Monday, 23 March 1987 Madam SPEAKER (Hon. Joan Child) took the chair at 2 p.m., and read prayers. Mr BRAITHWAITE(Dawson) —Madam Speaker, I seek your indulgence to raise a matter of privilege. Madam SPEAKER —Please proceed. Mr BRAITHWAITE —I refer to an article by Roy Eccleston on page 20 of the Saturday, 21 March 1987, edition of the Melbourne Age newspaper with the headline: `Hotel bill claim angers Kelty'. I read the following excerpts from that article: The ACTU secretary, Mr Bill Kelty, denied yesterday that he had claimed more than he spent on hotel accommodation during a trip to Europe last year partly sponsored by the Government. . . . . The Opposition trade spokesman, Mr Braithwaite, asked during question time on Thursday and again yesterday whether Mr Kelty had overstated his Swedish hotel bill by $200, and also overstated other hotel bills. . . . . Mr Kelty told `The Age' yesterday that the department had made a mistake. He said he had paid the Swedish bill partly by credit card, which came to just under $600, and the rest in cash. The total cost was about $1000. He said he had notified his legal advisers and would sue Mr Braithwaite or anyone else who said he had claimed more than he had spent. I refer honourable members to Pettifer's House of Representatives Practice and the chapter headed: `Attempts by improper means to influence Members in their parliamentary conduct' and particularly to the part headed `Attempted intimidation of Members', and I refer particularly to the case of Browne and Fitzpatrick of 8 June 1955. The questions that I asked in this House resulted from requests under the Freedom of Information Act, and I believe that Mr Kelty did overstate his hotel bills, although Mr Kelty denies this. Clearly what Mr Kelty has been reported as saying is an attempt to intimidate me as a parliamentarian or indeed any parliamentarian who has quite properly drawn to the attention of the Parliament matters of a questionable nature. Madam SPEAKER —I tell the honourable member for Dawson that I will consider the matters he has raised and report to the House at the earliest possible opportunity. Madam SPEAKER —I inform the House of the death on 21 March of Mr Arthur Neiberding Fuller, a member of this House for the division of Hume from 1943 to 1949, 1951 to 1955 and 1961 to 1963. As a mark of respect to the memory of Mr Fuller, I invite honourable members to rise in their places. Honourable members having stood in their places- Madam SPEAKER —I thank the House. Mr HAWKE(Wills-Prime Minister) —I inform the House that the Minister for Trade (Mr Dawkins) is absent until 25 March on official duty in New Zealand, and the Minister for Primary Industry (Mr Kerin) will respond to any questions relating to Mr Dawkins's portfolio. As a matter of courtesy, I also inform the House that the Minister for Employment and Industrial Relations (Mr Willis) will be absent from Question Time on Government business and any questions which would normally be directed to Mr Willis should be addressed to the Minister for Immigration and Ethnic Affairs (Mr Young). Mr HOWARD —I refer the Prime Minister to reported statements last Friday by the Treasurer that there would be a reduction in interest rates following the May economic statement and the August Budget. Bearing in mind the assertion by the Chairman of the Indicative Planning Council for the Housing Industry, Professor Fred Gruen, that market rates would have to fall by at least 3 per cent to reduce the current 15 1/2 per cent housing rate-and presumably by at least 5 per cent to reduce existing borrower rates to below 13 1/2 per cent-does the Treasurer's forecast therefore encompass a reduction in housing interest rates by the end of this year? Mr HAWKE —Let me make two points in answer to the question from the Leader of the Opposition. My friend and colleague the Treasurer indicated in his statement that there would be scope for a fall in interest rates. That statement is consistent with everything that I have said and that has been said by other commentators. Both the Treasurer and I have made it clear that it would be irresponsible to be precise as to actual timing. All we have said is that, as far as this Government is concerned, it has in place fundamental macroeconomic policies that will create the environment for a declining interest rate regime, but, of course, there are external factors outside of our control that will dictate the timing of such falls in interest rates generally and, following on from a fall in interest rates generally, a fall in mortgage rates. Secondly, I make this point: While the policies of this Government are clearly calculated to and will produce that environment for a falling interest rate regime, that is in stark contrast with the totally irresponsible statements of the Leader of the Opposition. He remains saddled with a $16 billion credibility gap. Mr Carlton —Rubbish! Mr HAWKE —That is a very precise description of his policies-rubbish! Of course, the fact, as is well known by every commentator, is that, if the Opposition were ever to be in a position-which fortunately it will not be-to bring in those sorts of policies, this country would see an explosion in interest rates the like of which it has never seen before. Ms FATIN —Will the Treasurer inform the House of the measures that are required to ensure continued firmness in fiscal policy? Mr KEATING —The very subject upon which the Leader of the Opposition based his question, and the Prime Minister's reply, goes to the issue of the need to maintain, at least at the fiscal policy level as well as other levels, a reduction in the demands of the public sector upon Australian savings so that those savings may best be directed to where Australia needs them at this time, which is in the replacement and improvement of the capital stock to lift Australia's export and import competing capacity. The difficulty that the Government has all of the time in trying to maintain the whole structure and sense of discipline in the community is being diminished by the unrepudiated tax commitments of the Leader of the Opposition which, as the Prime Minister said, stand at $16 billion, being $14 billion plus the current deficit-the $14 billion of stated losses which I annotated and handed to the Leader of the Opposition in the sitting week before last and asked him to write to me to show where they were wrong and where they should be corrected. They stand on the record. Yet we now find that there is a secret strategy document released by the Liberal Party of Australia which promises a $5 billion reduction in public outlays, which would leave, even on the Opposition's figures, $9 billion defined and then the removal of the current deficit. The fact is that those savings, net of sales of assets, add to a gross $2.3 billion-that is, the savings that are indicated in the secret strategy document published in the today's Australian, the Australian Financial Review and other papers add to $2.3 billion. Already, before the day is out, we have seen the Leader of the Opposition back off two commitments-that the age pension ought to be extended to 65 years for women and the abolition of the first home owners scheme. So we are talking about net savings of $2 billion to match $14 billion in tax loss commitments through the Opposition's taxation policy. Let me go through some of the cost to the Budget of these sorts of policies. The abolition of indexation of pensions occupies almost half of the savings total of $1,300m. I would be very interested to know whether the Leader of the Opposition thinks that that is a good policy and whether he would stick with that policy. He said on the weekend: `It is no good in opposition making commitments you will walk away from in government. I would rather make fewer commitments'. No doubt this statement has been put out to make him look more hairy-chested in the current environment, given the fact that he has had 18 months to bring down coherent fiscal wages and tax policies, and that 18 months down the road we have had to rely on a leak-a leak which has obviously been defended by his office-to try to flesh these points out. Some of the costs to the Budget of these sorts of policies are: Abolition of indexation of pensions-$1,300m. Abolishing all unemployment benefits to 15- to 18-year-olds would save $140m. Tighten supporting parents benefits: No saving. The Government has already taken action in this area and is achieving savings on Forward Estimates of $25m. Increase in the female age pension eligibility in 1987-88 from 60 to 65: A saving of $50m in the first year. But he backed off that this morning. Tighten eligibility for widows' pensions: No details given. In health, reduce the Medicare rebates from 85 per cent to 75 per cent in 1987-88: A saving of $180m this year and $300m in a full year. Abolish bulk billing: Savings at this stage cannot be estimated, but obviously there would be some modest saving to the system. Increased charges for pharmaceutical benefits from $10 per prescription to, say, $15: A saving of $120m in 1987-88 and $270m in a full year. Abolish the community employment program and Jobstart: $350m. Institute compulsory work for the dole: The costs are $700m, so the net savings on that package would actually cost $350m. Industry assistance: Abolish Austrade for a saving of $130m. A 20 per cent reduction in bounties: A saving of $46m. Abolish the fertiliser subsidies: A saving of $83m. Holding Commonwealth staff to zero increase: A saving of $35m. In education, abolish the equity and participation program: A saving of $46m: Abolish the Commonwealth Schools Commission: A saving of $6m. There are a number of other minor savings but they add up to $2.3 billion. On my sums, that is about $12 billion less than the Opposition needs to find to fund the tax commitments that it has let stand on the record. After the Leader of the Opposition this morning walked away from the commitment to extend the age pension to 65 years for women, there is $2 billion, of which $1,300m comes from taking the indexation of pensions away. What we finally see is that the Opposition would not have the guts to go through with that, so there would be virtually no savings to match the $14 billion of outlays it has got. The fact is that, 18 months into his leadership, the Leader of the Opposition has no fiscal policy, no tax policy and no wages policy. Over the weekend we had this urgently leaked document. The Australian Associated Press service said today that a spokesman for the Leader of the Opposition defended the leak of a secret report, showing that the Leader of the Opposition would make giant spending cuts if the Leader of the Opposition was elected Prime Minister. We are down to this: Eighteen months down the road there is no policy; there is only a leak. To make him look good over the weekend and to show that he is a hairy-chested Budget cutter, he sacked the shadow Minister for Foreign Affairs. So, he is not only a hairy-chested Budget cutter, but a sacker! Last week's wimp is this week's hairy-chested, strong, tough Leader of the Liberal Party. We want to see some solid numbers, and we would like to know from the Leader of the Opposition whether he believes in the non-indexation of pensions. Let him stand up and confirm and defend, as his staff does, this document, and say whether he stands for the non-indexation of pensions. Let him say where he stands on the yet unrepudiated $14 billion of tax commitments which I have read out line by line, for which I have given the authority in detail, and to him, and which he has not repudiated. Let us find out whether the new strong `Leader' of the Liberal Party stands for some decent public policy or whether he is going to run around with grab bags of tax commitments. It is very interesting that the $1,300m he would save by scrapping the indexation of pensions would just pay for the abolition of the capital gains tax, the fringe benefits tax, entertainment and substantiation. The Opposition, basically, will rip pension increases from pensioners so that it can abolish the capital gains tax, give back free lunches, free cars, and all of the other fringe benefits elements and thereby look after the people it looked after for years when it let them slip through the 60 per cent tax rate by the tax system it had which was full of holes. That is equity Liberal style in 1987-belt pensioners to give millionaires tax cuts through the abolition of the capital gains tax. Massive increments in wealth on the stock market will be given back to them so it can belt the hell out of the pensioners who cannot defend themselves. I would like to know from the Leader of the Opposition whether he supports the non-indexation of pensions. If he decides to backslide on that issue, let him be pinned down by the public and the media of this country about where he stands on not only fiscal discipline but also simple, decent equity. Mr SINCLAIR —I ask a question of the Treasurer. Given his sensitivity on matters affecting the lodgment of tax returns, can he advise the House when the imputation of dividends and foreign tax credits legislation will be introduced, and what changes are there to be to the policy announcements that he made earlier this year, given that each are to apply to taxpayers' dividends from 1 July 1986? Mr KEATING —Let me use this opportunity to repeat the glowing reference in the Economist last week to the Government's imputation legislation. It said, and it is right, that it is the purest and most effective imputation system in the world. What it will do is, for the first time, remove the impediment to the formation of equity in this country where we have been taxing equity twice and debt once. Mr N.A. Brown —Where is the Bill? Mr KEATING —Hang on; the honourable member will get an answer. Would not one think that the so-called party of free enterprise-the coalition-would have thought that there was some justice in removing the double taxation of dividends; that if one set oneself up as a partnership, a trust or an individual one does not pay tax twice on the earnings of a business but, if one happens to incorporate, one does? Australia, under this Government, will be the second country in the world to have a full imputation system. We will do it for a corporate rate of 49 per cent. The Germans do it for a corporate rate of 56 per cent. It needs to be well understood that not only will our imputation system be superior to that which operates in Germany but also we will do it with a company tax rate seven percentage points lower than that which applies in West Germany. It will be one of the major factors in improving capital formation in this country and will lift the capital stock which was disastrously smashed and hit when the Opposition was in government. How can honourable members opposite raise their heads, when we saw the massive destruction of capital assets through the 1970s, particularly in the manufacturing sector? I can understand the Opposition's embarrassment when we talk about bringing forward legislation. It will be in this session. The system will begin on 1 July this year. I was at a dinner on Friday night and people in the financial markets and the stockbroking industry are just starting to comprehend the importance of imputation. What a revolutionary change. It is the revolutionary change to the business tax system. I hope those opposite are embarrassed about it, because they ought to be. All they ever did when they were around was hand out protection. Mr Sinclair —What are you going to do about it? Madam SPEAKER —Order! The Leader of the National Party will cease interjecting. Mr KEATING —That will be legislated as well. All that happened on the other side was that members of the Opposition doled out protection to these industries so they became inefficient and, finally, with their manipulation of the exchange rate, by overvaluing the exchange rate, there was a flood of imports. Not only did it wreck farmers' incomes and rob farmers of their just returns, but at the same time it decimated our industries with a flood of imports. This is the first Government that has come along and decided to fix the basic fundamentals of capital formation so that we have not got a massive impediment to the stock exchange of mobilising funds against the acquisition of debt. For the first time ever from a Labor government we have got the basis for the proper formation of capital in the economy. So we can see a higher level of investment and a better performance on our current account. If those opposite are embarrassed about it-- Mr Hurford —Sinclair is opposing it. Mr KEATING —Is he opposing it? It will be interesting if those opposite oppose it, because if they oppose it they will be running true to form; that is basically giving the lurk merchants a go while refusing the legitimate people in business. That is why business has seen right through them and that is why business will never have them. Talk about deck chairs on the Titanic; it does not matter who leads those opposite, they will be washed to one side by business as quick as a flash because the business community realises that their election would simply be an attack upon its earnings and upon its longevity. Mr O'KEEFE —My question is to the Prime Minister and it concerns the issue of industrial disputation. I ask: Can the Prime Minister inform the House of the Government's record on industrial disputation? Mr HAWKE —There are many things of which this Government is entitled to be proud in its four years of office, but I guess there are probably very few of which we are more entitled to be proud than the way in which, under the policies followed by this Government, we have more than halved the level of industrial disputation in this country. While that is important and is recognised by people in this country and overseas, there are other measures of the performance of this Government in the area of industrial relations which, in some sense, are even more important, but before I go to those, let me make the point that it has been a matter of very considerable pride to me in representing this country overseas, particularly, may I say, in Japan-both there and when I have been talking to Japanese leaders here, as I was when the Japanese investment mission was recently here- to be told by the Japanese in unqualified terms that they recognise the very significant improvement in the industrial relationship in this country. In fact in the decisions which the Japanese are in the process of taking about lifting their level of investment in this country, one significant factor that they have taken into account is the very large improvement which has taken place. I was saying that the question of industrial disputation is just one measure. If we look at the contributions that have been made by Australian working men and women and their representatives, we have to take into account the historically unprecedented situation that where there has been very significant economic growth, the working men and women of this country have allowed themselves to endure a significant reduction in real wages. That is the first time that that has happened in the history of this country. We have had significant real economic growth. Working men and women through their representatives in the trade union movement and their negotiations with government said: `It is appropriate at this time to have a real reduction in wages'. Let us see what they have contributed to the rest of their fellow Australians. The basic thing they have contributed by accepting the reduction in real wages is an increase in the number of jobs, to the tune of three quarters of a million. There are three quarters of a million more Australian men and women, and young men and women, in jobs-nearly 80 per cent of those in the private sector-because the trade union movement and working men and women in this country have co-operated by accepting a reduction in the level of real wages. They are to be congratulated for the fact that they can see ahead. They can see their children in accepting at this time a reduction in the level of real wages. Of course, a corresponding economic fact has been that as they have accepted a reduction in the level of real wages so has there been a lift in the profit component of the national accounts and we have had our international competitiveness restored to the best position it has been in for two decades. I say to the honourable member for Burke that that is the record of this country, not something that has been achieved just by sensible policies; it has been achieved with the co-operation of Australian working men and women. It is in that context that I am sure the honourable member for Burke and the people of Australia will be aghast when they have revealed the duplicity of the Liberal Party in this area. Not only is it the President of the Liberal Party who preaches deceit and deception-`Let us say one thing publicly but believe in another thing privately'-but as my friend the Treasurer said in answer to the previous question, we have had revealed to us today the secret agenda. The front page of the Australian Financial Review reads: `Liberal Party's secret agenda'. What does the Australian newspaper say in this area of industrial relations about the implications of the Liberals' secret agenda? Just let me read the first two paragraphs of the article: The Federal Liberal Party has been warned by its secretariat that a Howard government might face a general strike early in its first term and could be forced to a double dissolution by a hostile Senate within six months. The scenarios are contained in a damaging draft document prepared by the Liberal Party's federal secretariat late last year and leaked last night. So here we have it again. These people never learn. What did they do by their policies of industrial confrontation in the period 1975 to 1983? They brought this country to its knees. They forced a wages explosion. They forced a situation of high levels of industrial dispute by industrial divisiveness, industrial confrontation, setting Australian against Australian. And now at the very heart of their secret agenda is the deliberate creation of another situation of industrial chaos in this country. We know what that would do. In one fell stroke it would destroy the renewed reputation that this country has created in the minds of overseas investors that now we do have a situation of co-operation in which trade unions and employers work together and co-operate. But they would destroy that in one fell swoop. I say to the Leader of the Opposition and those behind him who have been responsible for drawing up this secret agenda: Keep your hatred, keep your bitterness, keep your confrontation for the Liberal Party and between the Liberal Party and the National Party. It you hate one another, that is your business. But do not seek to perpetuate divisiveness and confrontation in the industrial relations of this country. Now that your secret agenda is out the people will make their judgment. They had enough of you in the seven years 1975 to 1983. They threw you out because you set Australian against Australian and you are about the same sort of business again. I can tell you what the results will be when the Australian people are called upon to make judgment about you, whether it be in 1987 or 1988: They will reject you again. Mr SHACK —In the previous answer the Prime Minister mentioned employment growth. Will he please explain to the House why in February 1987 the unemployment rate for young people aged 15 to 19 years stood at 23.3 per cent-2 per cent higher than the figure for the same period a year before and almost 2 per cent higher than when the Priority One campaign was launched by the Prime Minister in August 1985? Mr HAWKE —I am surprised that any member of the Opposition would address any question to this Government on the area of youth in this country. I remind the honourable member who asked the question of what the facts are: In the last 12 months in which those opposite had the responsibility for managing the Australian economy, they threw an additional 250,000 Australians, including many young Australians, on to the unemployment scrap-heap. That was their record and, as I have said, they did it without benefit of any dramatic loss in the terms of trade. They did it all by themselves. They had neither the courage, nor the competence, nor the wit, nor the intelligence to follow sensible macroeconomic policies. I remind the honourable member and this House of what the Government has done in this area. We have attacked the problems confronting young Australians in a comprehensive way. The first thing we did was to follow economic policies which have resulted in the highest level of employment growth in Australia's post-war history. I remind the House that three-quarters of a million new jobs were created, with over three-quarters of those in the private sector. Madam Speaker, I ask you and the House to recall this fact: Despite the enormous loss in the terms of trade, some 18 per cent since the beginning of 1985 and including a 3 1/2 per cent further fall in the most recent period, we have still in the last 12 months had an increase in employment of 131,000. That figure included jobs for young people. We have not contented ourselves with simply dealing with the problems of young people in the area of employment, but we have seriously addressed the question of trying to ensure that as many of our young people as possible will have as long a period in the education process as they possibly can. I remind you, Madam Speaker, and this House of perhaps the single most important statistic affecting young people: By the time those opposite left office they had achieved just about the lowest rate of retention in secondary education of any Western country. They handed over a retention rate of 36 per cent. That was the retention rate of young people in this country staying in the education system beyond the compulsory school age. We set about dealing with that. As a result, by the end of 1987 more than 50 per cent of our young people will be staying in the education system. We also inherited the unbelievable stupidity that these people were making it more financially attractive for people to go on the dole than to stay in the education system. We will have operating from next year a system whereby there will be no financial incentive for young people to go on the dole rather than to stay in the education system. What have we done about places for young