period. The desire on the part of the Stock Exchange is to get those periods for settlements down to under 10 days. It seems to me that those are reasonable demands for it to make. But it needs to be understood that those of whom a significant reduction in turnaround time for paperwork is expected are also beholden to the Stock Exchange in many cases for an efficient service on its part so that its members are able to ensure that their dealings are efficient. Many of the arrangements can be facilitated only after the Stock Exchange itself has undertaken certain activities in its own registries and offices. I understand that at times parcels of shares are sold with only one piece of paper, one scrip, for a very large number of holdings, and a holding when it is sold might be sold to a number of parties, and arrangements have to be made to issue temporarily stock to enable the trade transactions to be completed. It is normal for the Stock Exchange itself to arrange for the issue of appropriate markings so that the transactions can be completed. Yet those transactions which the Stock Exchange itself has to undertake very often take longer periods than the times the Exchange is giving those companies which list with it to complete their transactions. It seems to me that the Stock Exchange itself has to ensure that its own procedures are operating efficiently enough to make it possible for it to put the registries of those corporations, listed companies and the like in a position to carry out their tasks efficiently and effectively. The Stock Exchange cannot put pressure on these sorts of organisations to perform if, in its own house, it has not got its own systems completely in order. Under the provisions of this legislation there are fidelity arrangements which are designed to provide compensation where there is a lack of stock, and also to ensure that in situations where people who invest face a possible loss because of that lack of stock, compensation arrangements are in place. But it seems to me that it is not just a matter of settling those claims which might arise. It is a matter of addressing the machinery provisions to ensure that the listed companies and their registries operate efficiently, and it is a job for the Australian Stock Exchange to ensure that its own services operate effectively if cash settlement claims against the fidelity fund are to be minimised. Mr SNOW(Eden-Monaro)(12.41) —The securities industry has had many of its shackles broken with rapid deregulation and technological advance, and the boards of the six capital city stock exchanges have found it easier to come together under a single body. A new national exchange will be able to handle all the trading now conducted on the six independent exchanges. I believe the figure was about $22 billion in 1985. Many people not in the industry do not realise that the Australian broking industry is very much involved with competition on international markets, with London being one of the main threats, if one could call it that. There are quite a lot of Australian companies listed on the London market, and it is good that honourable members on both sides of the House have made it clear that a very important purpose of the Australian Stock Exchange and National Guarantee Fund Bill, perhaps its main purpose, is to get the stock exchanges' house in order to meet international challenges. A number of reasons have been put up by the Australian Associated Stock Exchanges in support of the restructuring of the stock exchange. Most importantly, it is illogical to have one central market, to which every member organisation belongs and with which they all deal, governed by six bodies whose only claim today for separate sovereignty is really geographic. At present there is no generally recognised single policy making body within the industry. There is a lack of discipline in the manner in which the industry is directed, although I would say that the Australian associated stock exchanges have been performing functions such as policy formulation and discipline. It is simply that the exchanges form a loose-knit group. The present system was devised for a different era when stock exchange policies were geared to maintain exclusive benefits for members. Also, as the Attorney-General (Mr Lionel Bowen) said in his second reading speech and as other honourable members have said, internationalisation of financial markets means that a national stock exchange makes sense. Back in April 1986, Mr Jim Bain, Chairman of Bain and Co., stated that the merged Australian Stock Exchange will be looking for significant cost savings in transactions as well as boosting its share of international equity trading through the adoption of computerised trading systems. He estimated that while Australia accounts for about 2 per cent of the size of total world stock markets, with a computerised trading system this could be doubled. He said that if we did not take that action fairly soon, we would run the risk of losing a substantial proportion of trading in our major stocks to competing stock exchanges and other automated systems, principally overseas but also possibly local, so that our world market share might actually be halved-instead of doubled as it would be under a computerised system-to perhaps one per cent. So we need to work quickly. I compliment the Attorney-General on the legislation and on his desire to get it through by April. I briefly mention another part of the legislation, relating to the National Guarantee Fund. Under the Bill protection for investors will be increased and a pool of money will become available from the existing fidelity funds to provide for development expenditure on national securities matters; for example, proposals for clearing houses and screen trading. The National Guarantee Fund will be made up of funds from the existing State fidelity funds, and about $15m of that fund will be used for investor protection through contract guarantees and insolvency protection. An unofficial estimate of the amounts involved in development and that sort of area is in excess of $30m. The National Guarantee Fund should be better able to handle crises in the area of investor protection. The support of every member in the House is welcome, and I commend the intention of the Bill to first of all establish a more co-ordinated, nationally oriented securities market and to provide additional investor protection to ensure confidence in that market. Mr DEPUTY SPEAKER(Mr Cowan) —Order! It being 12.45 p.m., the debate is interrupted in accordance with sessional order 101A. The debate may be resumed at a later hour. Sitting suspended from 12.45 to 2 p.m. Mr HAWKE(Wills-Prime Minister) —I wish to advise the House as a matter of courtesy that the Minister for Aboriginal Affairs (Mr Holding) will be absent from Question Time both today and tomorrow on Government business. The Minister for Arts, Heritage and Environment (Mr Cohen) will respond to any questions relating to Mr Holding's portfolio. Mr COWAN —I address my question to the Minister for Primary Industry. I refer to the recent National Agricultural Outlook Conference, at which the Bureau of Agricultural Economics suggested that there was a reasonable buoyancy within the beef industry. It also indicated that the average return per beef producer for 1986-87 would be about $13,000. Does the Minister agree with that assertion? If not, will the Minister say what plans he is undertaking and considering to assist the beef industry, particularly the anticipated expansion of the industry over the next three to four years? Will he also say what early negotiations are taking place in relation to the future Japanese export market? Mr KERIN —The BAE makes many projections and estimates at its annual Outlook Conference. Last year at this time it made an estimate of another drop in farm income, and for each following quarter it had to revise its estimates. So estimates are very much estimates. Compared with other sectors of primary industries across the board, wool and beef are doing relatively better. Of course, no one would suggest that $13,000 represents buoyancy. However, we ought to look at the composition of that estimate for the beef industry, because it goes right down to a very small number of cattle. One needs to look at the qualifications that apply to any industry under review by the Bureau of Agricultural Economics. In other words, there are always rather long tails on both sides of the average, and the average very rarely tells one much, except for comparison year by year. A lot can go into an estimate of income for any primary industry. It cannot be compared in any way, shape or form with wage income. I think people should understand that point. In terms of what plans we have, given that there is word around that the beef industry will expand, basically this Government believes in private enterprise and in the market determining these sorts of matters. Individual beef producers will make their own decisions. Other people will make their own decisions as to whether they should get out of wheat and into beef, where they can. We do not tell people what they can and cannot do. The full range of measures of assistance is available to the beef industry. The Government is spending a lot of money on brucellosis and tuberculosis eradication. Money is being spent on rural adjustment. There is a 50 per cent subsidisation of inspection costs. There are a lot of government measures in place for the beef industry. The last part of the honourable member's question referred to early negotiations with the Japanese. This was raised very strongly during the Australia-Japan Ministerial Committee meeting on 8 and 9 January this year. We reached an agreed form of words with the Japanese. We are in close consultation with the United States of America. We hope that the discussions commence early in the second half of this year. There have already been discussions at the official level. People have recently returned from those discussions. We have laid before them all of the additional studies rebutting the general points that are made by the Japanese in beef discussions. I draw the honourable member's attention to papers produced at the Australian Agricultural Economic Society's annual conference in Adelaide recently, which also targeted some of the issues that the Japanese are likely to raise in the negotiations. I take this opportunity to reject the proposition that we commenced the last beef talks too early. Basically, my predecessor, Mr Nixon, commenced them and this Government continued them. In this case, again, we will join with the United States in pushing for complete trade liberalisation in place of the beef quota. Madam SPEAKER —I inform the House that we have present in the gallery this afternoon the Rt Hon. Tomasi Puapua, the Prime Minister of Tuvalu. Also present in the gallery are members of an Association of South East Asian Nations parliamentary delegation led by Tan Sri Zahir, Speaker of the Malaysian House of Representatives. On behalf of the House I extend to the visitors a very warm welcome. Honourable members-Hear, hear! Mr JENKINS —Can the Treasurer inform the House of the extent to which the tax reform package's revenue measures underpin the Government's fiscal policy? Mr KEATING —The base broadening measures of the Government's tax reform proposals account for about $1.5 billion of the $4.5 billion of tax cuts which the Government is currently putting into effect. The remaining $3 billion is being paid for by natural growth in revenue and cuts to government outlays. In other words, they are provided by bringing down the Commonwealth Budget deficits. Yesterday, again, the Leader of the Opposition made clear that he would repeal those base broadening measures in respect of capital gains and fringe benefits and also repeal the lump sum measures, plus other measures, which of course would remove most of the $1,500m of the base broadening measures which we have. But in a remarkable uncharacteristic burst of candour, the Leader of the Opposition, when asked how quickly he could cut personal income tax rates, said: `As quickly as economic circumstances permit it'. In other words, he said: `Look, we know all of this talk about tax cuts is phoney and that the nation cannot afford them, that its income is going down', and when the question about tax cuts is put the answer is: `As quickly as economic circumstances permit it'. Mr Spender —Madam Speaker, I take a point of order. The question directed to the Treasurer was about the Government's tax policies and how they underpin the Government's fiscal policy. What he is now saying has nothing to do with that question. In accordance with the ruling that you have given before, Madam Speaker, he should be directed to be relevant. Madam SPEAKER —The Treasurer will be relevant to the question. Mr Keating —I will speak to the point of order, Madam Speaker. The relevance is that, with the nation's national income going down via the terms of trade, any talk in the nation from any quarter about a higher living standard from tax cuts that the nation cannot afford affects the Government, government policy and the nation. Mr Spender —On a point of order, Madam Speaker-- Madam SPEAKER —Order! The Treasurer is speaking to a point of order. The honourable member for North Sydney will resume his seat. Mr Keating —Madam Speaker, I have no intention of being gagged by a frightened Leader of the Opposition or his lieutenants on this question of his irresponsibility on tax. Mr Spender —On a point of order, Madam Speaker: In the first place you made a ruling, quite rightly, that the Treasurer should be relevant. In the second place, therefore, it is not open to the Treasurer to canvass that ruling, and in the third place what he was then saying was once again utterly irrelevant. He was, as well, indulging in the usual kind of personal abuse for which he has become notorious. Madam SPEAKER —The honourable member for North Sydney will resume his seat. The Chair made a statement that the Treasurer should be relevant to the question. Mr KEATING —All of us in this Parliament know that, with our national income having been cut so seriously in the way in which it has, it is arrant irresponsibility for any party to be wandering around saying `We will give you a rapid increase in living standards via tax cuts', which we know could not be paid for, given the fact that there is a shopping list around in the hands of the Opposition of $14 billion. Also, yesterday the Leader of the Opposition was indecent enough to say of me that my claims were figments of my imagination. Mr Spender —I rise on a point of order. Madam SPEAKER —Order! I find the Treasurer relevant to date, if that is what the point of order is. I am listening to the Treasurer. Before the Treasurer resumes, may I say to the House that in answering or asking questions or in debate in this House there is a certain amount of flexibility allowed to paint a background, as the Leader of the National Party will know he was given this morning. Opposition members interjecting- Madam SPEAKER —In debate. Mr Sinclair —I did not speak this morning. Madam SPEAKER —I said `and in debate'. The right honourable gentleman was not listening to me. Mr Sinclair —You meant my Deputy, Madam Speaker. Madam SPEAKER —I did say `Deputy'. Mr KEATING —Last week when I referred explicitly to each explicit reference of the Leader of the Opposition's tax policies, I presented to the House a list of them with the references. I now invite the Leader of the Opposition to take a copy of the references and to reply to me in writing where I misrepresented him. Be honest, Honest John. Give us a reply. Tell us where the lies are, where the distortions are. You are being trapped, aren't you? You are being trapped. Mr Howard —You are the one who is being trapped. Mr KEATING —No, I am asking you. You called me a liar. Tell me where the lies are there. Let me know where the imagination is. It is interesting that when Mr Howard was Treasurer the 60 per cent rate stayed there for five years. There was $3 billion out of Bass Strait, there were no cuts in tax; but now the Opposition is all overcome with the question that there must be lower tax. If there must be lower tax, tell us where the $14 billion of outlays cuts will come. The Leader of the Opposition made quite clear yesterday that after an election he would introduce a mini-Budget to pay for tax cuts, $6.6 billion on the scale that the Opposition has published. He made it quite clear yesterday in his statement that there is a commitment to income splitting, $3 billion. Mr Spender —I rise on a point of order. I remind you, Madam Speaker, that the question was directed to tax and the extent to which the Government's tax policies underpin its fiscal policy. What the Treasurer is now saying can on no view of relevance be regarded as relevant, and I ask you so to rule. Madam SPEAKER —To my mind, the Treasurer is painting the background. I expect him to be relevant. Mr KEATING —Again I refer to the background. The background is that if the Leader of the Opposition can get a tax auction block going for this country, if he were to get to the position of trying to force the Government into the kind of irresponsible tax promises he is now putting, this nation's economic credibility and prosperity would be massively injured as our exchange rate collapsed and our interest rates drove us into recession. That is the fact of the matter. Yesterday, again we had a commitment by the Leader of the Opposition to income splitting and child care rebates, $3 billion; repeal of the fringe benefits tax, capital gains tax, lump sum superannuation, $860m; so that is $3,860m. He then talked about expenses incurred in earning income being deductible, negative gearing and entertainment, $420m; that is $4.2 billion; plus the tax cuts of $6.6 billion. He was still talking about $10 billion yesterday. He has politely forgotten all the references by the Deputy Leader of the National Party a week earlier. The fact of the matter is: How can any person who has been Treasurer of this country parade such irresponsibility simply to get his political skin over the line in an election? How can he, knowingly and wantonly, put the nation's economic credentials and security at risk just to get himself elected? That is what it amounts to. He is not saying: `Look, the Government is right, the Government is doing the right thing, the Government is pulling the fiscal policy down, the Government is paying for tax cuts which it knows the nation can afford. The Government is making people who have not paid tax pay it for the first time'. No, he is saying: `What we will do is offer bribes that we know will wreck this country, but who cares as long as we are the government?'. That is where the Opposition stands. That is the new honesty of the Opposition in 1987, from a former Treasurer. I conclude by saying that now that on two occasions my statements in documenting the Opposition's policy have been referred to as lies, distortions, figments of my imagination, I invite the Leader of the Opposition to tell me which reference is wrong and what the right reference should be. Secondly, I invite him to reflect once again-- Mr Cadman —I rise on a point of order. There are indications that the Treasurer is concluding his answer, but I draw your attention to standing order 85. We have listened to this argument, exactly the same argument day after day. Madam SPEAKER —Order! The Treasurer is concluding his remarks. Mr KEATING —I again invite the Leader of the Opposition, a former Treasurer, and his front bench to ponder this nation's true economic circumstances and ponder what they are trying to do, and the auction block in tax they are trying to create which would tear this nation apart and ram it into recession. Mr WHITE —I remind the House that this is the second question in nearly 20 minutes. Madam SPEAKER —Order! It is the third question. Mr WHITE —My question is directed to the Minister for Sport, Recreation and Tourism. I refer to the Government's backdown in calling tenders for the major audio-visual contract for the Australian pavilion at Expo 88. This morning on radio station 3LO Mr Don Morris of Mojo MDA stated that previous Expo pavilion proposals from Australian companies had been given to an American company. These Australian companies and the American company are now all tendering for the same contract, with the American company having the clear advantage of knowing all the other proposals. I ask the Minister: How could such a breach of confidentiality occur? How can Australian companies now compete on an equal footing? What does the Minister intend to do about it? Mr JOHN BROWN —It is true that the Government has decided to re-examine the tenders for the main audio-visual contract in order to see that justice is not only done but seen to be done. Mr Cobb —What was in it for you? Mr JOHN BROWN —What was that? Say it louder. Madam SPEAKER —Order! I would not repeat it if I were the honourable member. Mr JOHN BROWN —I think he said: `How much under the table?'. Madam SPEAKER —The honourable member will withdraw his comment. Mr Cobb —I withdraw. Mr JOHN BROWN —There has been a deal of speculation over the last couple of weeks, on the Schildberger radio show, to which the honourable member referred, and also on the 7.30 Report. Most of it has been inaccurate, most has been fairly misleading and some has been mischievous. In fact, Schildberger has had the indecency to accuse me twice publicly of misleading this Parliament. I can assure all honourable members that I have not misled this Parliament on this or any other matter. Mr Cadman —Are you going to sue him? Mr JOHN BROWN —Yes, I am going to sue him. I must say that a lot of the mischief has been stirred up and to some extent motivated by the honourable member for McPherson who parades himself in here as my shadow Minister. I have yet to find one positive statement that he has made on either sport or tourism during his term in that position. To return to the facts surrounding the Australian pavilion at the Brisbane Exhibition-- Mr Carlton —What is life like on the North Shore? How is Parramatta these days? Madam SPEAKER —Order! The honourable member for Mackellar will cease interjecting. Mr JOHN BROWN —How is the car that you left sitting outside the Intercontinental until 6 o'clock one morning? If you want a bit I can give you plenty. Opposition members interjecting- Madam SPEAKER —The Minister will continue with his answer. Mr JOHN BROWN —The committee that I appointed to examine the Australian pavilion in Brisbane and to appoint various people to supply the various parts of that pavilion has, for nine months, been trying to find an Australian company that is capable of doing this. One of the people who have been making the most noise-and, as I understand it, the honourable member for McPherson has been ringing him daily for some weeks-is a man called Browning who took three or four months of my time while I, with my committee, examined the proposition that he had put forward for a theatre in Brisbane. The first proposition was $5m and eventually that increased to $10m. The film that was to be made to take place in this theatre was supposed to be provided by one of Australia's largest banking institutions as a bicentennial gift. The banking institution did not seem to know anything about it and when I eventually investigated the company with which we would be dealing, I found that it was a $2 company or a $200 company with two one-dollar shares issued and that it owed a considerable amount of money to the Northern Territory Government for early research into this experimental theatre. This is a man who is claiming that he has never had a fair go. Nevertheless, the committee asked Bob Rogers, an eminent American expo expert, the man who provided the first, second and third winning exhibits at Vancouver, to be an adviser to the committee. He agreed to that. Very early in the piece-about last August-one of the committee members wrote to Mr Rogers and asked him whether he would be in favour of providing an exhibit for Australia. He responded in very brief terms that he would, that he would be happy to reproduce his exhibit in Vancouver called `Spirit Lodge' and it would cost about $5m. That was a private letter between one member of the committee and Mr Rogers. Thereupon Mr Rogers came to Australia at the request of Qantas Airways Ltd for which he was doing a theatre at that stage. Mr Rogers advised my committee not about his theatre, but about expos generally. He is considered to be the world leader in expositions. I must say that his advice has been very valuable in terms of the total pavilion at Vancouver. He was never considered to be a tenderer or a prospect for the Australian theatre. The Australian Film Commission advised my Department of four very prominent Australian audiovisual companies that should be asked to tender. They were asked to tender. They were briefed orally by my committee about the sort of display we wanted and the brief, to a great extent, revolved around the sort of theatre that Rogers had in Vancouver and which was the smash hit. That was the sort of theatre that we wanted. We briefed the companies verbally and then a tender paper was formulated asking them to tender for this type of theatre. Five companies responded and I must say that the committee was not terribly impressed with their propositions. Most of them were experimental; very few, if any, had a proven record of the sort of reliability that I think all honourable members would want in an Australian pavilion. Nevertheless-I make no bones about this, and the honourable member for McPherson knows this because I briefed him confidentially the other night-at the end of the tendering arrangement it was discovered that the committee was not happy with any of the tenders. Then, as a last resort after spending all that time trying to find an Australian company to do the job, the committee decided to invite Bob Rogers to provide the theatre. It then came to light that one of the committee members had innocently and naively given the Australian submissions to Bob Rogers for comment. Mr Cadman —What a series of coincidences. Mr JOHN BROWN —Well, if the honour- able member has a suspicious mind he will have suspicious thoughts. He is in fact impugning very well credentialled and highly respected Australians who are members of the committee. Opposition members interjecting- Madam SPEAKER —Order! The Minister will continue his answer. Mr JOHN BROWN —When it was brought to my attention that Mr Rogers had been given a look at the Australian submissions I realised that a technical breach had been committed. That is why no contract has been formulated. Despite the avowals of many people, no officer in my Department has refused to sign a contract that was never even drawn up. I notice that the 7.30 Report last night made a very big issue of the fact that this officer had suddenly gone on leave. This officer has been going on leave on this date for the last four months and he is constantly in touch with me. If people are looking for him, they will find him in his cabin down on the south coast; he has not disappeared into space. Knowing that a technical breach had been committed, I took the proposition to the Cabinet and the Cabinet has now decided, quite properly, that a new-- Mr Sinclair —That sounds very suspicious to me. Mr JOHN BROWN —Well, everything sounds very suspicious to you. That is not unusual. Madam SPEAKER —Order! The Minister will ignore the interjections and continue his answer. Mr JOHN BROWN —The Cabinet has now decided, at my request, that a new committee should be formed and that all the tenderers shall be asked to resubmit their proposals. They are being given whatever time they want to present their proposals. I suppose that Australian Audio Visuals, which is supposed to have Mr Browning on subcontract, might even bring him along this time. AAV did not see fit to bring him along to the last display of its credentials. This time it might. I hope it does. It is my earnest hope that an Australian company can come up with a proposition that will enable us to have an Australian audiovisual company supply this main complex at the Brisbane exposition. However, it strikes me as very strange that Australia has suddenly developed this feeling of pride. Three or four years ago it was hard to get Australians to feel proud about anything. I, as much as any member of this House, have been very busy trying to build up Australians' faith in themselves, through the Hogan campaign and the Buy Australian campaign and now it seems that anything that is not Australian is bad. I remind honourable members that almost every pavilion-almost every theatre-at Vancouver was organised by an American. Almost every pavilion at Brisbane, including the Queensland Government's, will be organised by an American. This just happens to be their field of expertise. I did not see 260 million United States residents jumping up and down in anger when Rick Birch, a very eminent Australian, provided the opening and closing ceremonies at the Los Angeles Olympic Games, just as he did at the Brisbane Commonwealth Games because he happens to be the greatest expert in that field. All I want is the best possible exhibit for Australia. With the evolution of a new committee which will be chaired by a high ranking officer of the Department of Local Government and Administrative Services who is in charge of government purchasing and which will include Peter Faiman and hopefully Peter Weir, Tim Burstall and Geraldine Paton, who was the chairman of my original committee, I hope that the right decision will be made and that every Australian company will have the right to parade its wares as best it might. It is my fervent hope that one of them will win the contract. I should add that Mr White was also invited to appoint a representative to that committee and has declined to do so. I do not make any comment on that, but we offered the opportunity to appoint a member to that committee to make sure that justice is done. Mr BALDWIN —My question is directed to the Minister for Science. What was the basis for a record award of nearly $600,000 in the Australian research grants scheme for a stellar interferometer? At a time of acute stringency in funding, can this sum be justified? Mr BARRY JONES —I thank the honourable member for his question. As the University of Sydney is in his electorate, I know of his keen interest in Australia's research capacity. On 11 February I presented a cheque for $250,000 to the University of Sydney as the first instalment of a payment of $598,000 in this calendar year towards the cost of building the world's most powerful instrument for measuring stars. This is the largest single grant ever made under the Australian research grants scheme. The grant will be used to build a very high angular resolution stellar interferometer for the university's Chatterton Astronomy Department. It will be sited at Culgoora in the electorate of the Deputy Leader of the National Party of Australia, about 20 kilometres north of Narrabri in north-western New South Wales. It will be built back to back, if honourable members will excuse the indelicacy, with the Australia telescope. The device was designed by Professor Robert Hanbury-Brown of the Sydney University and is being further developed by Dr John Davis and Dr W. J. Tango. The project is also being supported by the Commonwealth Scientific and Industrial Research Organisation and the University of Sydney, and it should attract significant private support from industry under the 150 per cent tax deductibility scheme because of its implications in optics, microengineering and microelectronics. The machine will be capable of measuring stars with a resolution equivalent to measuring the width of a human hair at a distance of 100 kilometres so that the interferometer-- Mr Braithwaite —Can I hire it? Mr BARRY JONES —It could find a hair on the head of the honourable member for Dawson, if anything could. The interferometer will allow astronomers to study the fundamental properties of stars, including temperature, size, mass, atmosphere, composition, evolution and nuclear processes, which cannot be done with conventional telescopes. It will also contribute to the establishment of a precise distance scale in the universe. The interferometer is at the forefront of high science and high technology, and I am very proud that the development work and the vast majority of the equipment are Australian. It has received the highest level of international support for any Australian scientific project so far, and I think it deserves the full support of everybody in the House as an achievement that we can be proud of. The importance of the project was recognised by the Whitlam Government in 1974, with the award of a $75,000 grant for a design study of a successor to the earlier interferometer at Narrabri. Under the Fraser Government, high levels of support were given by ARGS. Because of the success of its prototype built in North Ryde, the new instrument will be built for about $4m, that is, one-tenth of the original estimate. Australia is recognised internationally as the world leader in the field of very high angular resolution studies of stars. This will keep Australia at the forefront of this science, but the size of the ARGS grant reflects a new philosophy in that body. The time has come for more targeting of grants, especially at a time of financial stringency. We should have fewer grants but larger ones of a more useful size and the setting out of priority areas, including the provision of funds for capital equipment. The dribble or spray effect, egalitarian though it is, has its limitations. Among the priority areas could be new industrial materials, molecular electronics, artificial intelligence, marine science and astrophysics. I repeat: This is a project of enormous significance, and it should be a matter of great national pride. Mrs SULLIVAN —My question, which is directed to the Prime Minister, refers to the stated objective of Ausflag, as reported by the Press in recent days, to have the present Australian flag replaced by a new flag by 1988. What approaches has Ausflag made to the Government for this objective to be achieved? What action, if any, has the Government decided to take in response to Ausflag's proposals? Mr HAWKE —I must admit that amongst the vast array of things that come to my attention I have not had brought to my attention any such approach. I will take steps to see whether any approach has been made to some Minister who would have a more direct responsibility for the matter which the honourable member raised. It not having been considered by the Government-certainly there is no Cabinet process whereby a Minister has brought any such approach-it follows that there is no government reaction. For what it is worth, let me repeat my personal position which I have put on a number of occasions. I do not see that this will be a bicentennial issue. It is like republicanism. It will be an issue which is properly a matter for discussion in a society such as ours. If or when- Mr Coleman —Confined to crackpots. Mr HAWKE —Oh, be quiet, will you, and make way for Hewson. It is a matter for proper debate in a society such as ours. I feel no emotion about it at all. It is a thing that may evolve in time, but I do not see it happening in anything like the time scale to which the honourable member has referred. I will check to see whether there has been any such approach. Mr CUNNINGHAM —Did the Minister for Primary Industry hear the recent comments by the Deputy Director of the National Farmers Federation endorsing the Queensland Premier's campaign? Can the Minister advise the House of the implications for farmers of a Commonwealth government introducing the economic policies endorsed by the NFF? Mr Spender —Madam Speaker, again I take a point of order. The Minister is not responsible for the statements of the NFF; they are not within his portfolio. These sorts of questions in the past have been ruled out of order, and this question should also be ruled out of order. Madam SPEAKER —The question is out of order. Mr Cunningham —On the point of order, Madam Speaker: My question to the Minister was: What would be the implications for farmers of a Commonwealth government introducing these economic policies? Madam SPEAKER —That is in order. If that is the whole question, it is in order. Mr Spender —Read the whole question. Madam SPEAKER —The honourable member will resume his seat. That is the question that the honourable member has now asked. This Chair has given other honourable members on both sides of the House the right to rephrase a question. The honourable member for North Sydney will resume his seat. I call the Minister for Primary Industry. Mr KERIN —We are all aware of the Press release by the National Farmers Federation which covered a wide range of policy matters. It said that it welcomed the Queensland Premier's coalition-wrecking activities and that it was reassessing its political strategy. That is said in the Press release. I can understand the National Farmers Federation's disgust with the pathetic leadership of the Liberal and National parties in this place-- Mr Spender —Come on; get back to the question. Madam SPEAKER —Order! I warn the honourable member for North Sydney. Mr KERIN —From the outset, let me state clearly that the National Farmers Federation has an important role to play in representing the views of farmers to government. While ever it is playing that role, I am very happy to consider seriously its views and will work with it on issues which are relevant to and in the interests of the farm sector and rural Australia. Of course, there is no question-one cannot avoid it-that some matters that it will raise will be at the heart of political debate in this country. We all know the realities of that and no objection is made to that at all. We need to look closely at some of the other aspects of the present operation of the National Farmers Federation with respect to its partisan political involvement. It is probably more accurate to say that its involvement will be represented as partisan. There has been independent comment on that and any fair-minded person would see it as partisan political involvement. Under the President, Ian McLachlan, the Federation has closely allied itself to the New Right. He has been anointed twice by Katharine West but has sensibly declined, and now there is another call in the papers by a Mr Hay who, I think, represents one of the outside groups making such an influence on the coalition parties in this place. Now Mr McLachlan says he is thinking about entering politics, but he does not know which party. Times are desperate indeed on the other side of the House. The NFF, I guess, supported the right wing of the Liberal Party to get Mr Howard, the present Leader of the Opposition, up. Mr Spender —On a point of order, Madam Speaker: You will recall the question that was eventually asked and was ruled to be in order. This answer has nothing to do with that question. It cannot be relevant and it must be out of order. Madam SPEAKER —The honourable member will resume his seat. The Minister will answer the question. Mr KERIN —All right, let us talk about policies, Madam Speaker. The NFF has been trying to give its politics some credibility by repeating ad nauseam that it is non-party political. It said that it is going to interview candidates and support anyone who supports NFF policy. That is fair in a democracy. Nine Australian Labor Party members and nine coalition members are going to be interviewed. The NFF has said that that is part of its political strategy which it is now reassessing. But before it has done any of this- Mr Shipton —Madam Speaker, I take a point of order. The Minister was asked a question which you ruled to be in order. He was asked to advise on the implications for a Commonwealth government of National Farmers Federation policies. Madam SPEAKER —I expect that that is where the Minister is-- Mr Shipton —You have given the Minister indulgence. He has indulged in a personality attack. Now he is referring to candidates-- Madam SPEAKER —Order! The honourable member will resume his seat. The Minister will answer the question. Mr KERIN —Madam Speaker, as I was saying, let us have a look at these policies. The NFF has endorsed the Queensland Premier before he has announced any policies and before it has conducted the political campaign it was going to engage in leading up to the next election. So I assume that the NFF endorses the Premier of Queensland's anti-democratic policies. I assume that it endorses the corruption that is inherent in that political system. I assume that the NFF endorses the most political public service in Australia. I assume that the NFF endorses the irresponsible budget management in that State. I assume that it endorses the fact that that State has the most regulated agriculture. All of those things are things which normally the NFF does not stand for. It has not said that it is in favour of over-regulation, corruption or anti-democratic practices. But now it is