people in the tertiary system? The record of the conservatives in their last four years of government was to create 8,000 additional places in the tertiary system. What has been the record of this Government? We have created 37,000 new places. When one looks at what we have done in employment creation, secondary education and in tertiary education one will see that we have comprehensively and realistically tackled the problem. The fact remains that, despite all those things that we have done in education and employment, there are young people who would not be able to get a job in the normal productive economic processes. So we brought in the community employment program. The community employment program was calculated to give employment experience and opportunities to the longer term young unemployed. But what is the Opposition's proposal? Under the leaked secret document which the Opposition does not have the guts to reveal to the Australian people it will abolish the community employment program. It will abolish Jobstart. It will abolish every single employment creation or training program that this Government has brought in. As far as this Government is concerned, I repeat that, whenever the election is called, we will stand up on every platform in this country and contrast the abnegation of the responsibility to the young which characterised the seven years in office of those opposite, and we will stand up with pride and show what we have done in our four years in office. Mr MARTIN —I refer the Minister for Social Security to reports that the Opposition would chop pensions to reach its target of spending cuts worth $2 billion in its first week in office. Can the Minister inform the House of the effect of such action on Australian pensioners? Mr HOWE —I thank the honourable member for his question. Quite clearly, the document shows that any Opposition claim related not only to the development of any sort of sophisticated social policy but also, more seriously, to the concept of any fairness in social policy has been out of the window for a very long time. I think everyone in this House recognises the importance of indexing pensions. The indexation of pensions was a significant reform of the early 1970s, a reform which has been especially important during the very difficult economic times we have experienced since then and especially important in framing Budgets in which there is any component of fairness. The notion of freezing pensions or suspending indexation is not new. It occurred, for example, between November 1978 and November 1979. During that period no increase in pensions occurred. During the Opposition's term in office pensions fell in real terms by 2.4 per cent. Perhaps even more seriously, the value of pensions for pensioners and beneficiaries with children fell during the Opposition's term in government by 34 per cent. In terms of our record, we have sought to redress the inequity of those years. During the period we have been in office there has been an increase in pensions in real terms of 5.7 per cent. For pensioners and beneficiaries with children there has been a real increase of more than 30 per cent. It is interesting to reflect that the views in the document have been canvassed before within the House, particularly with respect to pensions. On that occasion I raised the statement made by the honourable member for Maranoa who had suggested that there was no reason why we should be giving pensioners or anybody else in the community any more money. Apparently that statement caused some concern in the joint Opposition party room-I think, understandably. No doubt some members, and particularly back benchers of the National Party, feel some concern about saying to pensioners prior to an election: `You are going to have to take a chop'. So there was some concern. The honourable member for Richmond, who has been notable for the absence of any clear and firm statement of policy on anything since he has been the shadow spokesman on social security, was apparently told to come out with a statement in relation to the question of indexation. Apparently he was told that only for the purposes of the party room because, as we are all aware, there are enormous divisions between party rooms and divisions within party rooms. Pensions are a very serious subject. The statement was never made by the honourable member for Richmond. It was not made in the Parliament, and it was certainly not made by the Leader of the Opposition, because there is the secret plan, which is essentially a plan of reducing the standard of living-- Mr Blunt —Madam Speaker, I take a point of order. The Minister has said that a certain statement has never been made. I refer him to my statement dated 3 March 1987. Madam SPEAKER —Order! There is no point of order. It may be a point of explanation, but it is out of order. Mr HOWE —The honourable member for Richmond has been so quiet as the shadow spokesman that for the most part he is able to do his business by correspondence with country newspapers, rather than out in the open. The honourable member for Maranoa has a degree of honesty; he said he wants to see pensioners squealing like stuck pigs. Indeed, there will be some squealing if these propositions go ahead. Mr Ian Cameron —I raise a point of order. Madam Speaker, that is not what I said and I ask the Minister to withdraw that statement. Madam SPEAKER —Order! Would the Minister withdraw the comment? Mr HOWE —The phrase `squealing like stuck pigs' in relation to cuts was certainly used by the honourable member for Maranoa. I will not withdraw that because it was a quote. Madam SPEAKER —I did not realise that it was a quote. It is a quote, so it will not be withdrawn. Mr Ian Cameron —Madam Speaker, I would like to explain that I was referring-- Madam SPEAKER —Order! The honourable member may have the right to make a personal explanation after Question Time. Mr Ian Cameron —I ask the Minister to withdraw that quote. It is not what I said here in the House. Madam SPEAKER —Order! The honourable member may ask for leave to make a personal explanation at the correct time. Mr Ian Cameron —I ask for leave. Madam SPEAKER —The correct time is after the presentation of papers. Mr HOWE —While people within the honourable member's electorate will no doubt be extraordinarily concerned about the attack, not only on age pensioners but also on the invalids, widows and unemployed with children, while they are squealing and expressing their legitimate concern, let me say that their friends in the provincial towns and cities, under a conservative government-the Leader of the Opposition will not deny this-will be eating their lunches in restaurants, paid for by the taxpayers, driving around in hire cars paid for by the taxpayers-- Mr Hawke —It will be paid for by the pensioners. Mr HOWE —As the Prime Minister said, effectively it is the pensioners who will suffer these kinds of cuts, under the coalition, in their standard of living. They will be sitting there while millionaires are getting their pensions and while people in expensive restaurants are eating the food out of their mouths. If I could just paint another picture which flows out of the secret policy we have had revealed today. Mr Goodluck —I raise a point of order. I take offence at the statement of the Minister `taking the food out of the mouths of the pensioners' because it is not true and he knows it is not true; he is alarming the pensioners. Madam SPEAKER —Order! The honourable member for Franklin is quite out of order. The honourable member will resume his seat. Mr HOWE —The honourable member for Franklin should have the guts to stand up in the party room and stop this kind of stuff that is going on. He deserves all he is getting. Mr Spender —Madam Speaker, you have allowed the Minister to go on now traversing everything save the question, talking about-- Madam SPEAKER —Order! The honourable member has not point of order. He will resume his seat. Mr HOWE —I can understand, under the scenario I am painting, that there is the prospect in the honourable member for Maranoa's electorate of women aged 60 going on to unemployment benefit and being work tested, flowing out of this policy. Of course, there will be squealing and concern; so what does the Opposition propose? It proposes to abolish funding for the Australian Council of Social Service, so that organisation cannot lobby on behalf of the people that the Opposition is setting out to attack. I think this Government recognises that these are very difficult times and that people, as the Prime Minister has said, have had to take some reduction in their standard of living; but it is a question of fairness and some kind of decency, and it is a question of who is on the hit list of the Leader of the Opposition. It is not only the honourable member at the back over there who is on his hit list. It is the people of Australia, and in many respects those least able to look after themselves, who will be singled out for the most destructive attacks and cuts by this Opposition. Mr KATTER —Is the Minister for Aviation aware of moves in Queensland which could well result in a further deterioration in the already lamentably low standard of inland air services, excluding the jet schedules? Will he seek Federal Government support which will ensure the avoidance of such a disastrous move and will he act to give to the people of the inland who produce the major wealth of this nation a standard of air service, commensurate with that provided on the alleged major air routes, which keeps government members comfortable in the coastal areas and in the great cities? Mr PETER MORRIS —I thank the honourable member for his question. I take it that it refers to some rearrangement of services in the western Queensland region by Australian Airlines. I do not have the detail of the changes that are being proposed, but I do know that there are changes proposed and that they arise from the fact that for years and years Australian Airlines have lost heavily on the provision of western Queensland services. This loss is due to low average loadings, which was an occurrence under his Government on both the occasions it was in power, and it remains today. There are times of the year when the people of that region do need services, and they peak and at that time the higher capacity is used, but on an average basis the loadings are very low. For many years Australian Airlines was able to cross-subsidise the provision of those services from other services within Queensland and the rest of Australia. But in more recent years a joint subsidy was paid by the Federal and State governments for a limited period. That subsidy was withdrawn by the Federal Government, for proper reasons, and subsequently by the Government of Queensland. Whilst I appreciate the problem of the people concerned, the provision and licensing of intra- state air services in Queensland, in the manner in which the honourable member suggested, is essentially the responsibility of the Government of Queensland; but it has opted out of that subsidy responsibility. I say to the honourable member that whilst I understand his concern, his question would be better directed to the Government of Queensland. It may just be that those executive jet services to which he has referred could be provided by Joh's airline. That jet which he uses to fly all around Australia-- Mr Young —At what cost? Mr PETER MORRIS —I think it was $3,000 an hour. The Queensland taxpayers are bearing that cost. The honourable member is really saying to this Parliament that the money that is being spent by the Queensland Premier, for politicking around Australia, could be redirected to provide the same kind of service to the people of western Queensland? With that, I agree with him. Mr CHYNOWETH —Is the Minister for Arts, Heritage and Environment aware of statements in the Press concerning, firstly, the Queensland Government's plans to introduce legislation allowing perpetual leases on Great Barrier Reef islands to be converted to freehold title and, secondly, further Queensland plans, outlined in the Press this weekend, to circumvent a Federal Government decision protecting Shelburne Bay from a damaging mining proposal? Mr COHEN —I have heard that the Queensland Government proposes to change land tenure on the Barrier Reef islands from leasehold to freehold. The question we must ask ourselves is: Why? I think the answer is fairly simple; it is another example of the Premier of Queensland helping his little mates. Let me assure the House that this Government is not going to stand by and watch one of the great environmental masterpieces of the world be sold to anyone who wishes to exploit it. The Leader of the Liberal Party of Australia has come out in opposition to it, and I commend him for that. But what is the coalition's view? What is the view of the National Party of Australia? Senator Collard is the shadow spokesman for the environment. Every time he makes a statement on the environment he sounds like Whelan the Wrecker. In fact he sounds as though he would do for the environment what Colonel Sanders did for the chicken. All Australians recognise the need to protect the Great Barrier Reef. We can go back to the Whitlam Government, which first of all introduced the Great Barrier Reef Marine Park Act; then the Fraser Government, which implemented it; and, finally, the Hawke Government, which fulfilled the requirements of the Great Barrier Reef Marine Park Act and made it a reality. It was introduced by the Whitlam Government, proclaimed by the Fraser Government and fulfilled by the Hawke Government. The Great Barrier Reef was nominated jointly by the Fraser Government and Bjelke-Petersen Government for the World Heritage List. One of the reasons for its easy acceptance by the committee of the United Nation's Education, Scientific and Cultural Organisation was that the Government could guarantee to protect it through the fact that much of it was in national park areas, almost all of it was within the Great Barrier Reef Marine Park and there was leasehold and not freehold tenure. If the tenure of the land is changed, that protection is reduced. This Government has two pieces of legislation at its disposal-the World Heritage Properties Conservation Act, which obliges us as the Federal Government to ensure protection of the whole of the area, and the Great Barrier Reef Marine Park Act, which, of course, enables us to administer the reef park jointly with the Queensland Government. As honourable members will know, the Commonwealth has sovereignty up to the low water mark, so any developer who proposed any large scale development on the Great Barrier Reef islands-for instance, if he proposed to build a jetty or if, as happened in one place, someone proposed to build an airport runway out into the reef, or if any action resulting in sewage or effluent disposal was involved-would need the approval of the Commonwealth Government. Let me assure the House that this Government will take every action at its disposal to ensure that no damage ever occurs to Australia's great masterpiece, the Great Barrier Reef. Mr COHEN(Robertson-Minister for Arts, Heritage and Environment) —For the information of honourable members, I present the summary record of proceedings of the eighteenth meeting of the Australian Environment Council and of the fifteenth meeting of the Council of Nature Conservation Ministers held in Adelaide on 25 and 26 June 1986 respectively. Mr HOLDING(Melbourne Ports-Minister for Aboriginal Affairs) —Pursuant to section 36 of the Australian War Memorial Act 1980, I present the annual report of the Australian War Memorial for 1985-86. Mr HOWE(Batman-Minister for Social Security) —Pursuant to section 122 of the Compensation (Commonwealth Government Employees) Act 1971, I present the annual report of the Commissioner for Employees Compensation for 1985-86. Mr HOWARD(Bennelong-Leader of the Opposition) —Madam Speaker, I seek leave to make a personal explanation. Madam SPEAKER —Does the honourable member claim to have been misrepresented? Mr HOWARD —Yes, I do. Madam SPEAKER —Please proceed. Mr HOWARD —On the Sunday program yesterday and again in Parliament today the Prime Minister (Mr Hawke) made the totally and outrageously false statement that the policies now being proposed by the coalition would increase the Budget deficit by $16 billion. I take the opportunity of taking permissible parliamentary language to its extremity in saying that this particular misrepresentation of the Opposition's position scales the heights of dishonourability so far as the Prime Minister is concerned. Madam SPEAKER —Order! The Leader of the Opposition must show the House how he personally has been misrepresented. The Leader of the Opposition has not done so. Mr HOWARD —To be very precise, the Prime Minister yesterday said of me that I would add $16 billion to the Budget deficit. He repeated it again today. That is the most blatant untruth that this Prime Minister has used in the five or six years that he has been in the Federal Parliament. Let me give but two illustrations. He draws upon a list of-- Madam SPEAKER —The Leader of the Opposition has not in any way shown the House how he personally has been misrepresented. Mr Young —Why don't you raise it in debate? Let's have a debate about it. Mr HOWARD —Any time. Would the Leader of the House like to have a debate on the fiscal policies of the Government and the Opposition? Madam SPEAKER —Order! The Leader of the Opposition will resume his seat. The Leader of the Opposition is not showing the House or the Chair how he personally has been misrepresented. He has raised what the Prime Minister said on television and again in the House today but he may not now debate the issue. He has pointed out to the House that he has been misrepresented. He may not now debate that issue. Mr HOWARD —I do not seek to debate it but, in further enlightenment of the House as to how I have been misrepresented-- Madam SPEAKER —You did tell the House how you have been misrepresented. You are now attempting-- Mr HOWARD —I gave the example-- Madam SPEAKER —Order! You will resume your seat. Mr HOWARD —You think I am debating it, do you? Well, I will have a debate on the issue later on, when I can debate it with very great gusto. Madam SPEAKER —You are debating the issue. Please resume your seat. Mr BLUNT(Richmond) —I seek leave to make a personal explanation. Madam SPEAKER —Does the honourable member claim to have been misrepresented? Mr BLUNT —Yes, Madam Speaker, I was deliberately and irresponsibly misrepresented in the Parliament today by the Minister for Social Security (Mr Howe). Not only did he misrepresent me but also he misled the Australian people. Madam SPEAKER —Order! The honourable member will not accuse the Minister. Withdraw that. Mr BLUNT —I withdraw that. Today in the House the Minister delivered some sort of diatribe quoting from a paper that he had apparently got hold of and which was apparently dated the end of 1986. He said that that paper suggested that the coalition parties would not-- Madam SPEAKER —Would the honourable member please show the Chair how he personally has been misrepresented. I have brought this to the attention of honourable members on numerous occasions. You cannot speak on behalf of the coalition in a personal explanation. Mr BLUNT —The Minister referred to me by name, and I will get to that point. He suggested that the coalition parties would not index pensions and he then referred directly to me and suggested that I had not made a certain statement relating to the indexation of pensions. I draw to the Minister's attention my statement headed `Aged do badly under Labor' dated 3 March 1987 and read to him one relevant paragraph: The Liberal and National parties maintain their commitment to abolish the assets test and to adjust pensions for changes in the cost of living. Mr BARRY JONES(Lalor-Minister for Science) —I claim to have been misrepresented and I seek leave to make a personal explanation. Madam SPEAKER —You have done it all in one; go ahead. Mr BARRY JONES —On Friday 20 March I agreed to an interview by Channel 7 television news on the Government's price surveillance activities and the interview duly took place at lunchtime at the Woolworths supermarket at Manuka. The interview was shown on Channel 7 news Melbourne the same night and presumably in other cities as well. I indicated before the interview began that I needed to buy some cream for a painful skin condition. I was not aware that this was recorded and my search for the skin cream duly appeared on the television news that night. Channel 7 then proposed the following scenario: It would provide me $20 to buy food. I asked off camera for whom the food was intended and I was told I should buy food as if I were to feed myself in the unlikely event that I spend an entire weekend in Canberra. Mr McGauran —You made a fool of yourself, Barry. Madam SPEAKER —Order! The Minister will continue. Honourable members on my left will be quiet. Mr BARRY JONES —I did so and bought meat, vegetables, fruit juice and fruit amounting to $20.02 in all. Mr McGauran —Have you still got the rash? Mr BARRY JONES —The honourable member for Gippsland still suffers from nappy rash. A dropped nectarine duly appeared on the news as well. I later gave the food to Channel 7. The interview proper then began. In an interview lasting several minutes I made the following points: Firstly, that the interview was a highly contrived and artificial situation, and it was hard to see the point of it; secondly-- Opposition members interjecting- Madam SPEAKER —Order! Those on my left will cease interjecting. I ask them to heed the Chair. Mr BARRY JONES —That I never shopped in Canberra for my own food; thirdly, that-- Opposition members interjecting- Madam SPEAKER —Order! The Minister would do well not to take any notice of the interjections. Mr BARRY JONES —I want honourable members opposite to hear me-that my selection of food would not be typical of food purchases for a normal family; fourthly, that at my level of income, a $5 price variation would not be critical but it would be for people on-- Madam SPEAKER —Will the Minister get to the point? If those on my left ceased interjecting we might get there quicker. Mr BARRY JONES —Fixed or low incomes, and it was to assist such people and to maintain equity and fairness in the context of the prices and incomes accord that emphasis be placed on price restraint. In the course of the interview I made a verbal fluff. I told the interviewer that I had made a mistake and asked to repeat my answer. This was done. When the program appeared none of my interview was shown, except for the material which I had fluffed and which appeared uncorrected. Mr McGauran —Where have you been misrepresented? Madam SPEAKER —Order! The honourable member for Gippsland is pushing it a bit. The Minister will get to the point of misrepresentation. Mr BARRY JONES —As I was making my purchases, the interviewer's voice-over was heard to say that my purchases did not represent normal family needs and that, at my income level, I was insensitive to price fluctuations; thus my own complaints about the artificiality of the interview were turned against me to create an impression of cynical disregard for the poor. A brief comment by the honourable member for Mackellar (Mr Carlton) on my alleged failure in the prices area concluded the segment. In my 25 years in and around television I have never been `Pilgered' in this way before. The material was edited so selectively as to misrepresent my position totally. The only element missing was a custard pie in the face. I am surprised that Channel 7 News left it out. I am seeking a tape of the material and will lay a formal complaint to the Australian Broadcasting Tribunal over what I regard as an outrageous misrepresentation of my position and, I may say, a precedent that is not in the interests of any member of this House. The Clerk —Petitions have been lodged for presentation as follows and copies will be referred to the appropriate Ministers: To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The humble petition of the undersigned citizens of Australia 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 Fife,Mr Peter Fisher,Mr Nehl,Mr Ian Robinson and Mr Ruddock. 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 Ewen Cameron,Mr Peter Fisher and Mr Staples. 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 and Mr Hawker. To the Honourable the Speaker and members of the House of Representatives assembled: The humble petition of the undersigned citizens of Australia respectfully showeth: That we strenuously object to the proposal that many Post Office agencies are to be closed. They provide a network of offices with postal and agency services to residential areas and small communities. They serve a community need and we would be seriously inconvenienced if forced to travel further to purchase postal items or collect parcels. It would be an unnecessary expense particularly for pensioners without their own transport. We maintain that the purpose of Post Offices should be to serve the public for the variety of services they offer. They are a community centre particularly in country areas and if necessary they should be subsidised to retain them. Your petitioners therefore humbly pray that the House should take all possible steps to prevent the closure of Post Office agencies and that the network should be extended, with the Agency services they offer expanded. And your petitioners, as in duty bound, will ever pray. by Dr Harry Edwards and Mr Hawker. To the Honourable the Speaker and members of the House of Representatives in Parliament assembled. The humble petition of the undersigned citizens of Australia showeth that whereas: 1. They are completely satisfied with the design of the existing Australian National Flag. 2. They are aware it properly reflects the immutable characteristics of Australia, namely: (a) The Union Jack, itself the creation of three Christian Crosses, represents the Nation's historical origin and the source of its language and law; (b) The Southern Cross on an azure blue background signifying its geographical location on this planet Earth; (c) The large star depicting the advent of Federation in 1901. 3. They know the Flag has been a source of inspiration to generations of Australians in peace and war. 4. They recall that millions of native-born Australians and newcomers to these shores from other parts of the world have become united under its proud symbolism. 5. They are certain that any change to the Flag will produce division in the Australian community. Your petitioners therefore pray that your honourable House will propose and pass a motion that ``the existing Australian National Flag be changed only with the approval of the Nation as expressed in a Referendum''. And your petitioners, as in duty bound, will ever pray. by Mr Hawker and Mr Shipton. To the Honourable the Speaker and members of the House of Representatives in Parliament assembled. The petition of the undersigned respectfully showeth. We most strongly oppose the process of Food Irradiation by radioactive Cobalt 60 or any other radioactive substance. We oppose the introduction of regulations that will facilitate the food irradiation process by State Governments. We express our deep concern at this attempt to extend the use of radioactive substances and exposure of workers to radiation. We call on the Government to immediately ban the importation of radioactive Cobalt 60 or other radioactive substances and to immediately disallow the regulations that permit the irradiation of food here in Australia. by Mr Kent and Mr Scott. To the Honourable the Speaker and members of the House of Representatives in Parliament assembled. The humble petition of the undersigned citizens of Australia respectfully showeth: 1. That we the undersigned are totally opposed to the inequitable 33 per cent cut to Education Centres programs as announced in the recent budget; 2. That the impact of this will be to cut across programs and projects with a recognised National and International significance; 3. That this Education Centre Program received a 1983 grant of 2.2m and in that year saw 5.3m spent on Education and that a cut of $838,000 will have a devastating effect on this investment in our nation's future. Your petitioners therefore humbly pray the House of Representatives and Government of the Commonwealth seek to have the Minister to arrange finances within her Portfolio in order that this program be restored to 1986 funding levels or such as may be nearly the same, given national economic constraints, in order to maintain this unique national program. by Mr Ewen Cameron. To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The humble petition of the undersigned citizens of Australia respectfully showeth that: 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 that the House of Representatives acts to prevent anything which would desecrate the nation's Memorial to Australia's former servicemen. by Mr Fife. To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The petition of certain citizens of Australia respectfully showeth: That the Bill of Rights is a dangerous piece of legislation which gives us no new legally enforceable rights. That the Bill of Rights leaves out vital rights such as the right not to belong to a trade union, the right to own private property, the right to a private education. That the Bill of Rights gives dangerous new powers to a Federal Government Commission to investigate in private, without legal representation and with criminal penalties for refusing to co-operate. That the Bill of Rights deals with our rights; therefore we, the people, should say whether we want it by a referendum. Your petitioners therefore pray that you will oppose the Bill of Rights, support Liberal amendments to improve it in case it is passed, and pledge to repeal it should it become law. by Mr Hawker. To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The petition of the undersigned 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 respectfully showeth: That in the light of the Labor Government's failure to act to correct the many anomalies in the Assets Test on pensions brought to its notice, the Labor Government's legislation should be repealed before it has an unduly unfair impact on pensioners. Your petitioners therefore humbly pray that the House of Representatives in Parliament assembled should immediately seek the repeal of the Labor Government's iniquitous and unfair Assets Test. And your petitioners, as in duty bound, will ever pray. by Mr Hawker. To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The humble petition of the undersigned citizens of Australia, respectfully showeth: (a) That Australia's record high interest rates, currently at levels up to four times higher than competitor O.E.C.D. member countries, are causing severe hardship and damage to this nation's small business and farm sectors. (b) unless immediately reduced these artificially boosted interest levels will inflict irreparable harm to the national economy. (c) the individual initiative and job creation potential of the small business sector is in danger of being permanently crippled. Your petitioners therefore humbly pray that: (1) The Government will immediately reverse its interventionist policy which is artificially boosting interest rates in Australia to their highest level in 50 years. (2) The Prime Minister, Mr Hawke, and the Treasurer, Mr Keating, will honour their 1983 election pledge to bring interest rates down from their then level of 12.5%. (3) The Australian dollar will be allowed to float to find its own level in accordance with the Government's stated de-regulation objectives. by Mr Hicks. To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The humble petition of the undersigned citizens of Australia respectfully showeth: That we consider the 2% discounting of Commonwealth Occupational Superannuation Scheme pension adjustments on 10 Oct 86 to be a serious breach of trust by the Government. The Commonwealth has reneged on an established commitment as incorporated in Commonwealth legislation and benefit promise pensions are not being paid in full. In particular we resent the long-term effect of the discounting. The pension loss is compounded throughout the life of a pensioner and surviving dependants-into the 21st century for many. We consider this Government-induced penalty to be out of all proportion to the short-term `extraordinary circumstances of the economy' given as the reason for the discounting. Your petitioners therefore humbly pray that the Government: 1. limit the pension discounting effect of the Superannuation and Other Benefits Legislation Amendment Act 1986 to the period 10 Oct 1986 to 1 July 1987 so that pensions are restored to the 9 Oct 1986 level as a base for the 1987 pension adjustment; and 2. consult with organisations representing pensioners before changing the terms and conditions of Commonwealth Occupational Superannuation Schemes. And your petitioners, as in duty bound, will ever pray. by Mrs Kelly. To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The petition of the undersigned respectfully showeth: That we consider the decision to curtail the landscaping at the New Parliament House is a false economy. The landscaping is an integral part of the building and environs which together will be one of the world's most exciting examples of architectural design this century. Incomplete it will be a monument to our lack of resolve as a nation. Your petitioners most humbly pray that the Government: (a) Reconsider the reinstatement of the landscaping according to the present plans. (b) Consider savings which may be made in other areas to ensure this may be achieved. And your petitioners, as in duty bound, will every pray. by Mrs Kelly. 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 even 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. To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. This petition of the undersigned citizens of Australia respectfully showeth that we strongly oppose the introduction of the ``Australia Card'' or any other form of National Identification Numbering System. We believe that the introduction of a National Identification Numbering System is not only totally unnecessary but is a severe threat to our civil liberties and privacy. We condemn the Government's actions on this matter, particularly as no reasonable nor responsible justifications for the proposal have been forthcoming from the Government. We humbly pray that the House of Representatives, in Parliament assembled, should reject any proposal for a National Identification Numbering System. by Mr Kent. To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The humble petition of citizens of Australia shows: That the people of New Zealand and the New Zealand Government have given an example to the world in their efforts to achieve a nuclear free South Pacific, and such decision being endorsed by the people at a general election. Your petitioners therefore pray that the Australian Government support the principled stand taken by the New Zealand Government and urges it to condemn any efforts by the United States Government to impose economic or other sanctions on New Zealand in retaliation for their stand on nuclear vessels. We further urge the Australian Government to urgently implement its policy to promote the development of zones of peace and nuclear free zones in the Indian and Pacific Oceans. by Mr Kent. To the Honourable the Speaker and Members of the House of Representatives in 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 ever pray. by Mr Nehl. To the Honourable the Speaker and the Members of the House of Representatives in the 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 piece of Australian legislation ever, and that on all the evidence available, it 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 taxpayer's 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 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 Parliament assembled. The humble petition of pensioner and beneficiaries in the electorate of Indi respectfully showeth: We the undersigned protest at the cancellation of rent assistance for pensioner/beneficiaries who pay between $15 and $45 a week. Your petitioners therefore humbly pray that the rent assistance be restored as it was prior to December 25th 1986. And your petitioners, as in duty bound, will ever pray. by Mr Ewen Cameron. To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The petition of certain citizens of Victoria respectfully showeth: That all legitimate business expenses incurred in earning or producing assessable income should be allowable taxation deductions; That the Hawke Government's Fringe Benefits Tax is an unwarranted burden on the small business and rural sectors, which will severely affect their long term viability. Your petitioners humbly pray that the Government withdraws the Fringe Benefits Tax legislation without delay. by Mr Halverson. To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The humble petition of parents and friends of Our Lady Help of Christians School in East Brunswick, in the State of Victoria, showeth complete dissatisfaction in the reduction by 46% of funding to support their E.S.L. staff. Your petitioners therefore pray that a sensible review of this funding will take place in a school where the migrant population is 86% (possibly the highest in the State of Victoria). And your petitioners, as in duty bound, will ever pray. by Mr Hand. Petitions received. Mr DEPUTY SPEAKER(Mr Leo McLeay) —Madam Speaker has received a letter from the honourable member for Tangney (Mr Shack) proposing that a definite matter of public importance be submitted to the House for discussion, namely: The failure of the Hawke Government to expand opportunities for Young Australians. 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 SHACK(Tangney)(3.04) —Running very strongly through the Australian psyche-indeed it is part of Australian folklore-is the dream of every Australian family to own their own home. The security and the safety that is provided by families owning their own home really provides means to yet other ends. This dream is an important element, it is an important ingredient of what Australian families are trying to do. The basic goal of every Mum and Dad, the thing that they are most striving for, is to give their kids a better chance and a better start in life than indeed even their own parents gave them. In the 1950s and the 1960s when I and my brother were growing up our parents scrimped, saved and worked hard with one goal in mind-to give their boys a better chance and better start in life than their own parents had given them. It is what millions of Australian families have been doing for decades and they are doing it now. Indeed, it is what I am trying to do with young children. I am trying to give my kids a better start than even my folks gave me. The starkest contrast between the 1950s and the 1960s, and even the 1970s, is that the chances of succeeding in that goal are shrinking and receding. For the first time since the Great Depression, probably with the exception of only the period occupied by World War II, the living standards of Australian families are not going forward; they are going backwards. The blame can be laid squarely and fairly at the feet of the Hawke Labor Government. Australian families are finding it harder and harder simply to keep pace, let alone to get ahead. They are finding it harder and harder simply to maintain the standards they had four years ago when this Government was elected, let alone to get ahead. If one looks at the taxes imposed by this Government, at the charges imposed by this Government, at the interest rate regime presided over by this Government and at the general structure of costs in our community, one does not wonder that Australian families are going backwards. Parents have an inner anguish about their ability to do for their kids what their parents did for them. We can see very clearly that the chances of Australian children, teenagers and young adults for the first time in decades are shrinking; they are going backwards. Young people are not looking forward to an ever-expanding horizon; they are looking at the prospects of contraction in the opportunities for education, training, jobs, housing and in their ability to save-and indeed in their ability to spend on those things they desire. I turn now to education. Education is at once one of those foundation-stones upon which young Australians can build a prosperous life. It is also one of the springboards from which they can jump forward and make progress with their lives. We all know that any young person whose education fails to give him a solid grounding in the basic skills faces a life-long process of economic, social, political and indeed cultural disadvantage. The biggest issue outside the family home is mums' and dads' concern about the education that their kids are achieving and receiving. The biggest issue is the perceived decline in basic educational standards. Employers and parents, and even many teachers, are all too well aware of the number of young people who are finishing their education unable to read, write or spell properly, let alone count. The National Association of Personnel Consultants last year estimated that half of the 600,000 unemployed lacked basic educational skills; that is, 300,000 people lacked the most minimal standards that employers seek. It is not their fault; it is the fault of misplaced priorities in education by government. Over the last decade or two there has been a downplaying of the basics in education. It is no wonder that the Business Council of Australia survey in mid-1986 found that the majority of employers in Australia lacked confidence in the school system, as indeed do many parents. Much of the responsibility lies within the State arena but I repeat now our commitment to work with State governments and the non-government school sector to develop, in government, a national monitoring system to measure and keep track of educational achievement in basic standards. This initiative will enable the school system to target resources and redirect priorities to ensure that fundamental educational responsibilities are fulfilled because our pressure on standards, if we are to fulfil our obligations to our children, must be upwards and we must not forget the basics. It is disgraceful that this Government has now reduced access to higher education by year 12 school leavers to the level of the mid-1960s. At Question Time the Prime Minister (Mr Hawke) was trumpeting the Government's supposed achievements in higher education. But this year, for the first time since the mid-1960s, fewer than 40 per cent of last year's school leavers were able to gain a place in our universities and colleges. The reality is that the Hawke Government has taken higher educational access back 20 years and opportunities are not expanding; they are being reduced. Fourteen thousand qualified students were locked out of higher education last year. This year the estimates are responsibly around 30,000. If the trend continues unabated, 100,000 young Australians will have the doors of higher education slammed shut in their faces by 1992. What is the Government's response? It is deafening silence-nothing. It still cannot grasp the fact that there are more students waiting to study than there are places funded by the Government. The Minister for Education (Senator Ryan) has even tried to turn it back on the students who miss out, suggesting that they are too stupid to be accepted into higher education institutions. She refuses to acknowledge that because of the shortfall of student places, qualified kids are getting locked out. As we have stated in this place many times, a tertiary entrance score, a tertiary education admission score, or a higher school certificate score that would have got students in three or four years ago is no guarantee to get them in today. The personal anguish of many thousands of families who are realising that is too apparent to measure. The coalition has released its growth plan for higher education. We intend to expand the system, to open the doors of higher education to thousands of students who would jump at the chance to invest in their futures if they miss out under the present system. It is another example of where the Hawke Government in higher education is reducing opportunities for young Australians, not expanding them. If we turn to training and talk about those who miss out in terms of higher education, we will see that the picture in the training area, in the apprenticeship area, and in the technical and further education area is alarmingly worse. As any TAFE principal can tell us, the unmet demand for places is nearly 100,000 already. In the TAFE area we do not have to wait until 1992 to reach that figure. It is so serious that in some cases apprentices cannot get into the courses they need to complete their training. The greatest tragedy and this Government's most abject failure in the area of youth is the traineeship scheme. Mr Deputy Speaker, you will recall that we welcomed the traineeship concept when it was announced, and we looked forward to its providing at long last some expanded opportunities for young Australians, but the Government has botched it completely. At the end of January this year only 3,600 traineeships were in place. Most of them are in the Federal and State public services and only 500 are in place in private enterprise. Not only has the Government failed to deliver its promised 10,000 places by June 1986-long past-but also it does not have buckley's chance of achieving its target of 75,000 by 1988. Traineeships are supported by young Australians and they are supported by the Federal coalition. It is an utter disgrace that the Government has lacked the courage to stand up to the union opposition to the necessary flexibility in trainee wages. The Liberal and National parties will have the Australian Conciliation and Arbitration Commission insert a proper trainee wage rate in all awards to stimulate further opportunities for the training of young Australians. While we are talking about employment, nothing is more important to any young person than a fulfilling, satisfying job and career. It is the key to their independence. It is the key to their identity and all the other options, both socially and culturally, that our community has to offer. When the Prime Minister launched the Priority One strategy he said: We still have unemployment. It is improving . . . our employment programs are working. The Prime Minister will have to eat those words and do so with embarrassment. Mr N.A. Brown —What has happened since? Mr SHACK —Youth unemployment is higher today-that is what has happened-than when the Priority One campaign was launched. As I mentioned during Question Time today when asking a question of the Prime Minister which he totally refused to answer, in February 1987 youth unemployment was 23.3 per cent. An extra 11,000 young Australians are without a job than when Priority One was launched. This Government has ignored the reality of youth wage relativities. Young people are being locked out of jobs because of the bloody-minded attitude of the union movement which has stood squarely in the way not only of employment opportunities for young Australians but also of the successful implementation of the traineeship scheme. If we look at housing, what have we seen under the Hawke Government? We have seen the highest interest rates in history and a host of anti-investment taxes which have thrown housing into complete and utter chaos. Fewer home loans are available for young people, for young marrieds who want to start on the dream of owning their own home to provide security and sanctity in which to bring up their children. Those who are making mortgage repayments are paying exorbitant and artificially high mortgage repayments. The rental market is drying up rapidly. Rental charges have gone through the roof right around the country. So much for the Government's price watch scheme. It is a joke. One of the most basic costs, the cost of housing, has been forced up to punitive and record levels by the Government's misguided and mismanaged economic policies, impacting greatly on young Australians. Opportunities for them to own their own homes are not expanding. They are receding and reducing. If one looks at the area of saving one finds that no other generation of young Australians has been taxed as heavily by any government as the present generation of young Australians. Young people have been able to work hard in the past to save and to achieve their immediate goals. They have been able to gain through overtime. But today their overtime is generally taxed at the 47c in the dollar rate which makes it harder and harder for them to achieve their goals, even if they do have jobs. Many cannot save. Many find it impossible to make ends meet. They are going backwards. One finds them in electorates around Australia. Those who are forced into debt to meet their commitments are paying the highest interest rates in history on everything from a car loan to ordinary consumptive purchases on Bankcard. They are now paying 22 per cent on Bankcard purchases. Consumer debt amongst young people is higher than ever. It has never been so hard as it is under the Hawke Government for young Australians to get a good start in life, to make it to first base in their independent phase of existence. This Government has dodged the hard issues and turned its back on young Australians, despite the prime ministerial rhetoric. It has done nothing about the real issues but has tossed them into the transparent and gimmicky Priority One scheme in an attempt to prop up the Labor Party's declining popularity amongst young people. It will take a lot more than cinema ads, phone-ins, billboard posters or even appearances by Bob on Countdown and Country Practice to convince young Australians that this Government has done anything else but ignore their problems and plight in all the fundamentals such as housing, education, training, jobs and saving. This Government stands condemned for its absolute failure of young Australians. Mr DEPUTY SPEAKER(Mr Leo McLeay) —Order! The honourable member's time has expired. Mr STAPLES(Jagajaga)(3.24) —It is interesting that today the Opposition has raised this matter of public importance, a matter of public importance from its perspective: The failure of the Hawke Government to expand opportunities for young Australians. Opposition members are leaving the chamber now. They are not interested in opportunities for young Australians. It is also interesting to note that the Opposition has released only two policies of the whole range of policies which should be out by now and that one of those policies relates to education. It is surprising that the Opposition has released a policy on education when one considers the disarray and argument within the Opposition ranks at the moment. Whichever party or sets of parties one is talking about, it has come to conclusions on one policy-education. Perhaps it is because the Opposition really does not care too much about young people. It is easy to pull up a policy that talks about young people because young people are not really important to Opposition members. They are really after the big profits and getting more money from the white shoe brigade for Sir Joh or whoever. It is a really sad day today because it shows the sad depths to which this Opposition has fallen. I am tempted to feel sorry for the members of the Opposition, and I would be tempted to feel more sorry for them if it had not been for the gross mismanagement and callous disregard that the Liberal and National parties have shown for the young people of this country. What a load of humbug! The members of the Opposition come in here and talk about the failure of the Hawke Government to expand opportunities for young Australians. They are falling for it hook, line and sinker. By referring to the `failure to expand' they ask us to talk about a comparative record. I would be quite happy to stand here and just talk about what this Government has done. The Opposition has referred to a `failure to expand' and therefore the members of the Opposition will get right between the eyes what they left us and their record compared hard with this Government's record. I suppose that what prompted all this, what the members of the Opposition are all excited about, is the article in today's Sydney Morning Herald entitled `Hawke and the ALP lose their charm for the young voters'. If that is all they have to get excited about, there is not much joy for them there. All they have is little dull glows in the dark; there is not much to get excited about. Let us look at what this Government has done. This Government is the first government in Australian history to