saying that it is reassessing its political strategy. Let us just look at some of the policies of the NFF. The NFF wants real wages reduced by anything up to 40 per cent, ignoring the 4 per cent reduction that has already occurred. It wants manufacturing industry protection abolished tomorrow, ignoring the protection provided to parts of agriculture, and in this respect I can nominate the sugar embargo. Or is the NFF now suddenly in favour of regulation? I think the question is very serious. The NFF wants social welfare spending slashed but it wants assistance given to farmers under the rural adjustment scheme to be increased. Really, the only policy pronouncement which I have heard from the Queensland Premier is about a flat tax, so I assume that the NFF is now endorsing a flat tax-which would increase the tax on farmers. The NFF recently called for equality between housing and business interest rates, ignoring the fact that business interest rates are tax deductible. So, in after tax terms, most farmers are paying lower rates than home buyers. The fact is that interest rates on new housing loans are determined on a market basis. They are lower than the rates facing farmers because that is the free market outcome. The Government has cushioned the impact on previous savings bank borrowers, just as the rural adjustment schemes assist many farmers. Let the New Right and its allies-including now, I suppose, by its own words, the NFF-and the likes of the wrecker from the north, explain to the Australian people how their vision of an uncaring society, a society where nothing is done to protect its citizens, would benefit farmers. Quite frankly, it would not. Mr MILLAR —I address my question to the Prime Minister. I allude to his statement, couched in hyperbolic mode, that Australia is involved in a war for economic survival-a statement with which I totally agreed. Within that scenario, will the Prime Minister inform the House whether the economy is in a state of retreat or advance, and if the latter, to what heights must our $101 billion national debt rise before we taste the fruits of victory? Mr HAWKE —The honourable member for Wide Bay knows that if I had had such a rough question thrown at me by anyone else from the other side of the House, I would have got into my most aggressive mode. But because it has come from a member on the opposite side of the House whom I admire greatly, I will put the question into its most serious context. Mr Young —The honourable member for Maranoa has just faxed that through to Joh. Mr HAWKE —The Minister for Immigration and Ethnic Affairs tells me that the honourable member for Maranoa has just faxed that through to Joh-so watch out Clarrie. Seriously, I do not put a particular description upon the economy. I do not think one word describes the position. I put to the honourable member the fact that we now have dramatically and clearly a position where this country cannot continue to expect to sustain standards of living on the basis that that gap between what we earn through our exports and what we pay for imports will continue to be paid by dipping our hands into the pockets of overseas investors. That is an unsustainable position. I am trying to explain to the Australian people, as are my colleagues, particularly the Treasurer, that we cannot deal with that situation by using snake oil remedies. I am at one with the honourable member for Boothby in his criticism of his Liberal Party colleagues. We cannot have that sort of situation-I must say this to the honourable member-any more than we can deal with that situation by adopting the stupidities which are emanating from the Premier of Queensland. It is impossible to have a situation where we can promise the people of Australia an increased standard of living when our capacity to sustain existing standards is diminishing. I want to say to the honourable member that we should not, however, despair about that fact. I am not going to attempt to make political capital out of the historical reasons why we are at that point, because there is a considerable amount of guilt throughout the community. I do not think any great purpose is achieved by trying now to allocate it in particular shares. What I am saying-and I am glad that honourable member for Wide Bay is attempting to listen to the answer-is that that is the factual situation. Since we took office as a government, we have tried to begin the restructuring of the Australian economy to make it more relevant to the circumstances which are now confronting us and are likely to confront us in the future. Without saying to the honourable member that I will be exhaustive about all those things, perhaps I may, with respect, remind him of the sorts of things that we began doing when we took office. For instance, we regarded it as silly that one could talk about losing a steel industry. We thought that the natural capacities were there to have not only a steel industry which provided for our own domestic economy but also a steel industry that could be export oriented, and that is what we have achieved. We have achieved a significant restructuring of the shipbuilding industry. When we came to office, the shipbuilding industry had idle yards all over the place-unused capacity. That industry is now engaged in a significant and successful export marketing program. We have done the same thing in regard to heavy engineering. We tackled, in a way that it had not been tackled before by any coalition, the question of the textile, clothing and footwear industry. We did the same with the motor vehicle industry. I am proud, and I think the honourable member would share my pride, that in regard to the motor vehicle industry we have now reached the position where we will be exporting motor vehicles again. The Ford Motor Co. of Australia will be exporting motor vehicles into the United States of America. Our factories in South Australia will be exporting motor vehicle components to Japan. I think the honourable member will agree that those are the sorts of things that we have got to be doing. As great as the contribution of the rural industry has been and as important as it is going to continue to be, we cannot, in this rapidly changing world, have a situation where we depend, as to 40 per cent of our export income, on rural exports and about 40 per cent from mineral products, because the nature of world demand for those products has changed in a way where if we are going to have that composition of exports, we will be doomed to a continuous decline in our living standards. So what we have to do is make our economy more competitive in a wider range of economic activities. While we are doing that and making the hard decisions we will make the tough fiscal budgetary decisions. This means that in the meantime we will accommodate, by way of lower standards, to those realities with which we are confronted. In changing the structure of this economy, because of the great national advantages that we have, it will mean that if we work together rather than try to fight one another we can take advantage of those national facilities, we can take advantage of our basic political stability in this country and we can take advantage of our proximity to the fastest growing economic region in the world. By doing those new things, by showing that we can be competitive in those areas and by working together rather than fighting against one another we will bequeath to our children a higher standard of living and better job opportunities rather than the destruction of this economy, which would be necessarily intrinsic in the snake oil remedies that are being peddled by honourable members opposite. Mr LIONEL BOWEN(Kingsford-Smith-Attorney-General) —Pursuant to section 30 of the Human Rights Commission Act 1981, I present the Human Rights Commission report on the review of the Australian Capital Territory Adoption of Children Ordinance 1965. Motion (by Mr Young) proposed: That the House take note of the paper. Debate (on motion by Mr N.A. Brown) adjourned. Mr KERIN(Werriwa-Minister for Primary Industry) —Pursuant to sub-section 63 (4) of the Wheat Marketing Act 1984, I present the annual report and financial statements of the Australian Wheat Board, together with the Auditor- General's report 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 PETER MORRIS(Shortland-Minister for Transport) —For the information of honourable members, I present a report of the inquiry into the distribution of federal road grants. 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 National Research Fellowships Advisory Committee's report on fellowships awarded for 1987. 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 Industries Assistance Commission's interim report on Canned Fruit (Statutory Marketing and Interim Assistance Arrangements). Motion (by Mr Young) proposed: That the House take note of the paper. Debate (on motion by Mr N.A. Brown) adjourned. Mr UREN(Reid-Minister for Local Government and Administrative Services) —For the information of honourable members, I present the annual report of the Commonwealth Accommodation and Catering Services Ltd for 1985-86, together with the Auditor-General's report on the financial statements. Mr UREN(Reid-Minister for Local Government and Administrative Services) —For the information of honourable members, I present the annual report of the Commonwealth Fire Board for 1985-86. Mr CARLTON(Mackellar) —Madam Speaker, I seek leave to make a personal explanation. Madam SPEAKER —Does the honourable member claim to have been misrepresented? Mr CARLTON —I do. Madam SPEAKER —Please proceed. Mr CARLTON —The Minister for Sport, Recreation and Tourism (Mr John Brown), in the course of Question Time and during his answer to a question, made the comment that I had kept a car waiting outside the Inter-Continental Hotel, presumably in Sydney, until 6 a.m. I would like to indicate what the circumstances of this incident were. I wish to refer to a letter that I wrote to the Minister afterwards because I heard that a car had waited for me until early in the morning. I had come out of the hotel at 11 o'clock the previous evening after a function and I could not find a car. I went to the Commonwealth Centre and I could not find a car there. I rang up the depot, which was closed, and got a message. I rang the taxi service and got a taxi home and that is recorded by the Department of Local Government and Administrative Services. Concerned that I might be charged for the car waiting until 6 o'clock in the morning, and not understanding why on earth the driver would wait as long as that, I had my staff contact the depot and ask that I not be charged for that car. The depot refused to remove the charge. I then wrote to the then Special Minister of State, the present Minister for Immigration and Ethnic Affairs (Mr Young), detailing the circumstances and asking that the charge not be registered on my account. I subsequently got a letter from the Minister for Local Government and Administrative Services (Mr Uren) stating: Your letter of 13.8.86 to the Special Minister of State . . . regarding the difficulties you experienced with Commonwealth Transport on the evening of Thursday 7 August at the Inter-Continental Hotel in Sydney has been referred to me for attention. I am advised that the driver allocated to pick you up arrived at 11.00 pm and parked in close proximity to the entrance of the I.C. Hotel, but has been unable to explain why he did not observe your emergence from the Hotel. The driver was relatively new and did not then follow the correct practice of entering the function venue to make contact with you reasonably soon after the designated pick-up time. Appropriate instructions have now been issued and I consider it unlikely that a similar situation will occur again. I am sorry you were put to some inconvenience. No charge will be rendered by my Department for the cost incurred by our driver. Mr JOHN BROWN(Parramatta-Minister for Sport, Recreation and Tourism) —Madam Speaker, out of respect to this institution and to the honourable member involved I regret the imputation. I withdraw and apologise. Madam SPEAKER —I thank the Minister. Mr UREN(Reid-Minister for Local Government and Administrative Services) —Madam Speaker, with your indulgence, as my name has been brought into this I want to make it quite clear to all honourable members in the House that I deplore any breach of confidentiality in the driving pool in relation to the use of cars. As far as I am concerned, as the responsible Minister I will try to trace through how this gossip started. I will make inquiries. I object to any gossip at all in relation to any member of parliament, Opposition or Government. Mr CARLTON(Mackellar) —Madam Speaker, with your indulgence, I would like to thank the Minister for Sport, Recreation and Tourism (Mr John Brown) for the manner in which he has dealt with this matter. Mr BEAZLEY(Swan-Minister for Defence) —by leave-I have pleasure in tabling the report of a defence study into options for basing the fleet at Cockburn Sound in Western Australia and at Jervis Bay in New South Wales. The study was initiated by this Government for two main reasons. It recognises that the defence of Australia requires an increased naval presence in the west. It also recognises that the main base of the fleet in eastern Australia cannot remain in Sydney Harbour indefinitely. This is in keeping with the intention of the Government to establish a defence infrastructure appropriate to a self-reliant defence posture. A need for a substantial naval presence in the west, if the Royal Australian Navy were to properly fulfil its responsibilities, was recognised early this century. It was not until the early 1970s, however, that a decision was made to establish the facility we now have at HMAS Stirling in Cockburn Sound. It is a measure of this Government's determination to ensure an effective defence of our country that establishment of Stirling as a major base there should no longer be put off. This Government is committed to further developing Stirling, and thereby making a two-ocean navy a reality. It was this Government which decided to home-port the first destroyer at Stirling-HMAS Stuart-in 1984, and the second, HMAS Swan, in 1985; and it was late in 1985 that I announced that Stirling would become a major base for Australia's submarines. The development of Stirling reflects a strategic need to have the capacity for maritime operations to be conducted from the west as well as the east coast, and the consequent need to ensure that maintenance support is available there. Ships operating in the strategically important areas of the north and the north-west and supported from Stirling will gain a substantial increase in their effective operating time-by 13 per cent for destroyers and 31 per cent for submarines. The basing of more ships at Stirling will also enable the Navy more readily to develop expertise in areas in which it would need to operate in contingencies that could arise in shorter time scales. The report states that the development of Stirling for up to half the fleet would be a sensible planning objective to be achieved progressively. It is now the Government's intention to move half the fleet to Stirling. I have already announced that Stirling will be a major base for the new submarines. The first submarine to transfer will be HMAS Oxley, which will be home-ported there from September this year-in addition to the two destroyers already home-ported there. The report makes it clear that two Oberon submarines and four destroyers could be based at Stirling by 1990. Further development and basing could follow in the 1990s as the new classes of minehunters, submarines and light patrol frigates enter service. The report addresses the detailed implications of developing Stirling. Specific proposals now need to be considered in the light of the overall defence program, the Government's other important defence initiatives, and particular aspects such as provision for basing there further ships as the fleet expands to 16 or 17 surface combatants. Development of Stirling will have a significant local impact. Investment in Stirling could amount to some $330m over 10 years or more. Mr Donald Cameron —Buying votes. Mr BEAZLEY —I would have thought that the honourable member would have approved the rational dispersal of naval units around the coast. Mr Donald Cameron —You people are spending your money in Labor States. Mr BEAZLEY —Clearly, the honourable member has absolutely no idea about the defence needs of this nation. Up to 1,000 persons could be directly engaged in construction. Some 3,000 extra Navy personnel, wives and dependents could be expected to generate an increase in demand for consumer goods and services of $50m annually and create some 900 additional jobs in the area. The significance of establishing docking or ship-lift facilities in Western Australia for destroyers and submarines, particularly for emergencies, will increase with the number of ships at Stirling. The Government has decided to make a commitment in principle for a Commonwealth contribution to a West Australian marine support facility in order to ensure that this capability is available in Western Australia. Detailed matters which now need to be resolved include the scale and timing of the total facility, and of the Commonwealth's contribution to it, the development of other related support capacity in Western Australian industry and at HMAS Stirling, and the terms and conditions of Royal Australian Navy access to the facility. A team of senior Defence and RAN personnel will shortly begin discussing these details with Western Australian Government officials with a view to finalising the matter by May this year. It has to be remembered, of course, both in regard to this proposal and the total fleet basing issue, that the Commonwealth is operating in an environment of extraordinary economic difficulty. This will, of course, influence or negotiations. Development of Stirling will also have extensive indirect impact on the Navy generally, as it adjusts its whole infrastructure, oriented till now to an east coast navy, to the realities of an east-west coast navy. Historically, Australia's major military establishments have developed near the major population centres. Such location reflected a combination of factors-local defence of those centres together with ready access to industrial support a policy of supporting the operations of allies; and the ability to train and dispatch expeditionary forces. That has changed and changes to the logistic and other support arrangements need detailed consideration in consequence. It is also timely to examine options for developing a fleet base at Jervis Bay-against longer term prospects of a need to move the base from Sydney and the suitability of Jervis bay as an alternative location for the fleet in the east. While moving half the fleet to Stirling will relieve problems in Sydney for the medium term, a long term perspective is necessary. I repeat what I have said publicly before. The future growth of Sydney will impose increasing constraints on the Navy's operations. There are also inevitably competing and growing demands for limited space in big cities. The Navy's armament depot at Newington is a particular case. Not only is the extent to which it can now be used limited by new safety standards and encroaching development, but its occupation of 260 hectares of land for this purpose in the centre of a city is not prudent, operationally sound, or consonant with the other uses that urban pressures would suggest. It needs to be relocated to where it can efficiently and effectively support the fleet. We need therefore to begin to plan for an eventual move of the eastern half of the fleet to a more suitable long term location. The Government will now commission the environmental studies that need to proceed. The report notes the advantages of Jervis Bay over other locations for a new fleet base. There are a number of naval facilities there including the Naval Air Station at Nowra, and colocation would be advantageous. A new base would permit integration of those elements of the fleet left after buildup in the west, and enable efficiencies in support. Such a base would remain close to industrial support, including the dockyard in Sydney. The area has room for expansion and consolidation of other navy facilities over time. In sum, Jervis Bay has been clearly established by Defence examination as the most suitable alternative base in the east for the fleet. At this point, I shall respond to the views of the House of Representatives Standing Committee on Environment and Conservation in its report of 7 October 1986 on relocation of naval facilities to Jervis Bay, when it proposed that an environmental impact study for naval development at Jervis Bay should be undertaken only when a comprehensive planning study and public review of naval facility requirements and alternative sites demonstrate that relocation to Jervis Bay is necessary. The Government notes, but does not endorse, the position taken by the Committee. The Committee's approach would seem to invite the Government to come to a firm position to relocate to Jervis Bay before commencing an EIS thus rendering the EIS in any fundamental sense largely redundant. That approach seems contrary to the spirit of the Environment Protection (Impact of Proposals) Act 1974-75 and indeed to the recommendations of the Committee's 1974 report which said that: any proposal to develop naval facilities at Jervis Bay be subjected to an environmental impact study in accordance with the terms of reference of the Environment Protection (Impact of Proposals) Act 1974-75 and if it can be demonstrated that a more suitable site for such development exists the Australian Government should not agree to the proposal. The advantage of the process recommended in 1974 is that the Government will have before it the whole range of factors and interests, environmental and otherwise, which are pertinent to taking its decision. This is regarded as the more responsible approach and is consistent with earlier public statements from the Prime Minister, Mr Hawke, and me that no government decision on relocation would be taken before environmental studies were completed. The Committee also questioned the need for fleet base relocations to take place at all. It accepted the case for relocation of the armament depot from Sydney, but it raised doubts about the need for relocation of the fleet-drawing on references from the Dibb Review of Australia's Defence Capabilities, including the statement that an `accelerated move out of Sydney Harbour could not be justified by any pressing strategic imperative'. The Committee went on to comment that in its view the fleet base in Port Jackson would be capable of adequately accommodating a fleet of the present size into the twenty-first century. Even at the most optimistic rate of relocation, and assuming planning were to commence tomorrow, establishment of the fleet in Jervis Bay could not be achieved before the twenty-first century-in other words 15 to 20 years. The high cost of relocation-$1 billion-and the size and complexity of the task could well require a much longer time frame for that part of it which specifically relates to the dockyard. While it is true, as suggested by the Committee, that a naval build-up at HMAS Stirling, Western Australia, will relieve pressure on other naval facilities, that does not offer any long term solution to the prospect of increasing problems I have mentioned associated with Sydney Harbour. This Government is not prepared to ignore the fact that what are presently only difficulties in Sydney Harbour could eventually constrain naval operations. The second recommendation of the Committee dealt with the need for any proposed development at Jervis Bay to be considered and planned in the context of the overall proposal for fleet facilities and bases around Australia. I simply observe that such issues are addressed in the report I am now tabling and are taken into account in the course that is being followed by the Government. Once again, I would stress, as has been done in previous statements, that there is no commitment at this stage to relocating the fleet to Jervis Bay. There is a commitment to examining fully the environmental considerations of what is clearly the most suitable alternative location for the major fleet base in the east. That will be done before the Government reaches a final decision. The environmental assessment for Jervis Bay will therefore proceed. Finally, I need to emphasise that the possibility of long term relocation of the fleet from Sydney must not preclude action necessary in Sydney in the meantime. For example, development necessary for Australia's mine counter-measure capabilities is a high priority imperative and cannot be deferred. There will always be a requirement for mine counter-measure vessels in Sydney because of the Harbour's enormous economic significance to Australia. Accordingly, the development of those facilities necessary in Sydney to support this capability will proceed. Mr Deputy Speaker, I present the following paper: Fleet Base Relocation Study Report-Ministerial statement, 25 February 1987. Motion (by Mr Young) proposed: That the House take note of the papers. Mr SINCLAIR(New England-Leader of the National Party of Australia)(3.09) —A number of aspects of this statement are of great significance. While at this stage it is presented as a parliamentary paper, its implications are far more profound than those of many papers that are presented in this way after Question Time when the House is empty and nobody seems to be interested in what is going on. I think it needs to be remembered first of all that it is really no more than a response to the recommendations of the House of Representatives Standing Committee on Environment and Conservation report of 7 October 1986. As the Minister for Defence (Mr Beazley) has identified, there was a suggestion that there had to be a comprehensive planning study and public review of naval facility requirements and alternative sites before there could be any further development of the Jervis Bay site. For this reason it was necessary to have this report before the environmental impact study into the future use of Jervis Bay could be established. There are a number of aspects within the report which certainly have the total support of the Opposition although the longer term implications and some of its recommendations would certainly not receive carte blanche approval from those of us on this side of the House. There are a number of matters on which we would take quite a different stance if we were in government. As to the fundamental decisions, however, on having an environmental impact study into the proposal to develop naval facilities at Jervis Bay there is total agreement. It is essential that there be understanding and scrutiny of the Jervis Bay area to determine the impact on the magnificent clear waters and white sands that so characterise that very beautiful part of the east coast of New South Wales. On that, there is total agreement between the Government and the Opposition. There are aspects of the report on which I need to comment because, as I have suggested, the report has a number of implications which I believe to be quite profound. There is no doubt that in defence matters one cannot afford to set short term horizons. Essentially, there is an important program in Australian defence of trying to upgrade our long term capability, to ensure a continental defence capability and to ensure that Australia's defence forces can better react to any situation that might emerge anywhere around the Australian coastline. While it is true that the establishment of the port of Sydney began with white settlement and has grown from there it is not sufficient for us to maintain a naval facility there simply because it is a good harbour. It is a magnificent harbour but there have to be other reasons for preserving the fleet's main operations there. There are quite justifiable arguments, looking at the 50 year strategy, to develop further the HMAS Stirling facility at Cockburn Sound. It was with that in mind that the coalition Government started the development towards HMAS Stirling. It was the coalition Government's forward planning that enabled the first home basing at HMAS Stirling, following the establishment of residential facilities, so that the families of sailors posted to HMAS Stirling would be able to live with them. People need to understand that the characteristics of home porting require not just the stationing of a vessel but also the development of sufficient housing and residential facilities so that the families of all those sailors can live within reasonable proximity to the place where the ships will be home ported, so that spouses can see a little of their sailor husbands or, in some instances, wives and so that their lives can be somewhat more normal than would otherwise be the case. In that respect it is essential that we do not take a short term view. If we are to develop fleet facilities at Cockburn Sound it will be necessary to plan for the future development of naval residential facilities in that area so that those who will be based at Stirling can have the same sort of housing development as any other Australians when moved to a place far from wherever their initial point of residence might be. The long term future of the Royal Australian Navy and the balance between the fleets on either side of the Australian continent generate a number of different arguments. I am certainly very conscious of the financial constraints, to which the Minister has referred, which apply in his terms to this year. But financial constraints are not peculiar to this year. The transfer of naval facilities from any one base to another costs a lot of money. The development of housing facilities costs a lot of money. However, it is true that changing land use means that some parts of the present operations in the port of Sydney are certainly no longer suitable for that area. I agree totally that the Newington armament depot is one such illustration. There are other facilities in Sydney, although the Minister has referred only to the mine counter-measure facility. There are other naval facilities at Port Jackson, which I believe will need to remain there permanently. Simply because Sydney is a growing metropolis the Navy should not be denied the use of facilities-for example, the facilities at Garden Island. I know that there has been residential agitation from various people in that vicinity who suggest that there should be an alternative use for it but the commitment of resources is such that were the Navy to move from there the cost to the Australian taxpayers, albeit in the 20-year time span-or even longer-that the Minister refers to, would be such that I doubt that it would be justifiable. If one looks at other naval facilities around the world, particularly in the more densely populated countries, such as the United Kingdom, the United States, and countries of Europe, it will be observed that naval bases remain close to fairly heavily populated areas. The reason is that where there is a population it needs defence. It is no use moving all the facilities simply because there is an alternative civilian requirement. There is a need to co-locate and take account of civilian requirements; there is a need to take account of the environmental impact of those military facilities. But there is also a need to defend both people and the industrial infrastructure that inevitably is part of a larger aggregated metropolitan area. That large aggregate of people provide the services that are so essential to be able to maintain the fleet in a reasonably satisfactory state-as is the case for any item of military hardware or software. Therefore, the Opposition does not accept that it is inevitable that all the fleet, at any stage-even excluding the mine counter-measure-should be moved from Port Jackson. I have some reservations at the extent to which those facilities that are being transferred from past defence use around Port Jackson and are now being acquired or used by the State Government are in as good and secure hands as they were when they were in Commonwealth hands. The obvious need in the surrounds of Port Jackson is to maintain the environment, to ensure that there is not excessive encroachment of buildings and other unattractive facilities; but also to maintain something of that very beautiful native vegetation that was part of the original Port Jackson. That is far more likely to happen with the Navy or other defence facilities there rather than the land being in the hands of the State Government which, unfortunately, seems to be subject to the cries of land developers and others. State governments inevitably wish to get a few dollars and by selling off a bit of land here and a bit of harbour foreshore there they feel that they can meet their temporary cash needs, forgetting people's longer term environmental requirements. I would far prefer that land be retained by the defence forces around Port Jackson and elsewhere around Australia but used subject to proper environmental constraints. There is another aspect about this report apart from the need to remain in Port Jackson and that is the extent to which a balance can now be determined in the distribution of the fleet between the west and east of Australia. I do not believe that we can effectively draw a line down the middle of the fleet and say that half the ships will be here and half there. The most efficient use of scarce resources is to try to concentrate particular facilities on one side or the other. That does not mean that we have to home base ships permanently on one side or the other but, major repair and maintenance facilities need to be concentrated. Whilst it is true for patrol boats that it is fairly simple to develop repair and maintenance facilities-I was pleased to read in the Minister's statement the intention to make a Commonwealth contribution to the Western Australian marine support facility-I suggest that with heavier vessels and perhaps with submarines it would be wiser to try to preserve to the maximum the repair and maintenance facility on one or other side of the Australian continent; having vessels, if need be, home ported on the other side, but leaving the repair and maintenance where it can be best used in economic and industrial terms; so that we can have a better resource base from which to ensure that with fewer personnel there is the necessary maintenance of surface and underwater competence. A number of other aspects of the report flag future difficulties which are not resolved. The Minister has suggested that the only real decision being taken as a result of his statement today is that to proceed with the environmental protection impact of proposals study, which is necessary before further development of Jervis Bay can proceed. I will refer very briefly to the difficulties. It is important that it be understood that the future development of the Australian fleet predominantly has to be concerned with where vessels need to operate. I am concerned that we should think of our fleet being based not only in the east and west of Australia but also in northern Australia. There are problems in trying to maintain fleet operations. The development of patrol boat facilities at Cairns and Darwin undertaken by the coalition Government are illustrative of that. It is important, when thinking of future home basing or home porting of vessels, that we look at the way in which those ships, albeit closer to northern patrol from Cockburn Sound than they may be from Port Jackson, would be closer still if they could be based somewhere to Australia's north. I feel it is unfortunate that this report does not adequately canvass alternative sites around the north, nor the degree to which it might be possible to provide some additional fleet capability in northern waters. I well understand the difficulties of Port Hedland; yet that was an area-or there- abouts-where for a long while it was thought that it may be necessary to develop a patrol boat facility. I think that it is still essential that we look at north-west Western Australia and consider the degree to which it is desirable for some additional facility to be built there. The second point of that part of my concern lies in the problems of the general development of Australian industry. There are enormous problems in Australia at the moment in the adequacy of our industrial support. Sadly, our general manufacturing industry is in decline. Many areas around Australia are no longer providing the number of jobs in manufacturing that they used to. We need to be conscious that all our defence equipment is now far more sophisticated than it used to be. We need to have in mind that we need to utilise to the maximum civilian resources rather than military resources in order to maintain that defence equipment. I therefore think we need to encourage to the maximum the use of those civilian infrastructures. If we scatter our military resources to too great a degree, it may well be that we do not have an adequacy of those civilian infrastructures. In this respect, of course, we need to have regard to the places where future shipbuilding will take place and the extent to which we can maintain an adequate ship repair facility associated with dry docks and with the other ways in which modern vessels can be made and subsequently assembled. In that regard, there is no doubt that in respect of Cairns, for example, where North Queensland Engineers and Agents Pty Ltd has developed an excellent facility related largely to the order that was given it for the building of patrol boats, that city and that part of Australia have been given an industrial capability which is a significant extension of what was previously there. I think that is to be commended. In that sense, I regret that it seems to me to be another aspect that needs to be adequately considered for the future decisions that flow from this report. I think the cost of this relocation is one of the real problems in determining just where and to what degree Australia can maintain the sort of self-sufficiency for our Australian Defence Force in which we all believe. The cost of transfer from one site to another is enormous. It is necessary to look not only at the military facilities but also at housing, and I think, therefore, that planning and programming over a long time span is essential. To that degree this report is of assistance. Finally, I say to the Minister that, while I commend him for the presentation of the report, I see no reason why those who have prepared it cannot have their names included. It has always seemed to me to be unusual that, because somebody is in the civil service or the Defence Force, they are not allowed to have their names appended. I believe there is every reason why those who make their contribution to a report of this character should feel that they should get some, albeit temporary, honour and glory just by having their names included as the authors of the report. I suggest that on future occasions perhaps the Minister might adhere to that suggestion. Debate (on motion by Mr Lamb) adjourned. The Clerk —Petitions have been lodged for presentation as follows and copies will be referred to the appropriate Minister: 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 service a Community's needs 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 service the Public with the variety of services they offer. They are a community centre particularly in Country areas and if necessary 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. by Mr Ian Cameron,Dr Harry Edwards,Mr Hawker and Mr Ian Robinson. To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The petition of the undersigned respectfully showeth. We most strongly oppose the process of Food Irradiation by radioactive Cobalt 60 or any other radioactive substance. We oppose the introduction of regulations that will facilitate the food irradiation process by State Governments. We express our deep concern at this attempt to extend the use of radioactive substances and exposure of workers to radiation. We call on the Government to immediately ban the importation of radioactive Cobalt 60 or other radioactive substances and to immediately disallow the regulations that permit the irradiation of food here in Australia. by Ms Jakobsen,Mr Kent,Mr Milton and Mr Scott. To the Honourable the Speaker and members of the House of Representatives assembled, we the undersigned citizens call upon all Members to pay due respect to pensioners and concessional card holders and cease the constant erosion of our entitlements by the Hawke Government. The humble petition of the undersigned showeth: That we strenuously object to the Government's decision to delete 45 commonly prescribed drugs (including analgesics, anti-histamines, cough mixtures and expectorants) from the Pharmaceutical Benefits Scheme; That we strenuously object to the Health Minister's assertion that the health problems for which these medications are prescribed (e.g. arthritis and allergic rhinitis) are ``relatively minor, self-limiting illnesses''. That we beg the House to reconsider these deletions from the Pharmaceutical Benefits Scheme. And your petitioners as in duty bound will ever pray. by Dr Harry Edwards,Mr Hawker and Mr Wilson. 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. by Mr Connolly and Mr Simmons. To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled: This Petition of the undersigned citizens of Australia respectfully showeth that: (1) A cessation of the testing of nuclear weapons would break the cycle of research, development and deployment of nuclear weapons and prevent the acquisition of new and ever more lethal weapons of mass destruction. It would thus be a major and significant step towards ending the arms race and beginning the disarmament process; and (2) The Soviet Union has extended its unilateral moratorium on nuclear weapons testing until August 6 this year and has again invited the United States to cease its nuclear testing program. Your petitioners therefore urge the Australian Government to put the strongest pressure on the United States Government to join the Soviet Union's nuclear test ban. And your petitioners, as in duty bound, will ever pray. by Mr Kent and Mr Milton. To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The humble petition of the undersigned citizens of Australia sheweth that: We are opposed to the imposition of a Capital Gains Tax. Your petitioners humbly pray: That the Honourable House repeal any Act and reject any Bill which imposes this disincentive to economic growth. And your petitioners, as in duty bound, will ever pray. by Mr Beale. To the Honourable the Speaker and Members of the House of Representatives assembled: We, the undersigned are deeply concerned at the impact of the new Fringe Benefits Tax on the following grounds: 1. its severe and damaging effect on business confidence, investment and incentive, especially in the rural, mining and small business sectors. 2. its capacity to seriously worsen unemployment through the additional costs 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 Tax in order to preserve their livelihoods, their business 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 Benefit Tax Legislation forthwith. And your petitioners, as in duty bound, will ever pray. by Mr Blunt. To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The humble petition of the undersigned citizens of 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 Ian Cameron. 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 sheweth 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. To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The humble petition of the undersigned citizens of Australia sheweth that whereas: They consider that the people of the Philippines have been unjustly and corruptly defrauded of large sums of money by ex-President Ferdinand Marcos, his wife and their associates, that much of this ill-gotten wealth has been invested in countries outside the Philippines, including Australia, and that, in the interest of social justice, it should be returned to the Philippines, to be used for the benefit of its people. Your petitioners therefore pray that your honourable House will: Take all possible steps to repatriate to the control of the Philippines government all assets and financial interests that ex-President Marcos, his wife and their associates may have in Australia. And your petitioners as in duty bound will ever pray. by Mr Charles. To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The Petition of the undersigned citizens respectfully showeth: 1. That we are completely dissatisfied with the pricing of petrol in this country; 2. That under a Labor Government petrol prices have continued to rise excessively, with recent Government decisions adding over 8c per litre to the price of petrol in some country areas; 3. The proposed consumption tax could lead to a further rise of 6c per litre; and 4. The high cost of petrol discriminates against country residents who rely on their cars for essential communication and transport. Your petitioners therefore humbly pray that the Australian Government honour the commitment given by the Prime Minister during the 1983 election campaign to reduce petrol prices by 3c per litre. Further we strongly urge the Government to adopt a petrol pricing policy which does not cause unnecessary rises in the cost of petrol. 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 the undersigned shows: Graduated family allowances are of important assistance to families with more than one child. All family allowances, whether for one, two, three, or more children, have not kept pace with inflation. There are suggestions that all family allowances should be paid at the one flat rate. This would severely disadvantage families with more than one child. There are also suggestions that the dependent spouse rebate be reduced or removed. This would represent another blow to the family unit. Your petitioners therefore pray that the House of Representatives, in Parliament assembled, should: ask the Federal Government to increase the value of existing family allowance payments, and reject any moves to change the payments to a flat rate or to tamper with the spouse rebate. And your petitioners as in duty bound will ever pray. by Mr Hawker. To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The humble petition of the undersigned citizens of Australia sheweth that whereas: 1. They are completely satisfied with the design of the existing Australian National Flag. 2. They are aware it properly reflects the immutable characteristics of Australia, namely: (a) The Union Jack, itself the creation of three Christian Crosses, represents the Nation's historical origin and the source of its language and law; (b) The Southern Cross on an azure blue background signifying its geographical location on this planet Earth; (c) The large star depicting the advent of Federation in 1901. 3. They know the Flag has been a source of inspiration to generations of Australians in peace and war. 4. They recall that millions of native-born Australians and newcomers to these shores from other parts of the world have become united under its proud symbolism. 5. They are certain that any change to the Flag will produce division in the Australian community. Your petitioners therefore pray that your honourable House will: Propose and pass a motion that ``the existing Australian National Flag be changed only with the approval of the Nation as expressed in a Referendum''. And your petitioners, as in duty bound, will ever pray. by Mr Hawker. To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The humble petition of the undersigned citizens of Australia respectfully showeth: That in the light of the Labor Government's failure to act to correct the many anomalies in the Assets Test on pensions brought to its notice, the Labor Government's legislation should be repealed before it has an unduly unfair impact on pensioners. Your Petitioners therefore humbly pray that the House of Representatives in Parliament assembled should immediately seek the repeal of the Labor Government's iniquitous and unfair Assets Test. And your petitioners, as in duty bound, will ever pray. by Mr Hawker. To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The humble petition of citizens of Australia shows: That the people of New Zealand and the New Zealand Government have given an example to the world in their efforts to achieve a nuclear free South Pacific, and such decision being endorsed by the people at a general election. Your petitioners therefore pray that the Australian Government support the principled stand taken by the New Zealand Government and urges it to condemn any efforts by the U.S. Government to impose economic or other sanctions on New Zealand in retaliation for their stand on nuclear vessels. We further urge the Australian Government to urgently implement its policy to promote the development of zones of peace and nuclear free zones in the Indian and Pacific Oceans. by Mr Kent. To the Honourable the Speaker and Members of the House of Representatives assembled in Parliament. The petition of certain citizens of Australia draws the attention of the House to the fact that the lack of a Medicare Office in Wyong is seriously inconveniencing the residents of Wyong Shire. Your petitioners therefore request that a Medicare Office is established in Wyong as soon as possible. by Mr Lee. 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 of the above said bill ``National System for Therapeutic Goods for Human Use''. Your petitioners, most humbly pray that the House of Representatives in Parliament assembled, should: (1) Block the introduction of the above said bill ``National system for therapeutic goods for human use'' and (2) Continue to allow the free availability of vitamins, minerals, homoeopathic remedies, biochemic remedies and herbal remedies to the general public through the present distribution outlets. And your petitioners, as in duty bound, will ever pray. by Mr McVeigh. To the Honourable the Speaker and Members of the House of Representatives in the Parliament assembled. The humble petition of the undersigned citizens of Australia respectfully showeth: Objection to the display of advertisements, and promotion of Alcoholic beverages and Tobacco products via Television, Cinema, Magazine, Newsprint, Posters, Billboard and at sporting venues. Your petitioners therefore humbly pray that the House will request the Government to introduce such legislation and take whatever action is necessary to prohibit all such advertising and promotions, in order to protect the youth, families and people of Australia, and your Petitioners as in duty bound, will ever pray. by Mr McVeigh. To the Honourable Speaker and Members of the House of Representatives in the Parliament assembled: The petition of certain citizens of Australia shows that the forests of the Greater Daintree region are being destroyed at an alarming rate by logging, mining, road works, real estate subdivisions and clearing for agriculture. Your petitioners therefore pray that the Greater Daintree and wet tropics be listed as World Heritage to help protect this area from further destruction. by Mr Milton. To the Honourable the Speaker and Members of the House of Representatives in the Parliament assembled, Parliament House, Canberra, ACT 2600. We, your petitioners, humbly showeth: That Australia has over 2,500 threatened species of native plants and animals. All these species face extinction if their habitats are not properly protected. Your petitioners therefore humbly pray that your Honourable House: Call upon the Commonwealth Government in co-operation with the States and territories to urgently institute protective legislation for endangered species and their habitats throughout Australia. by Mr Nehl. To the Honourable the Speaker and Members of the House of Representatives in the Parliament assembled. The humble Petition of the undersigned citizens of Australia respectfully showeth that: Any proposals to abolish the Department of Veterans' Affairs gravely concern ex-servicemen, ex-servicewomen and their families because they renege on clear and unequivocal commitments from various Commonwealth Governments to properly care for Australia's veterans. Your Petitioners humbly pray that the House of Representatives in Parliament assembled, urge the Parliament to: Ensure that the Department of Veterans' Affairs continues to exist as a separate and distinct Department of State servicing the needs of veterans and their families. And your petitioners as in duty bound will ever pray. by Mr Nehl. To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The humble petition of the undersigned citizens of Australia respectfully showeth that: Any proposal to establish memorials to peace, the so-called Aboriginal War and anti-war activists and other left wing causes at the Australian War Memorial at Canberra would desecrate the Memorial as a fitting and solemn monument to those who served in Australia's Armed Forces and to those who died in defence of their country. Your petitioners humbly pray the House of Representatives acts to prevent anything which would desecrate the nation's memorial to Australia's former servicemen and women and war dead. by Mr Nehl. To the Honourable the Speaker and Members of the House of Representatives in the Parliament assembled. The humble petition of certain electors of Australia respectfully showeth: That the North Coast section of the Pacific Highway, from a point just south of Port Macquarie and just north of Woolgoolga, is in urgent need of major road improvement works in order to bring it up to road safety standards. Your petitioners therefore humbly pray that: The Federal Government immediately divert national highway funds or make available other funds towards the improvement of this section of the Pacific Highway. And your petitioners, as in duty bound, will humbly pray. by Mr Nehl. To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The humble petition of the undersigned citizens of Australia respectfully showeth: 1. that serving members of the Australian Defence Forces are frustrated and disillusioned at the continuing erosion of their conditions of employment, benefits and entitlements traditionally provided in recognition of the burdens placed on themselves and their families by service in the Defence Forces; 2. that the Government's decision to discount by 2 per cent the retirement benefits of members of the Australian Defence Forces has broken a trust that should exist between servicemen and the Government concerning the financial security of themselves and their families in retirement; 3. that the Government's decision to discount the retirement benefits of members of the Australian Defence Forces has seriously lowered the morale and commitment of servicemen and will further increase the number of experienced servicemen leaving the Defence Forces. Your petitioners humbly pray that you establish or expedite reviews of conditions, salary, allowances, entitlements and benefits for servicemen and reverse the decision to discount by 2 per cent retirement benefits for servicemen. by 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 Richmond electorate respectfully showeth that: The Hawke Labor Government's ID card proposal is the most far reaching and intrusive pieces of Australian legislation ever, and that on all the evidence available will not tackle in the most cost-efficient and effective manner tax and social security fraud. Your petitioners humbly pray that the House of Representatives, in Parliament assembled, urge the Government to: Reject Labor's ID card proposal to prevent a gross waste of taxpayers' money and a significant infringement of civil liberties. And your petitioners, as in duty bound, will ever pray. by Mr Blunt. To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The humble petition of the undersigned citizens of Wannon electorate respectfully showeth that: The Hawke Labor Government's ID card proposal is the most far reaching and intrusive piece of Australian legislation ever, and that on all the evidence available will not tackle in the most cost-efficient and effective manner tax and social security fraud. Your petitioners humbly pray that the House of Representatives, in Parliament assembled, urge the Government to: Reject Labor's ID card proposal to prevent a gross waste of taxpayers' money and a significant infringement of civil liberties. 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 Richmond electorate respectfully showeth that: Labor's Capital Gains Tax is standing in the way of economic development on the Far North Coast, a region with great potential for further growth and renowned for the enterprise and initiative of its local community. Your petitioners humbly pray that the House of Representatives, in Parliament assembled, urge the Government to: Repeal its anti-business anti-farming and anti-individual Capital Gains Tax. And your petitioners as in duty bound will ever pray. by Mr Blunt. To the Honourable, the Speaker and Members of the House of Representatives in Parliament assembled. The petition of certain electors of Dawson respectfully shows that while most urban areas of Australia enjoy ABC FM radio transmission, the Mackay region of Queensland is still deprived of this facility. Your petitioners humbly pray that the Government will immediately take steps to rectify transmission anomalies which continue to prevent approximately 100,000 potential listeners in this region from receiving this service. by Mr Braithwaite. To the Honourable the Speaker and Members of the House of Representatives in the Parliament assembled: The petition of certain citizens of Victoria respectfully showeth: That all legitimate business expenses incurred in earning or producing assessable income should be allowable taxation deductions; That the Hawke Government's Fringe Benefits Tax is an unwarranted burden on the small business and rural sectors, which will severely affect their long term viability. Your petitioners humbly pray that the Government withdraws the Fringe Benefits Tax legislation without delay. by Mr Halverson. To the 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 Dr Harry Edwards. Petitions received. Mr DEPUTY SPEAKER(Mr Leo McLeay) —Madam Speaker has received a letter from the honourable member for Wakefield (Mr Andrew) proposing that a definite matter of public importance be submitted to the House for discussion, namely: The serious implications for interest rates and for future generations of Australians of the enormous foreign debt incurred as a result of the failure of the Government's economic policies. 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 ANDREW(Wakefield)(3.30) —Last week was a watershed week in the Australian economy, because it was last week that we discovered that in fact our national debt had exceeded $100 billion. I am indebted to the honourable member for Wannon (Mr Hawker), who has presented me with a front page from the Sun indicating that the headline in that paper was little more than the figure. It read: `$101,366,000,000-We're a nation in red'. As a member of parliament, I am egotistical enough to wish that what I say today were being broadcast, not only because I want to be heard but because the message for the nation of Australia is that we are in desperate straits and everyone ought to be aware of it. I am also realistic enough to know, however, that out there in the listening audience most of the people are over-awed by the thought of a $101 billion debt. They find it unimaginable. They cannot conceive how large a mountain of money, in simplistic terms, $101 billion would be. It is like stepping outside this House on any evening, looking heavenward and asking oneself: How far away is that star? They think $101 billion is somehow infinite. They are so frustrated by the size of the debt, a debt that is beyond their imagination, that they simply go about their daily tasks in despair, wondering when on earth all of this economic chaos will come to an end. I am no economist, but I suspect that economists, with their reputation for indecision, are almost as frustrated, annoyed and frightened as are the ordinary people in Australia. What I would like to say to the ladies and gentlemen of Australia is that we do have a $101 billion debt, but we also have in this nation the capacity to address it and do something about it. I repeat: I am no economist but, as I understand the national debt, it is not unlike the debt that people have on their houses or I have on my property. While my equity and productivity are satisfactory and I can service the debt, the best thing I can do for my nation and my family is to be in debt. Every person who hesitates to go into debt for a house or a small business, but discovers that it is a debt he can service, should hesitate no longer. The problem the nation faces is that we now have a debt which we do not know whether we can service. It takes little imagination to determine that a $101 billion deficit is rather out of the reach of most of us. The people who I find most realistic about the size of the debt are the farmers who make up my electorate, because they are accustomed to being in debt. They have just become aware of the astonishing truth that while this Government has been in office the national rural debt has gone up by 30 per cent to $8 billion. So they can easily relate what is happening to their farms with what is happening to the nation. Just as they see that farm disappearing over the horizon as the bank manager knocks on their door, they can see the nation having to change its characteristics forever, as overseas investors knock on our door. What my farmers understand, and every Australian needs to know, is that the only way in which to redress the farm debt is to ensure that more product goes out of the gate to pay off part of that debt. They know how quickly they go backwards when they are not only in debt, but also failing to generate the productivity that will service that debt. Sadly, the nation no longer has product going out of its gate. Do you realise, Mr Deputy Speaker, that until this Government came into office this nation had never recorded a $1 billion monthly current account deficit? But under the stewardship of the Prime Minister (Mr Hawke) and the Treasurer (Mr Keating), in the last 24 months 16 current account deficits have been over $1 billion. In fact, the current account deficit in 1983 was $6.6 billion, or 3.8 per cent of our gross domestic product. In 1986 it had risen to $13.6 billion, or 5.9 per cent of our GDP. That is the reason that we cannot service a $101 billion debt. Those same farmers in my electorate who see the farm disappearing over the horizon and who are worried about how they can get more product out of the front gate know what it is like to go trembling into the bank manager's office, because he no longer regards them as the sure risk that they once were. That is the factor which is currently facing the nation. We once had, in bank manager terms, a AAA credit rating. But under this Treasurer, under the stewardship of this Government, we have for the first time in our history lost our AAA credit rating. Now we must go trembling to the international bank. People may well ask: `Why is our debt so high? How have we run up a $101 billion deficit?'. If people listen to the rhetoric of honourable members opposite they could be forgiven for believing that it was inherited from the previous Government. Nothing could be further from the truth. In fact, a graph that I have-I regret that I cannot incorporate it in Hansard-indicates that the debt occurred substantially under the Whitlam regime. In fact, 18 months after I married the rot set in. I think it is unrelated. But under the Whitlam regime the graph of government expenditure went through the ceiling. For all that has been said by those opposite about the regime of the Fraser-Anthony-Howard Government, people should take a look at the way in which they put a dip in the graph, which only started to rise again in the face of a drought. What has happened since then? It has gone through the roof. Whose debt is it? For almost half of the last 15 years we have been governed by people of the Labor Party's persuasion. They are the people who have to account to the people of Australia for a $101 billion deficit. I gladly concede that not all of the deficit I have referred to is in the public sector. Some of it, of course, is in the private sector. But let us make no mistake about it: The most dramatic growth-more dramatic even than in the private sector-has been the growth in public sector borrowing, which has risen by 40 per cent under the stewardship of the people opposite. Prime Minister Hawke inherited a $14 billion public deficit that he accelerated to $41 billion, and a public deficit of 8.2 per cent of our gross domestic product became 17.2 per cent of our GDP. It has been left for you and me to pay and for our children to inherit. Ladies and gentlemen, make no mistake about it: The gross foreign debt-the debt that every Australian must somehow service and that future generations of Australians, like the two young children of the honourable member for Bass (Mr Smith), will one day have placed on their heads-is increasing by $101 million every day, by $4.6m every hour, by $1,300 for every second that I deliver this speech. In terms that the nation can understand and cannot dispute, it is equivalent to a new Parliament House being built every 10 days. That is the rate at which we are currently going into debt. Dr Watson —Not with the BLF. Mr ANDREW —I thank the honourable member for Forde for that timely interjection. The interest bill alone on our foreign debt is now about $8 billion a year, or almost $10 a week for every man, women and child. I concede, as I mentioned earlier, that part of the debt is in the private sector. But the Government cannot wash its hands of what has been the private sector's enthusiasm for borrowing overseas. Let us consider, for example, what the difference is between interest rates here and interest rates abroad. In the United States of America interest rates during the period of this Government have fallen by 4.3 per cent, in Japan by 1.7 per cent, in France by 2.5 per cent, and in Canada by 3.2 per cent. We then have the telling truth: In Australia they have gone up by 5 per cent. What is it then that has encouraged the private sector to borrow overseas and further expand this national debt? It has been the domestic policies of the people who are currently running this country. What they are doing to the country may not be called running it, but that is what we will say for the purpose of this debate. Their domestic policies are reflected in our interest rates. Were that not true, other nation's interest rates would have gone in the same direction as ours. What have soaring interest rates meant? Anyone who is listening to this debate or who will read it in Hansard and who is currently servicing a home mortgage will know what soaring interest rates have meant to him. The National Australia Bank Ltd, whose rates over the past two years have gone from 11.5 per cent to 15.5 per cent and up to 17.5 per cent, indicated in today's Australian Financial Review that it is seriously contemplating further lifting home interest rates and cutting loan approvals. Why? Because in the domestic economic climate created by the Hawke-Keating regime interest rates will continue to soar. Last month, ladies and gentlemen, on the issue of interest rates this Government took $2.3 billion and used it to buy Australian dollars to prop up the falling Australian dollar. Imagine what lassoing that amount of money did to interest rates in Australia. People may well say, `That is all very well, Mr Andrew, but what can be done?'. Well, ladies and gentlemen, I have already addressed one fundamental issue, and that is the way our dollar floats. We have been so obsessed with propping up the dollar in order to maintain an accord with the unions that we have forced up interest rates in Australia. Labor members are obsessed with the idea that we can only improve the standard of living of all Australians by tying up more of productive wealth in tax revenue. I have a little note on my desk which says that one thing we should be thankful for is that we do not get as much government as we pay for. In three years we have seen no encouragement for the people in this nation who want to get on with making the nation tick. The Government has assumed that it is its role to motivate everything that people do, instead of stepping out of their way, making fewer demands on them, and allowing the people with individual incentive to get on with doing what they do best. As recently as last week, ladies and gentlemen, following this announcement that we were $101 billion in the red, the Government came into this House and poured nothing but scorn and derision on everything the Opposition offered as an alternative economic policy. Worse than that, yesterday the Minister for Immigration and Ethnic Affairs (Mr Young) moved a motion-a motion that had not been moved for 75 years-condemning the Opposition parties for misleading and confusing the Australian people with reckless and reactionary promises of change, promises which he said the Opposition was unable to enunciate or cost. Nero has fiddled while Rome has burned. This Parliament ought to have been occupied with doing what it could to redress the awful dilemma that we are leaving to future generations of Australians. But instead we spent an entire day yesterday being abused and derided by the Government for everything that the Opposition was offering. As if that were not enough, in order to add insult to injury the Prime Minister (Mr Hawke) in Question Time today said that he would rather be co-operating with us than fighting with us. But although he started in a monotone and relatively realistically, he could not complete the answer to the question without raising his voice in his usual protest. The Opposition stands ready as ever to co-operate with the Government in implementing the sort of economic policies that will allow us to address a $101 billion deficit and prune the interest rates that are currently crippling every Australian. But to date we have not had a word of encouragement from the Labor benches. Instead, we have had nothing but scorn and derision, which can serve only to further polarise the Parliament and further disgust the people who are watching what is happening. Mr DEPUTY SPEAKER —Order! The honourable member's time has expired. Mr LAMB(Streeton)(3.45) —I wish to make a few points immediately about the manner of the honourable member for Wakefield (Mr Andrew) as much as about the lack of content in his speech. When the honourable member admitted that he was no economist, he spoke for every member of the Opposition. He is certainly no orphan on that side of the House when it comes to a lack of comprehension about matters economic. Later in his remarks he showed a great fascination with the Premier of Queensland, Joh Bjelke-Petersen, when he referred to his own marriage and the fact that after 18 months of wedded bliss the rot with the deficit set in. I suggest that the link there is that there are two arms to the Queensland Premier's policies when it comes to hoodwinking the public. One is low tax, and the other is no sex before marriage-and we got that from the lips of Joh's own son, John. I suggest that the honourable member for Wakefield has been burning the midnight oil closely studying the statements from the mouth from the north. No wonder he has been studying them closely and not giving attention to his own leaders in the coalition, because last night we heard the tick list of who supports the honourable member for Bennelong (Mr Howard) and who supports the honourable member for Kooyong (Mr Peacock) as an alternative leader. The honourable member for Wakefield is suffering lacerations in the political groin because he is straddling the barbed wire fence with a foot deeply rooted in each camp. He cannot make up his mind. Perhaps he is dwelling so much on it that he is very much like the Deputy Leader of the Opposition (Mr N.A. Brown) who started to go on a doorknock last weekend to find out the fortunes of the coalition, to find out what people thought of its policies. I have been told that he spent three-quarters of an hour doorknocking in one house. The honourable member for Menzies sat down with a constituent in Eltham in his own electorate and discussed two matters. He did not discuss his policy on interest rates, nor the policies the coalition has on the external debt that makes up this matter of public importance; he said nothing about matters economic because he, too, like the honourable member for Wakefield, would admit to being an economic illiterate. What he was talking about were two other matters. One was `Please tell me' he asked the constituent, `how popular is the member for Kooyong and what do you think of him. How does Mr Peacock rate in your mind?' Then he went on to talk about the Joh factor and wanted to know what the constituent thought about that. The obsession with Joh Bjelke-Petersen, the obsession with the rift in the coalition has underlined the absence of policies and of analysis that goes on in matters fiscal, monetary and economic. I return to the manner of debate adopted by the honourable member for Wakefield. Normally a speaker is expected to speak through you, Mr Deputy Speaker, to honourable members in this House; but no, the honourable member for Wakefield played to the gallery. He directed his whole speech to the honourable ladies and gentlemen in the gallery. Another tool he has taken from Sir Joh Bjelke-Petersen is that one should never give people facts or analysis, but that one should play the populism role; give them what they want to hear, and keep talking snake oil economics. The honourable member says he is no economist, and we have ample proof of that fact in his speech and in every speech made from the Opposition benches. I must admit, however, that he was fair in talking about the figures. He did not speak purely in billions of dollars. He also spoke of the relative size of the external debt measured in percentage terms of the gross domestic product. I hand it to the honourable member for Wakefield that he was indeed honest in that regard, but I would like to go a little further with the analysis. Opposition members tend to blame the Government for every increase in the external debt. I have selected figures very carefully from the end of June 1980 to the end of June 1986, and clearly they are appropriate because they give three years of the Fraser Government and a rough equivalent of this Government's time in office for purposes of comparison. We find that the gross external debt did increase about three and a half times as regards the percentage of GDP. This Government is greatly concerned about that, and we will not turn our backs on it. I shall shortly outline the policies, fiscal and monetary, that have taken place in the last three years to remedy the seeds that the Opposition sowed in the Fraser years and which led to the burgeoning of the external debt. I will demonstrate quite clearly that it is the private sector more so than the public sector that has contributed to this external debt. A simple ana- lysis, such as any schoolboy could carry out, shows quite clearly that 60 per cent of the external debt is not due to the public sector. It is not due to this Government, State governments, local governments or statutory authorities. It is quite clearly due to the private sector. Forty per cent is due to the public sector, but when one in turn breaks down that figure one finds that this Government has not contributed largely to the growth in the public sector external debt. The Government's contribution has grown less than twice, but when we look at local government and statutory authority borrowings we see an increase that is sevenfold. Let us be dinkum about this and let us examine which part of the public sector contributes to the external debt. That analysis is essential before we can start to build a thorough in-depth analysis of what can be done and what is being done about the external debt. First, there are the exogenous economic factors-that is, those which are from outside, beyond our control-playing on the balance of payments. Since this Government came to office it is most unfortunate that the prices we are receiving for our exports, compared with the prices we are paying for our imports, have deteriorated by some 14 per cent. That factor alone has added two percentage points to the balance of payments deficit and the external debt factor. Secondly, we must look at the effect of devaluation on the external debt. When the Opposition was in Government it talked about deregulation of the economy and opening up Australia to the realities of the rest of the world, the global economy. But it did nothing about it. Members opposite stayed there in government and propped up the dollar, overvaluing it so that when the crunch came and we deregulated the Australian dollar we found that we suffered a significant devaluation. If honourable members opposite do their sums they will find that the devaluation of the Australian dollar accounts for nearly 30 per cent of the increase in the nominal Australian dollar value of gross debt since June 1980. It also accounts for 45 per cent of the increase in the last 12 months to September 1986. I said that I would return to where the seeds of our problem were sown. We need go no further back in history than to the early 1980s-the 1982 period when this country was subject to what has become known as the Fraser resources boom. The economy was beaten up and our expectations were such that people were encouraged to invest in our basic resources so that we could capitalise on these export earnings. If that gamble had come off it all would have been very well. As the honourable member for Wakefield said, it would have meant that we would have been able to service our external debt with the income from these increased resource exports. But then, not long after we found that the resources boom bubble had well and truly burst. The reason that gamble did not come off was that it had to be propped up- Opposition members interjecting- Mr DEPUTY SPEAKER —Order! The honourable member for Mayo and the honourable member for Dawson both continue to interject, and interject from out of their places. I warn both honourable members that if they interject again in this debate they will be dealt with. Mr LAMB —That strategy needed to be propped up by continued high prices for primary produce. In particular, it required overwhelmingly a continuing high price for oil because that high price for oil underpinned the high prices we were getting for competitive energies-coal, natural gas and so on. When that bubble burst we were left with the servicing debt on those investments-largely capital investments which were imported. I believe that the Opposition should be honest and come clean. It should accept the responsibility that it has left a legacy with the private sector of servicing an external debt which has its roots in the false resources boom of the early 1980s. There has also been a substantial shift in the nature of private borrowings away from equity or private investment in Australia to a form of investment whereby we have short term borrowings for takeovers and so on. We have many examples of this. One or two takeovers in our recent history have added $2 billion to our external debt. That was the money required to fund the takeovers and make the capital gains for a few individuals in Australia. When we examine the contribution to the external debt from the public sector we must look closely at the borrowings of statutory authorities and other levels of government. It was the Fraser Government which relaxed the official constraints on overseas borrowings of public non-monetary enterprises. That is a policy which our Government has continued up to now. As I said earlier, this led to a sevenfold increase in the percentage contribution of GDP to our external debt. The Prime Minister (Mr Hawke) has said that he is meeting this head on. He has announced that there will be a May economic statement and he has also indicated that the Premiers Conference will be held earlier this year. Both these matters have been brought forward to tackle the greatest problem that is facing Australia-not the level of interest rates or the performance of this Government, but our poor balance of payments brought on by external factors and the lack of policies laid down in the Fraser years. Our external debt is also a problem being tackled. In the remaining minutes available to me I will have a quick look at what the Government has been doing. First, the devaluation of the Australian dollar has made this country more competitive than it has been for 15 years. We have kept real labour costs down in that time and we have made Australia the most competitive it has been in the global scene for 15 years. It is imperative that we keep exports up and imports down and thus bring about a reality to the J-curve. If we compare Australia with similar countries we find that the J-curve does not occur overnight. One cannot turn around the mistakes of the past overnight; it will take some five to seven years to do that. But the runs are starting to appear on the board. We have seen a couple of months improvement recently in our balance of payments. The situation is still unsatisfactory but it is getting better. I would have hoped that the Opposition would explain to the people what it intends to do. But it cannot. It has no tax policy. It has no wages policy aimed at keeping cost-push inflation down. It has no interest rates policy. In fact, its only policy on interest rates is total deregulation. If the Opposition did that there would be so much pressure on demand and on the Australian dollar that interest rates would be forced up above 30 and 40 per cent. We would see interest rates go through the roof. Until the