take any real notice of young people. This Prime Minister (Mr Hawke) is the first Prime Minister to take any real notice of young people and to recognise that they are not only part of the future but a part of society today. It is just that young people have their own attitudes and places in society; there is not some cheap labour market approach of work for the dole. This Prime Minister understands young people and he cares about their role in the future and the present. Under the previous Government young people rarely rated a mention. They were shoved around from department to department. For the first time in Australia's history there is now an Office of Youth Affairs which is located in the Department of the Prime Minister and Cabinet. The Prime Minister showed his commitment to young people in his answer in Question Time today. In answering the question from the shadow Minister for Education and Youth Affairs, the honourable member for Tangney (Mr Shack), he showed what has been done in terms of work opportunities and training opportunities. I will reiterate and build on that answer and the honourable member for Lindsay (Mr Free) will talk more about the education areas. I will have my time cut out simply talking about what we have done in terms of employment. Let us look at teenage employment. The Opposition's record shows that between March 1978 and 1983 teenage employment fell by 10 per cent. There were 67,000 young teenagers who did not get a job during that period. In the period of the Hawke Government from April 1983 to January 1987 teenage employment rose by 11.9 per cent; that is, 75,000 extra jobs. I suppose that honourable members opposite thought that the teenage unemployment rate in February was good for them. They rubbed their hands in glee because they saw a bit of a rise there. Honourable members opposite should not get too excited because that is an isolated monthly figure and, as they know-they are well used to looking at polls because they get a new poll to look at every day-they should not be fooled by a blip; they should look at the trend. The underlying figures show little change. There is no glow of hope for the Opposition in teenage unemployment. The number of teenagers employed, based on non-seasonally adjusted figures, between August 1973 and August 1983 fell by 10.5 per cent and full time employment declined by 147,000 or 26.3 per cent. Since August 1983 teenage employment has increased by 57,200, or 10 per cent, to 627,000 in August 1986, with teenage full time employment accounting for 24.8 per cent of that growth. That is pretty significant and I do not think anyone can argue with that. The Opposition's record by comparison means that a lot of kids were out of the education system and out of work, and their incomes and their families are suffering now because of the neglect of those opposite when in government. Those teenagers are now young adults, some with families, whose incomes and futures have been blighted by their record in government. Let us not look at just the Australian comparison, but at the international comparison for youth unemployment-that is, those between the ages of 15 and 24-for those opposite who are not aware of the distinction between `teenage' and `youth'. From 1983 to 1985, the latest reliable international comparators show, youth unemployment in Australia dropped from 17.9 per cent to 14.3 per cent. The Organisation for Economic Co-operation and Development figure overall fell only from 17.7 per cent to 16.6 per cent. Australia's performance in youth unemployment has been far better, dropping from 17.9 to 14.3 per cent. The OECD European figure went up from 20.9 to 21.7 per cent. We have taken the problem of teenage unemployment and actually stopped the rise in teenage unemployment. That is quite a significant effort when we consider the changes that have been taking place in our economy. Mr Cadman —It is still too high. Mr STAPLES —Of course it is too high, but the Opposition does not provide any reasonable solutions. It has had its opportunity in government to provide reasonable solutions and it has failed. It has not provided reasonable solutions, both in its macroeconomic and unemployment policies. I return to the program of the Hawke Government. Total government expenditure on labour market programs and services has risen by a massive 98 per cent under this Government. The Opposition would cut into that, of course, as it is going to do away with the community employment program and Jobstart and many other initiatives of the Hawke Government. In the wake of the disastrous 1982-83 recession we were left with a massive unemployment problem. We have turned that around, not only by restructuring the economy and by providing more jobs where the jobs are needed for Australia and for young people, but we have responsed to the need for higher levels of training, skill and education in the Australian community. Work experience assistance under the CEP, which those opposite would throw away, has assisted 109,000 disadvantaged job seekers on worthwhile community projects. Jobstart, the integrated wage subsidy program which was introduced in 1986, will this financial year assist 128,000 people, very many of them young people. The Australian traineeship system, which the Opposition takes glee in ridiculing and in seeing the low numbers of young people involved, is gradually being introduced. It is a major new vocational training system to help develop the employability of young people, to help give young people the opportunities in non-trades areas of the work force. We now have almost 9,000 traineeships approved in Australia, and approximately 40 per cent of those are in the private sector. The major growth in the traineeship system will, from now on, be in the private sector because that has been the hardest one to get going, obviously because it is very widely scattered and it is very difficult to get people involved in it; but that is where the growth is going to be. I see the smirks and smiles on the other side, but it is more than they have ever done. Okay, those opposite are not interested in traineeships. Let us talk about apprenticeships and look at their record again. Let us look at what they are saying about this area and about our failure to expand opportunities. Let us look at the opportunities they left to the young people of Australia through apprenticeship programs, which I presume they still support in their policies. When we came to government in 1983 apprenticeships across Australia were down to 34,800. What an appalling record. That is what the Opposition thought about the training opportunities for young people in the trades areas in Australia. That must be a record low. What is it now? Honourable members on the other side would not know, but in 1985-86 it rose from 34,800 to 51,000, and this Government will spend about $122m to assist more young apprentices in 1986-87. We are trying to build the skills base of Australia, both in the trades area and in the non-trades area, and we are doing that through developing the public education system, the higher education and the vocational training system. Where are the jobs going to be? Under the Opposition's policies they will not be in the heavy engineering area or in the steel, car or textile areas, or wherever. The Opposition, when in government, was in the process of running down the country. All it had people doing was digging holes and quarries for coal and other minerals. That is the level of the opportunities it gave to young Australians. It would give them picks and shovels and send them out to work for the dole digging holes. The Opposition ruined this country and ruined the opportunities. It gave the young people no opportunities. This Government has set about restructuring Australian manufacturing, where most of the jobs in the cities are-such industries as the steel, automotive, heavy engineering, textile and clothing industries. That is where the jobs are and that is where the training will be. Many of the kids who have been disadvantaged mainly by the atrocious education policies that the Opposition brought in, the kids who do not have the educational ability, the kids who need the training, are often now in community youth support scheme centres, which the Opposition was also going to close down but which have been expanded under this Government. Funding has almost doubled in that area. There are youth access centres to give the kids information so that they know where to go, what their rights are, where they can get training, what they can do and what allowances they can get. The number of youth access centres, an initiative of this Government, will rise from 37 to 100. About one in every three Community Employment Service centres will now have a youth access centre where young people can get information about what they can get from this Government and from society. This year 15,000 to 20,000 placements are expected in the community volunteer program. I thought honourable members opposite would enjoy hearing that and would applaud it, but no, there is not a word about it from them. We have Jobstart, formal training for youth, the community youth support scheme-that is the only thing those opposite ever did, and even then they want to close it down-the community employment program, the Australian traineeship scheme and the youth access program. Young people form the focus of this Government's labour market programs. An amount of $430m-almost two-thirds of the Government's expenditure in this area-will be spent on young people between the ages of 15 and 24. It is expected that 280,000 young people will be directly assisted. It goes on and on, and those opposite have the gall and cheek to come in here and talk about the failure of the Hawke Government to expand opportunities for young Australians. I suppose they have been ferreting around in the surveys of the Australian Nationwide Opinion Polls Pty Ltd, surveys which their governments would never have done, to find dull glows of hope in the negativism of those surveys. Well, the ANOP survey clearly shows that this Government's youth strategy is in line with the attitudes and views of young Australians. It clearly shows that there is a substantial and high level of support for this Government's efforts to improve school retention rates and income support, to develop traineeships, and to provide community work opportunities for unemployed young people. Young people are placing more emphasis on the need for Government policy to be directed towards better training, better education and other mechanisms for obtaining jobs. That is good, and that is what this Government is doing. To increase that even further we have just announced a comprehensive school information program to let young people in the schools know what their futures can be-what they can expect. My time has run out. This matter of public importance has made my day. Mr DEPUTY SPEAKER(Mr Leo McLeay) —Order! The honourable member's time has expired. Mr McGAURAN(Gippsland)(3.39) —The one constant thread running through all of the Government's attitudes and policies towards young people is a gross underestimation of the integrity of young people. Does any member of the Government really believe that young people can be fooled and can be bought off? Does any member really believe that the shallow hypocrisy and the meaningless rhetoric of one government program after another really wash with the young? If any of them do believe that, I suggest they go into the schools and out into the community and meet the young people. They should go to the unemployment centres, the drop-in centres, and find out for themselves that the increasing cynicism of young people is directed at the Government. Does any member of the Government really believe that youth unemployment can be solved by the glossy and totally unsuccessful Priority One scheme, that the problems of education can be solved by the unworkable and complex Austudy, or that the drugs offensive can be solved by glossy public relations campaigns? The answer to all of that is no. But it seems to have dawned on no one in the Government that young people are not impressed by these things and that the Government is increasingly out of touch as it frames these massive public relations budgets. The honourable member for Jagajaga (Mr Staples) sought to portray the Prime Minister (Mr Hawke) as an all-knowing wise deity. In fact at one stage he said to us that the Prime Minister takes notice of young people. Well, you, Mr Deputy Speaker, would be aware that the Prime Minister seeks to take notice of a lot of people; hence, since March 1983 when coming to office, he has allocated $34m on advertising, almost $34m on public relations and $22m on promotions in journals and periodicals, seeking to improve his image. So he certainly tries to take notice of people. More specifically, $1.6m was allocated for Priority One with its newsletters, billboards, posters and advertising. The expenditure of some $13m over three years in promoting its drug campaign has also been a waste of Government expenditure. The honourable member for Jagajaga went on to say that the Prime Minister recognises that the young have attitudes, he understands them and he listens to them. Well, he had better listen to them and he will have to listen to them now because a Government poll of late last year-who else got it, of course, but Australian Nationwide Opinion Polls Pty Ltd, which seems to have a monopoly on Government polls-showed that almost half of teenagers and young people between the ages of 15 and 24 cited unemployment as the major and most important issue affecting their lives. As for Priority One, which is supposedly the linchpin of this Government's approach to youth unemployment, 40 per cent did not even know that it existed and only 20 per cent thought it would be of any benefit to them in any way whatsoever. Moreover, only 6 per cent of young people thought that Priority One would do something worth while. It further went on to reveal that six in 10 young people believe that their employment prospects are a low priority with the Hawke Government. So, if the honourable member for Jagajaga is correct that this Prime Minister seeks to listen to young people, he will have to reshape from the very bottom upwards his youth unemployment strategy. After all, what has the $1.6m publicity campaign brought for the Government? Well, there has been a 2 per cent increase in youth unemployment since Priority One started. The Minister for Employment and Industrial Relations (Mr Willis), commenting on the increase to an extraordinarily and tragic 23.3 per cent among teenagers seeking full time work, sought to down play that tragic rise and said: Although youth unemployment increased by two percentage points in February it would be rash to interpret this as a marked deterioration in the youth labour market. He should tell that to the young people trying to get a job. He should tell that to the increasing numbers of young people seeking employment. The honourable member for Jagajaga told us on this side: `Don't get too excited about what seems to be a hiccup in monthly figures on youth unemployment'. The youth unemployment figure may or may not increase next month, but that misses the whole point. By however much it increases or decreases, the figure is at an unacceptable level. If it decreases, it will not decrease by more than one, 2 or perhaps even 3 per cent. But does the honourable member for Jagajaga expect us on this side of the House to accept as a fait accompli, or as the norm, a youth unemployment rate of about 20 per cent? If he does so he, sadly, not only underestimates young people but also underestimates the Opposition. If we look also at the problems of Austudy, which is supposed to bind together all the different allowances and incentives for young people to continue with secondary and tertiary education, we find again that the rhetoric does not match the practice, the implementation of a Government policy. As always, Austudy was introduced with haste, without proper thought and certainly without any real planning. So we now have a situation in which hundreds of young people at university have received no income whatsoever since late last year. There would hardly be a member of parliament in this place who has not had a stream of young people or parents through his or her electorate office. The Government has only itself to blame. Expectations have been raised. Political points are sought to be scored but no follow-through occurs. Mr Blunt —They got the advertising out though. Mr McGAURAN —Of course, as the honourable member for Richmond says, the advertising is always in place. It is always carefully thought out. It is always carefully implemented and it is always expensive. Austudy falls flat because the forms are complex. Also, the cross-checking and processing of them have been unacceptably slow, based mostly on an inadequate and untried computer processing system. There is even a problem in that supporting parents are at the bottom of the queue. Anybody receiving a benefit is placed at the bottom of the queue for the processing of Austudy applications. The point is that there should not be such a queue so as to people deprive of the necessary support. The problems of education continue. It is an undeniable statistic that last year 14,000 young people who had the qualifications for tertiary education were unable to find places. This year that figure is expected to be in the region of 30,000. That will be 30,000 young people turned away from their due entitlement. Mr Cobb —What do they care? Mr McGAURAN —The honourable member for Parkes asks: `What do they care?'. That is not a rhetorical question because every time we ask a question of responsible Government Ministers, they never answer. Moreover, they seek to divert attention from their failings by referring to matters far in the past and without any substantiation. The Prime Minister's shallowness and deceitfulness came to the fore during Question Time. When asked a question by the shadow Minister for Education, he sought to wrap it all up in macroeconomics and failed to direct his answer to the specifics of the question. Can the Prime Minister deny that, as at 30 January 1987, only 3,600 traineeships were in place? That is a long way short of the promised 75,000 by next year. More than that, only 14 per cent of these are in the private sector. Mr Cobb —Another broken promise. Mr McGAURAN —It is another broken promise, the promise having been that 80 per cent would be in the private sector. I noticed that the honourable member for Jagajaga lowered that estimate during his contribution by saying that he expects that some 40 per cent will be in the private sector in the future. That is a very substantial retreat from earlier estimates. The drugs offensive has fallen on deaf ears. As the honourable member for Gilmore (Mr Sharp) knows better than anyone, as he is Chairman of the coalition's drug force, this Government has failed to direct the money where it is most needed. Again, the public relations exercise is beautifully executed, with all of the cynicism and all of the abuse of taxpayers' money imaginable. But, as with youth unemployment and further and higher education, the people who really need the help lose out. Mr FREE(Lindsay)(3.49) —It is a delicious irony that the Opposition should have proposed this matter of public importance on the very day that the Leader of the Opposition (Mr Howard) has dismissed from his front bench the one figure in the Opposition who has clearly demonstrated an appeal to youth. The Opposition may appear to take some comfort from the results of the poll published in this morning's Sydney Morning Herald, but I say to Opposition members and to their Leader that, with the dismissal from the front bench of the honourable member for Kooyong (Mr Peacock), the Opposition has blown it-and blown it irretrievably. With his departure, this flock of hypnotised fowls opposite, who masquerade as an Opposition, has been left bereft. It is as incapable now of developing policies for the youth of Australia as it is for anyone else. I must, however, commend the Opposition for at least giving the honourable member for Gippsland (Mr McGauran) a guernsey in this particular debate, as it has created one opportunity for one unemployable youth. Let us look at the record of this Opposition both in government and in opposition. The Liberal record in government towards youth was one of consistent neglect. Under the Opposition parties in government, youth unemployment mushroomed, educational opportunities contracted and, to make it worse, they blamed the young people, those victims of high unemployment, and used them as scapegoats. It was the Opposition parties which, when in government, in 1981 had the community youth support scheme marked down for the axe-it was doomed in the razor gang report in April 1981. The Opposition parties' approach to youth in opposition has been cynical and opportunistic in the extreme. They have been using a bag of tricks. Let me quote to the House from a document produced by the shadow Minister for education and youth affairs, the honourable member for Tangney (Mr Shack), entitled `Talking Points for Young Australians'. It is marked `confidential' on the top and, having looked at the contents, I can see why they would want to keep it confidential. It was tabled in the Senate last year by the Minister for Education, Senator Ryan-one of her more inspired tablings. Let me quote from the Opposition's bag of tricks for youth document. The shadow Minister, in that document, said: In speaking to many schools this year I have encountered a degree of hostility to politics and politicians in general. He is half right; there is certainly a degree of hostility towards Liberals among young people. He said further on in that document: Another of the tricks- note the word `tricks'- of communicating with young people is to talk their languages and experiences. For example: If there is a popular movie, try to draw some lesson from it or use a particular popular phrase (e.g., `make my day' from Clint Eastwood); if Bruce Springsteen is all the rage, then at least make reference to him somewhere in a discussion; finally, sport is the great leveller in Australia and every young person takes an active interest in it. Use sporting analogies wherever you can-even in explaining economic problems to them. That is the Liberal Party's bag of tricks when dealing with youth. He says to keep it sporting and seek their views on sport policy. Further on the shadow Minister's advice is to take their names and addresses. He says: One method which has had a degree of success is petition campaigns on youth-related issues. The petition gives you a bank of names and if it is followed up by a letter it can be pretty fruitful. He has some warnings, however, for members of the Opposition. They have to use a bit of guile and a bit of cunning because, as he says: Young people do share a concern about the size and cost of government, but in using examples of waste unearthed by the Waste Watch Committee it is preferable not to use `peace group grants'. Most young people view such groups as worthwhile. Another warning is that young people: . . . are not inherently resistant to the idea that youth wages should be more flexible, but it is a matter of presentation. Further on he warns: They do not share our view of job-creation schemes-the ANOP study found job-creation schemes were the most popular single choice for what Government should do for young people. That is the shadow Minister's advice to members of the Opposition when dealing with youth-use the bag of tricks, use guile and use cunning. It has no policy apart from this collection of slick tricks from the slippery shadow Minister opposite. In stark contrast, the Government's record is a determination to increase opportunities for the youth of Australia by doing better in the areas of education, training and jobs with the ultimate objective of providing a wider range of opportunities for young people-a range so substantial that unemployment in the future will not need to be an option for young people. That is the overall aim of the Priority One: Young Australia strategy with its eight key goals-to improve the quality and attractiveness of completing secondary education; formal tertiary education; to extend the opportunities or to increase the opportunities for job-based vocational training for young people who leave school early; to rationalise income support measures for young people in secondary and tertiary education; to increase the opportunities for young people to be involved in voluntary community service activities; to aid unemployed young people under a range of labour market programs; to provide a clearer focal point for young people to have access to a wide range of information on labour market, education and income support opportunities; and finally to improve other support programs for young people, particularly those who are disadvantaged. I put it to the House that the Government has achieved and continues to achieve remarkable success in all of those areas. I turn first of all to the Government's achievements in education and I seek leave of the House to incorporate in Hansard a number of tables to illustrate the points I am about to make. Leave granted. The tables read as follows- YEAR 12 RETENTION SUPPLEMENTARY STATISTICS Australia: 1982 1985 1986 Males... 32.9 43.5 45.6 Females... 39.9 49.5 52.1 Persons... 36.3 46.4 48.7 NSW: Retention to Year 12 in NSW rose from 33.7 per cent in 1982 to 41.7 per cent in 1985. In 1986 a substantial further rise to 44.4 was recorded. Victoria: Retention to Year 12 in Victoria rose from 34.3 per cent in 1982 to 45.4 per cent in 1985. A further rise to 46.8 per cent was recorded in 1986. These figures refer to schools only and do not include students in TAFE courses. Queensland: Queensland's retention rate rose from 42.1 per cent in 1982 to 55.1 in 1985. A further increase to 57.5 per cent was recorded in 1986. (To some extent these statistics are inflated by the comparatively high rate of migration into Queensland but they accurately represent the high growth rate in Year 12 retention.) South Australia: Year 12 retention in South Australia was 41.0 per cent in 1982 and rose to 51.2 per cent in 1985. A further substantial rise to 54.8 per cent was recorded in 1986. Western Australia: Year 12 retention in Western Australia was 37.4 in 1982 and had risen to 47.5 by 1985. In 1986 a further substantial increase to 50.3 per cent was recorded. HIGHER EDUCATION (Universities & Colleges of Advanced Education) 1. FUNDS FOR HIGHER EDUCATION ($,000s) (constant est. Dec '85 price levels) 1979 1980 1981 1982 1983 1984 1985 1986 1987 Total... 2,254 2,228 2,197 2,181 2,192 2,214 2,280 2,322 2,382 Change on previous year (%)... -1.2% -1.2% -1.4% -0.7% -0.5% -1.0% -3.0% -1.8% -2.6% Change: Liberal vs Labor (%)... 1979-1981 Triennium (Last Liberal Triennium) -3.7% 1985-1987 Triennium (First Labor Triennium) +7.6% Change: Capital Funds (%)... 1978-82 (Liberal) -73% 1983-87 (Labor) +43.4% 2. STUDENT PLACES IN HIGHER EDUCATION (thousands) 1980 1981 1982 1983 1984 1985 1986 1987 Total... 249.3 252.3 255.5 263.1 270.3 278.0 288.9 299.9 Change on previous year (%)... 0.2% 1.2% 1.3% 3.0% 2.7% 2.8% 3.9% 3.8% Change: Liberal vs Labor... 1978-1982 (Liberal) 3.3% 1983-1987 (Labor) 14% No. of New Places Created... 8,100 36,800 STUDENT ASSISTANCE EXPENDITURE ($ Millions) Type Liberal 1978 1982 (82-78) % Change Labor 1983 1987 (87-83) % Change SAS... 7.0 9.3 2.3 +32.9% 19.9 55.6 30.9 +179.4% ASEAS... 4.1 2.6 -1.5 -36.6% 3.3 4.2 0.9 +27.3% ABSEC... 9.8 10.7 0.9 +9.2% 11.6 13.5 1.9 +16.4% ABSTUDY... 3.4 6.7 3.3 +97.0% 8.4 17.1 8.7 +103.6% AIC... 10.9 10.1 -0.8 -7.3% 10.7 10.6 -0.1 -0.9% TEAS... 124.2 92.7 -31.5 -25.4% 111.6 146.2 37.2 +31.0% PGA... 7.5 5.5 -2.0 -26.7% 7.7 7.9 0.2 +2.6% Total... 167.9 137.6 -30.3 -18.0% 173.1 255.2 82.1 47.4% (Constant prices-CPI Deflator with 1976 as Base Year) SAS = Secondary Allowance Scheme ASEAS = Adult Secondary Education Allowance Scheme ABSEC = Aboriginal Secondary Assistance Scheme ABSTUDY = Aboriginal Study Assistance Scheme (tertiary) AIC = Assistance for Isolated Children Scheme TEAS = Tertiary Education Assistance Scheme PGA = Postgraduate Awards Scheme Mr FREE —The tables show that under this Government secondary education has become far more attractive. Retention rates to the end of year 12 have improved remarkably under this Government-from 36.3 per cent completing secondary education under the Liberals to almost half of young Australians, 48.7 per cent, completing a full secondary education in 1986. The contributing factors towards this great success have been government spending on schools, our participation and equity program and our improved student support. We have also provided increased opportunities in tertiary education. The spending by government in the tertiary sector has improved markedly under the Hawke Government. The Labor Government has provided 36,800 new places in the tertiary sector in the first triennium, compared to 8,100 under the last Liberal Party Government triennium. I ask the honourable member for Tangney: Is this taking higher education access back 20 years? Of course it is not. He claimed that 30,000 students were unable to get places this year but he knows when he says that to the House that it is arrant nonsense. In the area of student support, the table I have incorporated shows the dramatic increase across the board in the Labor years of government compared to cuts or modest increases in the Liberal years of government. That rationalisation process of allowances to youth is proceeding very well. The Australian traineeship scheme has been mentioned in this debate. I acknowledge that the target set by this Government was ambitious. The target had to be because the challenge was so great. We are pleased with the solid progress that has been made in the Australian traineeship system. We have tackled the difficult area of providing voluntary community service activities, but solid progress has been made and more will be achieved. In providing assistance to unemployed youth through the community employment program, jobstart and the community youth support scheme fine progress has been made, and they are all contributing to providing improved opportunities for youth. The youth access centres, by providing a focal point for youth to get information on opportunities in work and education, have been an outstanding success. The Commonwealth Employment Service job centres are losing their dole office image among young people and are becoming increasingly places where opportunities for employment can be found. In assisting disadvantaged youth I point to the success of the drug offensive, assistance to homeless youth and the training of youth workers. In this debate the Opposition has been so consistently wrong in so many areas that I think a full refutation of some of its misinformation should be produced. Finally, I will concentrate on one aspect, the position of unemployed youth which was highlighted by the honourable members for Tangney and Gippsland. Let me produce the facts from an article which appeared in the Age on 17 March under the heading `Jobless young served better in Australia than overseas'. The article quite clearly points out: Unemployed young people in Australia fare better than their counterparts in many other countries, where joblessness is a bigger problem and benefits may be difficult or even impossible to obtain. That was reported in the annual report of the Organisation for Economic Co-operation and Development last September. Australia's 14.3 per cent rate of unemployment is better than in many other countries and is certainly better than the 20 per cent under the coalition. Mr DEPUTY SPEAKER(Mr Leo McLeay) —Order! The honourable member's time has expired. The discussion is concluded. Mr IAN CAMERON(Maranoa) —I wish to make a personal explanation to the House following Question Time. Mr DEPUTY SPEAKER —Does the honourable member claim to have been misrepresented? Mr IAN CAMERON —Yes, I do. Mr DEPUTY SPEAKER —The honourable member may proceed. Mr IAN CAMERON —In Question Time today the honourable member for Batman, the Minister for Social Security (Mr Howe), continued to wrap his words together and attribute words to me which I have not said in respect of pensioners. I have still not been able to get the transcript of the 2GB radio interview. The Minister said that it was in Hansard. I have not said anything in this House pertaining to the matter. What the Minister did when he was asked a question on 19 February was quote my comments in an interview. The Hansard of that date states: . . . when I say cuts I mean cuts that every Australian is going to squeal like a stuck pig because they are all going to suffer. I have not tied that comment at all with pensioners. The interview continued: . . . because right now everyone of us has got his hand in the till and we got to get it out of the till if we're going to get this country up and moving again. I stand by those comments. As I recall, that is what I said. The interviewer asked me whether anything was sacred. I said that I did not particularly think so. He asked me a question about defence. I said I felt that that was probably a little sacred and it was something on which we should not be cutting expenditure. I said: Defence spending, I guess that's something that we have to maintain. I guess that's probably one thing that is a bit sacred. The interviewer then asked: What about pensions? I replied: Pensions. I guess the pensioners might have to stand still- I did not say `cuts'- . . . if we can have less taxes- the interview was to do with reducing the amount of taxation from the present top rate of 50c to 25c in the dollar- there's no reason why we should be giving pensioners or anybody else in the community any more funds. That is, if we are to reduce taxation. I stand by those remarks. I would also add that it is not the coalition's policy to cut out the indexation of pensions. Mr DEPUTY SPEAKER —Order! The honourable member cannot speak on behalf of the coalition. I think that he has made clear where he was misrepresented. Mr IAN CAMERON —I hope that the House has noted that, and when the Minister comes into this House in future and misrepresents me- Mr DEPUTY SPEAKER —Order! The honourable member has made the point where he was misrepresented. If he wishes to pursue that point further, he can do so. He does not have any right to speak about the Minister or other parties in the Parliament. Mr IAN CAMERON —I would like to point out to you, Mr Deputy Speaker, and to the House that the comments I made were not related to one another; they were completely separate. I object to those words being tied together and used against me in this place. Mr BEALE(Deakin) —On behalf of the Standing Committee on Expenditure, I present the report of the Committee entitled `An efficient organisation, or, an efficient audit? Review of the Auditor-General's efficiency audit report into construction project management practised by the Department of Housing and Construction', together with the minutes of proceedings and evidence received by the Committee. Ordered that the report be printed. Mr BEALE —by leave-The report of the Expenditure Committee which has just been tabled is a review of an efficiency audit report of the Auditor-General. The cover page of our report has an interesting drawing and an engaging title. The drawing depicts two buildings-one ultra modern and in excellent shape; the other, a building in ruins. The title is `An efficient organisation, or, an efficient audit?'. Taken together, both the drawing and the title represent the difficulties the Committee faced with its review because the building in excellent shape represents the view of the Department of Housing and Construction of the quality of its administrative procedures for managing major construction projects; whereas the building in ruins represents the shambles that the Australian Audit Office saw in the Department's construction project management. Thus, major differences between auditor and auditee required the Sub-Committee of which I was Chairman to spend a considerable amount of the time not normally needed on this type of review. The efficiency audit report is primarily an examination of the administrative efficiency of the Department's handling of two major construction projects-the National Acoustics Laboratory and Ultrasonics Institute at Chatswood, New South Wales, and the Australian Defence Force Academy at Campbell, Australian Capital Territory. The major areas covered by the audit were variations to contracts, choice and application of project delivery methods, project review, tendering procedures, and, octopus-like, spreading its tentacles across the entire report, the need for standards, guidelines and manuals which were a recurring theme, a constant refrain, of the efficiency audit report. This brief description of the audit report and disagreements between the Department and Audit serves to underline that the Committee's task was complex. It was made unnecessarily complex as a result of the contempt with which the Department treated the Audit report. As a prime example of the Department's attitude I take honourable members to table 1.1 of the Committee's report. The table shows that the Department rejected over 50 per cent of the 42 Audit recommendations, and this includes 11 recommendations interpreted by the Committee as being rejected. The inadequate quality of some of the Department's responses required the Committee to interpret them and in some cases to classify a response as a rejection although the Department said it `accepted' the recommendation. For example, on more than one occasion, Audit asked the Department to give `consideration' to doing something. The Department accepted some of the recommendations of this type, but what it accepted was the `consideration' and not the change the recommendation sought. This type of response is clearly misleading and can be construed as an attempt to pull the wool over the Committee's eyes. The Committee believes this evasiveness was the product of bureaucratic politics in that the Department did not want to sour too much its relationship with the Australian Audit Office and therefore adopted the pretence of `accepting' recommendations. Such responses have made our inquiry unnecessarily difficult and have thus resulted in unnecessary time consuming work. This is no credit to a department that prides itself on its professionalism. Turning to the Audit report, the Committee has found it to be less than satisfactory. Our findings, which relate mostly to Audit recommendations the Department disagrees with-the major recommendations-use words not chosen lightly, such as `unconvincing', `confusing' and `superficial', to describe the Audit recommendations. This can lead the interested observer to question whether the benefits of the audit were commensurate with the cost of over $100,000. One of the major areas of Audit concern was variations to contracts. Variations to contracts can result from a number of factors, such as design errors and omissions, and can sometimes lead to significant increases in the costs of a project. The major recommendations of the Audit report on contract variations cover essentiality testing, guidelines, and formalised controls and standards. Each of these is dealt with separately in the Committee's report but, for the sake of brevity, I will deal with them collectively in this statement. There is considerable confusion in the Audit analysis and resulting recommendations. Thus there are two recommendations on guidelines for checking specifications and documents-an overlap acknowledged in the audit report-a recommendation on controls, which appears to be similar to another recommendation on monitoring variations against standards, and yet another recommendation on essentiality testing which appears to make redundant some, if not all, of the other recommendations on contract variations. Another weakness of the audit analysis is that, apart from a few examples, it is guided by generalisations based on big numbers-the number of variations and the additions to total costs. The Committee appreciates and shares Audit's concern about the cost implications of variations but what is lacking generally in the Audit analysis is an assessment of whether the errors identified were the result of inadequate procedures, lack of compliance with existing procedures or the result of human error associated with the lack of supervision. There is an inconsistency in a logic which uses an implicit criterion of the need for guidelines to test the quality of administrative procedures when guidelines and other institutional procedures are known to exist. Further, one of the problems about variations is not necessarily their number but the need for variations and whether this need could have been anticipated at the design stage of the project. This type of essentiality testing goes beyond the examination of administrative procedures and can be done only by persons who have the necessary technical expertise. A recurring theme of the Audit report is the need for guidelines, standards and so forth. The unshakable belief of the auditors is that each mistake should be covered by a subsequent separate guideline. The Committee report pursues this matter in some detail so I will quote only its conclusion that `the mind boggles at the prospect of a guidelines document reaching encyclopaedic proportions as each human error is covered by a separate guideline'. A red tape solution to perceived problems of public administration is no solution at all. Choice and application of project delivery methods is another major area of the Audit report. Briefly, project delivery refers to the particular way in which the construction of a project is to be managed. The traditional method requires completion of design and documentation before tenders are called, a single lump-sum contract between the successful tenderer-the head contractor-and the Department and project management by departmental officers. Under construction management the Department contracts with an individual or an organisation to manage and co-ordinate the construction of the project, so that the construction manager takes the place of the head contractor under the traditional system and there is reduced emphasis on departmental project management. Construction management was used on the Australian Defence Force Academy project where the cost escalation was enormous-a forecast increase of $25m or 51 per cent for the second construction management package. The Department listed a number of factors where construction management was said to offer better prospects than other options, but this did not satisfy the auditors. What they expected to find was the choice of construction management based on the consideration of the comparative costs of other options `because information as to relative cost should always be taken into account when such issues are being determined'. The Department has not obeyed this Audit edict and so, for the auditors, construction management became the villain of the Australian Defence Force Academy piece. The Audit report called for an assessment of the extent to which construction management had contributed to the cost increases because this would assist the Department to make better informed decisions on the use of construction management in the future. There have also been significant increases in the apparent `real' costs of the National Acoustics Laboratory and Ultrasonics Institute and the Australian Defence Force Academy. Ascertaining the reasons for these increases and the responsibility of the Department, rather than what was in the Audit report, became the overriding issue of the Committee's review. I will return to this aspect later. Unfortunately, the Audit analysis of the second construction management package gave us no assistance because, to put it bluntly, the analysis was naive. Surely, the relevant question is not how much construction management has contributed to the cost increases of the Australian Defence Force Academy, but rather whether in the circumstances construction management was the best choice. The Department says it was. Audit says it does not have the professional expertise to make a judgment! The Department gave the Committee documents and explanations as to why it chose construction management, but one does not know how much the Department told Audit or how well Audit listened. The Audit insistence on comparative cost analysis ignores unquantifiable benefits or the horses for courses method of choice, but there is now some belated recognition by the auditors of the need to take these factors into consideration. Impressions and suspicions are probably a necessary starting point for investigation but a dangerous finishing point on which to base conclusions and recommendations. Tendering procedures is yet another major area of the Audit report. The Department favours open competitive tendering which entails selection of the successful tenderer after public invitation. Audit says that two State public works departments use selective tendering as the National Capital Development Commission has done recently for housing contracts. Selective tendering offers to the entire building and construction industry the opportunity to submit credentials for consideration so that only those selected are given the opportunity to tender-many are called but few are chosen. The Audit report describes the proponents' case for selective tendering, states the Department's objections to it-selective tendering is costly to set up and administer-and then, Audit pulls the evaluation rabbit out of its hat. Based on the conclusion that there are two schools of thought on the merits of selective tendering, Audit asks the Department to evaluate this tendering system. The Audit analysis is superficial because it is selective and inaccurate. The reference in the report to the relative poor performance of open tendering is to research published in 1971, some 14 years before the presentation of the Audit report. The reference to the National Capital Development Commission using selective tendering recently for housing contracts is factually incorrect and no attempt was made to find out why the National Capital Development Commission decided not to use open competitive tendering for housing contracts or why the majority of States did not use selective tendering. Evaluation and/or studies have their costs. Those who ask for them have a responsibility to ensure that their recommendations are soundly based. Assessment of the quality of an efficiency audit report gets tied up ultimately with the contribution it has made to improving the efficiency of the area under examination. This assessment is detailed in the last chapter of the Committee report. Briefly, what we say is that although there are some useful Audit recommendations, these are not the major recommendations which the Committee has found to be `unconvincing', `confusing' and `superficial'. The general impression the Committee is left with is that the Audit analysis is superficial. There are some aspects relating to the quality of the evidence which are worth noting. The first was the reluctance of the Department to own up to the Audit criticism that the Department took a `management risk' that did not come off. The cryptic comment the Committee makes in its report is that to `get to the bottom of a simple factual matter has been time consuming because of the need to find the way through the labyrinth of arguments'. In the foreword to the Committee report, I said that some of the Audit evidence lacked any credibility. In the matter of the site allowance dispute, Audit was clearly critical of the Department but backed away from this position under questioning and introduced new reasons to support its analysis of the dispute. This is unsatisfactory. At the minimum, it points to a lack of supervision within the Audit Office and an apparent readiness to accept, without internal testing, statements that are critical of the audited organisation. What disturbed the Committee most, however, was the use by the Australian Audit Office in evidence given to the Committee of cost information not contained in the Audit report and a method of calculation different from that used in the Audit report to support a conclusion of that report. I will not labour this point but earnestly hope that this massaging of figures will be the last of its type from the Australian Audit Office. This review by the Committee has been made complex by the amount of detail. It was thus left to the Committee to look for the wood despite the trees. The overriding issue in our inquiry is, however, not what is contained in the audit report but rather the matter of significant increases in the apparent `real' costs of the National Acoustics Laboratory and Ultrasonics Institute project and the Australian Defence Force Academy project and the extent to which departmental management was responsible for such increases. From cost information published in the Department's annual reports the Committee calculated increases of apparent `real' costs for major construction projects, from 1980-81 to 1985-86, managed by the Department and used this as a yardstick with which to measure the performance of the two projects. The costs of the Acoustics project increased from $12m to over $25m and that of the Defence Academy, in the second construction management package, from $49m to over $95m. When we compare the increases of the two projects with the six-year average mentioned above we find that the increases for the National Acoustics Laboratory and Ultrasonics Institute and the Australian Defence Force Academy are five times and eight times greater respectively than the 1980-81 to 1985-86 average. These are significant increases indeed. Some of them can hardly be said to be beyond the control or influence of the Department of Housing and Construction. The Committee has recommended that the Department undertake `post occupancy evaluations' of both projects which will, among other things, specify the causes for the real cost increases and indicate whether the cost increases were within the control or influence of the Department. Such evaluations would be open to scrutiny and would thus enable one to get to the bottom of the basic and overriding issue concerning the Department's management of these two projects. My thanks go to my fellow Sub-committee members, the honourable member for Fraser (Mr Langmore), the honourable member for Lindsay (Mr Free), the honourable member for Macarthur (Mr Martin), the honourable member for Bass (Mr Smith), and particularly the Expenditure Committee Chairman, the honourable member for Banks (Mr Mountford), many of whom are in the House today. I also pay tribute to the contribution of the honourable member for Grayndler (Mr Leo McLeay). The Sub-committee thanks those who made submissions to the inquiry and also thanks the Secretary of the Expenditure Committee, Phil Bergin, and inquiry staff Malcolm Aldons and Ron Newton, and the support staff in preparing the manuscript of the Committee report, Heather Chapman and Peter Ratas. The Sub-committee pays particular tribute to Malcolm Aldons, who dedicated much of his time as Acting Secretary of the Expenditure Committee to resolving the conflicting positions that arose as a result of this inquiry. I commend the report to the House. Mr MOUNTFORD(Banks) —by leave-As Chairman of the Expenditure Committee of the House I would like to make a few comments on the report which has just been tabled by the honourable member for Deakin (Mr Beale), who chaired the Sub-committee which conducted the inquiry. It was a review by the Expenditure Committee of the Auditor-General's efficiency audit report on construction project management practised by the Department of Housing and Construction. The Audit report examined two major projects managed by the Department of Housing and Construction; namely, the National Acoustics Laboratory and Ultrasonics Institute at Chatswood, New South Wales, and the Australian Defence Force Academy at Campbell, Australian Capital Territory. The audit addressed DHC's approach to tendering systems and its review of project management performance. In broad terms, the audit inquiry was directed towards assessing the quality of these processes and the extent to which they contributed to the efficiency and economy of Commonwealth outlays on the two projects. The Australian Defence Force Academy was estimated to cost $65m in July 1980, and the forecast cost as at June 1986 was $146.8m. The National Acoustics Laboratory and Ultrasonics Institute is designed for use as a combined laboratory and office complex. In April 1978 it was estimated to cost $12m and by December 1984 the funds authorised for the project