Opposition gets its house in order and comes clean with the public the public should not be hoodwinked; it should stay with this Government. Mr DEPUTY SPEAKER —Order! The honourable member's time has expired. Mr MILLAR(Wide Bay)(4.00) —There are no two ways about it. The innocent, the uninformed, sitting in the gallery listening to the remarks of the honourable member for Streeton (Mr Lamb) would be immediately impressed with his erudition and the lucidity of his presentation on economics, knowledge of which, by his own remarks, we are totally lacking on this side. That thought, no doubt, would be instantly replaced by the one as to why a government containing members of such blinding brilliance should be in control of a country that is rapidly sinking further and further into the mire. It strikes me as being somewhat similar to sharing a plunging lift with the honourable member and being comforted by his expert knowledge as to why the cable broke. What we must do, of course, is to ensure that the cable does not degenerate to a point at which we are at risk. In this country we have been singularly inattentive to that requirement for too long. We have before us now a situation in which we are leaving an evil legacy to our children and our children's children and so on. We have done this simply by indulging ourselves, encouraged by governments which are committed to the view that a basic requirement of governments within a democracy is to accommodate the expectations of the electorate, with an overconcentration on the next election and little thought for the next generation. That is one of the inevitable consequences of democracy which no doubt moved Winston Churchill to describe it as the worst possible form of government except all the others because governments of necessity are bound to govern within the parameters of acceptability by the electorate and therefore not govern as wisely as perhaps they know they should, or as we certainly know they should. The inescapable fact is that a penalty attaches to that; a cost attaches to it; and it is now before our eyes. This House is painfully aware of it, to the extent that today the Prime Minister (Mr Hawke) in answering a question without notice from me in Question Time, which I acknowledge was a little curly, spoke with greater candour than he has within my memory. For the first time he acknowledged that the solution to this problem is not within the hands of government, that it is dependent on the support and awareness of our community in the broad. It is a matter of attitudes. I acknowledge that these attitudes have been forming for more years than those for which the Government is immediately responsible but these things took their rise during the Whitlam era. Within a period of weeks and months our electorate was encouraged to believe that expectation is synonymous with entitlement. There is invariably a substantial gulf between expectation and entitlement, and the irony of it is that the faster one goes to meet the expectation the greater the gulf becomes. This is evidenced in our social welfare programs. In spite of the best efforts of this and previous governments, over a period of years and after the expenditure of thousands of millions of dollars to relieve the problems of the needy, we are confronted with the awful paradox of having numerous people in more need. Clearly, if we are dependent entirely on the attitude of the electorate, when people are imbued with the notion that that which they want they can have, we are in a dire predicament. It behoves us to come clean and tell the Australian people the precise nature of our circumstances. Perhaps there was just a glimmer of light in the Prime Minister's remarks today. I could be excused some doubt as to whether the Government would bite the bullet, but the bullet must be bitten. The thought that the future of our children is being mortgaged and that the prospects for ordinary development of this country are at an all-time low are more than we can contemplate with any peace of mind. When we get down to the fundamentals of it-we have this huge national debt and the realisation that the export earnings from wool, beef and wheat are absorbed in totality to pay the interest only on our national debt-it is an incredible state of affairs, yet with an historical inevitability we have pursued our folly. For those who have a thought for such matters it can be traced through the record of man. It is quite clear that we cannot handle the good times. If one studies man and his progression or retrogression, one will find a constant pattern, and if one projects that pattern into graph form one will see a rise to greatness from adversity, a plateauing out wherein there is time to lose touch with reality and plunge to adversity. It calls for wise, persuasive and honest government to persuade people to accept the enormity of the problem which presently confronts us. Why do honourable members think an invader from the north is threatening to descend upon the scene? It is a product only of the disillusionment of the electorate, if I may be pardoned for saying so. Both sides of this House have endeavoured to find solutions within the parameters of conventionality when, in fact, we are in an exceedingly unconventional position. The ordinary cures will not repair our circumstances. Our country is afflicted with a malaise-a cancer, if one likes. For it to surrender to the treatment necessary to the restoration of good health it must firstly have confidence in the diagnostician and the surgeon to whom it must submit. To fill either or both of those roles it is essential for the Government to come clean. The Government knows with an absolute certainty what is wrong with the country. For heaven's sake, if the Prime Minister does not know what is wrong and what must be done to remedy the situation, who in this country could possibly know better? We are entitled to our respective views, of course, as to how best it could be handled, but the Government knows what is wrong with this country. It would help enormously if it came clean and told the electorate what is wrong with it and explained its dereliction thus far by trying to resolve the problem within conventional parameters. It should tell the electorate that it tried to accommodate the electorate's expectations but that the day of reckoning is upon us. I am sure that not one member of the Government does not acknowledge in his heart of hearts the truth of what I am saying. Without wishing to affront the intelligence of people, there is little difference between bringing up a family, running a corner store and governing a country in fundamental terms. Within the family the children know instantly what they want but the parents, hopefully having acquired a modicum of wisdom through experience, are obliged to make a judgment on two points: Firstly, is it good for them and, secondly, can we afford it? If the answer is no on either score the kids instantly hate the parents' guts but they cannot vote them out in the next election. That is the only essential point of difference. This Government has compounded the mischief initiated by the Whitlam Government in encouraging the people out there to believe that what they ask for they can have. We have moved towards their expectations, and we have mortgaged the futures of our children and our children's children. What can we do about it? The first thing is to spell out where the cancer in our body is located and whether it must be excised or subjected to radiation and treated. Oppositions are traditionally at risk in such a situation of, if not asserting, at least inferring that they can cure the cancer by rubbing ointment on it. Naturally the patient, relieved of the awful prospect of going under the knife, has an inclination to turn towards them. But this Opposition is endeavouring to point out to Australia the enormity of the problems confronting us. The extent to which it may be able to persuade the electorate to recognise and support the measures proposed remains to be seen, but surely to goodness we can at least be honest with the electorate. To persist in being dishonest with it, as we have been-not only this Government, but this Government in particular-will mean that we will simply destroy this institution which is all we have between us and anarchy. The minutes are short; the days are short; it may be even too late now, but at least we have to try. The people out there who, disillusioned with not being able to meet the repayments on their houses or their cars or their overseas trips, whilst I have a passing sympathy for them, must be brought to a realisation that that which we expect is not necessarily synonymous with that to which we are entitled. Just ponder the fact that in this proud country, subject to some aberrations, with a mere 16 million people competing for a toehold on this planet with a population of 6,000 million, what an inexcusable conceit it is for us to strut and swagger in our belief that we are masters of our destiny. We are subject to that global market-place, and it is no good deluding ourselves into believing that we have a right here. If we do not earn our place under the sun out there the outcome is beyond doubt. Mr PRICE(Chifley)(4.10) —I want to thank the honourable member for Wide Bay (Mr Millar) for his contribution. No one on the Government side has ever underestimated the seriousness of the economic challenges facing Australia. Indeed, I think the honourable member for Wide Bay suggested that there is a degree of unanimity about that. However, the opposite side of the House certainly does not accept the need for joint action to solve this problem. The only bipartisan initiative from the Opposition benches has come from the Deputy Leader of the National Party of Australia, the honourable member for Gwydir (Mr Hunt), who suggested the establishment of an all-party delegation to go to the United States of America to try to talk to the Americans about their subsidy schemes that will wreck the traditional markets of our wheat growers. I commend him for it. If the honourable member for Wide Bay is suggesting that we need more such initiatives of a bipartisan nature, I agree with him. I think it is not being honest with Australians to dwell on just our international debt. I do not think it is helpful to dwell, as has been done today, merely on people's mortgages. We have to deal with a complex integration of economic factors. I can agree with the honourable member for Wide Bay that traditionally there have been faults on both sides of government. But as a very young back bench member of this Government I am satisfied that we have tried to tackle some very difficult tasks. Let us consider why Australia, the lucky country, is in the present situation. Traditionally, we have depended, overly depended in my view, on the farmers of Australia. We have depended on the sale of coal, wheat and wool. We have depended on our mineral exports. Those products will always be an important part of our trade mix. But we have been overly dependent on them. What has happened? Let me quote a few figures to you, Mr Deputy Speaker. In 1980-81 coal was sold for $48.40 a tonne. In 1985-86 it was sold for $40.32 a tonne. Now it is selling for $36.35 a tonne. It is suggested that the price will go down even further. Wheat sold for $190 a tonne in 1980-81; it sold for $129 a tonne in 1985-86; and it sells for $99 a tonne at present. All of our traditional wheat markets are under threat. But I want to make the point that they are not under threat because our farmers are inefficient. They are under threat because of agricultural policies in the United States and Europe that are really wrecking the world agricultural scene. This point should be made time and again: We can slash the costs of farm inputs in relation to outputs, but we will not be able to sell an extra tonne of wheat on overseas markets because Australia, as a small country, can never afford to indulge in the stupidity of the European Economic Community and the United States in terms of what they are doing to agriculture. In 1980-81 iron ore sold for $17.30 a tonne; in 1985-86 it sold for $16.23 a tonne; and now it is selling for $15.76 a tonne. The pressures on the price are downward. In 1980-81 barley sold for $176.40 a tonne; in 1985-86 it sold for $90 a tonne; and now it is selling for $71.86 a tonne. There has been a massive decline in Australia's terms of trade. I think this is one of the aspects to which the honourable member for Wide Bay was referring. I agree that this poses an enormous problem. No one from either side of the House is going to claim a miracle solution-a six-months solution, a 12-months solution or, indeed, a two-year solution. But we have to be sure that everything is in place to enable us to work our way through this problem. Let me turn to our debt. As the honourable member for Streeton (Mr Lamb) has mentioned, the public sector debt was $7 billion in 1980. It has grown now to $40.5 billion. The private sector debt was $6.5 billion in 1980. It has now grown to $60.7 billion. It is interesting to note the ratios of borrowings. Sixty per cent of this money has been borrowed by private enterprise countries overseas-- Mr Lee —How much? Mr PRICE —Sixty per cent. Forty per cent is government debt. As a percentage of gross domestic product, government debt has increased from 5.9 per cent of GDP to 17.2 per cent of GDP. On the private side, the debt has increased from 5.5 per cent of GDP to 25.7 per cent. A lot of people on the Government side of the House are very concerned about the level of private borrowing. Indeed, there have been suggestions that we ought to legislate it away. While ever we have such a terms of trade difficulty, we should remember that in last year's Budget there was a 10 per cent factoring in of decline in export prices. This year an 8 per cent decline has been factored into the Budget. While ever that is happening and there is a projected $14 billion deficit on our current account, clearly we have to borrow overseas. If we are asking overseas investors, not Australians, to pay for that debt, those investors have to have confidence in the Australian dollar. Opposition speakers, including the honourable member for Wakefield (Mr Andrew), often say that we should let the dollar fall even lower. Overseas investors are greatly concerned about insuring against not upward pressure on the dollar-that is, the dollar rising in value from its current rate-but downward pressure. The recent intervention of the Reserve Bank of Australia to put a bottom under the dollar was criticised, but I think it was right. If we want to attract overseas investment in Australia, the investors have to have confidence in the dollar and in its current basic range. I make that point in relation to our national debt. Let us look at some of the Opposition's policies. Is the Opposition saying that the floating of the dollar was a mistake, that it is something that we should not have done and that we should rescind it? Basically, I do not think the honourable member for Wakefield would argue in this way, because no doubt that decision has given a breathing space to our agricultural exporters and a real incentive to our manufacturing exporters, to manufacturing for import replacement, and to export activity. That is an initiative of this Government. We have also deregulated the financial institutions and this has been seen as a good thing. This Government has put in place some policies which have been tough and which have laid the ground work. I refer in this respect to the depreciation of the dollar and the deregulation of the financial markets. But these policies are not going to work overnight. There are signs that they are working, but we face a long term problem. Would the Opposition do what the Government has done? I am sure that the Australian people know what the policies of this Government are and what actions we have taken. However, it is very difficult to understand exactly what the Opposition is proposing. We are going to have another May statement which will deal with expenditure cuts. The public will know what is involved. But what expenditure cuts would the Opposition propose to bolster our economy and save our younger people from the problems they are experiencing with mortgage repayments? Is the Opposition prepared to outline where it sees the painful decisions should be taken? Can we take a bipartisan view? It is very hard to take a bipartisan view if one does not know what the other's view will be. It is very hard to get public support if one is not prepared to tell. The situation is the same in respect of taxation. As a government and as a party, we have been through the pains of taxation reform. I suggest, with a little degree of respect, that the Opposition is going through a similar exercise as well. But at least the public knows what our position is. It knows that fairness and equity are the basis of our taxation policy. People know what the benefits are and they know how our policy is going to be paid for. I suggest that the Opposition has a responsibility to do that. The Government has also had a role to play in respect of agriculture and minerals. This Government has tried to revamp the Department of Trade by setting up Austrade. We have established an industry policy. Some honourable members on this side of the House might say that we have not gone far enough. However, as the Prime Minister (Mr Hawke) has indicated, the car plan, the steel plan, the heavy manufacturing industry plan, and decisions made in respect of plastics, chemicals, communications, information and software are all Government initiatives to get manufacturing going again, if not in the export area-and mostly that has been the orientation-at least in terms of import replacement. The Government has had a wages policy. We have asked the Australian people to accept lower wages in the interests of future generations, job creation and getting this country on its feet. It has been very painful and very difficult to explain, but at least we have been out there saying it. What is the Opposition's wages policy? Will it freeze wages or will it slash wages? I think people have a right to know. Mr DEPUTY SPEAKER(Mr Mildren) — Order! The honourable member's time has expired. The debate is concluded. Debate resumed. Mr BRUMBY(Bendigo)(4.21) —I wish to make some brief comments in relation to the Australian Stock Exchange and National Guarantee Fund Bill, which I think is a good one and which in many ways has originated from requests by the industry itself for the twofold changes that are being proposed in this legislation. The first of those changes is that this Bill will provide a legislative backing for a reorganisation of stock exchanges in Australia. So we are establishing a single national stock exchange, to be known as the Australian Stock Exchange Ltd, which will have six capital city exchanges as its subsidiaries. The second aspect is that this Bill also creates the National Guarantee Fund which will consist of the pooled assets of the existing fidelity funds operated by the separate capital city exchanges. That is being done to provide greater protection to investors in respect of the failure of contracting parties to meet their transaction obligations or in relation to dealer insolvency. By way of background, I say that there are six capital city exchanges which are located around Australia-in Sydney, Melbourne, Brisbane, Perth, Adelaide and Hobart. As it stands at the moment, each of those is a separate body. Although each is a separate body there is a national umbrella group, which is called the Australian Associated Stock Exchanges, which represents the various exchanges. Each exchange has its own fidelity fund out of which are paid claims which are based on misappropriation or fraudulent use of funds or securities. The exchanges contain a number of markets, as I think the honourable member for Charlton (Mr Robert Brown) said this morning-and he gave a fairly good description of those markets. There are board markets, futures markets, options markets and so on. The regulation of this industry is co-ordinated by a formal agreement between the Commonwealth and the States which was entered into about eight years ago. Under that agreement each party is represented on the Ministerial Council for Companies and Securities, which has responsibility for legislation. Under that agreement the Commonwealth passes the agreed legislation and reciprocal legislation is then enacted by the States. This Bill fulfils the Commonwealth's obligations under that arrangement which I have described. As I have said before, the proposal, which is to create a national exchange that will own the capital city exchanges, was forwarded to the Ministerial Council by the stock exchanges body and considered at the meeting held in March 1986. The Ministerial Council approved the preparation of this legislation. It is the Bill that will give effect to that. So it is a Bill that has industry support and I believe that it has bipartisan support in this House. The reasons that we need a national exchange are many. There has been a growing recognition over recent years that the Australian exchanges, as they exist in their present organisational structure, are ill-equipped to meet the needs of a rapidly changing world. In broad terms, it is argued that the exchanges are in many ways overregulated; that they tend to have a multiplicity of structures and committees which review and decide, in general terms, on what are or should be common issues between each of the exchanges. The overregulation that exists, the lack of a national framework for decision making and the mishmash of organisational structures have made many people in the industry query whether the Australian stock exchanges, as they presently exist, are properly or appropriately placed to meet what should be a fundamental objective of our stock exchange; that is, to provide a centre or facilitator for the raising of new capital in the Australian economy. Indeed, over recent years I think there has been a growing recognition that the existing structure belongs to a past era and it is no longer equipped to meet the challenges of the future. But there are a number of other reasons why there is now a necessity for change in the organisational and decision making structure of the Australian stock exchanges. Over the past few years there have been a number of what could be described as exogenous influences which have imposed enormous change on the exchanges, and the time is now ripe for this sort of positive response to that change. Some of those changes that have occurred have been briefly mentioned in the debate. There have been massive changes in technology, massive changes in the way in which accounting mechanisms are dealt with, massive changes in communications systems, and dramatic changes in information systems that operate throughout the Australian stock exchanges. There have also been major changes in financial markets in Australia. The adoption by this Government of the recommendations of the Campbell Committee of Inquiry into the Australian Financial System to deregulate aspects of that system has had the effect of removing the segmentation of financial intermediaries, and that has affected exchanges. The abolition of exchange controls has also encouraged the internationalisation of securities dealings. A fourth change that has occurred relates to the Trade Practices Act, which has been the subject of changes relating to unfixed brokerage and many other matters. So all those things have had an impact on the Australian stock exchanges and all have meant that really the time is ripe for change now. A single exchange is a very sound development. It is certainly in Australia's interests. The proposal will allow the exchanges to meet the challenges and the changes-and there will be more changes-which will affect the Australian financial system in the future. Because we will have a single national exchange it is my view that regulations and efficiencies will be reduced. There are opportunities for territorial competition-as I have heard it described-between many of the exchanges. We know of the unproductive parochialism that often occurs between Melbourne and Sydney. This concept of a single national exchange should lessen the opportunities for that sort of competition. The central role of the Australian exchange as the vehicle for raising capital in the Australian economy will be enhanced by this measure, and I think that is a good thing for the Australian economy. Finally, the opportunity for the Australian exchange to be an important part of a truly international finance market will also be considerably increased by this measure. They are all positive things in what is becoming an increasingly sophisticated and information based international economic environment. Those things are good. The second part of this legislation deals with the National Guarantee Fund. I do not want to say too much about that because it is a fairly simple concept and, again, a sound development. But I think it is a good thing because currently there is a reluctance by many ordinary Australians to invest in publicly listed Australian companies, or in other financial securities, through the Australian stock exchange. In fact, a survey which has been done by the stock exchange group itself suggests that 90 per cent or more Australians do not own and will not own shares; in other words, they will not have any ownership in Australian public companies. There are many reasons why 90 per cent of Australians do not own shares. An obvious one is that in terms of their income, their disposable income and so on, they do not see shares as particularly viable and they simply do not have the savings to buy them. But there are other reasons as well. In the surveys that were conducted by the Australian stock exchanges, one of the main reasons that were given by people who do not buy shares in Australian public companies was that they preferred what they believed to be safer and lower risk investments. So the National Guarantee Fund, the contract guarantee and the insolvency protection which will be afforded by this fund may serve, in my view, to alleviate many of those concerns. If they do alleviate many of those concerns, one of the barriers to more Australians owning shares, for instance, will be removed and I think that is a good thing. In summary, this legislation is relatively straightforward; it is supported by the industry; it has bipartisan support in this House and I have pleasure in supporting it. Mr MAHER(Lowe)(4.30) —Stock exchanges, in their own way, have an enormous historical link with the functioning of this Parliament. The first question ever asked in a Westminster parliament was directed to a Minister in the House of Lords in 1721. It was about a joint stock company that had gone bust and it is known as the South Sea Bubble scandal. At that time a company supported by King George I, in which an enormous number of people in England had invested money, went insolvent. That produced an incident in Parliament that today has developed into perhaps the highlight of the day's proceedings for honourable members on both sides of the House, that is, Question Time. Today we are still debating the regulation of joint stock companies and their modern day regulators, the stock exchanges. What we are doing today is quite an extraordinary step forward. We are creating a legal entity of an Australian stock exchange. It will not be in Canberra where the National Gallery, the High Court of Australia and other monuments are but there will be an Australian stock exchange board in the six States where stock exchanges are operating although I am told that there are provisions for stock exchanges in the two Territories-the Northern Territory and the Australian Capital Territory. It is a legal fiction. There is an Australian stock exchange. This is an important step because imputation is just down the track and this will encourage the transfer of enormous amounts of investments to shares. Government decisions will put shares on a par with real estate investment because capital gains are being taxed and the tax advantages and tax hedges of negative gearing have been abolished. As the honourable member for Bendigo (Mr Brumby) said, members of the community have, for many reasons, avoided investing their savings, lump sum superannuation payments or any money they may have inherited, in shares or debentures. Australians have been frightened and suspicious of shares. Nevertheless, the Government in moving quickly to set up the Australian Associated Stock Exchanges has done much, and is doing much, to encourage investment in shares. That means investment in shares in ordinary companies-in public companies and in private companies. Stock exchanges handling public company shares will receive a great boost out of this legislation. I notice that the proprietor of Bain and Co. said in Tokyo-he is quoted in the Australian Financial Review-that if this legislation goes through and if stock markets are computerised so that the trading floor is abolished the notion of broker's assistants rushing around in a frenzy will go and trading will be done from computer terminals. Such a move could increase Australia's share of international equity trading from 2 per cent, which we have now, to 4 per cent, which is an enormous jump in business for stock exchanges. Perhaps, unfortunately, it will mean fewer jobs for people down the line but in the long term costs can be reduced and I believe job opportunities also. A survey in Toronto, Canada, showed that the average share purchase or sale transaction cost was $3.22. When computers were introduced, the average transaction cost dropped to 50c. In Melbourne and Sydney it cost $3.50 to enter up a share transaction. While in Toronto the transaction fee has been reduced to 50c for the stock exchange, it is not believed that it will get that low in Australia. Nevertheless, there will be an enormous saving for brokers, overheads and for members of the general public who are prudently going into share buying. The legislation embraces the notion of a National Guarantee Fund. At present there are six fidelity funds, one in each of the States. A National Guarantee Fund will bring in $50m which is held in the various States. It is not necessarily held in equal amounts. The brokers in their wisdom are not taking points. The whole lot will come in from the States where there were only weak funds and from the States where there were strong funds-the States that had investments, assets and money put aside perhaps for calls. It will be a no-fault fund which is a fair concept. Anyone who has practised law and has had to try to make a claim against, say, a solicitor's fidelity fund will know the problems that arise. It may have been a client who had a solicitor for years and that solicitor went bad or bankrupt or absconded. One case I had when I was in practice in Sydney involved a client who had had an old solicitor who had committed suicide. All my client's money, documents and old system title deeds were missing. Everything was gone. For the three years I was in that firm I never resolved my client's claim against the fidelity fund because he did not believe that things were missing. He could not remember what he had given to his former solicitor. Making claims under fidelity schemes is very difficult. One has to establish what was lost. One has to have proof that the solicitor had custody. If he or she was so incompetent that he or she never entered the transaction in the trust account, one got nowhere. The tracing and making of claims under fidelity funds is very difficult and the Law Society is entitled to be pernickety. This legislation is positive. It has a back-to-back proposal, as it were, which will cover the broker to client relationship and it will also cover dealings between brokers, where a broker sells to another broker and cannot produce the share script. It is a no-fault fidelity scheme. The legislation is urgent because there are factors in the Trade Practices Commission's annual report which makes action by April essential. Certain restrictive trade practices in broking have been brought to the attention of the Trade Practices Commission and have been frowned on because the means for entering into the stock broking industry have been very restricted. Australia's stock brokers and stock exchanges have been moving to take action in this regard but their right to continue as they have been will run out on 1 April next. It is not my wish to delay the House. The funds that I mentioned will come from the six States will total about $50m. Some $15m of that will be held for a fidelity guarantee scheme. A large part of the residue will be used to computerise the Australian stock exchanges and this will put Australia on a par with other nations. As the honourable member for Bendigo said, we have followed the recommendations of the Campbell Committee of Inquiry into the Australian Financial System. We have deregulated the stock market; we have done a lot, and are doing a lot, to encourage investment in Australian companies. We are encouraging small investors to place their savings with confidence in shares and public companies listed on stock exchanges. This legislation will go a long way towards allowing them to invest with reasonable security and allowing stock exchanges to operate in our nation with greater efficiency. Mr LIONEL BOWEN(Kingsford-Smith-Attorney-General)(4.39) —in reply-I thank all honourable members for their contributions. The Australian Stock Exchange and National Guarantee Fund Bill is not opposed and I welcome that. A number of honourable members raised a couple of points which I will do my best to answer. The honourable member for Dundas (Mr Ruddock) raised the issue as to whether there might be a danger in the sense of what he called business rules which could be the subject of disallowance. We do not see any particular problem with that position because that is virtually the situation that has existed for a long time. The Bill merely continues the pattern that has existed in previous legislation. I am assured that the stock exchanges have no difficulties with this approach. The same principle applies to parliamentary disallowance. In other words, the rules will operate until such time as there may be a disallowance; so there will be no interruption of what might have been the intention of the Australian stock exchange. I am sure that if there were some suggestion of disallowance the exchanges would be well aware of it. The honourable member for North Sydney (Mr Spender) raised a couple of matters. One of them related to the question of drafting. It is a bit of a perennial problem in the Ministerial Council that the Victorian draftsmen feel that they can write legislation in plain English and the Commonwealth draftsmen feel that they can do it better. There is a contest about whether they are both using plain English. As far as we are concerned the important thing is to get simplicity in drafting-drafting that can be understood. I accept that some of the matters are of a contentious nature in terms of how extensions of what was intended might be interpreted. We have achieved a fair amount of success in this area despite objections from those who do not have to do the drafting. That is no criticism of any comment made but it goes to the issue of whether the drafting could have been done in simpler English. I make the point that it is very important that we understand that what has been achieved is of some significance, because this is a co-operative scheme. There is a need for the Bill. If we relied on what are called separate schemes or arrangements we would have to get approval by each State's Supreme Court and there would be all the difficulties of calling meetings of affected parties in each State. We have overcome this to a fair degree. The drafting was done so as best to meet the complexity of that matter. The honourable member for North Sydney raised a very interesting point about the problem of compensation and limiting payment to $50,000 when it is related to loss in terms of property damage. That is referred to in proposed new section 122w, on the `limits of compensation'. I am advised that the Executive Director of the Australian Stock Exchange was invited to raise any matters in the Bill that he might have felt were of concern. This matter was not raised. When looking at the Bill I think that the advice given was right-we are looking at a claim having a limitation of $50,000. The honourable gentleman acknowledged that but he asked whether it would not be more appropriate when dealing with an actual loss where a dealer has become insolvent for it to be related to a percentage of the total. For example, 14 per cent of the sum we have at the moment would be in excess of $2m and that is a pretty substantial amount. I ask the honourable gentleman to consider that it is expected that where there is a loss of property there will be compensation by the return of the property in specie. In other words, there would be no limit. One could hardly draw a distinction between the loss of cash and other damage worth $50,000 and say that compensation should be greater than $50,000. It would be better to return the property, which would be the objective of this proposed new section. We are saying that, while each client can be paid only $50,000, a client who might not have had available shares transferred to him should have them transferred from the insolvent. I think that is the explanation of the proposed new section. Therefore, it is not thought that there needs to be any distinction in the matters that the honourable gentleman has raised. Whilst it is acknowledged that $50,000 cash could be of some value, it would be of more value if we could replace the property which was the subject of the transaction that was not brought to fruition because of insolvency. That could well be done if the property still existed. I ask the honourable gentleman whether that satisfies the issue. I commend 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 Lionel Bowen) read a third time. Bill returned from the Senate without amendment. Bill presented by Dr Blewett, and read a first time. Dr BLEWETT(Bonython-Minister for Health)(4.46) —I move: That the Bill be now read a second time. The need for an independent body to collect information and evaluate programs in the health and welfare area has been voiced by a number of groups and parliamentary committees over recent years. In 1979, the Senate Standing Committee on Social Welfare reported on the need for evaluation in Australian health and welfare services. The Committee reported: The essential prerequisites for evaluation-that is, the determination of needs, the setting of goals and objectives, the establishment of standards and the collection of appropriate data-are at present given a low priority . . . It is imperative that proper evaluation occurs in order to provide information essential to the proper planning of the health and welfare system and to the efficient and effective operation of agencies! In the following year, 1980, a Joint Committee of Public Accounts reported on substantial overpayments to chemists under the pharmaceutical benefits scheme, and recommended the establishment of a Bureau of Health Economics to provide independent, objective and publicly available analysis of economic facts and issues relating to the Australian health industry. The Committee identified two major functions for such an organisation; the first being to monitor and analyse the Government's expenditure on health to ensure that moneys are being spent according to priorities. The second function was to examine issues relating not only to central aspects of health care but also those aspects that cross the boundaries between various areas of health operations. In the same year the Commission of Inquiry into the Efficiency and Administration of Hospitals, chaired by Mr James Jamison, gave support to the recommendation of the Commonwealth Parliamentary Joint Committee of Public Accounts that a Bureau of Health Economics be established. This Committee envisaged that the Bureau would undertake identification of internal and external factors influencing efficiency in hospitals and other health institutions. It also recommended that the Bureau collate comparative statistics and financial data on a national basis. The coalition Government failed to respond to any of these recommendations. Unlike our predecessors we acted. The establishment of the Australian Institute of Health within the Commonwealth Department of Health in August 1984 was a first step in response to the recommendations made by those committees. At that time the functions of the Institute were to research a wide range of health issues with a special focus on public health, social medicine, health statistics, and health economics. With the creation of the Institute it became clear that there was a need for additional broad public health expertise in Australia. So just one year after the establishment of the Institute, I supported the establishment of an independent