stood at $25.5m The reasons for the increases are dealt with in the Auditor-General's Report and are commented on in the Committee's report. In particular, the Committee has commented on the variations to the contracts, cost overruns, tendering procedure and contract delivery method. We note in the report that the two projects undertaken had significant increases in apparent real costs which were out of kilter with the average cost performance of DHC with major construction projects. In spite of the Audit Office's assurance that these cost escalations were not the reasons for selecting the two projects, there are references to cost escalation in the report. The two projects were not typical projects and the cost overruns so experienced are not indicative therefore of the Department's general efficiency on construction projects. In October 1985, the Minister for Finance (Senator Walsh) announced the Government's intention to introduce program budgeting. There has been acknowledgment that the presentation of information in program format accords with the major recommendations of the Committee's 1979 report. One of the features of program budgeting will be the program statement for each program including indicators of program performance. The Department of Housing and Construction says that the performance indicators are, for each major construction project, timeliness, suitability and delivery costs. We have received hardly any evidence on how delivery costs are to be used as a measure of effective performance and have thus pursued this matter ourselves. Briefly, the Committee believes that a performance indicator that measures increases in `real' costs-total costs less inflationary increases-is required. This would be a `litmus test' indicator of DHC's cost performance. When the figures for projects completed in a particular year are aggregated, the result can be compared with the aggregations of previous years so that it would be possible to observe trends of better or worse performance. The Committee has made an appropriate recommendation. For those like the Auditors who are very interested in cost performance, this `litmus test' indicator would also help distinguish the wood from the trees. There have been some 36 efficiency audit reports prepared by the Auditor-General-12 of these have been reported on by the Expenditure Committee and a further seven are under consideration by the Committee. The comments in these reports represent, I think, a consistent endeavour by the Committee to make a constructive contribution to the development of efficiency auditing. The practice of the Committee is that we look at not only the responses of the organisation that has been audited, but also the quality of the efficiency audit report. The first report on an efficiency audit suggested two categories of analysis: General to the efficiency audit process; and specific to the efficiency audit report. In respect of this current report we have made particular reference to the audit report. Some of the comments will not be well received by the Auditor-General, but I hope he accepts the comments as an attempt to improve not only his operations, but the general acceptance of efficiency audit. In respect of the audit report, we have found some of the conclusions as: `Unconvincing', para 3.12; `confusing and unconvincing', para 3.16; `unconvincing', para 4.13 and `unconvincing and superficial', para 4.17. In the report we draw attention to the differences between the Department of Housing and Construction and the Auditor-General's Office. Whilst the level of disagreement was somewhat constrained, I cannot but feel a more forthcoming approach by the Department of Housing and Construction may have been more productive. We say in the report: DHC's evasiveness is the product of bureaucratic politics in that the Department did not want to sour too much its relations with the Australian Audit Office (AAO) and thus adopted the pretence of `accepting' recommendations. As we note in the report, a great deal of time consuming work was undertaken by the members of the Committee to comprehend the information available or rather to put the information provided into a readily comprehensible format. The Committee has also made a number of recommendations which affect the Department of Housing and Construction. We suggest post-occupancy evaluations and the need for a cost-performance indicator of measures, increases and real costs. These have been dealt with in detail by the Chairman of the Sub-committee, the honourable member for Deakin. In a very early report of the Committee, which dealt with the Parliament and public expenditure, presented in February 1979, the Committee noted that efficiency auditing was still in its infancy in Australia. The Committee suggested that efficiency audits be undertaken if for no other reason that they were the only reviews which would be made available to the Parliament. While efficiency auditing is no longer in its infancy, I am not sure whether it has yet reached maturity. Having read some of the comments by the Commissioner of Taxation in response to the audit report of the Australian Taxation Office on prescribed payments, I am sure that I am not the only one with such concerns. I have recently noted a comment regarding auditors. It is in correspondence between the Commissioner of Taxation and the Auditor-General. In the letter, the Taxation Commissioner suggests that some of the comments in other audit reports `lend support to the picture of an auditor residing in an ivory tower, emerging only to shoot the wounded when the major battle is over'. As a former government accountant with audit experience, I am not sure whether I share his sentiments. However, having been involved in the review of this particular efficiency audit I have some sympathy for that view. In the formative period of the Expenditure Committee, former Labor Treasurer and former Committee member, Frank Crean, hit the nail on the head when he was reported to have said that an efficiency audit was a curious juxtaposition of words, a combination of the subjective elements of efficiency with the precision of audit. Until standards are developed and accepted for efficiency auditing the problems that Frank Crean foresaw some 10 years ago will continue. The Expenditure Committee review indicates the need for the auditors to make explicit the criteria used to test efficiency and perhaps even to reach agreement with the auditee on the use of such criteria. We also believe that when auditors are told that their recommendations are not practical they should take this comment very seriously rather than brush aside such comments. My overall impression is that the Australian Audit Office does not appear to have anyone to play the role of the devil's advocate. `You found a mistake-you beauty' appears to be the order of the day, rather than the adoption of a more professional accounting audit approach. I once again pay tribute to the honourable member for Deakin for his diligence and dedication. As a shadow Minister he has many demands on his time and I, with the other members, thank him for his commitment to the Committee and the expertise he brings to it. I also thank other members of the sub-committee for their dedication and involvement during the period of the review. I pay tribute to Mr Malcolm Aldons, who was Secretary to the Sub-Committee. Malcolm served the Committee as Secretary for some eight years from its inception in 1976 and then moved to the Procedure Office. He returned to the Committee for a short term as Acting Secretary and was very involved in this inquiry. Malcolm's commitment to the work of the Expenditure Committee and its role in the parliamentary process is unquestioned. I would like to acknowledge Malcolm's contribution and I thank him for his advice and assistance over the last four months. I also acknowledge the presence in the House of the Committee's new Secretary Mr Phil Bergin who already has shown his efficiency and expertise in the Committee's deliberations and hearings. Earlier I referred to the comment about the auditor as someone who comes on to the battle field after the battle to shoot the wounded. I am not sure in this instance whether the Expenditure Committee was invited to take part in the battle between the auditor and the auditee. I think we have, however, resisted that temptation. In conclusion, I note that the Committee has seven efficiency audits under consideration at present, and I understand that more are forthcoming. I hope that our comments about the work of the Auditor-General's Office will be seen as more constructive. The current debate between the Auditor-General and other officers of the Australian Public Service adds little on efficiency auditing, rather it belittles the efficiency audit process to which the Committee and many others are committed. I commend the report to the House. Mr LEO McLEAY(Grayndler) —by leave-I wish to say a couple of things on efficiency audits. I commend the honourable member for Deakin (Mr Beale) and the honourable member for Banks (Mr Mountford) for the work they have done on this efficiency audit. One of the difficulties with this report and with other reports that the Expenditure Committee and the Joint Committee of Public Accounts have brought down in this Parliament on the concept of efficiency audits is that we tend to continually hear that they have not worked out the way they should. One would have thought that the Australian Audit Office and those people who are involved in the efficiency audit program would have, by now, got to a position where it would be far better run than it is. I must say that I was most impressed some years ago when the Government changed the Audit Act to provide for efficiency audits. The Audit Office process is one of the few ways by which the Parliament can bring some accountability into the activities of the executive government. The Audit Office provides a window into the way in which the executive government works. The concept of efficiency audits seemed, at that time, to open the window even wider and to provide parliamentary committees with some insight into how various areas of the executive government were performing their task. All members of parliament, who take the view that there should be, under the Westminster system of government, a sense of accountability to this chamber and to the members of this chamber by the executive government, would have seen the efficiency audit process as being a very important mechanism in that accountability function. But what we have seen in the Auditor-General's Office in the working up of efficiency audits is that they seem to come to a peak at some stage, and now that the Auditor-General has abolished the efficiency audit division within the Audit Office the auditor is now doing comprehensive audits and not so many efficiency audits. I would have thought that when the Parliament amended the Audit Act to provide for efficiency audits the Auditor-General, who asserts that he is an officer of the Parliament in a sense, would have taken that to mean that the Parliament expected that there would continue to be efficiency audits, or at least the Parliament would have expected that until that piece of legislation was repealed. I would have thought that if the Parliament had not decided to repeal that piece of legislation the Auditor-General would have continued with these efficiency audits, and would have given them high priority in the operations of the Audit Office. It would seem to be that that is not so much the fact now. As members of parliament, as back bench members of parliament and as Opposition members of parliament, all members of parliament other than the Executive should take some concern in that, because if we are to see some of these windows that were opened closed into the activities of the executive government, no matter which side of the House that government is drawn from, we should be doing something about it. If the Audit Office works down the level of people involved in the efficiency audit program it is not in the best interests of the efficient operation of this Parliament. The fact that the Parliament, through parliamentary committees, is continually saying to the Auditor-General that there is something wrong with his methodology and that it cannot understand why he and the departments that he audits are continually in conflict and that parliamentary committees have to somehow or other make some adjudication on that conflict, also suggests to me that there is probably something not going quite right in the Auditor-General's Office. One might be able to say that the Australian Taxation Office might be rickety and inefficient, but maybe it cannot be as rickety and inefficient as the number of efficiency audits into that Office that have been tabled suggest. The Department of Housing and Construction may not have its act together, but maybe it cannot have its act in dissaray as much as this efficiency audit would suggest. Maybe the problem is that the people that the Auditor-General has doing the job do not understand the concept of what they are doing. Maybe one of the problems in the Audit Office is that the Auditor-General's Office is editing these reports to the extent that by the time they are tabled in the Parliament the editorial process by senior officers in the Audit Office, who have nothing to do with the audit in question, have changed the thrust of it to the extent that it is incomprehensible. I make a plea for the Audit Office to somehow or other ensure that it continues to operate in the spirit of the amendments to the Audit Act which set up the efficiency audit activities of the Auditor-General, that it continues to provide through efficiency audits that window into the executive government that the Parliament by passing that legislation expected, and that it give consideration to having officers at a more senior level conduct the field activities of the Audit Office in dealing with the Auditor-General's efficiency audits. Finally, I take up the comment of my colleague the honourable member for Banks that it is probably a good idea that the Audit Office and the auditee get some general agreement on where they are going before audits start. I recall Mr Brigden, when he was the Auditor-General, commenting during a hearing of the Expenditure Committee on why the efficiency audit division within the Audit Office was disbanded, saying that some people took the view that they had to set out to be gotchers all the time and that that was not the best way for the Audit Office to work. That might be so but I, as a member of parliament and a member of a couple of parliamentary committees, hope that the Audit Office has not made its operations so bland that the window into the operations of executive government will be obscured, at the least, or closed. Debate resumed from 28 November, on motion by Mr Hurford: That the Bill be now read a second time. Madam DEPUTY SPEAKER(Mrs Darling) —Order! I understand it is the wish of the House to debate this Bill, the Petroleum Resource Rent Tax Assessment Bill, concurrently with the Petroleum Resource Rent Tax Bill, the Petroleum Resource Rent Tax (Interest on Underpayments) Bill and the Petroleum Resource Rent Tax (Miscellaneous Provisions) Bill. There being no objection, the Chair will allow that course to be followed. Mr BRAITHWAITE(Dawson)(4.42) —The petroleum resource rent tax is a profit-based tax designed to replace the present crude oil excise and the royalty system in those fields to which they apply. Whilst one does not suggest that it is part of the present tax reform measures of the Treasurer (Mr Keating), it is part of the whole tax reform system introduced by the Government in the four years it has been in office. The 63 pages of this legislation will further increase and complicate Australian tax-based laws. The tax will apply only where there is an excess of project-related receipts for a financial year over both project-related expenditure for the year and undeducted expenditure of previous years brought forward at a compound rate. Theoretically, the RRT may look like an improvement on the present system, which is production-based, but there are enormous problems, both with the concept and with the Government's proposed implementation of the tax. The Opposition has opposed and continues to oppose the RRT because it is an additional tax on the petroleum sector that cannot be justified if exploration is to be encouraged. Any member of the Australian Petroleum Exploration Association will confirm that fact. On top of this the RRT will be an administrative nightmare for both the Government and the oil industry. When one takes into account the associated administrative costs, the compliance costs, the penalties and the size of the legislation itself one can only imagine the pitfalls into which people paying this tax in the future and the Government will fall. The Liberal and National parties will, therefore, oppose this legislation. The next Liberal-National Party Government will review the operations of this legislation, if it is passed now, with a view to its repeal if it harms oil exploration throughout Australia-and the Opposition believes it will. A resource rent tax in respect of certain mineral-based activities has been Australian Labor Party policy since 1977. Following the election of the Hawke Government, the former Minister for Resources and Energy, Senator Walsh, and the Treasurer set about to introduce the tax. Between December 1983 and April 1984 the Government released three discussion papers and consulted with industry. This led to an announcement in July 1984 that an RRT was to apply to greenfields off-shore petroleum products, that is, any off-shore oil producing fields that were discovered after July 1984. The legislation was mooted for two years and eight months. We have had, I think, 32 amendments to it, which reflects the uncertainty which has been created in the industry and its development. The Government's thinking has been muddled in this regard. Legislation to give effect to the Government's decision was introduced into the House of Representatives in the Budget session some two years after it was mooted. There are four Bills in the package. The Petroleum Resource Rent Tax Assessment Bill 1986 provides the framework of the tax and defines where the tax will apply, how it will apply and how it will be paid. The Petroleum Resource Rent Tax Bill 1986 will formally impose and declare the rate of the tax at 40 per cent. The Petroleum Resource Rent Tax (Miscellaneous Provisions) Bill 1986 will amend other legislation. For example, it will amend the excise Act to remove areas to which the RRT applies. The Petroleum Resource Rent Tax (Interest on Underpayments) Bill 1986 will impose an interest charge in respect of underpayments on the petroleum rent resource tax. This provision could not be included in the PRRT Assessment Bill as, under section 55 of the Australian Constitution, laws imposing taxation may deal only with the imposition of taxation and may not contain extraneous matters. I would like to give a history of secondary taxation on the oil industry. In addition to all the normal measures, that is, company tax, royalties, et cetera, the Australian oil industry has been subject to a levy on crude oil production. This secondary taxation of the oil industry stemmed from the view that part of the revenue flowing from the large price rises forced by the Organisation of Petroleum Exporting Countries in the early 1970s should accrue to the Government. The extra revenue gain was referred to as a windfall and governments around the world thought they had a right to it. In fact, they built it into their budgets. Expenditures were made in conformity to the windfall, until even with the levies that were gathered from the oil the greed of the Government was such that expenditures led from what were formerly balanced Budgets to the massive deficits of the last four years-$8.5 billion, $7.9 billion, $5.1 billion and $4 billion. In all, about a $25 billion debt has been incurred through the excessive deficits of the last four years, the years of the Hawke Labor Government. The Australian Government imposed a production-based crude oil levy which went through a number of changes and permutations until today it is quite complicated to operate, although wonderfully simple in terms of raising revenue. The RRT is an extension of the current Federal Government's attitude that petroleum resources are community property and that the community as a whole has a right to share disproportionately in the returns from the exploitation of non-renewable resources. One might call them social oils. This attitude overlooks the fact that the community already benefits from a profit-based, relatively high company income tax rate of 49c in the dollar. It also disregards the fact that the community also benefits from such non-profit based taxes as sales tax, payroll tax, fringe benfits tax-not to mention the royalties and production excises also imposed on the oil industry. The Government has ignored history and its expenditure of windfall profits and now proceeds to squeeze the last taxation dollar from the oil litre. The resource rent tax also has a history. The resource rent royalty operates in certain areas of Western Australia and rationalises Federal and State imposts. It was only made possible because of the Labor Government of Western Australia being compatible with the Federal Labor Government in Canberra. It applies to post-1984 developments that do not occur in Bass Strait or the North West Shelf. The Government has touted the RRT as a vast improvement on the old production-based system. The legislation being debated has effect from 1 July 1984. As I said, it has taken the Government two years and eight months to have this legislation drafted and introduced and it will be nearly three years by the time it is voted on. There are very good reasons why the RRT should be abandoned right now. The Government has steadfastly chosen to ignore the fact that because of the oil price drop there are no longer any windfall gains to tax. In the period of nearly three years since the tax was announced the price of oil has fallen and no windfalls now exist to tax. There are two major reasons why RRT should be abandoned. Firstly, the changed pricing conditions which apply now vis-a-vis 1984 have reduced gains and therefore act as a disincentive to further exploration and production. Secondly, there is the imminent decline in Australia's level of self-sufficiency and the effect that this will have on our economy. Any taxation revenues coming from secondary tax at the moment are a penalty to profit and a disincentive to future investment. This Government, in this and other ways, has made profit within private industry a dirty word but taxation a byword. Oil companies are already committed to revenues by company tax and royalties, so if Australia is to stay competitive as a place to explore the RRT proposal needs to be defeated. Such taxation discriminates between the different exploration portfolio structures. The Australian Petroleum Exploration Association Ltd on 24 November 1986 directed to the Minister for Resources and Energy (Senator Gareth Evans) a submission for a case for a change to the petroleum tax regime. With that letter the Association enclosed a submission to the Federal Government at the invitation of the Minister. Its contents are interesting, particularly when one realises that it is talking about the significance of petroleum to the economy, the risk in prospectivity, the high Australian costs, the source of Australian funds, general business tax regimes, petroleum taxes, resource rent tax and old oil tax. Page 19 of that report mentions the resource rent tax. The report states: Throughout the debate on secondary taxes of the past four years the Government has proposed the `resource rent tax' as the solution for the industry's concerns. It has continually failed to understand, or chosen to ignore, the operations of the industry: exploration decisions are made on the basis that post-tax profits from successful exploration must be able ultimately to cover all costs, including the costs of unsuccessful exploration and a premium for the aggregate risk entailed. The proposed parameters for the RRT do not acknowledge this. The tax therefore constitutes an active disincentive for oil exploration. It is not, and should not be claimed to be, a tax on resource rents-it is a tax on risk-taking and will have a predictable impact on the Australian exploration industry's attitude to such risk-taking. RRT if generally applied onshore, would have a similar impact. The most likely effect of the RRT will be to shift exploration decisions away from those projects which are more likely to make significant additions to the nation's reserves towards the lower risk/lower potential volume prospects. In other words, RRT is bound to turn off that great productivity which Australia is now seeking. It is also appropriate to note the oil price collapse over recent years, because this is part of the legislation we are discussing. The world oil price has fallen, and the domestic price of Bass Strait crude oil has fallen from $A43.71 a barrel in January 1986 to $A29.37 a barrel in March 1987. The average price fell from $A29.07 a barrel in the first half of 1986 to $A22.85 in the second half of the year. The domestic price has fallen from $A35.36 in July 1984 to $A29.07 in March 1987. The effect of this collapse has been to reduce commercially recoverable crude oil reserves and to reduce the number of anticipated worthwhile exploration prospects. Company cash flows have been more than halved and it is now nearly impossible to raise equity capital on the stock-market for high risk exploration. Profits are being skimped to very marginal gains on the invested capital, but government still pursues this policy of massive taxation of the resource. In turn, this has made acquisition of reserves through takeovers and mergers more attractive than exploration. It is axiomatic that exploration activity is sensitive to crude oil price. Under an RRT regime exploration decisions are sensitive to both the RRT tax threshold rate and the crude oil price. The proposed RRT rate of 40 per cent, with the proposed threshold rate, will render all but a few high risk exploration prospects unattractive at current oil prices. The sensitivity of production to the level of producer returns was shown in 