inquiry into research and teaching of public health and tropical medicine to be conducted by an American expert, Dr Kerr White. The report, which I tabled in February 1986, recommended the establishment of two national independent statutory authorities, one for health statistics, and the other for technology and health services assessment. The need for these two centres was based upon the lack of comprehensive Australia-wide information and effective assessment processes in the $16 billion per annum health industry, financed by the Commonwealth and managed by the States. The administrative complexities and high costs which would be incurred to establish two new authorities were considered by the Government to be unnecessary in view of the overlap with the then existing functions of the Australian Institute of Health. After detailed consideration of these issues the Government decided that the Institute of Health could effectively encompass both of these functions. The Better Health Commission in its report last year, `Looking Forward to Better Health', stated that a national health data base was widely recognised as essential for health advancement in countries around the world. It was heavily critical of the collection of health statistics in Australia and used as support for its assertions a comparison by the World Health Organisation of the major health statistical collections of 16 developed countries. Australia was ranked very low, being last in the collection of hospital statistics. Responsibility for this abysmal state of affairs must rest above all with the conservative coalition which has governed this country for 31 of the last 40 years. It is simply not possible to remedy such a situation in less than a decade. The Better Health Commission gave support to the recommendation of the Kerr White Report for the establishment by legislation of a National Centre for Health Statistics. The Bill before the House will establish the Australian Institute of Health, which will: collect and provide assistance in the production of health related statistics; conduct and promote research into the health of the people of Australia; and undertake studies into the provision and effectiveness of health services and health technology. These functions are fully defined in the Bill and are intended to establish the Australian Institute of Health as an effective independent statistical and research organisation to provide both Commonwealth and State governments with a reliable base for policy formulation. This Bill will allow the Institute to obtain wide support in achieving its objectives through: actual and perceived independence and long-term viability; the co-operation of the States on data provision; legislative guarantees to the States of the confidentiality of statistics; the support of professional bodies; enlisting respected researchers from outside the Public Service; and the clear definition and maintenance of the role of the Institute. The Government has acted to ensure that the independence of the Institute is recognised by the introduction of this Bill which establishes it as a statutory authority. The Institute will be dealing with highly sensitive information relating to private health related organisations, the health of individuals and the financial position of States and Territories. It is therefore vital that the Institute be independent and be seen to be independent. The composition of the Institute includes three State and Territory representatives and reflects the importance of the State and Territory authorities in collecting and supplying health statistics. In drafting the Bill the proposed policy guidelines for statutory authorities and government business enterprises have been followed closely. The Institute will be subject to the written directions of the Minister, the functions and constitution of the Institute are clearly established, and the reporting requirements of the Institute are defined in the legislation. The financial arrangements are set out including those necessary for trust money and property. The Government believes that, to ensure the effective operation of the Institute, it is important that the functions of the Institute do not compete with those of the Australian Bureau of Statistics and that the two bodies are mutually supportive. To ensure close co-operation, the Commonwealth Statistician or his nominee is to be appointed as a member of the Institute. Secondly, the Australian Institute of Health will have an ethics committee. The functions and composition of the ethics committee are to be determined by regulation based upon recommendations from the National Health and Medical Research Council, and it will be responsible for approving persons to whom data may be released. Thirdly, the Director of the Institute is empowered to employ staff other than under the Public Service Act in order to attract pre-eminent researchers to work for the Institute. These measures and the others I have outlined will ensure that the Institute will be grounded on high ethical principles and will attract quality researchers. There will be no financial impact from this Bill. To date the Institute has received administrative support, such as the payment of salaries, from the Department of Health, and accounts have been processed through the Department of Finance. There is an administrative infrastructure operating within the Institute responsible for its day to day operations and sufficient expertise exists within this infrastructure to satisfy the additional requirements of a statutory authority given that the Department of Health will continue to provide some services. I am confident that the Australian Institute of Health as a statutory authority will be in a strong position to develop a far greater knowledge and understanding of the health of the Australian people, and will contribute significantly to the needs for assessment and evaluation identified by the many inquiries into Federal health. With the public health challenges now faced by this country this Bill is both appropriate and timely. I commend this Bill to the House, and I present the explanatory memorandum to the Bill. Debate (on motion by Mr Blunt) adjourned. Bill presented by Dr Blewett, and read a first time. Dr BLEWETT(Bonython-Minister for Health)(4.54) —I move: That the Bill be now read a second time. The Bill before the House contains a number of amendments to the National Health Act which affect the pharmaceutical benefits scheme's safety net and special patient contribution arrangements. In addition, the Bill includes a provision which will give the Secretary to the Department of Health the authority to make arrangements for advance payments to pharmacists if for any reason it is not possible to meet the accepted period of 30 days for the payment of pharmacists' claims. Honourable members will recall the significant changes which were made to the pharmaceutical benefits scheme on 1 November 1986. The most important aspect of these changes was the introduction of the safety net for those most in need who have to purchase large numbers of prescription drugs. These changes ensured that no individual or family would have to pay for more than 25 PBS prescription items in any one year. Already 10,500 entitlement cards have been issued which provide free pharmaceutical benefits for more than 25,000 Australians. The introduction of the new PBS arrangements has been widely accepted by the public and pharmacists alike and, with the exception of criticisms from a few Opposition members, the arrangements are widely recognised as both cost-efficient and directing resources to those most in need. During the introduction of the new scheme, one or two minor problems have been identified and the Bill now before the House proposes a number of technical amendments, mainly of a machinery nature, to address these issues. The current arrangements allow a prescription to be counted towards the safety net only if the maximum quantity of the drug is prescribed by the doctor and dispensed by the pharmacist. In two cases these arrangements have been found to be unsatisfactory. Both of these are dealt with in clause 4 of the Bill. In the first case, the amendment enables a prescription to be counted towards the safety net threshold when the maximum quantity of the drug changes between the time the prescription is written and when the drug is dispensed. Honourable members will appreciate that this will occur relatively infrequently but it is a necessary provision to protect those people who, for example, have a number of repeat prescriptions for a particular drug which has its maximum quantity increased on recommendation of the Pharmaceutical Benefits Advisory Committee before all those repeats are filled. The second case is to allow prescriptions for less than the maximum quantities of dangerous or addictive drugs to also be counted towards the safety net threshold. I am sure all honourable members will agree that this is a sensible amendment which is in keeping with the spirit of the Government's present drug initiatives. As a result of this amendment patients will not be disadvantaged where, in particular cases, doctors feel it necessary or appropriate to prescribe a smaller quantity of a dangerous or addictive drug. The Minister will be empowered to determine the items to which this provision applies and I will be seeking advice from the appropriate professional bodies as to which drugs should be included on the list. Clause 5 of the Bill removes the requirement for pharmacists and others who issue entitlement cards to retain the supporting documentation for 12 months. In its place is a requirement that the documentation be sent to the Secretary to the Department of Health within one month of issuing the entitlement card. This provision will clearly benefit pharmacists as they will no longer have to retain supporting documentation for extended periods and it will, of course, substantially improve the capacity of the Department to audit the issue of entitlement cards in a more timely fashion. At the present time the payment of $3.75 to pharmacists and others who issue entitlement cards on behalf of the Commonwealth is a charge against the administrative vote of the Department of Health. As this is a cost directly attributable to the pharmaceutical benefits scheme it is considered more appropriate that this cost is allocated under Part VII of the National Health Act. Clause 6 effects this change and also includes the requirement for the Minister to seek agreement with the Pharmacy Guild of Australia in the determination of the level of the fee. Clause 8 of the Bill is a technical amendment relating to the special patient contributions arrangements under the pharmaceutical benefits scheme. There are at present three drugs subject to the special patient contribution provisions which allow for the payment of an additional charge by the patient when the drug's manufacturer disputes the price determined by the Pharmaceutical Pricing Bureau. Under the present arrangements, if prescriptions for any quantity in excess of a maximum were authorised, either the Commonwealth would be required to reimburse the pharmacist at the manufacturer's selling price for all quantities in excess of the maximum or the pharmacist would have to absorb the additional special patient contributions. This clause provides a formula for the calculation of a pro-rata special patient contribution to overcome these problems. Clause 11 provides for the insertion of a new section 99ab into the National Health Act to provide the Secretary to the Department of Health with the authority to make advance payments to approved pharmacists, approved medical practitioners and approved hospital authorities. In reimbursing pharmacists for claims lodged under the national health scheme, payment can only be made in accordance with section 99 of the Act, which requires payments to be calculated on the price of drugs in force at the date that they were dispensed. The only way of correctly determining the relevant drug price is to process all prescriptions fully. During the past two years a number of factors, including repetition strain injury, have resulted in some difficulties in processing pharmaceutical claims within the period of 30 days. To minimise the financial impact of these delays in processing claims the Department made advance payments based on statistical calculation of the value of a pharmacist's claim. Claims paid in this manner were to be subject to full processing when resources became available in order to determine the correct entitlement due. In examining the methods the Department had available to it to reprocess claims paid by the advance payment method, legal advice was sought from the Attorney-General's Department. That advice indicated that the Department had no power under section 99 of the National Health Act to make such payments and accordingly the system of advance payments ceased immediately. The Auditor-General was immediately advised and he will comment on this aspect of the Department's administration in his March report to the Parliament. In addition to the changes to the pharmaceutical benefits scheme, the Bill contains a minor amendment to alter the definition of `basic private table'. Under the current definition, gap benefits are payable only in respect of services which are performed while a person is an in-patient of a hospital. This clearly disadvantages those people who have pathology specimens taken while they are in-patients but not analysed until after they are discharged. Clause 4 of the Bill overcomes this anomaly by making these pathology tests eligible for inclusion in the calculation of gap benefits. I commend the Bill to the House and I present the explanatory memorandum to the Bill. Debate (on motion by Mr Tim Fischer) adjourned. Bill presented by Mr Duffy, and read a first time. Mr DUFFY(Holt-Minister for Communications)(5.02) —I move: That the Bill be now read a second time. The purpose of this Bill is to amend the Radio Licence Fees Act, in accordance with a government decision, to improve arrangements relating to the assessment and collection of licence fees from companies licensed to broadcast commercial-including supplementary and remote-radio services. The amendments complement amendments made in the Broadcasting Amendment Bill (No. 2) 1987. The Radio Licence Fees Act provides for substantial fees to be payable by commercial radio licensees based on the gross earnings derived by the licensee company from activities related to broadcasting. The fees, which are payable on each anniversary of the original grant of the licence, are assessed as a percentage of the gross earnings during the accounting period preceding the anniversary. A sliding scale is provided so that the percentage rate increases for higher levels of gross earnings. The proposed amendments can be summarised as follows: The definition of gross earnings in the Act is clarified by limiting its application exclusively to income received from the licensee's broadcasting activities. The Bill also seeks to correct an anomaly in the legislation which enables licensees to vary accounting periods in relation to gross earnings, but does not empower licence fee assessments to be made for periods other than the standard 12 months. The amending provision will allow for the calculation of licence fees based on a period other than one year where a licensee obtains Australian Broadcasting Tribunal approval under sub-section 123 (2) of the Broadcasting Act 1942 to alter the dates of its annual accounting cycle. The amendments are not intended to alter significantly the amount of fees payable to the Commonwealth. They will remove from consideration, as part of `gross earnings', those earnings derived from the non-broadcasting activities of licensees and make it clear that earnings are assessable only in respect of advertisements and related matter broadcast by a licensee. The Australian Broadcasting Tribunal, which is the delegated collection agency, expends a great deal of time and effort in determining whether licence fees are assessable for non-broadcasting activities; yet earnings from these activities constitute only a small percentage of total gross earnings. This, in turn, has created a frustrating administrative burden for licensees. The net savings effect of the amendments should be significantly more than the anticipated cost of $30,000 to 35,000; the latter cost arises from employment of an extra person by the Tribunal to cover the additional work load involved in a more comprehensive assessment of licensees' returns. A small loss in revenue will also arise from the narrower definition of assessable earnings. I now turn to the detail of the proposed amendments. Gross Earnings The definition of `gross earnings' in section 4 of the Radio Licence Fees Act has caused considerable difficulties in its interpretation by the Tribunal. The Tribunal has attempted to clarify the definition by specifically listing the component items of gross earnings in its licence fees return form. The definitions of these items were based on legal advisings and included such matters as sale of programs, hire of facilities, and recoupment of landline expenses. Some licensees, however, contested the validity of the Tribunal's interpretation in relation to such items. On the other hand, it was considered that an attempt to list in legislation all the various items which could be included in `Gross earnings' would result in a continuation of time consuming problems of interpretation and administration. The provisions in the Bill provide a precise definition of gross earnings which is tied to revenue received by licensees from their broadcasting activities only; that is, revenues which arise out of the transmission of programs-including advertisements-to the general public. Receipts from a licensee's non-broadcasting activities will not be taken into account for licence fee purposes. In addition to the examples I have already mentioned, the items which will not be assessable under the amended definition of `Gross earnings' include amounts earned from the production of advertisements, recoupment of expenses incurred by licensees on behalf of advertisers, and receipts from the sale of programs by licensees in transcript form. Assessment Periods Licence fees under the Radio Licence Fees Act are currently assessed on the licensee's earnings over a 12-month period. However, sub-section 123 (2) of the Broadcasting Act 1942 permits a licensee to adopt another accounting period, while the period of assessment remains fixed at 12 months. As a result, where an accounting period is put back, a gap will arise between the end of the former period and the commencement of the following period. This will have the effect of excluding an amount of gross earnings from licence fees calculations. Conversely, where the licensee brings the accounting period forward, the assessment periods will overlap and gross earnings will be double counted in licence fee calculations. This inability to make assessments for periods other than the standard 12 months drew adverse comment in the Auditor-General's April 1985 report to the Parliament. In one instance observed by the Audit Office, following a change in accounting dates from 30 June 1982 to 30 September 1982, licence fees were paid for the period 1 October 1982 to 30 September 1983 but were not paid for the period 1 July 1982 to 30 September 1982. The amendments in this Bill will allow greater flexibility to accommodate such changes in accounting periods by allowing for the calculation of licence fees over a period of more or less than one year. The amendments will ensure that all periods are assessed, and are assessed at the appropriate percentage rate on the sliding scale. The approach taken in the Bill is to take account of all earnings between the end of the last assessed accounting period and the end of the new accounting period as assessable gross earnings. For the purposes of determining what percentage rate should apply on the sliding scale set by the Radio Licence Fees Act, the gross earnings figure for that period-which may be more or less than one year-is converted to represent an annual rate. The percentage set in the Act for that annual rate is then applied to the gross earnings for the period. Transitional Amendments The Bill includes a consequential provision to ensure that the amendments outlined above apply equally to broadcasting station licences which have not yet been converted to the new service based licensing system under the Broadcasting and Television Amendment Act 1985. By virtue of section 11 of the Broadcasting Stations Licence Fees Amendment Act 1985, the Broadcasting Stations Licence Fees Act, as it was before 1 January 1986, has continued application to such old system licences. The measures in this Bill will provide greater certainty in the assessment and collection of radio licence fees, will be difficult to circumvent and will lead to greater ease of administration both for the Tribunal and for affected licensees. I commend the Bill to the House. I present the explanatory memorandum to the Bill. Debate (on motion by Mr Tim Fischer) adjourned. Bill presented by Mr Duffy, and read a first time. Mr DUFFY(Holt-Minister for Communications)(5.10) —I move: That the Bill be now read a second time. The purpose of this Bill is to amend the Television Licence Fees Act 1964 to improve arrangements relating to the assessment and collection of licence fees from companies licensed to broadcast commercial television services. The amendments complement amendments made in the Broadcasting Amendment Bill (No. 2) 1987 and in the Television Licence Fees Amendment Bill (No. 1) 1987, which was introduced and passed by this House in the Budget sittings 1986 as the Television Licence Fees Amendment Bill 1986 and is currently before the Senate. Honourable members will recall that in 1986 I introduced the Television Licence Fees Amendment Bill (No. 1) 1987 as part of the package of equalisation legislation. That Bill amends the definition of gross earnings which is central to the assessment of licence fees. This Bill provides for the calculation of licence fees based on a period other than one year where a licensee obtains approval to alter the dates of its annual accounting cycle. Honourable members will note that the Radio Licence Fees Bill 1987 which I am introducing concurrently with this Bill includes both the amendment to the definition of gross earnings and the change in assessment periods. For details of the relevant amendments contained in this Bill, I refer honourable members to my speech on the Radio Licence Fees Bill 1987. The provisions in this Bill differ from the equivalent provisions in that Bill only in that they apply to television licences rather than radio licences. The improvements to the provisions for assessment and collection of licence fees contained in this Bill and the others in this package represent common-sense administrative improvements rather than any dramatic change of policy direction. Although I have referred to the equalisation legislation, honourable members should note that these amendments are in no way tied to that legislation. These amendments will be of great value irrespective of the passage of equalisation or other major government policy initiatives in relation to broadcasting. I commend the Bill to the House. I present the explanatory memorandum to the Bill. Debate (on motion by Mr Tim Fischer) adjourned. Bill presented by Mr Duffy, and read a first time. Mr DUFFY(Holt-Minister for Communications)(5.15) —I move: That the Bill be now read a second time. The purpose of this Bill is to amend the Broadcasting Act 1942 to implement a government decision to impose penalty fees for the late payment or non-payment of radio and television licence fees. These fees are payable by licensed broadcasters under the Radio Licence Fees and Television Licence Fees Acts 1964. The Bill complements amendments in the Radio Licence Fees Bill 1987 and the Television Licence Fees Bill (No. 2) 1987. Neither the Broadcasting Act nor the licence fees Acts presently contain any penalty provisions for the non-payment or late payment of licence fees. The only sanction available to the Australian Broadcasting Tribunal, which is the delegated collection agency for licence fees, is the ultimate and disproportionate sanction of revocation, suspension or non- renewal of a licence. The Bill provides an additional sanction through the imposition of a monetary penalty calculated as a percentage of the amount owing. The provisions will provide for a small amount of additional revenue from penalty fees for late payments and will assist in ensuring collection of the full revenue due to the Commonwealth. I now turn to the detail of the amendments. Sections 6 of the Radio Licence Fees and Television Licence Fees Acts provide for licence fees to be paid by licensees on each anniversary of the date of commencement of the licence. Sub-section 86 (11d) of the Broadcasting Act empowers the Tribunal to refuse to renew a licence if it is satisfied that the licensee has failed to pay the amount due under the relevant licence fees Act. An equivalent provision, paragraph 88 (1) (b), deals with suspension or revocation. Use of this ultimate sanction would be so drastic that there is, in effect, no effective penalty for late or non-payment. In the past, the Tribunal has expressed concern that some licensees were allowing time to elapse after an assessment had been issued before paying their licence fees. Any delay in payment of fees is, of course, a cost to the Commonwealth in terms of interest forgone. The amount of revenue due to the Commonwealth in the form of broadcasting licence fees is quite considerable. The total licence fees payable by commercial radio stations during the period 1 July 1985 to 30 June 1986 was $7,396,452 and for commercial television stations during the same period the amount was $60,915,505. The principal provisions in this Bill are contained in clause 5. New sub-section 123a (1) provides for the imposition of a penalty fee at the rate of 20 per cent a year on overdue fees. The penalty provisions operate only where the fee becomes overdue by two months, but in these circumstances the penalty fee is calculated from the due date. The existing provisions in section 123 of the Act allow six months from the end of each accounting period for the licensee to prepare accounts and documentation. Consistent with these provisions, new sub-section 123a (6) provides that the due date for the purpose of the penalty fee provisions will not be before six months after the end of the accounting period. New sub-section 123a (2) provides for the Minister, or an authorised officer, to remit the penalty fee. The decision to remit must take into account such factors as whether the delay was due to the fault of the licensee, whether the licensee had sought to minimise the delay and whether there are special circumstances which mean it would be fair and reasonable to remit the fee. Honourable members should note that the penalty fee and associated remission provisions are closely modelled on relevant provisions in sub-section 207 (1a) of the Income Tax Assessment Act 1936. Clauses 3 and 4 of the Bill amend sections 86, licence renewal, and 88, licence suspension or revocation, to take account of the new penalty fee provisions. Instead of the licensing sanctions of the Tribunal being applied for a failure to pay fees, the Tribunal must consider whether there has been unreasonable or repeated delay in licence fees payment. In considering whether to exercise these licensing powers, which are still the ultimate sanction for failure to pay licence fees, the Tribunal will clearly be required to assess whether the exercise of power is warranted in the individual circumstances of each case. Clause 6 of the Bill is a technical provision to ensure that the amendments in the Bill apply equally to old system licences; that is, licences which have not yet been converted to the service-based licensing system. The provisions in this Bill form part of a package of measures to introduce greater certainty and more efficient administration in the assessment and collection of radio and television licence fees. In particular, this Bill will help to ensure full and prompt recovery of fees owing to the Commonwealth. I commend the Bill to the House. I present the explanatory memorandum to the Bill. Debate (on motion by Mr Tim Fischer) adjourned. Debate resumed from 23 February, on motion by Mr Barry Jones: That the Bill be now read a second time. Mr WEBSTER(Macquarie)(5.20) —A couple of days ago I was speaking on this very important Nuclear Non-Proliferation (Safeguards) Bill 1987 and I mentioned a couple of matters which were of great concern to all Australians. For example, I mentioned the fact that it was our responsibility as a nation to share our energy resources with other members of our global community. Secondly, I made the important point about the role we can play in preventing the spread of nuclear weapons. I also mentioned that this Bill is this Parliament's signal to all those countries which share membership with Australia in the Treaty on the Non-Proliferation of Nuclear Weapons of our good faith in fulfilling our obligations under that Treaty. I then mentioned briefly the fact that the Parliament, the Government and its predecessors had given a lot of time and thought to the issue of how the development of our uranium resources might affect peace in the world. That is a very important point especially as last year was the International Year of Peace. I mentioned that as part of that process this Government, to its credit, had commissioned a report by the Australian Science and Technology Council on Australia's role in the nuclear fuel cycle. That particular organisation is frequently referred to as ASTEC. I then answered a number of questions which I think are important for the Parliament and, more importantly, for the people of Australia to understand. Hansard recorded my answer to the question about the possible impact on peace if Australia were to export its uranium as an energy resource. I followed that with another question which was related to the one I answered at the time of the interruption of the debate. That question was whether our efforts would make any difference to countries that wanted to make nuclear weapons. Hansard recorded the answer that was given on that occasion. When the debate was interrupted I was asking this question: If a country did want to develop such weapons, would it use its civil nuclear industry and the resource that we had provided in order to produce nuclear weapons? I was in the process of giving the answer in the form of a quotation from ASTEC. I will now give that quote. ASTEC said: Should a country decide to embark on a weapons program it is unlikely to use a civil power reactor to do so. This is because such a use would be inefficient both in terms of producing weapons usable material and in terms of electricity generation . . . Once sufficient weapons usable material has been obtained quite different technology, for which a civil nuclear industry would be of no direct value, is needed to fashion a nuclear weapon and to provide the necessary delivery system. The final question that ASTEC sought to satisfy itself on was this: How is the export of uranium related to preventing the spread of nuclear weapons? Would it strengthen the non-proliferation Treaty and Australia's role in it? The report noted that Australia was in fact obliged to assist countries in developing peaceful nuclear power stations. We are bound by the NPT as part of a unique deal. That deal involves individual countries denying themselves an autonomous and closer nuclear supply and generation schemes so long as they can be part of an international and open system of nuclear supply. The report went further, however, and emphasised that export of our uranium would increase our influence in global control of nuclear power. It stated: We have concluded that Australia is heeded in the non-proliferation debate to a greater extent than one would normally expect. This is due in part to the considerable reserves of uranium within Australia and Australia's record as a reliable supplier under strict controls and in part because Australia has continually sought to provide practical solutions to problems facing the non-proliferation regime. We consider that Australia must continue to maintain its high profile and that there will be additional opportunities for Australia, through active involvement in the nuclear fuel cycle, to further advance the cause of non-proliferation. With such an involvement we consider that Australia can make a direct contribution to the development of the civil nuclear fuel cycle in ways that will increase global energy security, help to strengthen the elements of the non-proliferation regime and help to reduce the risks of misuse of civil facilities and the diversion of nuclear material from civil to military uses. Without such involvement, we consider that global energy security would be less assured and our ability to strengthen the non-proliferation regime and to influence future developments in the fuel cycle would be reduced. The Opposition and the Government endorsed these conclusions, as did the scientific and diplomatic communities. Having satisfied the criterion of whether uranium exports build or subvert peace, the Parliament is now in the process of legislating to strengthen the safeguards which will guarantee that we will continue to be so satisfied. I will not go into the details of the legislation. The Minister for Science (Mr Barry Jones) and other honourable members have already explained these quite adequately in earlier speeches. Suffice it to say that it ensures that at each and every stage of the mining and processing of our uranium there are safeguards to ensure that none of the material is diverted for military purposes. That is of prime importance. It covers the three principal elements of accountability, containment and surveillance of all material. The bottom line is that the Government, the Parliament and the people of Australia will be able to make sure that the resource of uranium that we possess is used to enrich human life rather than to extinguish it. Many Australians will not have read the ASTEC report, nor will they have listened to this debate. Unfortunately that means that many will still hold the mistaken and simplistic equation inculcated by anti-nuclear groups in our schools, even our churches, town halls and media that uranium mining means nuclear weapons. Therefore it behoves this Government to explain and market this legislation and the decisions that it embodies. The Government should use its talent for marketing its policies and programs to educate Australians, young and old, about the effectiveness of this legislation and of international safeguards in general and the contribution to peace and development that our uranium industry makes. Of course, that would involve standing up to the anti-nuclear activists in its own party and in our schools and elsewhere. These activists would mobilise to block any effort to balance the propaganda that they so freely peddle in the community. But these activists and their work must be stopped and stopped by the Government which is firmly committed to this Bill. These are the people who are peddling the lie that uranium mining means bomb proliferation. These are the people who suppress the truth that nuclear power is one of the means we have at our disposal to prevent the catastrophe of the greenhouse effect being caused by the use of fossil fuels, such as coal, to generate power. These are the people who will not tell the public that radiation from uranium mining and nuclear power generation-and indeed even from nuclear weapon tests-represents only a fraction of the radiation to which we are exposed every day from the earth's crust, consumer goods, our cities, our non-nuclear power plants and industries and from that much lauded but elusive energy source, the sun. I commend the Bill to the House and to the Australian people. It represents an important Australian contribution to non-proliferation. It is further proof of our commitment to share the riches that God has bestowed on this nation but desires to be used for the benefit of all. I commend the Government for bringing the Bill before us. The Government has the support of the Opposition and of informed opinion for the Bill and the overall policies that it represents. In conclusion I only repeat my hope that the Government will go out now and do the necessary work to ensure the concurrence of the Australian people with this Bill and its policies. Mr LANGMORE(Fraser)(5.30) —The Nuclear Non-Proliferation (Safeguards) Bill 1987 puts into statutory form obligations which all Australian governments have accepted since 1973. It is very good to see that the Opposition parties are supporting this Bill now. One wishes that there were more such consensus in this chamber. In January 1973 Australia became a party to the Treaty on the Non-Proliferation of Nuclear Weapons. The Treaty involves a commitment by those signatory countries without nuclear weapons not to acquire them and to accept safeguards on their use of nuclear material while nuclear weapons states agree to work towards nuclear disarmament. It is the failure of all the nuclear powers to make any progress at all towards nuclear disarmament that I want to discuss this afternoon. Not only have all five of the nations which possess nuclear weapons failed to work seriously towards disarmament and fulfilment of their obligations under the Treaty but also they have rapidly accelerated the arms race. Since 1983 the United States of America has been working towards a new round of the arms race, weapons in space. Star wars, or the strategic defence initiative, SDI, is a concept that is claimed to provide a perfect or near perfect defence against attack by nuclear armed missiles. In the words of President Reagan in his famous speech of 23 March 1983 when he announced the SDI program: Up until now we have increasingly based our strategy of deterrence upon the threat of retaliation. But what if free people could live secure in the knowledge that their security did not rest upon the threat of instant United States retaliation to deter Soviet attack; that we could intercept and destroy strategic ballistic missiles before they reached our own soil of that of our allies? So the goal of the SDI program is to destroy all nuclear armed missiles or their re-entry vehicles, their warheads, before they reach their targets. On the fact of it, President Reagan's vision of a world free from the threat of global nuclear holocaust is very attractive. Certainly the ethical basis of the system of mutual assured destruction, code named MAD, which is aptly named balance of terror, is highly suspect. A strategy which promises the replacement of deterrence based on terror with deterrence based on defence seems preferable. Nevertheless, in fact the SDI concept does not promise deterrence based on defence; the strategic defence initiative involves the creation of seriously destabilising conditions which threaten the peace of the world. Let me make a simple analogy. Let us assume that two neighbours in a street each possesses a powerful shotgun while all other residents of the street have only .22 rifles. These two neighbours are bitterly hostile to each other and have kept peace between themselves only because each fears the other's shotgun. Occasionally one or other of them will terrorise a weaker resident into subservience, but neither wants to provoke the other into using the shotgun. One day one of the two people with shotguns announces that he has discovered a means of completely protecting himself and his friends from shotgun blasts. The other shotgun owner is interested in the idea as well, but does not have the technology to implement it. Clearly, the person with the shield can, if he wishes, attack anyone in the street, even the other shotgun owner, with complete impunity; there is no come-back at all. This is one of the main problems with SDI. While President Reagan says that it will render nuclear weapons `obsolete and impotent', in fact it will render only Soviet nuclear weapons obsolete unless the Soviets too can deploy defence as good as that provided by SDI. In the absence of a Soviet SDI system as good as that of the Americans, the US would find itself in a position where it could launch a first strike on the Soviets with no fear of Soviet retaliation. The whole basis of a mutual deterrence would thus be destroyed. It should be clear to all that no responsible and patriotic leadership in the Soviet Union could ever permit such a circumstance to arise because, if it did, the Union of Soviet Socialist Republics would be at the mercy of the United States. The Soviets could find themselves forced to choose between submitting to overwhelming US power and acting to prevent the deployment of an effective SDI system ever taking place. This is destabilisation with a vengeance. Indeed, it can be cogently argued that