1986 when oil prices dropped dramatically and Esso-BHP shut down production in Bass Strait because it had become uneconomic. Marginal producers' realisation dropped to its lowest level in 10 years, at about $A3 per barrel, and export ceased. In order to lift producer returns to levels that made production viable, the Government made temporary concessions to the industry. The on-shore excise was suspended and the top rate of the old old levy was reduced from 87 to 80 per cent. These measures are currently being reviewed. The production outlook and self-sufficiency are areas that we should examine. The medium term outlook for Australia's potential crude oil production has changed dramatically since RRT was introduced in July 1984. In March 1984 the Bureau of Mineral Resources estimated that there was a 50 per cent probability that at least 2,600 million barrels of crude oil remained to be discovered in Australia. One might now say with hindsight that that was a massive exaggeration, and perhaps proposed a type of boom revival in order to justify the RRT. It was estimated that about 1,800 million barrels of this oil could be discovered and brought into production by the year 2000. It was also estimated that more than 50 per cent of the 1,800 million barrels of undiscovered oil would be found by 1989. On this basis the Bureau considered that there was a good chance that Australian oil production would rise by about 30 per cent by 1989 and then plateau at this level before beginning to decline in 1996. These assessments were based on the assumption that 1,000 million barrels would be discovered off the north-west by 1989. This assessment vastly overestimated the contribution that would be made by the Jabiru field. Estimates ranged from 150 million to 200 million barrels, but Jabiru has reserves of 20 million barrels and nearby Challis has some 40 million barrels. The wild-cat Eclipse well caused massive speculation about the amount of oil with estimates ranging as high as 1,100 million barrels, but Eclipse 1 was a dry hole. Since 1984 there has been a fundamental reversal of opinion regarding the nature of future discoveries. In the north-west it appears that fields are likely to be small and will require extensive exploration to bring them into production. The Australian Petroleum Exploration Association estimates that a total of only 100 million barrels has been added to crude oil reserves from new discoveries in the three years from 1984 to 1986, with some 20 million barrels being located in 1986. The historic average for discoveries over the past 15 years is about 70 million barrels annually. In February 1987 the Federal Government released a revised outlook which forecast that production would be about 20 per cent lower in 1989-90 than in 1983-84. The outlook estimated that Bass Strait production in 1992-93 will be slightly more than half the 1985-86 production of 470,000 barrels a day. That is a massive decline from what is being produced today. This rate assumes that the development of several discovered but as yet undeveloped fields will proceed together with projects to enhance the production rates within existing fields. Bass Strait producers, however, have indicated that it may not be commercially viable to proceed with these developments, in which case Gippsland Basin production is forecast to fall to 170,000 barrels per day by 1990. I recently had the opportunity of going out to inspect both on-shore and off-shore developments in Bass Strait. I was very impressed with the work that was going on, with the capital invested and with the dedication of those people to their work, but might I say, massively discouraged by the taxation regime of this Government. The changed production outlook and the question mark hanging over the commercial viability of further developments in the Gippsland basin, and indeed elsewhere, under an RRT are major ramifications for future Australian import requirements. The Government's 1984 estimate suggested that Australia could be 95 per cent self-sufficient in crude oil in 1990. Recent estimates point to Australia being only 65 per cent self-sufficient in that year; a 30 per cent decrease in estimate over the period of 2 1/2 years. If Bass Strait developments do not proceed, that figure could be as low as 50 per cent. Just to put the House completely in the picture I would like to quote from today's Australian Associated Press report of the minerals exploration and petroleum exploration groups, which I think is significant and brings this subject right into the nub of the problem. The report states: Expenditure on mineral exploration during the December quarter increased 8.7 per cent on the previous quarter, but expenditure on offshore and onshore petroleum exploration declined significantly, according to official figures released today. The Australian Bureau of Statistics said expenditure on mineral exploration during the December quarter totalled $96.3m, up 8.7 per cent on the previous quarter, a 14.5 per cent increase over the December quarter, 1985. Expenditure on onshore petroleum exploration during the quarter totalled $42.9m-10.3 per cent more than the September quarter, but 59.4 per cent less than the December quarter, 1985. Expenditure on offshore petroleum exploration during the December quarter was $33.2m, a 21.7 per cent drop on the September quarter, and down 58.2 per cent on the December quarter, 1985. I think I should repeat the actual impact reflected in this day's announcement which is: Expenditure on offshore petroleum exploration during the December quarter was $33.2m, a 21.7 per cent drop on the September quarter . . . That speaks for itself. At the current world price of oil and the current Australian dollar value, crude oil imports in 1990 could cost some $A3,000m compared with a net crude import bill of $A44m in 1985-86. There is a massive movement of $2,956m in our essential imports within four years. I use that word `essential' because there is no way that we will get around it, particularly with the rate of research that is going on with alternatives under this Government. Given Australia's current balance of payments problem, an additional outflow of this magnitude would have serious repercussions, as I have mentioned, in an area where our current account deficit is running on average at over $1 billion a month and increasing our national debt as a result. That is the type of crisis that will be added to the crisis we have at the moment. I have outlined two basic reasons for the Opposition's rejection of this legislation. The changed pricing conditions that apply now vis-a-vis 1984 when the RRT was announced, giving rise to reduced incentive for exploration and production; and the effect of a decline in petroleum self-sufficiency on the Australian economy. In order to boost Australia's level of self-sufficiency, more exploration and development work needs to be done. The volume of this work that is needed will not proceed while the level of producer realisation is so low. Producer realisation is affected by the price level and the tax level. As we have little power to exert on the price level currently throughout the world, if we are to effect producer realisation it must be via the taxation levels. By getting rid of the RRT we are providing a significantly greater incentive to exploration companies to explore, while still ensuring that the community gains a return on the assets through the normal taxation and royalties system. In claiming that producer realisation affects exploration, it is as well to review the recent performance of the exploration sector. Off-shore exploration expenditure fell by 25 per cent between 1985 and 1986. Mr Tim Fischer —They are overtaxed. Mr BRAITHWAITE —Overtaxed and underdeveloped, and we are not enticing people to carry out this exploration. Off-shore exploration is expected to fall by another 56 per cent in 1987. Total private exploration expenditure has declined by 35 per cent between 1985 and 1986, and in 1986 there was a 55 per cent fall in on-shore drilling. Price is a critical factor in exploration decision-making. Petroleum exploration expenditure in Australia has tracked the import parity price. There is ample data available to suggest on a world wide basis that exploration activities are directly related to earnings, which are a function of oil prices and tax regimes. Exploration should thus be responsive both in the short and longer terms to any reduction in taxes which results in increased, post-tax, cash flows or expected returns. That is a normal business procedure and expectation. APEA, in its submission to the Government on tax reform, draws attention to a number of cases where relatively modest changes in taxation have had a marked effect on exploration spending. In the United Kingdom's North Sea area in 1984 and 1985, following changes to the fiscal regime, exploration drilling increased from 128 wells in 1983 to 182 wells in 1984, and to 157 in 1985. The United Kingdom is a country which encourages exploration and development compared to Australia. R. E. Megill studied the relationship between the United States of America exploration expenditure to industry well head revenue over the period 1978 to 1981. He showed that expenditure was consistently close to 25 per cent of industry revenue. In Australia historically there has been a direct correlation between exploration activity and pricing policies. The exploration industry reacted positively to encouraging pricing changes in 1965, 1975 and 1978. The new oil policy resulted in a sustained period of high exploration activity reflecting price growth, higher potential producer realisations and policy stability. Abandoning the RRT would at least raise producer realisations from future discoveries and act as an incentive to explorers to make those discoveries. Once discoveries were made on revenue flowing from production, it is reasonable to expect that a significant portion of the extra revenue generation would flow back into exploration as additional investment. Under the current excessive and punitive taxation regime of the Australian Labor Party's Government, to which the RRT will only add, indigenous Australian crude oil production will decline dramatically over the next few years, leaving a shortfall which will have to be met by either new discoveries or imports. Recent statistics released by the Australian Petroleum Exporters Association show a disturbing fall in exploration and development drilling and seismic work. This year's petroleum exploration activity in Australia is expected to fall by more than 50 per cent to its lowest level since 1980, in comparison to the figures I gave the House for the United Kingdom. Mr Tim Fischer —It is a disgraceful situation. Mr BRAITHWAITE —It is an absolutely disgraceful situation. Probably only 136 petroleum exploration wells will be drilled this year, in comparison with a record of 265 in 1985. Australia's crude oil demand is expected to grow at a modest rate of one per cent a year. However, at the same time indigenous crude oil production from current discoveries will decline quite rapidly. The combination of decreasing domestic production and moderately increasing demand will, as I have said, leave a widening shortfall which will have to be met by either new discoveries or imports, and the consequences for Australia's balance of trade of increased oil imports would be most unwelcome, particularly in the current circumstances. But with low prices and the severe downturn in projected exploration activity, the outlook for future discoveries is severely impaired. With only a few discoveries, Australia's self-sufficiency level will drop to only 35 per cent in the 1995 to 2000 period. This compares with the recent 100 per cent self-sufficiency in Australia. Clearly this outlook demands that urgent steps be taken to encourage exploration and development. Only then will Australia have a domestic industry on which it can rely for supplies. There is no doubt that to allow the optimum level of exploration, development and production, the Government must lower levels of taxation on the oil industry. The fact that the Government takes almost $7 billion in tax from the oil industry underlines the need for complementary restraint in government expenditure. We are continually telling the Government about this in this House. The Government needs to allow the oil industry to retain the financial resources that are necessary for optimum exploration and development. The Government must allow oil producers to have free access to markets and let the market-place establish prices. The Government needs to review critically all existing regulations and remove them wherever the benefit cannot be shown to exceed the cost. Most topically, the Government should withdraw this resource rental taxation legislation now before the House. In all of this I have outlined the problems that are besetting the oil developers, the explorers and the people doing the work out of the well-head. But what is in it for the consumer? All these costs and all these taxes that I have mentioned have the habit of finding their way into the pockets of the consumers. I am reminded that every litre of fuel that one buys from a bowser anywhere in Australia, almost two-thirds of the cost goes in government taxation, either in excise or levies-and in the future could be in royalties under this legislation. So it is the consumer in the end who is paying the price for the mischief this government is creating in the oil development areas. It is interesting also, in the light of Mr Hawke's promise, when he was trying to assume government, that he would reduce the price of fuel around Australia by 3c a litre. How many of my colleagues faced the election with the Australian Labor Party candidates saying that they were determined to pull the price down by 3c a litre from what it was then. The people believed them and put this Government into office. But what is the reality and the substance of that promise? The fact is that today the price is 13c more a litre than it was in 1983-84-that is, 13c a litre more compared with the promised decline of 3c. Unfortunately, that is the sad history of the manner in which this Government has been demanding more and more from an industry that will now be less able to give what is asked. For the obvious reasons that I have stated in the course of my speech, the Opposition firmly opposes the four Bills included in this cognate debate. Mr CHYNOWETH(Dunkley)(5.12) —It is with great pleasure that I rise today to speak on the Petroleum Resource Rent Tax Assessment Bill, the Petroleum Resource Rent Tax Bill, the Petroleum Resource Rent Tax (Interest on Underpayments) Bill and the Petroleum Resource Rent Tax (Miscellaneous Provisions) Bill. I rise to speak on behalf of the people of Australia and of the many service station proprietors in Australia who must be suffering repetitive strain injuries occasioned by the daily changing of petrol prices on their hoardings. I saw an electronic one in Mentone in Victoria at the weekend where the operator can change the price by the pressing of a few buttons. I also stand to orate a totally unsatisfactory malaise that confronts the motorists of this country who are the unwilling pawns in a petrol price merry-go-round that ensures that the price that we pay for petrol today will be nothing like the price that we will pay tomorrow. I could open a vast medical casebook to support further my two doctoral examples of the petroleum industry, but I am sure that honourable members will find that this is unnecessary. The greed of the petroleum industry cartel in Australia can be seen to be a cynical rip-off that frustrates service station operators back into the ground-I suppose towards the earth's inner crust where this black sticky substance called oil is found. Hence the causes of these ills are all the same. The symptoms are well known. A prescription is imperative. These Bills are in part a remedy for a state that happens far too often and is allowed to occur far too easily. Upon entering the oil industry one discovers a web of intrigue that is very hard to unravel. I suggest that the oil companies prefer the scenario to be this way as it suits their convenience. The web becomes complicated when we realise that it is also a sensitive amalgam for the Government as it stretches to encompass petrol prices, petrol excise regimes and government revenue. Nonetheless, this Government is not afraid, and nor should anyone else be, to face the oil companies and question the spirit of rules by which they play. The resources that the oil companies exploit is a scarce, non-renewable asset that should belong to all Australians. It appears that this maxim is true only while the resource is awaiting extraction. As soon as the oil has been extracted, it suddenly becomes the property of a multinational company. The multinational oil companies have had a blatant disregard for the average Australian. They toy with the motorist like a yo-yo as petrol prices rise and fall. They cajole the outlet operator in a fashion more attuned to wildcatting. Finally, they impinge their needs upon the Government, with the hope of creating what they believe to be the utopian situation of industry deregulation. Why is the average speechless, powerless, abused, inadequate and naive motorist the butt of the oil companies' wheeling and dealing? Why is the honest, battling, hardworking site owner on the receiving end of the oil companies' taunts and threats? Why is the Government's oil industry policy labelled by the cartel as deficient and as a stunt to economic growth? The simple answers lie intertwined within a notion of survival. The motorist, dependent on petrol, cannot buy it anywhere except in an oligopolistic market-place. The service station operator must accept the lot that his oil company casts him; otherwise his business is on the line. Finally, the oil companies are venomously critical of government policies in the industry because these policies hinder the companies' ability to record even more enhanced profits while still holding the strings of the motorist and the outlet operator. Call it intimidation, if you will; call it tyrannical if you think it is unfair: I prefer to call it downright un-Australian. The fact remains that oil companies still make vast profits from Australia whilst petrol prices fluctuate violently in a smog of talk about trigger prices, import parity and dollar rates. The approximate profit of Ampol Petroleum Ltd, the Shell Co. of Australia Ltd, Mobil Oil Australia Ltd, BP Australia Ltd, Caltex Oil (Australia) Pty Ltd and Esso Australia Ltd in 1984 was $574m. In 1985 these multinational oil companies made $307.6m. This figure does not include Esso which, in the previous year, made a profit of $412m. I hasten to add that Esso handed over to its American doyen a dividend of $280m. In 1986 the combined profit of Esso, whose profit fell, and Caltex, whose profit was unsatisfactory to shareholders, was only a mere $375m-just over $1m a day. These profit results are amazing and, at the same time, alarming figures for they represent the moulding of motorists, Government and station owners to fit the needs of BP, Shell, Caltex, Ampol, Mobil and Esso. Undoubtedly these oil companies are an aggressive collection of entrepreneurs who put their case very forcefully and very effectively. However, in the mind of the average Australian the force and direction of the oil companies should be ruthlessly questioned when the following newspaper headlines appear: B.P. profit surges 460% A leaner Mobil makes a tidy $40m profit Esso profit dives to $350m Mobil exceeds profit target with 363% leap to $54.5m Esso earning doubled to $412m I would like to read something from the Age of last week, from the oil companies and their friends. It is headed: `Gloom, doom and despair to colour APEA meeting'. It states: New taxation legislation before Federal Parliament . . . more than 6000 job losses in the past year . . . the oil price still a third below its 1986 peak . . . an exploration effort which has stalled . . . This is the background against which the oil industry will meet next week at the annual Australian Petroleum Exploration Association conference. On the same page of the Age is the heading `Oil, gas stocks push market to a record'. It states: The all ordinaries index reached a record high on the national sharemarket yesterday as unusually heavy investment in the oil and gas sector prevailed. The all ordinaries index closed at a record 1648.8 points after a 9.4 point rise. The 48.6 point rise in the oil and gas index was a major reason for the record close. This is the doom and gloom. The intention of the multinational oil companies must come under further scrutiny when, in the light of these headlines, they proclaim rather hysterically that present Government oil policies, under which, I add, they achieve record profits, are inadequate, placing the nation's economy at risk and likely to weaken the future security of oil supplies. I suggest that this is a blatant and poorly disguised bid to increase profits even further at the expense of the average Australian motorist, service station owners and the Australian Government. I cite three pieces of evidence to reinforce this suggestion. Firstly, the Broken Hill Proprietary Co. Ltd's 1985 annual report appears to corroborate this opinion when it cautions that `a new resource rent tax will reduce the incentive to explore for and develop new oil fields'. The big Australian's eagerness to prospect and drill is admirable, but it must be put in the context of a multinational company where profit is the only desired zenith. It seems that for Esso-BHP `a dollar earned from the oil today is more valuable than a dollar earned in five years time'. The incentive to produce as fast as possible, therefore, is obvious. Secondly, the Australian Petroleum Exploration Association, in its 1984 report `Petroleum Exploration: The case against more tax', chided that `the rate at which Australian industry discovers and develops new oil is more a function of economic expectation than geology'. Once again it seems that shareholders have an uncanny leverage over the rationale of the petrol industry. There is certainly no place for the motorist in this discussion. Finally, to what extent can the multinationals be trusted? Regrettably the oil industry in Australia and overseas has been confronted with one of the most serious challenges since its beginning. Rapidly falling prices have placed great stress upon all quarters of the industry. It cannot be forgotten that Esso, for example, is wholly foreign owned and that 100 per cent of its profit is repatriated. I very much doubt that the parent company feels any overwhelming obligation to Australia. This raises a central question in this debate. In a world of petrol bowsers, radiator flushes, automatic car washers and 24-hour food marts where do Australian motorists and service station owners stand? The golden age of service stations has passed. Twelve thousand of Australia's petrol retailers have gone out of business since 1966. Most operators have no choice if they want to survive-they must run motor repair workshops, hire out videos and sell America's Cup souvenirs or food. The retail market-place is all but totally controlled by the major oil companies. The consequences are disastrous. The glorious age of motoring may also have been overtaken too, for petrol consumption is declining. Today's motorists face wildly fluctuating prices which are discreetly manipulated by the oil companies. For example, it is a Christmas tradition that there be higher prices in late December when the companies know that people will be travelling more. Let me give some prices that my staff have located today throughout Australia. These are the prices that Australians are paying for BP petrol. They point out the discrimination that is happening to the Australian motorist. Today in Hobart people are paying 65.5c a litre for super and unleaded petrol. In Sydney they are paying 49.9c a litre. It was claimed just before that the Prime Minister (Mr Hawke) gave a promise that the price of petrol would come down by 3c a litre. There is a difference of nearly 15c per litre charged today between Hobart and Sydney. Other prices are: Brisbane-54.9c; Canberra-56.9c; Broome-57.5c; Wyndham-63c; Alice Springs-62.6c; Gympie-54.9c; Cairns-56.9c; Broken Hill-63.9c; Albury-58.9c; Ceduna-62.5c and Melbourne-51.9c. The highest price today is 65.5c a litre in Hobart and the lowest price is 49.7c a litre in Sydney. The petrol companies are the villains and their discounting is costing motorists and service station owners a lot of money. There are four ways in which the companies dispose of product. Firstly, they supply it to high volume jobbers such as Delta Petroleum or Solo Oil Australia Pty Ltd. Secondly, they sell it to the owner operators of the service stations. These people, because they are not tied to an oil company, are wooed to a certain extent and given some substantial price benefit. Thirdly, the greatest number of outlets are people who regard the oil companies as landlords. These people who rent the premises from the oil companies have no choice about the price, pay exactly what the oil companies invoice them and sell their product at virtually the price that the oil companies dictate to them. Their position in the market-place is very much determined by the extent to which they can afford to engage in competition, given that the maximum margin available to them is under 4c per litre. The remaining form of distribution is through company-owned sites which are usually in prime locations offering high volume sales from multi-lane sites which are known in the industry as gas pumpers. These service stations are usually run by commission agents who often receive less than 1c a litre for the petrol they sell. The price at these commission agent sites is determined by the oil companies. Technically companies are not allowed to telephone ordinary service stations and say that the price has changed, but the companies do instruct their commission agents to adjust the price of petrol up or down. I cannot believe that all petrol companies in Melbourne suddenly have the same thought to increase their price by about 9c overnight. Someone must be directing them to do it. The price at these commission agent sites is determined very strongly by the oil companies. Thus the oil companies clandestinely operate directly in the retail market. They