SDI-type systems are destabilising and therefore dangerous precisely to the extent that they are effective. Those who dispute this analysis and say that it is purely theoretical or academic should ask themselves why the US and the Soviet Union agreed to sign the treaty against anti-ballistic missile systems, of which SDI is merely the most recent and grandiose expression, in 1972. They signed out of mutual self-interest. They saw that deploying nationwide ABM systems would call into question the ability of the other side to retaliate effectively against a first strike. They acted to preserve the linchpin of global peace-the concept of mutually assured destruction. Unethical it may be, a balance of terror it certainly is, but there is no doubt that this has strongly discouraged military conflict between the super-powers and that the only viable alternative is multilateral disarmament. Supporters of the US SDI program retort that this is all very well but that the Soviets have long been working on an SDI of their own. Therefore, they say, the US program will do no more than equalise the situation. Both super-powers, they say, will have SDI-type defences and so stability will be preserved, and on a defensive rather than offensive basis. There is no doubt that the Soviets have indeed been working within the limits of the ABM treaty for the most part on anti-ballistic missiles and anti-satellite systems. The US has published claims, difficult to substantiate or refute because of the chronic Russian mania for secrecy, that the Soviet Union has been working on such programs for the last decade or so. Even accepting these claims at face value, we need to look more closely at the goals of the US and Soviet programs. It turns out that they are rather different. For the US, a more open society, there is little problem. President Reagan has spelt out the goals of SDI very plainly-to provide a perfect or almost perfect defence against attack by nuclear missiles. Official US sources give the example of 10,000 warheads launched in the US with only 10 getting through the envisaged SDI shield. It is admitted that this level of performance will stretch even Yankie ingenuity and technological capabilities to the utmost, but this is the goal set by the President. In looking at the Soviet effort one thing becomes clear from the outset. The effort is apparently large and long term but, even according to US official sources, seems to be concentrating more on anti-satellite than anti-ballistic missile applications at present. Moreover, there is no evidence to suggest that the Soviets are seeking the kind of perfect or near perfect defence which President Reagan wants with SDI. It is easy enough to show that even if they wanted such a defence-a real equivalent to SDI-they would stand far less chance of achieving it than the United States. A perusal of the literature shows that the US too is highly unlikely to be able to achieve the levels of perfection set by President Reagan. It is well known that the Soviet technology base is inferior to that of the West generally and the US in particular. Soviet efforts to beg, borrow or steal technology from the West confirm this assessment. It is also agreed that the critical technology for a successful SDI is not the lasers, the electromagnetic gun or the particle beam weapons, difficult as they are, but the computer software. Even so keen a supporter of SDI as Clarence A. Robinson, who represented the US and helped sell SDI to Mrs Thatcher, has written that when it comes to the software `the critics' arguments have some validity. It is precisely in the field of computer technology-hardware and software both-that the US officially claims to have a lead, and a growing lead, over the Soviets. This is according to testimony of the US Under Secretary for Defense, Donald Hicks, to the research and development panel of the House Armed Services Committee. How then can it credibly be claimed that Soviet anti-satellite and ABM programs, however large, can ever do what it is extremely doubtful the United States can do from a leading position? Thus, it is apparent that the Soviets are not trying to develop an SDI-type near perfect defence. Their goal is much more limited. They want to take out as many United States missiles as possible but have no delusions about reducing a United States attack of 10,000 warheads to a mere 10 actually reaching their targets in Russia. Mr Tim Fischer —Mr Deputy Speaker, I take a point of order. My point of order is that, whilst a good deal of latitude is allowed in a debate of this nature, on the Nuclear Non-Proliferation (Safeguards) Bill, the honourable member has, for some length of time, been straying way outside the ambit of the Bill. He has also been very inaccurate in his assessment of Russia. Mr DEPUTY SPEAKER(Mr Mildren) —Order! That is irrelevant. Mr Tim Fischer —I put it to you that he should now be brought back to the thrust of the Bill before the House. Mr DEPUTY SPEAKER —Order! I ask the honourable member to attempt to be relevant to the main point of the Bill. Mr LANGMORE —Mr Deputy Speaker, what I am saying is absolutely central to the Bill. The Bill is about putting into a statutory form the provisions of the Nuclear Non-Proliferation Treaty. That is what the Bill we are debating is about. I am talking about the failure of the nuclear powers to fulfil their obligations under the Treaty. Therefore, what I am saying is entirely germane to the Bill we are debating. The Soviet goal is damage limitation, not a perfect defence. The Soviets know all too well that a perfect defence is beyond their capabilities. Mr Downer —I take a point of order, Mr Deputy Speaker. The point at issue in terms of relevance is the relationship between the strategic defence initiative and the Nuclear Non-Proliferation Treaty, to which this Bill is supposed to relate. The SDI has nothing whatsoever to do with the NPT. It may be relevant to other treaties but it is entirely irrelevant to the Nuclear Non-Proliferation Treaty and Australia's nuclear safeguards policies. Mr Barry Jones —Mr Deputy Speaker, I think that is an absurdly narrow reading. Debate would be artificially constrained to an absurd degree if that were the case. I think the honourable member is entitled to draw a reference to the broad context-- Mr DEPUTY SPEAKER —Order! The Minister will resume his seat. I think there is room for some latitude in debate on a Bill of this kind and the Chair will determine just what that latitude is. Mr LANGMORE —Thank you, Mr Deputy Speaker. The honourable member who took the point of order clearly has never read the Treaty. If he had, he would know that Article 6 provides that the nuclear powers commit themselves to working towards nuclear disarmament. What I am talking about is their complete failure to do that. Before I was interrupted I was saying that the Soviet goal is damage limitation, not a perfect defence. The Soviets know all too well that a perfect defence is beyond their capabilities. What must worry them is that despite the critics, it may not after all be beyond the United States. Should this be so, we are back to the people with the shotguns, one of whom is immune to shotgun blasts while the other is not. The point about the Soviet effort, then, is that it has much less ambitious goals than the American SDI program. One cannot equate one with the other. Until quite recently it was thought that the 1972 ABM Treaty-the anti-ballistic missile Treaty-between the United States and the Soviet Union would prevent much testing of SDI systems. Part one of Article 5 of the Treaty states: Each party undertakes not to develop, test or deploy ABM systems or components which are sea-based, air-based, space-based or mobile land-based. So only fixed-site land-based systems-such as the Soviet laser and particle beam systems-are permitted under the Treaty. But recently, some elements of the Reagan Administration, relying on legalistic jiggery-pokery, have begun to argue that the treaty really does not mean what it says and that it is all right to test ABM systems for SDI in space, for instance. This remarkable conclusion is achieved by arguing that the ABM Treaty restricts only those types of ABM system which existed when it was signed, not ones based on new physical principles like X-ray lasers and beam weapons. This is asserted in the face of the unequivocal wording of the Treaty itself. At present the ABM Treaty is the only arms control agreement in full legal force between the super-powers. SALT I has long since expired through effluxion of time. SALT II was never ratified by the United States but was observed, nevertheless, by both super-powers until President Reagan decided to scrap it last year. It now seems that there is a strong push under way in Washington to try and reinterpret the ABM Treaty out of existence. It would be more honest simply to withdraw from the Treaty under the provisions of Article XV. It is true that Washington's official position at present is that the Treaty stands as written, without novel interpretations. Quite apart from the ingenious interpretations being peddled to justify SDI testing, it is universally agreed that SDI deployment would violate the ABM Treaty and that either renegotiation or withdrawal would be necessary if the United States ever deploys SDI. However one looks at it, SDI deployment means the end of the ABM Treaty. Yet, despite this, President Reagan apparently decided about three weeks ago to bring forward deployment of SDI weapons to 1994-seven years from now. This was despite the fact that he had offered at Reykjavik not to deploy them for 10 years. Three days after Reagan's decision, Defense Secretary Weinberger announced that there would be no deployment for 10 years. This reversal is welcome but such vacillation offers no confidence that the Reagan Administration will not continue towards the ultimate folly of SDI deployment. There was even a report in the Australian yesterday that a senior arms control adviser to President Reagan is to visit Australia for talks about `revision' of the ABM Treaty. `Revision' would mean abandonment of the Treaty. Australia must forthrightly reject these blandishments for the folly they are. Even Mrs Thatcher has publicly denounced breaking away from the anti-ballistic missile Treaty. Supporters of SDI research and deployment have argued that stability is not threatened because President Reagan has offered to share the technology with the Soviets so that they, too, would have a system of equal capability to that deployed by the United States. Moscow has shown a predictable scepticism towards this offer. The reservations of the Soviets are readily understandable. Is it really credible that the United States would hand over to the Soviets the results of years of research, gained at enormous expense? The Australian Government has very properly opposed SDI. Recognising the dangers implicit in the concept, it has declined to endorse SDI or to participate in research. It has stated that if our railgun research were used in SDI research, we would suspend our railgun co-operation with the Americans. Subsequently, the Government announced that our railgun research would end this year. The Government has made clear that it endorses neither the United States SDI program nor the Soviet ABM projects, principally because it sees them as obstacles to effective arms control measures. This is a responsible and even-handed approach. Moreover, the Government has communicated to the United States Government its belief that the traditional `strict' interpretation of the ABM Treaty should be adhered to. A primary justification put forward for our continued participation in the American alliance is that it gives us more influence in Washington than we would have as a small neutral or non-aligned power. If this is so, we have an opportunity to use our influence with the Administration to help restrain pressures for the United States to break out of, or just break, the ABM Treaty. It is not simple that the ABM Treaty is the last significant strategic arms agreement in force between the super-powers, but that its demise would open the door to the unrestricted deployment of SDI-type systems to the detriment of the strategic balance. In particular, as the Government has recognised, the damage SDI can do to arms control is very significant. Already the Soviets are threatening to deploy hundreds of new missiles with thousands of real and dummy warheads to saturate the SDI defences. The United States would doubtless respond with new missiles of its own, above and beyond MX and Trident II. And so SDI would stimulate a new escalatory spiral of nuclear weaponry. Far from rendering such weapons obsolete, it would make them the growth industry of the late twentieth and early twenty-first centuries. The fact that a promising arms reduction agreement was scuttled at Reykjavik last year because of SDI further highlights the damage the concept has already done to arms reduction and arms control prospects. It is important then that Australia continue to exercise her influence with our ally to restrain those extremist elements in the Administration who see SDI as the road to the millennium or, more likely, as the road to strategic superiority of the United States over the Soviets. In a world bristling with nuclear weapons-- Mr DEPUTY SPEAKER —Order! The honourable member's time has expired. Mr DOWNER(Mayo)(5.50) —Mr Deputy Speaker, I thought you were very liberal in your interpretation of the Standing Orders in allowing the honourable member for Fraser (Mr Langmore) to give a long and rather disappointingly ideological diatribe against the United States Administration's strategic defence initiative project. Mr Langmore —You obviously have not read the Treaty. Mr DOWNER —Mr Deputy Speaker, I also draw your attention to the fact that the honourable member has apparently resorted to abuse, claiming that I have not read the Treaty on the Non-Proliferation of Nuclear Weapons, when I spent eight years in the Department of Foreign Affairs which included my being involved in disarmament issues. That piece of information is entirely false. Perhaps the honourable member would do better if, firstly, he read the Nuclear Non-Proliferation (Safeguards) Bill which is before the House since that is what this debate is supposed to be about and, secondly, he tried to examine with a little sophistication the issues relating to the strategic defence initiative. After all, it is well documented by many people that the Soviet Union has been embarking on a research and development project similar to the American strategic defence initiative. We do not know whether that will be successful. Perhaps it will be successful, perhaps it will not. One of the arguments against the American strategic defence initiative is that it apparently can never work. If it can never work, frankly, it does not really matter to Australia or to other countries; it matters to the American taxpayer, of course, and that is a separate issue, but it does not matter to anybody else if it does not work. If it does work it will be the first time in history that a country such as the United States has provided itself with an effective umbrella against nuclear attack. It would not matter how many additional nuclear weapons the Soviet Union produced, if the SDI worked they would, of course, be valueless. So again, the argument about it exacerbating the arms race if it can work is not a particularly relevant one. Looking at it the other way round, if it does not work, why should it exacerbate the arms race? If it can never work there is no need for anybody to take countermeasures against it. As a matter of fact, since we are on this issue, I think it is disappointing that the Australian Government turned down the opportunity which other Western governments took of participating in the strategic defence initiative program. As a result of that, we could have got anything up to $200m of high technology research and development work in this country. I know that the Minister for Science (Mr Barry Jones), who is at the table, shares very strongly my view that we must do everything we possibly can in this country to bring ourselves up to international standards in terms of the level of technology being pursued in this country. What a shame that that one very great opportunity has been turned down by this Government. I do not want to labour this issue because I am one of those people who have been arguing that SDI is really not relevant to this piece of legislation. This legislation, instead, is about the Australian nuclear industry and the role of that industry in the international community, particularly through the sale of our uranium and the nuclear safeguards agreements that we have with a number of countries and organisations. I think the Australian nuclear industry is extremely important to Australia's national goals. It is important to one of our goals, the goal of building a much stronger domestic economy, and it is important to another of our goals, the goal of greater regional and global stability and security. Through our own uranium sales and our own nuclear policies we can make a major contribution to that global security. As far as the domestic economy is concerned, it is argued that our uranium industry is an export industry with a value of about $400m a year. It almost goes without saying that that has implications for jobs in this country, it has implications for investment and it has implications for exports at a time when our balance of payments is in an historically bad position. Uranium exports are also Australia's entree into global nuclear politics. Australia is a small country. We do not have a great role in the international community-perhaps unfortunately, perhaps fortunately-but we can use this one commodity that we have, and we have a good proportion of the total world supply, in order to exercise some influence internationally. This Bill is essentially relevant to the latter of those national goals, the national goal of pursuing international stability, in this case through our entree into global nuclear politics; and it puts into legislative effect Australia's non-proliferation obligations, and especially through our nuclear safeguards policy. I very strongly support all of this. I have played some part in the negotiations of Australia's nuclear safeguards agreements-in my case, the European Atomic Energy Community's nuclear arrangements. However, I think it is a pity that, in drawing up this legislation, the Government has left something of a loophole which the Opposition has drawn attention to. The Opposition has proposed amendments to this legislation so that that loophole will be closed. What we do not want is some artificial legal contrivance being put forward by some sections of the community which will use this legislation in order to try to stop visits to Australia, in particular, by American, British and other allied ships that may or may not have some kind of nuclear potential. In order to ensure that that loophole is never exploited I think the Government should agree to the amendment being put forward by the Opposition in order to close the loophole altogether. The people who do not want visits by American or other allied ships that may have some nuclear capacity are the same people who argue that we should have no uranium industry in this country at all. I know that those people-I know many of them myself-are people of goodwill. They are people who are genuine in their commitments to try to play some part in promoting global peace, but they are people who live permanently with their heads buried deeply in the sand. Unfortunately, in order to pursue their objectives they are mounting scare campaigns which really amount to some sort of intellectual terrorism which, in particular, is frightening the young and impressionable people of our country. They are doing that with grossly exaggerated arguments about the effects of selling uranium to countries under our safeguards agreements and how that uranium apparently will come raining back down on Australian cities in the form of nuclear weapons. That whole argument, in any case, is built on the completely false premise that somehow Australia can stop the nuclear industry. We simply cannot do that. Let us just look at the facts. More than 30 countries use nuclear power to generate electricity. In some of those countries more than 50 per cent of the electricity they use is generated by nuclear power. Are those people who are saying that we should not mine and export uranium seriously suggesting that we should put out the lights in all those countries and that we should increase the price of conventional fuels to the rest of the world, in particular the developing world, which can ill afford that sort of increased cost? We all know about the disaster at Chernobyl and we have all heard of the near disaster at Three Mile Island. There is no doubt that there are risks with the nuclear industry; nobody would ever deny that. But in spite of Chernobyl that industry still has an extraordinarily good safety record and an extraordinarily good environmental record. That, let us face it, is not something that we can say for the coal industry. The numbers of mining disasters that there have been in our country and in other countries are witness to the fact that that industry has with it many great dangers. As environmentalists quite rightly continually point out, one of the consequences in Europe of the large number of coal-fired power stations is now the presence of acid rain, something that I would like to believe all European nations were doing something to try to stop. I regret that one or two countries are obstructing efforts by the Europeans to stop the creation of acid rain through the coal mining industry or the coal-fired power stations. Of course, the other side of this argument is that Australia is not the sole source of uranium. If a country really wants uranium it can get it from just about anywhere; there is no question of that. The fact that Australia has some 20 per cent of the world's known uranium reserves does not mean that, if Australia were to cut off its supply of uranium, the other 80 per cent would somehow be unobtainable. Clearly it is very easily obtainable from all sorts of sources and I mention South Africa as one. But I hope that those people who are opposed to the mining and export of uranium from Australia will concentrate on this matter because they are also the people who are often very vocal about South Africa. They should appreciate that Namibia particularly is a major source of uranium and that the South African Government does not impose the stringent safeguards on the export of uranium that our country applies. I think all of us, when we are debating these issues of uranium mining and exporting and our nuclear safeguards arrangements, need to appreciate the very great importance of energy policies to global stability. After all, many people will remember that it was energy shortages that was one of the causes of the Second World War. Of course it was not the only cause but those energy shortages were, without doubt, one of the causes. To this very day one of the reasons tension in the Middle East is of such great concern, particularly to the Europeans and the Americans, is that it is such an important source of energy supplies. In other words, the reliable supply of energy is enormously important if we are to contribute towards a stable international environment and Australia ought to be contributing to that. We tried to contribute to it through our exports of coal and, to a much lesser extent, oil. Unfortunately, we are sometimes hindered by actions taken on our waterfront. We ought to be doing the same thing with exports of uranium because by exporting it ourselves we can try to ensure that those supplies remain predictable and reliable to countries which have the need to import energy. It is also important to remember that the nuclear industry exists already and that it will not go away however much we pray, however much we wish or however much we may just close our eyes and hope. That industry is here to stay and for as long as it is here to stay uranium will be needed. If we cut off supplies of uranium, if other countries cut off supplies of uranium, those countries which already have a nuclear industry will inevitably be forced to invest in fast breeder reactors and in doing that increase the risk of weapons grade plutonium being produced, because that is one of the by-products of fast breeder reactors. By supplying uranium, by ensuring that there is a regular supply, we are in turn ensuring that countries will at least have the disincentive to outlay the vast amount of extra capital needed to build fast breeder reactors. That is a very important point which needs to be made. In other words, it reduces the need for other countries to take more steps in the nuclear fuel cycle than they have already taken. All of these things are precisely why the Australian Science and Technology Council, in its well known 1984 report to the Government, recommended-I think it was its first recommendation-`that exports of Australian uranium should not be limited'. It is extremely regrettable that the Government responded to that recommendation by saying that it would not accept it. It would not accept it because people on the left of the Australian Labor Party maintain the sort of hysteria against the nuclear industry which is totally unrealistic. By responding to that hysteria, by caving in to that pressure, the Government has closed uranium mines in Australia. Two of them are in my State of South Australia-the Honeymoon and Beverley mines-but it has also closed the Yeeliree mine in Western Australia, Koongarra and so on. The consequence of that is the loss of $1,000m worth of investment in our country. One would think the Government would be doing everything it could to attract investment just now but it is not. It also means the loss of some 3,000 jobs in the building of those mines and some 1,400 permanent jobs. It is extremely regrettable that that recommendation of the ASTEC report has been turned down by the Government. But at least it has maintained the Roxby Downs mine in my electorate and the Ranger mine, in particular, in the Northern Territory and it has continued the safeguards policy that was put in place by the Fraser Government in the safeguards treaties that were negotiated by it. I would argue-I am sure that the Government would agree-that this safeguards policy is enormously important for international stability. As I said earlier, it gives Australia a window into nuclear politics. Our clear objective and every Australian's clear objective is to prevent the further spread of nuclear weapons. Of course we aim to do that through the non-proliferation regime. As far as our exports of uranium are concerned, that regime comprises two essential treaties-one is the Treaty on the Non-Proliferation of Nuclear Weapons to which something like 134 countries are signatories and the second is the International Atomic Energy Agency's safeguards. Our uranium exports are subject to the rigors of the Non-Proliferation Treaty and they are subject to the International Atomic Energy Agency's safeguards. By making our exports subject to that regime we are making a major contribution not only to it but also to the whole concept of non-proliferation. Safeguards as they exist, whilst not perfect, are the best guarantee there possibly is for the peaceful use and the peaceful development of the uranium and nuclear industry. The safeguards cannot, of course, be 100 per cent foolproof; I think we would all appreciate that fact. However, I add that since our safeguards policy has been in existence, apparently there has not been one single example of that policy being abused but we can never be 100 per cent sure that it would or could never be abused. The alternatives are easily provided uranium, without safeguards, from countries such as South Africa and Nigeria. One can see that by Australia providing uranium it also provides, with its responsible safeguards, the very best bet that the nuclear non-proliferation regime will have some meaning in our future. It is quite logical that we should follow the recommendation of the ASTEC report to go further in the nuclear industry in this country. As yet I do not think there is a case for the building of nuclear power stations in Australia but I think there is a case, as ASTEC recommended in its ninth recommendation, for providing some more nuclear fuel cycle services. Again the Government has apparently rejected this recommendation not because, I assume, the recommendation is in any way illogical, not because it is easily contestable-I think the case for it is incontestable if one is serious about the effectiveness of the non-proliferation regime and if one knows, as I know, that Australians are committed to that regime-but because it wants to keep the left wing of the Australian Labor Party happy. I regret very much that so many people in the Government, so many people in the Public Service and people in ASTEC as well are having their sensible recommendations hindered and stopped simply because a small minority of people in the Labor Party are demanding compromises and concessions in order to shut them up when it comes to election time. For Australia to get further involved in the nuclear fuel cycle or nuclear fuel cycle services, as ASTEC states, does make an awful lot of sense and there is plenty of scope for us to do it jointly with other countries which are as committed as we are to that non-proliferation regime. Take the example of Japan given by ASTEC. I very much regret that the Government has rejected that recommendation. In conclusion I reiterate, so there is no doubt at least in the minds of honourable members of my view in this matter, that an enormous amount of humbug is spoken and written about the whole nuclear industry in both this country and other parts of the world. It is here to stay for many years to come and we have just got to contribute to it in the best way we can to ensure that it works. If one turns away from it, it will still be there but others will be contributing to it, not us-not responsible, constructive and positive Australia but irresponsible countries which have no concern for the non-proliferation regime. I would not like to contemplate the consequence of that. It would certainly reduce the security of all of us in this chamber-all of our families, all of our friends-and perhaps it would reduce substantially the security of mankind. We have an obligation, albeit a moral obligation, to contribute to that non-proliferation regime. I am glad to see that the Government has half-heartedly, but at least to some extent, understood that obligation and, in some ways, has implemented it through this legislation. Mr BRUMBY(Bendigo)(6.10) —It is my pleasure to support the Nuclear Non-Proliferation (Safeguards) Bill which I believe to be good legislation and which, it seems, enjoys bipartisan support in this House. The Bill gives effect to Australia's international non-proliferation obligations which require domestic legislation. Those obligations arise under the Treaty on the Non-Proliferation of Nuclear Weapons, Australia's safeguards agreements with the International Atomic Energy Agency, Australia's bilaterial nuclear safeguards agreements with other countries and Euratom and the Physical Protection Convention, which is not yet ratified. The Bill also provides the legislative bases for the operation of the Australian Safeguards Office in administering Australia's safeguards system. As the explanatory memorandum to this Bill points out, the Bill establishes a system of permits for the possession and transport of nuclear material and other nuclear items such as equipment, information and material which is used in nuclear reactors. The permits will be issued by the Minister who will be given the power in this legislation to impose conditions which govern all aspects of the possession of nuclear material and items. It is worth pointing out by way of background that the Nuclear Non-Proliferation Treaty was negotiated in the mid-1960s, first between the United States of America and the Soviet Union and then by the 18-nation disarmament committee. It was endorsed by the General Assembly of the United Nations in 1968 and entered into force in 1970. The establishment of the Nuclear Non-Proliferation Treaty was a major step forward in international agreements for the limitation and control of nuclear armaments. Article III of the NPT requires each non-nuclear weapons state to accept the International Atomic Energy Safeguards on all nuclear activities which are carried out within its territory. Australia became a party to the NPT during the days of the Whitlam Labor Government in January 1973. If I remember, those were the days when the dumvirate was the Cabinet of Australia. The International Atomic Energy Agency came into being in 1957 when its statute entered into force. The statute states two objectives for the agency: Firstly, to enlarge the contribution of atomic energy to peace, health and prosperity throughout the world; and secondly, to ensure that the assistance provided by it is not used in such a way as to further or assist any military purpose. So the technical development and the implementation of the safeguards required by Article III of the Treaty are entrusted to the Atomic Energy Agency which then applies the safeguards to verify that countries are complying with their NPT obligations not to manufacture or otherwise acquire nuclear explosive devices. So the two parts work hand in hand. In a sense, they are mutually dependent. Australia signed its safeguards agreement with the International Atomic Energy Agency in July 1974, again during the Whitlam Labor Government period. As far as this Bill goes, physical protection measures are intended to protect nuclear materials and facilities from theft or sabotage, especially by terrorists. Physical protection can also be regarded as one of the measures which reduce the risk of proliferation and may overlap some safeguards measures verified by the International Atomic Energy Agency, such as containment and surveillance. The Convention on the Physical Protection of Nuclear Material concluded in 1980 under the Atomic Energy Agency auspices provided certain levels of physical protection during international shipments of nuclear material. It also defines certain serious offences involving nuclear materials, which parties to the Convention have to make punishable. So this Bill gives legislative effect to Australia's obligations under the NPT, the Agency agreement and the Convention. We can make many points about this legislation. In its impact and scope, in a sense, it is very broad. I should emphasise that Australia is very strongly committed to the Nuclear Non-Proliferation Treaty and we believe very strongly in its effectiveness. The NPT, with all its associated safeguards, has proven in our view to be the most effective international arms control and disarmament treaty which has yet been devised. We believe that that is highlighted by the fact that no diversion from any safeguarded facility has been recorded by the International Atomic Energy Agency. This impressive safeguards record reflects the political influence of the system as a deterrent, as well as the technical effectiveness of safeguards. In pursuance of our NPT obligations and our firm policy of non-proliferation, the Australian Government permits exports of Australian uranium; but we permit them only to countries with which we have a bilateral safeguards agreement. We have concluded 11 bilateral safeguards agreements which cover 19 countries. The basic requirements of those agreements are that Australian original nuclear material will be used only for peaceful, non-explosive purposes and that Australian original nuclear material will be covered by the International Atomic Energy Agency safeguards. The bilateral partners with whom we have signed are obliged to seek prior Australian consent on a number of matters. If they wish to reprocess any of the spent fuel which is derived from Australian original nuclear material they must seek prior Australian consent. If they wish to transfer any Australian original nuclear material to a third party there must be prior consent; and if they wish to enrich Australian original nuclear material beyond 20 per cent of the isotope U235 they must also get prior consent. So those bilateral agreements are very strong and far reaching in their implications. This Bill also strengthens the Australian safeguards system by putting it on a sound legal basis and by giving statutory authority to the Australian Safeguards Office. The application of the safeguard requirements to the Atomic Energy Agency has not been a problem because the Agency is a government entity. In the case of other holders of nuclear material, principally the mining companies, the safeguards system has been functioning satisfactorily on the basis of goodwill and co-operation. A legally enforceable system is necessary-that is what this legislation brings into effect-because Australia has international obligations to fulfil and it is inappropriate simply to rely on goodwill to fulfil such obligations. The Australian Safeguards Office is a small unit in the Department of Resources and Energy which, I understand, has been functioning very efficiently for a number of years. It is the intention that the issuing of permits and other administrative procedures should be carried out with the minimum of inconvenience consistent with the fulfilment of obligations under the legislation. It would not be appropriate to speak on this important legislation, dealing as it does with nuclear non-proliferation, without making a number of general points about Australia's overall efforts to bring about disarmament, arms control and reductions. This Government stridently endorses our world-wide aspirations for stability and arms reductions. This Government would be failing in its responsibility to the Australian community and the wider community of nations if we failed to make our voice heard on what, in our view, clearly is a matter of fundamental importance to the world. Some of the ways-and there are many-in which we have pursued this objective of disarmament and arms control are as follows. The first way in which we have given increased emphasis to that task is by appointing Australia's first Ambassador for Disarmament. We have as well considerably increased the resources available to the Department of Foreign Affairs for its efforts to produce disarmament, arms reductions and arms controls. The second matter in which this Government has been active is in the context of a comprehensive test ban. In this regard we place enormous emphasis on the work which is being undertaken in the United Nations Conference on Disarmament, work which was aimed-and is still aimed-at creating a comprehensive nuclear test ban treaty. If we are serious about placing a lid on the growth of the arsenals which are held by the super-powers, a verifiable, comprehensive test ban treaty is obviously an important and integral part of that process. We believe the Treaty is a sensible and feasible proposal which will not get bogged down in intricate detail. It would quickly inhibit the deployments of new weapons and the modernisation of existing ones. It would place international pressure, for instance, on the French to cease their testing program in the Pacific. A comprehensive test ban treaty would also be an additional obstacle to the acquisition of nuclear weapons by countries which do not have them, and it would provide valuable support to the Nuclear Non-Proliferation Treaty. The third matter on which this Government has been particularly active and on which we have a good record is that of chemical weapons. We have been making special efforts to develop international sanctions against chemical weapons. Again, the United Nations Conference on Disarmament has been the principal venue for work in support of negotiations aimed at a comprehensive convention banning the use, possession and manufacture of chemical weapons. The proposed convention would also ensure the destruction of existing stockpiles of chemical weapons and their means of production. So that also is an important and valuable initiative that we have taken. As I mentioned earlier, the precise focus of this Bill, the Nuclear Non-Proliferation Treaty, is also an integral part of the ways in which this Government pursues its objectives of peace and disarmament. We have played a vital and influential role in the Third Review Conference of the Nuclear Non-Proliferation Treaty which was conducted during 1985. As I said earlier, the NPT brings together all of those nations, such as Australia, which have voluntarily agreed not to become nuclear weapons states and, as such, it provides an important means of exerting international pressure on the United States and the Soviet Union to negotiate for nuclear arms control. We contributed in a considerable way to that Third Review. We still have an effective international Nuclear Non-Proliferation Treaty, and this Government can take some credit for keeping that Treaty effective and functional. The fifth matter that I wanted to mention was the role of this Government in our relations with Washington and Moscow. In all, we have made a substantial contribution to the various negotiations which have been under way and are, in a sense still under way, which are aimed at arms control. In our dialogue with and representations to the super-powers we have made it clear that we are strongly opposed to the escalation of the arms race in outer space and that we support neither the United States strategic defence initiative, Star Wars, nor its Soviet counterpart. We view both the American and the Soviet research programs as threats to the framework of mutual deterrence on which the world's security relies. They also, in our view, threaten to undermine the anti-ballistic missile Treaty, which remains the principal achievement of arms control negotiations between the super-powers. The final matter I wanted to raise in relation to our efforts to bring about arms reductions was the aspect of the South Pacific Nuclear Free Zone. This Government is particularly proud of its initiative and achievement which led to the conclusion of the South Pacific Nuclear Free Zone Treaty. Australia and 10 other members of the South Pacific Forum have already signed this Treaty and we view it as a significant arms control measure and a positive contribution to regional security. The Treaty addresses itself to the common concerns of South Pacific nations on nuclear testing, the proliferation of nuclear weapons and the dumping of nuclear waste. Last year, on 21 August, this House passed legislation which will allow Australia to ratify the South Pacific Nuclear Free Zone Treaty. In fact, our legislation goes beyond the minimum that is technically required for this purpose. As well as covering all of the substantive provisions of the Treaty, it also reflects our policy of opposition to the manufacture, testing and stationing of nuclear weapons in or by Australia. We presently have discussions under way with the super-powers, of course, to try to ensure that they will also sign that Treaty. In conclusion, this legislation before the House is good legislation. I dare say that we would not be debating this legislation, nor would we in any way have an effective voice in international affairs on nuclear disarmament and arms control matters, were we not an exporter of uranium. We are an exporter. Being an exporter of uranium gives us a strong voice in international affairs as far as nuclear disarmament goes and the issues of world peace. I repeat: Without being an exporter of uranium we simply would not be in a position internationally to take the positive measures and stands that we have taken to contribute to world peace and disarmament. I make that point because it is often one of contention in our community. In that regard, I strongly support the export of uranium, bearing in mind, of course, that we export it only to those countries with which we have signed bilateral safeguards agreements. I mentioned earlier that there are some 11 of those, covering 19 countries, and those agreements ensure that the uranium Australia exports can be used only for peaceful purposes. I have pleasure in supporting the legislation. Dr KLUGMAN(Prospect)(6.28) —The Nuclear Non-Proliferation (Safeguards) Bill is a non-controversial piece of legislation, and I do not want to go over the basic parts of the Bill again. They have been outlined by other speakers, especially by the honourable member for Bendigo (Mr Brumby), who gave an excellent summary. My interest in this legislation and in items relating to it is considerable. For the last two years-nearly three years-I was a member of a sub-committee of the Joint Committee on Foreign Affairs and Defence, which dealt with and presented a report on disarmament and arms control. Since considerable latitude has been allowed in this debate until now, I hope that latitude will be extended to me. I would like to read part of my dissenting report, which appears at page 681 of the report of the Committee. It deals with disarmament generally, and I quote this extract especially because of the questions that were raised by the honourable member for Fraser (Mr Langmore) earlier in the debate. It reads: It is relevant to remember that there has not been a war between democracies since World War I, whilst there have been hundreds of major and minor wars, sometimes between democracies and authoritarian regimes, but most often between the latter. One important, long term objective at least, of all opponents of war must therefore be the spread of democracy with its associated civil rights and liberties. It is not possible to discuss the threat of nuclear war and the methods of preventing it, without pointing out the vast differences between the member countries of the Warsaw Pact and the Western societies. The democracies are relatively open societies and especially in the U.S.A. the executive has to justify all military expenditure in some detail to Congress and the public. Everybody can therefore be aware of the proposals for new weapons and the arguments for and against them. In the closed society of the Soviet Union no such public discussion takes place and in many cases the existence of new weapon systems or the extent of existing ones can only be obtained by traditional intelligence gathering- or spying- or the use of highly sophisticated surveillance by the U.S.A. The question of verification therefore becomes more important. Additionally Soviet propaganda and disinformation is much more effective in Western societies where public opinion can actually change government policies. Specifically on the question of the strategic defence initiative which was raised by my colleague the honourable member for Fraser, I said: Whilst far from convinced that SDI will work and accepting that there is a significant risk of destabilsation of the current position, it is my view that agreement between the U.S.A. and the Soviet Union to share results of any successful research and its installation by all nuclear powers, would be the only path likely to lead to complete nuclear disarmament. I accept that this is not very likely, but the alternative of continuing to live permanently `protected' only by the use of `mutually assured destruction', is not one that can be faced with equanimity. Those are the only alternatives that we are aware of at present. I am old enough to have been in my early teens in the late 1930s. When one honourable member said earlier that the Soviet Union may be preparing for SDI-type defences but certainly it would never be capable of perfecting them because it was too incompetent, it reminded me of the late 1930s, when we were told that the Japanese were the wrong build to be able to fly planes. We all found out very soon after that this was not true. We were told by the appeasers at that time that the Axis powers had no aggressive intentions. We are told similar sorts of things now. We are told that the Soviet Union would not know what to do with the countries of Europe if it attacked them, and so on. I hope that those people are right, but I do not think that our defence posture can be based on that view. My view on the Nuclear Test Ban Treaty, which is a significant part of this discussion dealing with non-proliferation is that, whilst I have no objections to the Nuclear Test Ban Treaty-I think it is a good idea-a much more important ban would be the banning of the testing of new delivery systems rather than the banning of the testing of nuclear material. Arguments about moratoria on nuclear testing are a propaganda exercise. The Soviet Union has not tested nuclear weapons since the middle of 1985 and has claimed much moral virtue for this position. However, if one looks at the five years ending currently, in February 1987, when the Soviet Union has said that it will resume testing-the United States has continued testing-one will note that there have been 85 Soviet and only 68 United States tests during the five-year period, even though during two of those five years there were no Soviet tests at all. In 1982 there were 31 Soviet tests and 18 United States tests. In 1983 there were 27 and 15 respectively, and in 1984 there were 27 and 15 respectively. Since 1984 there have been 20 United States tests, giving a total of 68 tests, whilst in the first three years of this five-year period, with two years at zero, there have been 85 Soviet tests. My view is that underground nuclear testing, in the case of powers that already have nuclear weapons, is not really of major concern. It is of concern in the sense of preventing horizontal proliferation, and therefore should be discouraged. But I think that members on both sides of the House sometimes make some ridiculous statements-for example, when criticising French tests in Mururoa. We talk about Mururoa being in our backyard. We are picking on a huge backyard as far as the Pacific is concerned. When we sent an Australian-New Zealand scientific group, at the invitation of the French Government, to Mururoa we found that the amount of radioactivity in Mururoa after the French tests was less than it is, for example, in this building currently. Mr Brumby —Impossible. Dr KLUGMAN —It is true. Mr Brumby —What about the new Parliament House? Dr KLUGMAN —Yes, the new Parliament House will have background radioactivity of about 25 to 30 times that of Mururoa. Members of this Parliament used to visit the Commonwealth Bank building in Martin Place, Sydney, for meetings, and some members had offices there, in the days before the Chifley Square building was completed. The background radioactivity in that building was about 50 times that of Mururoa. Mr Brumby —Will we have to wear lead suits in Parliament House? Dr KLUGMAN —I do not know whether we will have to wear lead suits. There is certainly a hell of a lot more radioactivity on flights, even to Adelaide, probably, but certainly to the United States or Europe. Mr Barry Jones —Less in Adelaide, I would have thought. Dr KLUGMAN —Less in Adelaide. In Adelaide itself there is not very much, but when one reaches great heights, there is a hell of a lot more radioactivity. I am depressed by-one could not call it intellectual debate-the lack of understanding in the Australian community on the question of radioactivity. Mrs Kelly —What about this Parliament? Dr KLUGMAN —I have not done tests, but I would think that in this Parliament the level would be about 20 times that of Mururoa. Mr Brumby —How close is Mururoa? Dr KLUGMAN —I am talking about the level at Mururoa, not what we get from Mururoa. Mr Brumby —How far is it from here? Dr KLUGMAN —I do not know-three or four thousand miles. Anyway, it is a ridiculous proposition. I am not suggesting that we should encourage the French to test there, but it is ridiculous for us to get excited about it. Let me refer to a couple of significant points. The main point we are addressing is the question of horizontal proliferation. If one looks at chapter five of our report, one will see listed the countries which currently have nuclear weapons. They are the United States, the Soviet Union, Great Britain, France, China and India. There is some doubt whether Israel has nuclear weaponry. I do not know. A large number of other countries have the ability to have nuclear weapons. Most of them-touch wood, or thank God, depending on one's religious beliefs-have little motivation. Some have some motivation and some have high motivation-or allegedly high motivation inasmuch as we can judge other people's motives. Australia, of course, is amongst the countries which would have the ability to produce nuclear weapons, but it has little or no motivation. A large number of other countries are in that category. Most of the countries of Europe are included. There are countries in South America-Argentina, Brazil and Chile-and South Korea and Taiwan which have the ability and, we say, some motivation. Then there are countries-they may or may not include Israel-such as Iraq, Libya, Pakistan and South Africa with what we consider to be high motivation to have nuclear weapons. They certainly have the capability, and they probably have significant motivation. The question of motivation is twofold. A country may feel that is must defend itself. A country may be confronted by other countries which have nuclear weapons. That is, of course, why we want to prevent horizontal proliferation. If one country has them, the other country feels that it must have them. Another point that is often not considered by people who have not thought about it is that nuclear defence is, of course, much cheaper than what we call a conventional defence force. The number of people employed is minimal and the cost of the weaponry is much cheaper than the cost of conventional weapons. My own view, and I re-emphasise it, as I said in my dissenting report, is that currently there is significant evidence to say that what has prevented major wars since the Second World War is the feeling of potential or probable mutually assured destruction. We are all worried that a smaller country perhaps than the countries which now possess nuclear weapons will come under the control of some person who may or may not be certifiable in our terms of psychiatric behaviour and who would or could start a nuclear war. I think that that is a threat and, in any case, the threat is averted only by that feeling of mutually assured destruction. When one is dealing with people who do not behave rationally, the question of mutually assured destruction does not particularly worry them. After all, we are aware of people who for allegedly reasons, but often for political reasons, are prepared in effect to commit suicide, whether hara-kiri as it was in the olden days or what is happening in the Iraq-Iran war currently. People are convinced that they will go to heaven if they do certain things and that it is the will of God that they should do them. If we are able to avoid the nuclear threat by something along the lines of the strategic defence initiative, it is an excellent solution. I emphasise that that defence would have to be available at least to the two super-powers. It is no good just one of them having it because that, by itself, would immediately mean that the other power is almost forced, if it feels threatened, to take immediate action before the installation of a perfect strategic defence system. I have made this contribution to the debate because I feel strongly about it. I feel particularly strongly about the fact that the debate is not conducted on a rational level in Australia. I do not know who to blame for it. I think to some extent governments of all political colours have to take some of the blame. Instead of trying to explain the factual situation, they find it easier to mouth slogans about peace, preventing war, being concerned with nuclear disarmament and having participated in all kinds of negotiations. While all those things have to be done, I think that one of the most important things that ought to be done is to try to educate our population to have intelligent discussions on questions of nuclear disarmament and possible potential nuclear war. There is hardly any need for me to commend the legislation because everybody agrees that it is necessary for us to safeguard our nuclear material. I appeal to honourable members to try to debate these issues rationally and to go out into the community and debate them rationally. Although I said earlier that I issued a dissent in the report of the Joint Committee on Foreign Affairs and Defence, I would point out that it is an excellent report overall. It contains some three or four dissents from different people, but overall it gives a great deal of factual information. I have asked the Minister for Defence (Mr Beazley) to provide a copy of the report to every secondary school library as a step for people at least to be able to look up factual information. Although he has not yet agreed to my request, he is certainly sympathetic to it. Mr Barry Jones —Beware the May statement. Dr KLUGMAN —The Minister says: `Beware the May statement'. I would not be at all surprised if we have produced X number of copies of the report and that people have not bought it and read it. I do not know its cost, but I believe it is around $30 and it is probably lying around Australian Government Publishing Service shops all over Australia. I feel that it should be distributed because it is bipartisan. Surely we are all keen to raise the level of factual information that is available in the community on the question of nuclear disarmament and the threat of nuclear war. Mr BARRY JONES(Lalor-Minister for Science)(6.46) —in reply-I assure honourable members that I do not intend to take my full 20 minutes, but I wanted to thank the honourable members for Dawson (Mr Braithwaite), Lowe (Mr Maher), Warringah (Mr MacKellar), Eden-Monaro (Mr Snow), Macquarie (Mr Webster), Fraser (Mr Langmore), Mayo (Mr Downer), Bendigo (Mr Brumby) and Prospect (Dr Klugman) for their contributions on what truly could be regarded as a very wide ranging debate. To recapitulate, the Treaty on the Non-Proliferation of Nuclear Weapons, which was occasionally mentioned in the debate, is the most successful and widely adhered to international nuclear arms control treaty. There are now 136 parties to the Treaty. It has made a major contribution to international peace and security. It also makes a major contribution to the security of Australia's region. All six ASEAN states and all members of the South Pacific Forum except Vanuatu are members of the Treaty. Some 30 years ago projections were that by the 1980s there would be between 20 and 30 nuclear weapon states. The NPT has been a major factor in halting such an horrific development. The Treaty has set a standard of responsible international nuclear behaviour which it is becoming politically more and more difficult to transgress. It is a matter of very great regret that a very small group of countries with nuclear industries are apparently keeping open the nuclear option. Australia has consistently urged on them membership of the NPT, the acceptance of full scale safeguards, or the development of regional non-proliferation arrangements, such as nuclear free zones, to assure the international community and their neighbours of the peaceful intent of their nuclear activities. All NPT members have faithfully adhered to their obligations. It is not the fault of the Treaty that a small number of states have failed to adopt non-proliferation commitments which the overwhelming majority of the international community has been prepared to accept. The question should not be, not why has the Treaty failed to attract these countries, but why have these countries failed to conform to responsible international behaviour. The onus is on them. Those who have remained outside the Treaty have criticised the NPT on grounds such as its recognition of the existence of any nuclear weapon states, or that the distinction between nuclear and non-nuclear weapon states which is to be found in the Treaty is inherently discriminatory. While such arguments are not without some basis, particularly granted the inability of the super-powers to put the lid on vertical proliferation, they fail completely to deal with the reality of the nuclear problem addressed in the NPT. They fail to accept the fact that control of nuclear energy, not denial, is the only safe course. To put it more bluntly and clearly, whatever flaws there may be in the NPT and within the current non-proliferation regime, it is equally clear that if the world community had failed to develop the NPT, then today's world would be a much different and assuredly a much more troubled and dangerous place than it is now. It would be a world characterised by these large numbers of nuclear weapons states which in today's unstable environment would put us in a much larger and much more turbulent powder keg-to mix the metaphors-than even our current less than satisfactory position. There has not always been a tremendous degree of candour. We know about the atomic weapons in the United States of America, the Union of Soviet Socialist Republics, the United Kingdom, France, China and India, but there are a number of other countries which have indicated antagonism for the Nuclear Non-Proliferation Treaty. The fact that they are antagonistic in itself says much for the fundamental reality and significance of the Treaty. The Bill strengthens the Australian safeguards system by putting it on a sound legal basis, giving statutory authority to the Australian Safeguards Office. There has been a strong degree of support for the Bill; so I do not need to restate all the arguments. I wish to take up one or two points. The honourable member for Eden-Monaro in his speech on Monday referred to the prospects for fusion as a possible energy source. Last October I visited the Lawrence Livermore Laboratories in California and saw one of their major projects, the mirror fusion test facility-the MFTF-B. It is a huge hollow linear magnetic fusion machine, 60 metres long, weighing 461 tonnes and planned to be used for generating plasma. The machine cost $242m to build and $150m in research and development costs to work up. I climbed into the chamber with trepidation, along with the Secretary of my Department. In February 1986 it ran for 24 hours, then the Department of Energy said: `Shut it down and moth-ball it'. The reason for this was that there had been a higher rate of success from a `closed' system at Princeton in a torus or doughnut-shaped fusion machine called the Tokamak. So fusion may well be on the way, but I think not this side of the twenty-first century. Obviously there will need to be enormous investment before the Americans get it right. As I said, when the machine ran in February it had the coldest point in the solar system, 4 degrees Kelvin, and the hottest spot, 80 million degrees Kelvin, within 30 centimetres of each other. Magnetic fields are heat insulators. Lawrence Livermore Laboratories also have a huge laser excitation project for producing fusion. There was some discussion-it was raised by the honourable member for Macquarie- Mr Peacock —What have they done with the MFTF-B? Mr BARRY JONES —It is a memorial. Mr Peacock —For your visit? Mr BARRY JONES —Well, yes. I am sure the honourable member for Kooyong, who is Opposition spokesman for foreign affairs, would be very welcome to see it. It is a most extraordinary and awe-inspiring piece of engineering. But it indicates that there is no certainty as to the most effective way to bring about fusion and obviously billions and billions of dollars will be spent before the Americans work out the right way to do it, if indeed it is technologically feasible in the long term. Some anxiety was expressed by the honourable member for Macquarie about the nuclear debate. He seems to be worried about the fact that debate existed at all. But one cannot deal with an issue which is disputed by suppression. One can only deal with it by proper analysis and close scrutiny of all the issues involved and, as the honourable member for Prospect said, we must make sure that we have access to proper information. In all too many examples decisions in high scientific matters have been made in the past by governments in total ignorance. For example, the approval of Australia as a nuclear weapons site is a very good example. The Menzies Government was very poorly informed by the British about the dangers, including fall-out, of which it barely had any understanding. The Menzies Government simply did not care to ask. There should have been a wide-ranging parliamentary and public debate. As the honourable member for Prospect said, debate could be more rational but the problem is that where deeply held value systems are involved-as is the case with the prevailing fear about atomic weaponry or indeed about almost all large scale technology whether it be Chernobyl, the Challenger disaster or Bhopal-it is very hard to get that rational approach because people are carried away by fear which reduces their capacity to express rational arguments. Sometimes even parliamentarians are perhaps a little inhibited in the same way because of the sheer complexity of the issues involved. I thank honourable members for their contributions to the debate. Question resolved in the affirmative. Bill read a second time. The Bill. Mr BRAITHWAITE(Dawson)(6.58) —by leave-I move: (1) Page 10, after clause 8, insert the following new clause in Part I: Act not to apply to visiting allied forces ``8A. (1) This Act does not apply in relation to- (a) ships, aircraft or equipment of a visiting allied force; (b) a member of a visiting allied force acting in accordance with the member's duty; or (c) a member of the Defence Force or a Commonwealth officer associated with a visiting allied force acting in accordance with the member's or the officer's duty. ``(2) In this section, `visiting allied force' means an armed force of a foreign country declared by the Minister, by notice in writing published in the Gazette, to be a visiting allied force for the purposes of this section. ``(3) A certificate, signed by the Minister, certifying that a member of the Defence Force or a Commonwealth officer is or was associated with a visiting allied force or is or was acting in accordance with the member's or the officer's duty is evidence of the facts stated in the certificate. ``(4) Where the Minister considers that it is necessary, for the purpose of preventing, detecting or investigating an offence against a law of the Commonwealth or of a State or Territory, or for the purpose of proceedings in relation to such an offence, that a provision of this Act apply in relation to a person or thing referred to in sub-section (1), the Minister may, by notice in writing published in the Gazette, declare that a provision of this Act so applies to the extent and for the time specified in the notice, and the provision shall apply accordingly.''. (2) Clause 40, page 28, after sub-clause (1) insert the following sub-clause: ``(1a) Where, at any time before or during the hearing of proceedings before a court in relation to an offence against this Act, there is submitted to the Judge or Magistrate a certificate signed by the Minister certifying that the proceedings involve or may involve matters relating to- (a) ships, aircraft or equipment of a visiting allied force; (b) a member of a visiting allied force; or (c) a member of the Defence Force or a Commonwealth officer associated with a visiting allied force, the Judge or Magistrate shall make orders- (d) that all members of the public be excluded during the proceedings; (e) that no report of the proceedings be published; and (f) prohibiting access, before, during or after the proceedings, to any affidavit, exhibit, information or other document used in the proceedings that is on the file in the court or in the records of the court.''. (3) Clause 40, page 28, line 29, after ``sub-section (1)'' insert ``or (1a)''. In speaking to the amendments and also to the Bill as a whole, I have gained the impression-and this has been borne out by the honourable member for Prospect (Dr Klugman)-that the legislation itself is not necessary. We indicated this during the second reading debate. The Nuclear Non-Proliferation (Safeguards) Bill is only as strong as those people who act outside the Treaty, not those who act inside it. We have given examples of the dangers that exist quite innocently around us. It comes back to the point that this legislation is only necessary because the Minister for Resources and Energy (Senator Gareth Evans) has a great love of legislation and amendments. Obviously that comes from his law experience. I have looked at the Senate Hansard and note that the same amendments that we are moving tonight were discussed there. At that time Senator Gareth Evans moved some six amendments to his own Bill. Although he had prepared it, nevertheless he thought that within the time that it took the Bill to pass through the Senate, those six amendments had become necessary in what must be regarded as a very complicated piece of legislation. We still wonder whether it is necessary. 38 It struck us as strange that the two amendments that we moved-they were moved by Senator Durack in the Senate-were not taken up. We believe that our amendments are very necessary to safeguard some of our allies who possess nuclear weapons and nuclear-powered vessels which visit from time to time. It surprises me that the Minister for Science (Mr Barry Jones) has not seen the wisdom of accepting these amendments. If he would, the debate would proceed a lot faster. The Opposition is seriously worried about the extent to which this Bill could be used by a government of any persuasion here to prevent the operation of our defence arrangements with our nuclear allies. It is interesting to note that when the honourable member for Fraser (Mr Langmore) was talking in connection with this he was describing those nuclear allies in less than complimentary terms, which makes me wonder whether he is not only anti-United States but also pro-USSR. The Bill in general requires a permit for the possession or transport of nuclear material, but it would be almost impossible to administer this legislation literally when it comes to the existing defence arrangements that we have with those allies. It is clear that under the ANZUS Treaty and within our traditional Western alliance we have in our defence arrangements allies which are nuclear powers and which do not as a matter of policy state whether their warships carry nuclear weapons. The ANZUS Treaty and other less formal but traditional alliances with our other allies are very important to the defence of this country. That was very much borne out by the second debate. Some of these countries possess nuclear weapons. They have ships that carry nuclear weapons; they have nuclear-powered ships, and so it goes on. As far as these international agreements are concerned, our allies quite lawfully possess that material. Whether or not some people like it, it happens to be the Government's policy to allow these ships to come to Australia, as it would be the policy of the Opposition. Indeed we welcome them, which is sometimes more than I can say for the Government. It is certainly the Opposition's policy to do this. We well know that a number of people in Australia take very active steps to protest against these particular visits. A very small and probably declining element of the Australian community is prepared to take extreme steps to make its objections to these visits known. I suggest to the Government that it would even be prone to taking the legal steps contained within the Bill before us to try to prevent them occurring-an action which we fear. The interpretation of this legislation could well be put in question by certain people in Australia for very political reasons. If this situation arose I think there would be a difficulty. There may well be a difficulty in explaining to a court exactly what is intended by this legislation and by the international instruments to which it gives effect. We are concerned that we should make it explicit that this legislation does not apply to our defence arrangements, particularly those dealing with nuclear allies. The suggested amendment seeks to insert in the legislation a provision which makes it quite clear that this Bill and all the international instruments with which it deals will not apply to our defence arrangements and, in particular, to those arrangements with allies who are nuclear armed. Not only is it not intended that the legislation should apply to these defence arrangements but also as a matter of law it will not apply to those particular allies. The fact that the Government, through Senator Gareth Evans, has confirmed this, as I have said, is some comfort for the future and, hopefully, will add strength to the otherwise powerful legal argument that would be advanced in the courts by the Government if the event that I fear did occur. We believe that it is better that the legislation express this intent and not have it interpreted by some court and judges in the future outside the full knowledge of what the Minister intended at the time. It should be made crystal clear in this legislation exactly what is intended. The other aspect of the second proposed amendment is that it deals with proceedings before a court related to an alleged offence under this proposed Act, that is, the offence of possession or transport of nuclear material. As our allies would not wish to confirm or deny that nuclear arms are being carried on their warships or their aircraft when they came to Australia, this Bill could potentially have a very serious effect on those defence arrangements. In court proceedings in relation to an offence against the proposed Act involving matters which may relate to visiting ships, aircraft, equipment or members of an allied force the court should be closed. The effect of our proposed amendment is to do this. I know a clause in the legislation will give the courts power to have a hearing in camera in relation to proceedings under this legislation. However, the Opposition's objection to that is that it is giving a discretion to the courts. As I have already said, the Opposition is not happy about the way in which such discretion might be exercised by some judicial officers. Therefore, it ought to be quite clearly laid down in the legislation in the way that is proposed. The matter of discretion was subject to amendment in the Senate. Discretions might have a part in some law, but it is the authority of this Parliament and the authority of the Government that should be carried without those discretions having to be exercised. For those reasons I hope those amendments find favour with the Government so that it can ensure a speedy passage of the legislation through this House. Mr BARRY JONES(Lalor-Minister for Science)(7.05) —This matter has already been disposed of in the Senate. In fact, the honourable member for Dawson (Mr Braithwaite) has just been reading very eloquently from the Senate debate. If, by some inadvertence on my part, the amendments were to get through, the legislation would have to go back to the Senate, so its passage would hardly be speeded up. The amendments are curious. The honourable member for Dawson began by saying that he thinks the legislation is unnecessary; he then added complex amendments which we believe to be totally superfluous to requirements and which may at one point add an unnecessary complication. These are the reasons that we do not accept the amendments to exclude the application of the legislation to visiting armed forces. Firstly, it has to be said that the issue was considered in some detail during the drafting of the Bill because it would have been an option that was open to the Government. If we were keen on superfluous legislation Parliamentary Counsel would have been foaming at the mouth looking forward to the chance to put it in the Bill. The Government certainly agrees with the intent of the proposed amendments, but it has to be said that in any event visiting allied forces would not be affected by the legislation. The legislation would not apply to nuclear weapons or nuclear material on board a visiting foreign warship or military aircraft by virtue of the common law doctrine of sovereign immunity which provides for immunity for visiting foreign warships and military aircraft from prosecution under Australian law. Further, visiting military personnel are immune from prosecution for actions pursuant to their duties under the Defence (Visiting Forces) Act 1963. We could say that a common law provision is not enough; what about a statutory provision? The statutory provision is there in the Defence (Visiting Forces) Act 1963. In the circumstances the amendments proposed by the Opposition are not necessary. The complication, as we see it, comes in the proposal to insert new clause 8A (c)-the reference to a member of the Defence Force or a Commonwealth officer associated with a visiting allied force acting in accordance with the member's or the officer's duty. Since the safeguards legislation can apply only to such persons in specified circumstances, such as those in possession of nuclear material or technology, it would appear that the Opposition envisages Australian personnel being in possession of, or having access to, nuclear material and technology of the visiting forces. That seems a very unlikely contingency if one looks at the reality of the matter. The Government rejects the amendments, and I hope that in order to get the legislation through quickly honourable members opposite will not press the matter to a division. Question put: That the amendments (Mr Braithwaite's) be agreed to. The Committee divided. (The Chairman-Mr Leo McLeay) Ayes . . . . . . . . . . . 52 Noes . . . . . . . . . . . 72 —— Majority . . . . . . . . . 20 —— Adermann, A. E. Hicks, N. J. (Teller)Aldred, K. J. Hodges, J. C. Andrew, J. N. (Teller) Hunt, R. J. D. Beale, J. H. Jull, D. F. Blunt, C. W. McArthur, F. S. Braithwaite, R. A. McGauran, P. J. Brown, N. A. Macphee, I. M. Cadman, A. G. Miles, C. G. Cameron, Donald Millar, P. C. Cameron, Ewen Moore, J. C. Carlton, J. J. Nehl, G. B. Cobb, M. R. Peacock, A. S. Coleman, W. P. Porter, J. R. Connolly, D. M. Reith, P. K. Conquest, B. J. Robinson, IanCowan, D. B. Ruddock, P. M. Dobie, J. D. M. Sharp, J. Downer, A. J. G. Shipton, R. F. Drummond, P. H. Sinclair, I. McC. Edwards, Harry Smith, W. Fischer, Tim Spender, J. M. Fisher, Peter Sullivan, K. J. Goodluck, B. J. Watson, D. J. H. Hall, Steele Webster, A. P. Halverson, R. G. White, P. N. D. Hawker, D. P. M. Wilson, I. B. C. Baldwin, P. J. Jenkins, H. A. Beddall, D. P. Jones, BarryBilney, G. N. Kelly, R. J. Blanchard, C. A. Keogh, L. J. Blewett, N. Kerin, J. C. Bowen, Lionel Klugman, R. E. Brown, Robert Lamb, A. H. Brumby, J. M. Langmore, J. V. Campbell, G. Lee, M. Charles, D. E. Lindsay, E. J. Charlesworth, R. I. McHugh, J. Chynoweth, R. L. Maher, M. J. Cleeland, P. R. Martin, S. P. Cohen, B. Mayer, H. Cross, M. D. Mildren, J. B. Cunningham, B. T. (Teller) Milton, P. Darling, E. E. Morris, AllanDubois, S. G. Morris, PeterDuffy, M. J. Mountford, J. G. Duncan, P. O'Keefe, N. P. Edwards, Ronald O'Neil, L. R. T. Fatin, W. F. Price, L. R. S. Fitzgibbon, E. J. Punch, G. F. Free, R. V. Saunderson, J. Gayler, J. Scholes, G. G. D. Gear, G. Scott, J. L. Gorman, R. N. J. Simmons, D. W. Grace, E. L. Snow, J. H. Griffiths, A. G. Staples, P. R. Hand, G. L. Theophanous, A. C. Hayden, W. G. Tickner, R. E. Hollis, C. Uren, T. Howe, B. L. West, S. J. Humphreys, B. C. (Teller) Willis, R. Hurford, C. J. Wright, K. W. Jakobsen, C. A. Young, M. J. Everingham, P. A. E. Dawkins, J. S. Question so resolved in the negative. Bill agreed to. Bill reported without amendment; report adopted. Bill (on motion by Mr Barry Jones)-by leave-read a third time. Mr DEPUTY SPEAKER —Order! It being approximately 7.15 p.m., I propose the question: That the House do now adjourn. Mr BRAITHWAITE(Dawson)(7.18) —During this sittings period I have been presenting petitions to this House on behalf of the constituents of Dawson, and more particularly the City of Mackay and the region, about the lack of Australian Broadcasting Corporation FM radio. This matter has had a sorry history. In about 1981-82 the Department of Communications not only proposed that the FM service be available in Mackay but also actually allocated funds. To my knowledge, the required equipment was able to be acquired by the Department for that transmission. In the meantime, the Department of Communications has been very tardy and slow in making the necessary arrangements. At the moment the FM signal comes through the Mackay translator on its way from Rockhampton to Townsville. Both of those centres receive the FM service but Mackay misses out. Quite a few years ago the Department of Communications said that it would move on this matter. At that time the Department said that a conflict of channels existed. This was even though that conflict was with a station as far removed as Gladstone in the south. All we are looking for is a line of vision frequency. The Department of Communications suggested that we would have to wait until the channels were altered to the ultra high frequency band before the very high frequency band became available. It is distressing to think that a community the size of Mackay, which is made up of about 90,000 people, is being denied a service just because of procrastination and lack of interest within the Department of Communications. Many people are complaining that the ABC is causing the delay. That is not the situation. The ABC would be more than happy to take the service and transmit it from Mackay if only the people within the Department of Communications would come up with an answer. This is not the only problem for the ABC within that region. The ABC station 4QA has equipment that was installed in 1949. Honourable members would have a fair idea of how ancient that would be-it is about 40 years old. That equipment is continually breaking down and there has been no effort to replace it. When it was put into service in 1949 there was almost line of vision reception. News items broadcast from Mackay are often about events in Clermont, Dysart or Middlemount, the mining areas of the Bowen Basin. But the irony is that they cannot be heard in those centres. Areas 70 or 80 kilometres from Mackay find it easier to get transmission from Townsville or Rockhampton because of the stronger beam. If the ABC is intent, under its new plans, upon giving more local content to people, particularly in new items-especially now that it has taken away the local and regional television news-this is the wrong way to go about it. I was quite surprised within the last week to find out that this is not peculiar just to Mackay. Cairns has the same complaint. Mr Cunningham —So has the Latrobe Valley. Mr BRAITHWAITE —I suppose that the Cairns hinterland would be a good example and the honourable member who has just interjected has other examples. I think it is a real tragedy that the Minister for Communications (Mr Duffy) is saying that we are expanding FM services and radio services when some places do not even have the proper facilities and services in place but have been languishing for the last 40 years. I have asked the Minister about this, and I have taken it up with the officer responsible for liaison between the ABC, the Department of Communications and the Department of Local Government and Administrative Services. For goodness sake, somebody should get out and do something. Only yesterday in this House the Minister indicated that by 1988 an FM commercial service would be available in Mackay. All I can say is that if the Department of Communications acts with the same speed as it has in connection with these complaints I have raised perhaps by the year 2000 we might be getting close to it. There is a real concern and there is a real suspicion in the city and in the region about whether the 1988 performance on FM commercial radio can be fulfilled, particularly when these other matters have been in the pipeline for the last six years and nothing has been done. I am speaking tonight to support the petitions of those people in Mackay. I ask the Minister and, in particular, the Department to come to a decision quickly so that those services can be properly offered. Mr DEPUTY SPEAKER(Mr Leo McLeay) —Order! The honourable member's time has expired. Mr MARTIN(Macarthur)(7.23) —This Sunday it will be my very great pleasure to visit a town in my electorate called Thirlmere to participate in an event which has developed some great significance for that very small town. In fact, a musical extravaganza is being put on by the people in Thirlmere in the Miners Memorial Music Shelter. In October last year it was again my pleasure to attend the official opening of that development, which has been put in place through a very large and, I also suggest to honourable members, a very important showing of community spirit. Some honourable members would know-certainly the honourable member for Throsby would know, having once represented that area-that Thirlmere is a small village located to the west of Picton. It has amongst its many charms the railway museum which has been developed over a long period for steam buffs, for historians and for people who have an interest in that form of transportation. As well, it has a very interesting streetscape. I am pleased to see that the Minister for Arts, Heritage and Environment (Mr Cohen) is in the House because I understand that his counterpart in New South Wales has taken some interest in the streetscape at Thirlmere because of its historic significance. Indeed, it is my understanding that the Heritage Council of New South Wales is taking such an interest in that streetscape that it will be looking at preserving it and ensuring that all the buildings constructed along the main street of Thirlmere conform to the rustic appearance that presently exists. More importantly, as I have indicated, the question of the construction of the Miners Memorial Musical Shelter has stood testimony to the community spirit that exists in that small village. Many honourable members would know that, over a number of years now, Thirlmere has provided homes for a large mining community that has worked in the Burragorang Valley. It was largely through community effort, particularly the miners at Tahmoor and the people who lived in Thirlmere itself, that this Miners Memorial Musical Shelter was actually constructed. The Joint Coal Board also has to be commended for making a substantial donation to the construction of this shelter where `Music in the Park' is conducted on a regular basis. This provides an opportunity for the townspeople in Thirlmere to get together in a social environment on a Sunday and to just reflect on the contribution that has been made to the local community by the miners who have worked in that area over a very long period. The Miners Memorial Gates were put in place largely as a testimony to the husband of one of the most outstanding citizens in the Thirlmere district; that is, Mrs Agnes Chalker. Unfortunately, some years ago her husband was killed in the mines. In memory of her husband and other miners who have given their lives in working in that very dangerous occupation these gates were fashioned to go across the front of the Miners Memorial Music Shelter and, as I have indicated, were officially opened in October last year. Tonight I would like to commend and to make particular mention of those people in the local area of Thirlmere who have contributed to the development of this facility. As I have mentioned, Mrs Agnes Chalker has been the driving force behind this. I commend the miners from the Tahmoor colliery and a range of other people and organisations, including the Joint Coal Board, some of the local councillors on Wollondilly Shire Council, in particular Ron Traynor, voluntary workers from the Tahmoor Colliery and the Tahmoor Washery, the Deputy Mayor of Camden, the Macarthur Country Tourist Association, the Thirlmere business centre and a number of other people who are located in that area. The fact that they have been able to get together to make available a facility that the local community actively uses, rather than building in memory to somebody an edifice that nobody takes any great notice of or puts to any use, is a very good thing for the area. The people of Thirlmere are to be commended. It is with a great deal of pleasure that I will be going there this Sunday to participate in the latest of these Sundays in the Park. I am sure it will be the forerunner of many great events. Mr DEPUTY SPEAKER —Order! The honourable member's time has expired. Mr GOODLUCK(Franklin)(7.28) —Tonight I wish to raise a very serious matter. During my speech I want to have a good swipe at a Sydney newspaper but before I do that let me say for the benefit of honourable members present tonight-I do not need to tell them as they know-that Tasmania is a State of the Commonwealth. It is good to see the honourable member for Bass (Mr Smith) present. Tasmania is a State of Australia with a population of 400,000 people. The people of Tasmania are determined-some say that they are a bit unusual but I will discount that-and they are passionately fond of their State. They love their State and they will put up with a few jokes and being the butts of jokes. I have been the subject of a few jokes in my lifetime, and the Minister for Arts, Heritage and Environment (Mr Cohen) would understand that. I have been asked `Have you got two heads?', or `How are you going with your cricket, Bruce? With six fingers you should be a good spinner', and all that sort of thing. I have been asked: `You are related to everybody in Tasmania, aren't you?' Incidentally, I probably am. Anyway, we put up with those sorts of jokes and we laugh them off and carry through because, in the main, most Tasmanians are passionately proud of their State. They love their State. That is the reason why the Prime Minister (Mr Hawke) always miscalculates on issues concerning Tasmania, such as the dams issue and now the timber industry. This Government thinks that it can walk over the Tasmanians but it cannot because the Tasmanians are very determined. I read a few of the Sydney newspapers occasionally just to see whether my name is in print because I have relatives in Sydney. Mr Cunningham —You've got an aunt. Mr GOODLUCK —Yes. I happened to read something in the Sydney Daily Telegraph dated 25 February which honestly made me absolutely mad. It gave a compliment but, by giving the compliment, it was really taking the mickey out of a lot of Tasmanians on the other. I thought that tonight they would not get away with it. I have checked with the staff of the Telegraph here. They are quite okay; they are decent people and always write fairly and appraise fairly. I do not want to burn all my bridges. They are good people up there from the Telegraph. I also rang my friend Dorian Wild who usually takes the mickey out of me but she had nothing to do with the article. Mr Cohen —Get to the point. Mr GOODLUCK —Do not get impatient. It is like the timber industry; he will cut down the trees in due course. The article is headed `Tassie folk the wizards of Oz' and states: Struth! It's enough to make you sell up the red-brick and go bush. It seems those tin-pot Tasmanians know more about our heritage-- Mr Peacock —What? Mr GOODLUCK —Tin-pot Tasmanians- know more about our heritage than ``real Australians''. A survey of 1271 Aussies has found that the Apple Islanders are more aware of Australia Day than the mainlanders. I take offence at that article, in particular calling Tasmanians `tin-pot'. The article is really saying that Tasmanians are not part of Australia even though we know more about the heritage of Australia than do Australians in the other States. There have been some very famous Tasmanians-including me. For example, Joe and Enid Lyons. Mr Robert Brown —Your grandfather was one of them. Mr GOODLUCK —Yes, and Errol Flynn, who went to the same school as I did. There is Merle Oberon. Eileen Joyce is a famous pianist, as honourable members would know. There have been many famous Tasmanians and to use the word `tin-pot' gravely offends the majority of Tasmanians who, as I mentioned before, are proud of their State and do not like a Sydney newspaper referring to them as tin-pots. If the editor does not apologise, I will bring 200 of my tin-pot Tasmanians to Sydney and we will take over the Sydney Telegraph. Murdoch took over the Press; so I will take over the Telegraph. I would like to read a little quote from another Tasmanian, Tim Bowden from the Australian Broadcasting Corporation, when he launched the book The Double Man which is written by a fellow classmate of mine Philip Koch. I think that what he said is not rude; it is great. Mr Campbell —Hurry up. Mr GOODLUCK —The honourable member should be quiet. He stated: Tasmania, you see, is the testicle of Australia, suffusing the mainland with strength and vigour. What a pity there is only one of them. Mr FREE(Lindsay)(7.33) —On Monday evening in the adjournment debate I commenced an assessment of the personality disorders of the Premier of Queensland based on an analysis of his speech patterns. Unfortunately interventions by a number of National Party members on that occasion prevented me from completing this analysis. I really feel that I owe it to the House to complete the picture. On Monday evening I was about to refer to some important new evidence which became available in the television review of the Sydney Morning Herald on Saturday, an unusual place in which to find this evidence. I offer two examples of Johspeak from that review. The first is reasonably intelligible-comparatively anyway. In response to a question he was asked on a television program the Premier stated: Well, don't let's worry about whether it's six or seven or five or four. They vary from time to time. Certain people come and go. You know that or you ought to know it. If you don't, I'm telling you now. The second example in the review is really of great interest. In fact it is so interesting that the reviewer adds a caution. He said: . . . don't adjust your newspapers . . . This is what the Premier actually said: The only ones who wish me to retire really, truly, honestly mar people empire rock solid they have got no option in lots of ways you know many ways about it but that's not necessary, the people who want me to retire are the Socialists. Those two examples of Johspeak very strongly support the manic psychosis theory as opposed to the paranoiac theory to which I referred the other evening. Page 300 of Hutt and Gibby's Patterns of Abnormal Behaviour gives a description of the manic personality which is very interesting indeed. Hutt and Gibby states of the manic psychotic: Associations of ideas continue to be accelerated, and speech is rapid and at times unintelligible. Hallucinations and delusions are shown, with delusionary systems, which are not well integrated, dominating. The delusions developed are usually those of grandeur. The manic feels that he has an unlimited amount of power and wealth at his disposal. He begins to think of himself as the wealthiest and most powerful individual in the world. In the more acute phases of mania, thought associations are speeded up to such a degree that speech becomes incoherent and does not ``hang together.'' Phrases may be unconnected. (Such speech is known as ``flight of ideas'') Despite the more superficial wealth of the associations they actually are impoverished. If we listen very closely to the speech of a manic, we find very few different ideas are actually expressed. I suggest what I have read provides very strong support for the manic theory. Certainly on the evidence available it is imperative that the Premier should be the subject of a proper assessment. It is bad enough that the Premier's candidate for the leader of the Liberal Party, the honourable member for Kooyong (Mr Peacock), was, as the Sydney Morning Herald observed on Saturday, out to dinner on the night that he should have been organising his numbers. It is even more worrying that the senior partner of this duo, the Premier of Queensland, may be permanently out to lunch. Mr HODGES(Petrie)(7.36) —On 27 January the Minister for Health (Dr Blewett) issued a Press release advising doctors that 33 prescription drugs made by two manufacturers should not be prescribed for new patients and that doctors should personally monitor patients who are already on those drugs. He said that his action had been taken as a result of recommendations of the Australian Drug Evaluation Committee. The Press release of the Minister stated: . . . that to date there had not been any reports of adverse reactions linked to possible bio-inequivalence of the products. He said medical and scientific advice to the Government was that patients satisfactorily stabilised on these products could safely continue using them with proper monitoring by their doctors. That statement is rather strange because information about drug anomalies with those particular manufacturers had been reported to the Department of Health almost two years earlier. With that Press release were a couple of pages of resolutions and explanations from the Australian Drug Evaluation Committee. Two sections of the explanations read as follows: Because of accumulating concern about the inadequacies of bioequivalence data from Gestalt Pty Ltd, ADEC believes action has to be taken on products which are dependent solely on this source for evidence of bioequivalence. After consideration of the consultants' report it was concluded that data from Gestalt Pty Ltd could not be relied upon and therefore no statement could be made about the bioequivalence of any of the products tested by this company. Again it is strange that ADEC would come to that conclusion when the information had been in the Department for almost two years. Twenty-three days later-on 19 February-the Minister for Health issued another Press release announcing that there would be an independent review of the drug evaluation functions of the Department of Health. He issued the terms of reference for that review and said that it was to report to him by 31 May 1987. Let me canvass one or two facts which are relative to the background and lead-up to these two Press releases. In February 1985 a Dr Rod Hall, a clinical pharmacologist with the Department of Health, was sent to South Africa to investigate Gestalt Pty Ltd. He came back and, I understand, made a very critical report about the operations of that company. No action was taken by the Department. I understand that the report was suppressed and pigeon-holed. About September last year a Dr Allan McLean of the Prince Alfred Hospital in Melbourne wrote to the Health Department and he also drew attention to drug anomalies with preparations marketed by two companies-Protea Laboratories and Alphapharm Laboratories. These two people had impeccable backgrounds, experience and qualifications. Both reported to the Department. One of them worked for the Department-yet no action was taken on these matters. Now the Minister is having an inquiry. `This will put the lid on the issue for a while obviously', he says to himself. `It will take the heat off and let a little time elapse. Maybe the issue will become a little more obscure'. There is no doubt that there has been a cover-up within the Department of Health regarding these two companies and the drugs that they have listed. Now the Minister is squirming. He carefully told us in one of his Press releases that he did not know about this matter until October last year. For years Protea and Alphapharm have been granted what is known as fast track listing of their products on the pharmaceutical schedule. Health standards have been jeopardised because of irresponsible officers of the Department of Health. The inquiry is welcome but no inquiry is necessary to pinpoint the individuals in the Department. Health standards have been sacrificed to cut costs-it is as simple as that. The Minister should reprimand, demote or even sack the officers concerned. The fast track listing of generic drugs for these companies has been a scandal for years. In the interests of good health practices it should be stopped immediately. There would hardly be a pharmacist or indeed a doctor in this country who is not aware of the actions of these backyard manufacturers. Mr DEPUTY SPEAKER —Order! The honourable member's time has expired. Mrs DARLING(Lilley)(7.41) —I rise in this adjournment debate to touch briefly on a matter of government policy which has been of serious concern to many constituents in my electorate of Lilley, and indeed constituents across Australia. The matter in question is the availability to the public of natural medicines, and I am particularly keen to address this matter in the House this evening because there has been considerable misrepresentation of the Government's intentions in this area. I stress that it is government policy and intention. There is no draft Bill before the House and no draft Bill in the office of the Minister of Health (Dr Blewett). Indeed, I would particularly like to clear up this misunderstanding as government policy is directed not only to continuing the same level of access to these natural treatments, but also to enhancing the safety and quality of these substances for the health and welfare of the Australian public. Honourable members will be aware of the considerable number of representations made on this matter, largely through the prompting of the Australian Natural Therapists Association. They will also be aware of the response given by the Health Minister, which categorically states the worthy intentions of the Government in future policy. The Minister assures me that the Federal Government is not intending to place restrictions on the sale or availability of popular natural medicines on the market. Nor does the Government seek to require patients to be issued prescriptions to purchase common natural remedies. The Government's intention is to continue with the present arrangements for natural medicines, but move to ensure that standards are introduced to guarantee the safety and quality of commercially produced natural medicines-mainly vitamins. This will be achieved through the introduction of a national system for therapeutic goods for human use. This system will require commercially-produced natural remedies and homeopathic preparations to be registered, and for manufacturers to be licensed to comply with a code of good manufacturing practice. However, I would like to emphasise that all existing natural remedies would be given automatic registration and proposed controls would not extend to private practitioners who prepare remedies individually for their patients. Furthermore, commercially produced natural remedies would not be subject to the same assessment requirements as pharmaceuticals. Vitamins which are now available without prescription-and that is the huge majority of vitamins-will still be available without prescription. They will not be assessed in the same manner as drugs and prescriptions will not be issued. The only instance in which a prescription will be required is where prescriptions are now required for particularly potent preparations that are currently identified and will continue to be in the future by the National Health and Medical Research Council. These substances are actually listed on the poisons schedule and require prescription for the protection of the patient. The Minister for Health has assured me that this will not change. I particularly welcome the policy of the Government in this area because I am fully aware of the considerable relief offered to many people through natural treatments. As a matter of fact, if any honourable member is interested, I will be delighted to delineate the considerable benefits of taking vitamin E on a regular basis. The level and substance of constituent response on this issue has proved to me that this represents a serious health issue, and I feel that the Federal Parliament is a worthy and appropriate forum in which to reassure the people of Australia that the Government's policy retains the needs of individual patients as its paramount consideration. I am therefore pleased to support the Government in this initiative, which I feel reflects an effective amalgamation of the economic logic of free market availability and the sensible intervention of a caring government which seeks to guarantee the health and safety of its citizens. Dr WATSON(Forde)(7.46) —I rise tonight to discuss the Austudy scheme introduced on 1 January. This scheme is just another example of this Government's never-ending ability to get things wrong. It has been one of the biggest issues in the Forde electorate over the past few months. Every time I have received a complaint from a constituent I have written to the Minister for Education (Senator Ryan) to make her aware of it. On each occasion I have been surprised to receive a standard reply referring to the disastrous Priority One program. Has this Government no shame, or is it simply blinded by its own propaganda? The young people of Australia and their parents are well aware of the failure of the Priority One program to deliver the tens of thousands of promised traineeships. They do not want to hear another word about it. They remember the glossy brochures, the hyped-up advertising campaign and the billboards which simply read: Young Australians should be seen, heard, educated, employed, encouraged, respected and all treated as if they're the future of this country. The billboards gave no indication of how young people or employers could become involved in the program. But then again, Priority One was strangled by red tape from the beginning. It probably would have taken a series of billboards with fine print to explain all the rules associated with the scheme. The replies from the Minister on the Austudy scheme also contained the usual bureaucratic references to strategies, rationalisation and reorganisation, et cetera, complete with a promise that everything will be right after 1989. I would like to concentrate on one bureaucratic decision, namely to use students' ages as the criterion for payment of secondary allowances rather than the previous basis of their grade or form. Before the change, allowances were paid to all students in year 11 regardless of their age at the time. I cannot see any sense behind the decision, but it smacks of the general centralist approach of the Hawke Government. It discriminates against my State of Queensland, the Northern Territory and the less populous States of South Australia and Western Australia. In Queensland, 43 per cent of year 11 students are aged 15 or less. The same figure applies in Western Australia, while in South Australia it is 45 per cent. In the Northern Territory it is 36 per cent. This contrasts with the situation in Victoria, where only 2 1/2 per cent of year 11 students are aged 15 or less. The Australian Capital Territory has 3 per cent, New South Wales 4 per cent and Tasmania 9 per cent. This means that students and their parents in Victoria, the Australian Capital Territory, New South Wales and Tasmania are far better off than their counterparts in Queensland, Western Australia, South Australia and the Northern Territory. The Australian Capital Territory's comparatively low figure of 3 per cent may be significant in terms of a continuing centralist approach. The discrimination against Queensland students in favour of those in the Australian Capital Territory in the tertiary education sector is well documented. There are almost three times as many tertiary places per 100,000 population in the Australian Capital Territory as there are in my home State. Perhaps it was one of the Minister's advisers who proposed the change in secondary allowances under Austudy. Perhaps it was the Minister herself because, after all, she is a senator for the Australian Capital Territory. Regardless of who it was, it is a pity that they did not look at the situation throughout the whole of Australia prior to drawing up the Austudy provisions. The 43 per cent of students and their parents in Queensland who are affected should not be out of pocket because the Commonwealth Department of Education considers that they are a grade ahead of what someone else says is the ideal level for their age. There will always be arguments among educationalist as to the ideal age for children to begin school. It needs to be remembered that those who will not qualify for assistance in year 11 are missing out because of decisions their parents made ten years ago. One could almost describe it as bordering on retrospectivity. The guidelines are not logical on that basis and neither are they logical when the general cost of education is considered. The final two years of high school in every State and Territory are the years of specialisation. At the end of Year 10 we ask students to choose a program which will hopefully lead to a life-long career. Consequently, the subjects studied in the final two years are much more complex than those in the previous years. Sometimes specialised equipment is needed as well, and there are the financial pressures on parents as the students make the transition from being young teenagers to young adults. The Minister for Education has said she would like to encourage young people to stay at school to complete Year 12 to improve their chances of getting a job. No one would argue with that. It has been long recognised that the provision of allowances for the final two years of high school might help in that regard. But the Government has failed to recognise that it costs parents just as much to keep a student aged 15 in Year 11 as it does for a student of 16. The Minister has promised to monitor the situation and I plead with her on behalf of the parents of Queensland to remove this discrimination from the Austudy provisions. I have written many letters to her on behalf of my constituents. I hope she will take them into account. Mr DEPUTY SPEAKER —Order! The honourable member's time has expired. Mr CLEELAND(McEwen)(7.51) —I rise tonight both as a member of this House and as a member of the Victorian branch of the Returned Services League of Australia. I rise in that dual capacity to express my concern at remarks made by the State President of the RSL, Mr Bruce Ruxton. I am pleased to rise tonight because Mr Ruxton has yet again been proved to be wrong-indeed, one may say very wrong. We all recall that when Archbishop Tutu arrived in Australia unseemly matters were raised by Mr Ruxton and I regret that language was used which made Australia a laughing stock throughout the world and which created an appearance for many people throughout the world that we were a very racist nation. I am sad that the Press in fact took the time and trouble to report the nonsense that Mr Ruxton said and gave it so much notoriety in the media at the time. But, of course, when Mr Ruxton was attacked on his statement, what did he say? He had the gall to say that he was representing the views of Australians-the majority of Australians. He said that he was also representing the views of members of the RSL-not just the Victorian branch or the Victorian executive, but the views of all members of the RSL and the views of the majority of Australians. He had the gall to say that and to put it through the media. Of course, Mr Ruxton is wrong on all counts, because he does not represent the views of all members of the RSL. He does not represent the views of all members of the RSL in Victoria, let alone in Australia. I believe Sir William Keys was quite correct in coming out and saying that Mr Ruxton is wrong and that he does not represent the views of the RSL. Perhaps more importantly, in tonight's Melbourne Herald there is a report of an Australian public opinion poll, a gallup poll, which asked questions throughout Australia on whether Australians supported Mr Ruxton's views. The report is very interesting because the poll, conducted over the first two weeks of February, found that 64 per cent of Australians disagreed with Mr Ruxton's criticisms of black immigration and of the archbishop. I might add that the attack on the archbishop was not just an attack on him as an individual; it was an attack on the Anglican Church and on all members of that Church, which made the attack even more disgraceful. What was interesting about this poll was that 72 per cent of those people aged 16 to 39 years of age disagreed with Mr Ruxton. I might add that it makes me very proud to be an Australian here in this House tonight to think that so much good common sense and so much decency exists in Australia and that Mr Ruxton has been so shattered and proved so wrong in his statements. But of course, he does not finish there. The report goes on to say this: Mr Ruxton today seemed surprised by the result of the Poll. Mr Ruxton said: I don't know where they took this poll. Was it in Richmond, Springvale, or somewhere in Cabramatta? Let us just analyse what this man has said. He is suggesting that somehow people in Richmond or Springvale in Victoria or Cabramatta in New South Wales are not Australian. According to the poll he is saying that if 64 per cent of Australians disagree with him those people-Australians who live in those suburbs-are not Australians and they do not agree with the rest of Australia; they are somehow different people. This man's views and comments are most alarming. Obviously he speaks from the top of his head and does not think about what he says. He is an absolute embarrassment to the Returned Services League. The man should learn to think before he speaks. In winding up let me say this: The most pleasing thing about the poll is that it says one thing to Mr Ruxton: `You are wrong, wrong, wrong'. Mr CAMPBELL(Kalgoorlie)(7.56) —Frederick Walter Collard, who died on 1 December 1986, was born in 1912 in Western Australia and represented the electorate of Kalgoorlie from 1961 to 1975. I had the pleasure of working for Fred in many campaigns. His background was that of a common man-a trade union official with the Australian Workers Union and a wartime airman, rising to the rank of leading aircraftsman before his discharge in 1946. That background was to follow him throughout his parliamentary career. Reading the Hansard record of his speeches, one is struck by the wide range of matters in which he found time to be interested. His concern for the average Australian was continually expressed in all he did. All the topics he rose to address followed Australian Labor Party policy to look after those least able to look after themselves, to better the lot of all members of the community, whether from his electorate or the wider community. In that regard, his work with parliamentary delegations overseas was highly respected. He represented the Parliament and the people of Australia in Lima, Abidjan, Geneva, New Zealand and Tokyo. Fred Collard often spoke on pedestrian subjects, but in a concerned manner; in all areas of social welfare; education, especially that of isolated children and their special needs; and Aboriginals in relation to business development as proposed in the States Grants (Aboriginal Advancement) Bill of 1968. He was a champion for reform and the maintenance or upgrading of the dignity of his fellows. As further evidence of his wide-ranging interests, he was to speak in 1966 of the benefits to isolated communities of television, thereby pre-dating the then Minister, Mr Staley, by some 10 years. However, he never made the extravagant promises that Mr Staley made. He was instrumental in swaying the Caucus of the need for special consideration for the gold mining industry in relation to gold tax. I had a special affinity with him in that area. Long time Press gallery journalist and political encyclopaedian, Ian Fitchett, recalls that Arthur Calwell was so sure of the worth of Fred Collard and Kalgoorlie that a week before the 1963 election he vigorously electioneered in Kalgoorlie-probably to the detriment of the rest of the country, because it was a campaign he lost. More often in opposition than in government he was a debater of terrier-like qualities and never let a chance go by to show up the Government, giving great support to his leaders. I and my staff extend our sympathy to his family, especially his daughter Judy who resides in Kalgoorlie. Question resolved in the affirmative. House adjourned at 7.58 p.m. The following notices were given: Mr West to move- That, in accordance with the provisions of the Public Works Committee Act 1969, the following proposed work be referred to Parliamentary Standing Committee on Public Works for consideration and report: Construction of Air Movements Cargo Hangar at RAAF Base Richmond. Mr Barry Jones to present a Bill for an Act to provide for the establishment of the Com- mission of Inquiry into the Lemonthyme and Southern Forests, and for related purposes. The following papers were deemed to have been presented on 25 February 1987: Census and Statistics Act-Australian Bureau of Statistics-Statement of disclosure of information-1987-No. 2-List of names and addresses of agricultural establishments for Australian Meat and Livestock Corporation. Defence Act-Defence Force Remuneration Tribunal-Determination-1987-No. 1. Public Service Act-Determinations-1987-Nos. 3, 6. The following answers to questions were circulated: (Question No. 4695) Ms McHugh asked the Minister for Aboriginal Affairs, upon notice, on 25 September 1986: (1) What was the (a) number of person hours involved in the (b) cost of outside contract surveying and drafting services used by his Department and instrumentalities responsible to him in (i) 1984-85, (ii) 1985-86 and (iii) 1986 to date, including work contracted out to the Australian Survey Office and the Department of Housing and Construction. (2) Are there any instances where surveying or drafting requirements have not been satisfied due to limitations on the resources of (a) his Department or instrumentalities responsible to him, (b) the Australian Survey Office or (c) the Department of Housing and Construction; if so, what are they. Mr Holding —The answer to the honourable's member's question is as follows: (1) The following information has been provided to me by the respective portfolio agencies. Department of Aboriginal Affairs (a) (i) Nil (ii) Approximately 35 person days (iii) Nil (b) (i) Nil (ii) $14 498.60 (iii) Nil Australian Institute of Aboriginal Studies (a) (i) Nil (ii) Nil (iii) Nil (b) (i) Nil (ii) Nil (iii) Nil Aboriginal Development Commission (a) (i) Approximately one person day (ii) Approximately 1/2 person days (iii) Approximately 5 person days (b) (i) $500 (ii) $250 (iii) $2361 Aboriginal Hostels Limited (a) and (b) maintains no detailed statistics on the cost of outside contract surveying and drafting services but has estimated average usage at 210 person hours per year at a cost of $6000 per year. (2) The following aggregate answer is provided for the Aboriginal Affairs portfolio. (a) No. (b) The Australian Survey Office is responsible for the staffing and funding of its surveying services. (c) The Department of Housing and Construction is responsible for the staffing and funding of its drafting services. (Question No. 4808) Mr Tickner asked the Minister for Defence, upon notice, on 17 October 1986: When can I expect an answer to my question No. 2938 placed on notice on 29 November 1985. Mr Beazley —The answer to the honourable member's question is as follows: The answer to question on Notice No. 2938 was published in Hansard of 17 February 1987, page 49. (Question No. 4809) Mr Tickner asked the Minister for Defence, upon notice, on 17 October 1986: When can I expect an answer to my question No. 3369 placed on notice on 13 March 1986. Mr Beazley —The answer to the honourable member's question is as follows: The answer to question on notice No. 3369 was published in Hansard of 13 November 1986, page 2968. (Question No. 4989) Mr Macphee asked the Minister for Communications, upon notice, on 28 November 1986: (1) Has Telecom participated in meetings of a Product Protection Committee; if so, (a) what is the purpose of the committee and (b) have senior management and the Telecom Board of Commissioners been kept informed of its activities, including having access to the minutes of the committee and any sub-committee. (2) Did he state in a letter to me, dated 18 August 1986, that Telecom has no Product Protection Committee or Product Protection Group in the Directories area. (3) Does he intend to take any action if such a committee exists. (4) What proportion of Telecom's annual profit is derived from commissions it receives on its Yellow Pages directories service. (5) What has been the net annual profit from Telecom's Yellow Pages in each year since 1980-81. (6) Why did Telecom, when making the payment of about $US1 million to the owners of Australian Directory Services (ADS) in connection with their acquisition of Directories Australia make the payment through a reduction in royalty payments to Telecom to Directories Australia instead of ADS, which had allegedly suffered significant additional costs in developing alternative selling records as a result of Directories Australia's behaviour. (7) If ADS did incur additional costs and part, or all, of the $1.5m was compensation for that loss, why was it paid to Directories Australia as capital rather than to ADS as revenue? Mr Duffy —The answer to the honourable member's question, based on advice from the Australian Telecommunications Commission, is as follows: (1) There is no ``Product Protection Committee'' in the Directories area of Telecom. Telecom, on its own account, and in conjunction with its contractor has from time to time engaged in the normal business of competitive analysis, but at all times within the bounds of normal industry ethical standards. Senior Telecom and contractor management form a group called the Yellow Pages Management Group (YPMG) whose purpose is to provide overall direction to the management of the Yellow Pages and to approve expenditure on items such as Promotion and Advertising and Market Research. Product protection is usually an item on the agenda of YPMG meetings. (2) Yes. (3) There is no such committee (See reply to (1) above). (4) and (5) Telecom regards details of profit derived from the Yellow Pages directory service as commercial-in-confidence. (6) Telecom contributed to the settlement by an offset in royalties as a matter of convenience to Telecom. As no budget had been allowed for this event, Telecom took the view that it was simpler to effect payment by issuing a credit note to Directories (Aust) (who had recently been taken over by the owners of ADS) which allowed them to offset the about $US1 million against royalty payments. (7) Telecom did not co-operate with Australian Directory Services (ADS) to transfer a revenue payment to a capital payment. There was no discussion to this effect between Telecom and ADS. Telecom was not a party to, nor was it aware of Australian Directory Services internal accounting procedures which would have resulted in tax benefits by ADS.