justify their presence by proclaiming that they are a spur to price competition. This is just the type of encouragement that the Australian community does not need. In the present set of unfortunate circumstances this would appear to be so, for frequently oil companies, acting individually or in concert, do create price war conditions. They promote a strain of guerilla warfare in the suburbs either through the provision of bulk supplies at preferential prices to the secondary market and/or by dropping prices at their commission agency operated outlets. Such wars are created for any number of reasons, not the least of which is to quite temporary overproduction or excessive stockholdings. However, the resulting price competition generated is mainly in the retail market and not at the wholesale level. I put it to this House that price reductions of this nature are temporary and selective, and are clearly discriminatory between retailers. If a retailer is discriminated against, so are the customers of the retailer. The shameful fact is that the oil industry has cleverly created a market where there appears to be price competition but where in fact there is little, if any, price competition at the wholesale level. This is possible because the major companies have a captive group of retailers-lessee dealers-and there is no incentive to provide dealers with the best prices on a permanent basis. There must be no doubt by now that the price of petrol at the retail pump is not decided by consumers or by retailers. Price rises and price falls are based upon the decision of oil companies. Should the oil companies ever be successful in driving out the remaining independent dealers, the ability of the multinationals to increase prices contrary to public interest will be undoubted. It is really a pitiful state of affairs. The oil companies claim that they are presiding over healthy discounts initiated by retailers, but this is untrue. The discounting is initiated by the oil companies, and the retailers are obliged to contribute to the cost of that discounting. Far from being good for customers and consumers, the end result is that discounting means that occasionally motorists can buy petrol at the right price. Clearly this is unsatisfactory; yet the multinational oil companies are crying out for taxation relief to undertake greater exploration and eventually rip off the motorist even more. I believe that these actions of the oil companies should not be tolerated. The Bills provide for a rent resource tax to be based on profits earned and it will rise and fall with the level of profits. This will not only redress the situation of unprofitable producers paying excise but also will allow the Government and the people of Australia to share in any windfall profits that may arise. The `quiet deceivers' of the petroleum industry have been promising to do more than sell petrol for a number of years. Perhaps the passage of the Bills will ensure that the resource wealth of Australia is shared more fully among all Australians. It may also bolster a new public perception of the oil companies that, despite their protestations, sometimes their `toils ain't toils' at all. Mr GOODLUCK(Franklin)(5.31) —I listened with interest to the comments by the honourable member for Dunkley (Mr Chynoweth). I agree with some of the things he said but not others. Somebody has done research for him. I will not refute or dispute some of the things he said. The position is not as simple as he makes it out to be. In 1976 the Collins Royal Commission on Petroleum pointed out that certain things in the industry needed to be straightened out. Mr Justice Collins said that there was discrimination and that the industry was very complicated. He said that it was very difficult to analyse the industry and to bring down recommendations making it fair for every motorist in Australia. Interestingly, at that time the price of petrol in Melbourne was 14.5c a litre and in Hobart it was 19c a litre. The same differentiation is evident today. The honourable member for Dunkley has forgotten one thing. I will be political for a few seconds only. We have a price watch. The honourable member for Canning (Mr Gear) is going to look at the price of petrol. I think that there will be a politician at every service station just to find out the price of petrol. Yet the Government says: `We will bump up the Prices Surveillance Authority. We will say that it is a great organisation. It will make recommendations on prices, and it will be fair for everybody'. We can lay a bit of blame on the oil companies, but they are in the market-place to compete. We can condemn them a bit, but they do provide employment and opportunities for people in Australia. So we cannot knock them too much. Let me say to the honourable member for Dunkley that the Prices Surveillance Authority-I ask him to listen to this very carefully; I have been saying it for 12 years, but nobody has taken any notice-fixes a maximum wholesale price for petrol in every capital city. The price does not vary very much. For example, in Melbourne it is 54.53c a litre; Sydney, 53.59c; Brisbane, 49.86c; Hobart, 57.56c; Perth, 54.38c; and Adelaide, 52.68c. We must remember that the Authority fixes a maximum wholesale price. Is the honourable member for Dunkley going to take a point of order? Mr Chynoweth —Oh, no. Mr GOODLUCK —The honourable member had me worried for a minute, after listening to him for half an hour. The Authority fixes a maximum wholesale price for petrol and then, all of a sudden, the problems start to occur. In fact, the figure the Authority sets is fictitious because retailers in certain parts of Australia are able to sell below it. For example, the prices cited by the honourable member for Dunkley were below the Authority's price. What is the use of saying `We have a Prices Surveillance Authority and we will give it more staff; we will have people look at prices', when the Authority fixes a maximum and then allows petrol to be sold by oil companies at well below that price in every part of Australia? Surely to God, it is a simple process. We have talked about this before. Honourable members opposite are in government; we are in opposition. I have suggested on many occasions that the Government's price watch-let us be truthful about it-is just a political hoax. Is somebody going to sit in a service station in Hobart and say `That's the price', while in Queensland another price is set? Surely to goodness we have the mechanism-the Prices Surveillance Authority-to set the price. It is an authority which the Government wants. We do not want it because, as far as I am concerned, it has failed miserably. We have the structure to say to the industry: `That is the wholesale price'. Let us start working from that firm base. If the oil companies, which go to the Authority, are able to justify a price rise, they get the price rise. That is the mechanism for fixing the wholesale price. The trouble starts to occur after that. I have argued for years that oil companies drop their price below the wholesale price-sometimes 5c or 6c a litre below it. They say that they are not making a profit in certain States, but the price is higher in other States. When the companies go to the Authority and obtain an increase, there is an increase in the price of petrol across the board throughout Australia. Instead of analysing the price in Hobart, Melbourne, Sydney or whatever, they say that that is their price collectively. Then they are able to drop the price in certain volumed areas of Australia, such as Melbourne and Sydney which have three million people each. That is why Australian motorists are so concerned. That is why there is so much complaint. The problem is very difficult to overcome. The oil companies say: `We are competing in the market-place. The biggest volume is in Melbourne and Sydney. We can drop the price down and sell more petrol'. That is where the problem lies. Let us forget about the Government's price watch. It will not wash. The Government wants its Prices Surveillance Authority, which it supports so determinedly, to have the authority to look at prices, and then the Government can say to Australian consumers that the Authority is the mechanism to overcome the problems. If it can do that, we might get somewhere. If we are to look at the oil industry and at fairness for motorists, do we not have a mechanism in this Parliament to do so? A joint select committee could consider the oil industry. The Royal Commission on Petroleum cost $1.6m. My colleague, the honourable member for Ryan (Mr Moore), who is the shadow Minister and is at the table, knows that only one speech was made on that in this Parliament in 1976 and it was mine. No one can refute that. The inquiry cost $1.6m. We were in government at the time and we found it very difficult to bring down recommendations on the industry. The issue has gone on and on. The variations in the price of petrol take attention away from the fact that we want to be self-sufficient. Of course we cannot support the legislation. We want explorers in Australia to be self-sufficient. We do not want to depend on Arabian countries for certain imports of oil, because when they are cantankerous, a shortfall occurs and we have strife. We must support exploration. We must ensure that the wells run freely and that there is money for that purpose. We want explorers to come to Australia so that we can be self-sufficient and not dependent on imports. In the American crisis there was a fear that home heating oil, fuel for cars and so on could not be supplied. There was a problem and everybody said: `What are we going to do?' We do not want that to occur again. We want to be self-sufficient in future so that we do not have to depend on other countries. Then we can say: `We are right. Australia, with 15 million people, many of whom are motorists and are dependent on the motor vehicle, home heating oil, diesel and so on has no worries'. Surely that is what we should be aiming at. As a government we should have the mechanism to be able to say that there will be fairness for all motorists in Australia. Surely we can make certain that the explorers have the will and the money to be able to succeed. We must give them a go and we must make certain that the oil companies, through their marketing practices, do not con motorists. We must ensure that there will be fairness from everybody. Then we might get a bit of equality into the price of petrol. I ask the Government not to talk today about price watchers and about the price of petrol or to make comparisons, because its Prices Surveillance Authority has failed miserably in the area of petrol pricing. Mr WRIGHT(Capricornia)(5.39) —It is not unexpected, I believe, that the petroleum industry would oppose the proposed resource rent tax that we are considering today. I read an article prepared by the industry which says that the tax is a discriminatory secondary tax. The article stated that it was not properly structured and claimed that it was not a true profit-based tax. I intend to challenge those claims. It went on to say too that the circumstances economically have changed since this tax was first thought of. The idea of a resource rent tax was mooted in the early 1980s and was committed to by the Government in 1984. I think it is always expected that an industry will argue against any type of tax, but I think that it has an obligation to test it out, check it through and find out exactly what is being proposed. It is my belief that if the industry really did that it would find that this tax that is being proposed in this legislation is really in its interests. I think that whilst it is understandable also that there are industries opposing it, governments have a responsibility to ensure that the people they represent-the community and, in this instance, the Australian community-share in the potentially high returns of any type of industry that exploits a nation's resources. In this instance we are talking about the exploitation of our petroleum resources-resources that we need to remember constantly are very scarce and non-renewable. I listened with some interest to the shadow Minister, the honourable member for Dawson (Mr Braithwaite). He claimed that the proposed tax would be a deterrent to exploration. All I see him doing is echoing the views being put forward by some elements of the industry. But again the claims are not true. The fact is that this tax is not based on production as we have with excises and royalties, but that this tax is based on achieved profits. I will restate that: This tax is based on achieved profits. The cash register has to show the return. It is not a matter of saying `We have produced X numbers of barrels of oil in a day or over a period' and if it is measured in terms of quantity, some sort of tax, excise duty or royalty will accrue. That is the present system and that is the system that it seems the Liberals and the Nationals want to support; that is, that we have a taxing system based on production. But that is not so with this resource rent tax. The new system will replace the existing system and not add to it. Instead of having something based on production, it will be based on achieved profits. This really means that those who want to get into the exploration of our petroleum resources on the off-shore of Australia will be able to get in there knowing that if they do not make profits they will not be paying the tax. I am quite amazed that members of the Opposition say that they are going to oppose this legislation. I would have thought that they would, first and foremost, want to see a greater share and return to the people of Australia for the exploration and exploitation of our resources. I also thought that, being in an alleged private enterprise party, they would say: `If you have a tax, base the tax on proven profits and achieved profits, not on what is simply set down as production'. In contrast to the production-based secondary tax systems which I believe members of the Opposition are arguing for, the Government's petroleum resource rent tax will be payable-I stress this-only in respect of those earnings which will be achieved. I appreciate that the world oil system in the industry has been very volatile in recent times. There have been constant fluctuations in prices. There is a constant threat of glut and oversupply. If that is the situation, surely the industry should grab this concept with both hands. If there is going to be a tax based on the profits and there is a constant threat on those profits because of the possible manipulations of world prices and the world supply, if I were in that industry I would want to say: `I will pay the tax when I am making the quid, not when I am just producing it and storing it away'. It surprises me that members of the Opposition have taken this position. Mr Robert Brown —They don't understand it. Mr WRIGHT —I really do not think they do. What we have here is a proposal that guarantees that the Australian people will get a fairer return and a fairer share from the exploration and exploitation of this country's petroleum resources yet, at the same time, ensures adherence to and advances the concept of risk and reward. Many members of the Government believe that we ought to pursue the idea of risk and reward. But where an industry is prepared to take the risk there ought to be the rewards. In this instance the companies which take the risks will get their rewards because it will be profit based and not just production based. I believe that in the long term we will see an encouragement of the exploration of off-shore petroleum resources simply because of the thrust of this legislation. I want to use the few moments that I have to canvass some of the comments that were made by the honourable member for Dawson. As a Queenslander I have listened to him tell Queenslanders over and over again and, for that matter as he has done here today, tell Australians that the Hawke Government has caused the price increases. I heard someone interject from cockies corner about all these promises that the Hawke Government undertook to keep prices down. I think it is time we put some facts about fuel increases on the record. First and foremost we have to appreciate that the Federal Government only controls the wholesale price of fuel and that the States have the power to control retail prices. Having accepted that because it is the true position, it is the States that control retailing, but it is the Federal Government that controls wholesalers. It is a worthwhile exercise for honourable members to have a look at the growth in wholesale prices of fuel since Fraser took over from the Whitlam Government. The wholesale price today-I am looking at Queensland because that is my special interest at the moment-is 49.86c. That is the Brisbane price. That price has risen from 39.54c since Labor came to power in 1983. That is a rise of 10.32c during this period. Over this time we have seen prices rise and fall. In fact, someone told me the other day that wholesale prices have fallen in Queensland some seven or eight times over the last four and a bit years but, regrettably, very few of those falls have ever been passed on to the motorist. The fact is that there have been these rises and falls. Let us come back to the figures again. The wholesale price of fuel at the time Labor came to power was 39.54c-this is the Queensland price. The wholesale price today is 49.86c, a little more than a 10c increase. Let us compare this with the wholesale prices which applied under members of the Liberal and National parties, who now sit opposite, when they were in government. In July 1975, the wholesale price was not the 39c that it was when we took over, it was 11.69c. So in July 1975 when the Fraser-Howard Government took over from the Whitlam Government it was 11.69c, but during that period it rose to 39.54c-almost an increase of 28c a litre. That is more than a 250 per cent increase and yet members of the Opposition have the audacity to stand up and say that we have caused the massive increase in the price of fuel. Well, the facts do not prove that, the facts disprove that claim. I will state it again-an increase from 11.69c at the end of the Whitlam era to 39.54c to the end of the Fraser-Howard period. If anyone needs to be condemned for the increase in the price of fuel in this country, that condemnation certainly, surely and truthfully can be levelled at the Liberal and National parties. Yet we constantly hear members of the Opposition getting up and blaming us. Let us also look at the figures that do exist. We should understand as well that we should allow for inflation. If we index and allow for inflation, we find that since the Hawke Government came to power the retail price of fuel has fallen by about 3 per cent. Why? Because the Hawke Labor Government, through the Prices Surveillance Authority has insisted that the wholesale price charged by the companies-honourable members realise that this is the basis of the ultimate retail price-is justified. Yet let it be placed on the record that the Liberals and Nationals want to abolish the Prices Surveillance Authority. I believe that the Hawke Labor Government has an excellent record in the way it has handled the fuel industry and the price of wholesale fuel in this country. It has been the Hawke Labor Government that has acted to ensure that the overall petrol excise has been reduced. Following the 1986 Budget the petrol excise was 23.884c per litre. Since then it has been reduced to 19.15c per litre. If that does not show an effort to keep down the price to industry and to motorists I do not know what does. The facts are very clear that the Hawke Labor Government has met its commitment and we cannot be held responsible for the fact that Queensland does not care a damn about the retail price. It does not care that in some cases in Brisbane fuel is priced at 50c a litre but in the northern parts of my electorate it is priced at 64c a litre. When one tries to take anyone on about it people try to cover up by claiming that the reason is the high cost of freight. That is certainly not true. It is time the people of Australia, particularly those in my State, Queensland, realised that the State is responsible for the ultimate price that they are paying at the bowser. I am most pleased that the Prime Minister (Mr Hawke) has pledged that increases in excise will be restricted to 6 per cent. In this way we will retain our present reputation as having the lowest petrol prices in the world. We might say that 50c a litre is still too much to pay-or even 55 cents or 60 cents-as it is when one has to pay for it oneself, but when we compare our petrol prices with those applying in other countries in the Western world we realise how well off we are. I support the remarks of the honourable member for Dunkley (Mr Chynoweth) about some of the problems in the petrol industry generally, I realise that these remarks do not apply specifically to the measures before the House but they relate very closely to the petrol industry. I make a plea for the people involved in the retailing of fuel as service station proprietors. Many are living on the very edge of poverty. There are some 1,600 service station proprietors in Queensland. It is very clear that unless we can protect these people in some way one-third of them could go to the wall. As I have travelled around Queensland, and central Queensland particularly, I have seen service stations where six and seven people were being employed which are now down to being strictly family concerns. The people there are working long hours for a very low return. I put it to this House that if oil companies can flog off fuel and give special prices to the independents and jobbers and reduce the wholesale price by 10c a litre to an entrepreneur who can then flog it to his mates and make for himself tens of thousands of dollars, if the oil companies can regularly have a special price 10c a litre below the normal price, why cannot they do so on a regular basis? I have given an instance of one jobber who purchased 700,000 litres-a very large tanker-of fuel at just on 10c a litre less than the normal price. Breaking the rules, he travelled through central Queensland and sold that fuel to a local independent giving that person a 5c a litre cut. He made a profit of $35,000 just by buying the fuel at that price. He then sold it to the independent who reduced his price to the motorist by a couple of cents a litre. He made a profit of something like $20,000. Good on the jobber and good on the independent for being able to do that. That is part of business. If one can get a decent buy one takes advantage of it, but the whole issue comes back to some type of commercial morality. If the companies can do this-it is not an isolated incident when an oil company flogs off millions of litres of fuel to jobbers and independents and middle people-on a regular basis at a price up to 10c a litre lower than normal I believe the Australian motorist has every right to ask why the price of fuel is so high. Why are these companies not doing it with normal supplies? If they can sell fuel at 10c a litre less at some times why cannot they bring the wholesale price down to the service station proprietor by 5c a litre? I think it is time we had a hard look at the petroleum industry. Whilst I appreciate that the Prices Surveillance Authority has acted within its powers and has kept the hammer on these price increases, it seems to me that there is certainly a lot of flesh in the petroleum industry. That is certainly proven by the special deals being given to jobbers. I support the thrust of the Bills before the House. A profit based tax is in the interest of everybody because those who are making the profit have the ability to pay the tax. Mr EVERINGHAM(Northern Territory)(5.55) —The honourable member for Capricornia (Mr Wright) spoke about a lot of flesh in the petroleum industry. From the way in which he was squealing in his contribution to this debate it seems to me that the blow torch of the electorate is about to be applied to some of his flesh. He had to search back as far as the Fraser Government to try to compare its figures and what we were promised would happen under the Hawke Government. Prime Minister Hawke in 1983 was prepared to promise anything to the Australian people in order to gain their votes. He broke this promise just as easily as he broke so many others. The public perception of fuel prices by the Australian motorist is about to be shown to the honourable member for Capricornia through the ballot box. The honourable member for Capricornia is squirming about the price of petrol because the election is getting inexorably closer. The Prime Minister promised anything in 1983 to win. He stuck his neck out by saying that he would lower the price of petrol but now we hear from the honourable member for Capricornia that the high price of petrol is all the fault of the States and the oil companies and that the Prices Surveillance Authority does not have the necessary powers to reduce it. What has been happening since 1983 if the honourable member has to squeal and look to weak excuses such as that so far down the track at this late stage? I can understand the concern of the honourable member for Capricornia; it is a concern for his seat. There is real anger out there in the community at the price of fuel. Every time one goes to the petrol pump one finds that it does not matter what Prime Minister Hawke said about reducing the cost of fuel, the price of fuel has gone up and up and up. The honourable member cannot tell me that the public will wear the eyewash that he wants them to wear by referring to graphs on what happened with Malcolm Fraser in 1975; they know what it is costing at the service station. They know that it is costing them a poultice to fill their tank and they are going to tell the honourable member for Capricornia all about that as soon as Prime Minister Hawke has the guts to face the Australian people. Mr Wright —What about you? You are not even in the electorate. You are getting out. Mr EVERINGHAM —Let the Prime Minister call an election. Mr Wright —Come into Capricornia and have a go. Mr EVERINGHAM —I will be doing my share of campaigning and the honourable member can be sure that there will not be any Labor member coming from the Northern Territory. I will be happy to campaign in Capricornia too. I will be able to tell the people of the electorate of Capricornia that in remote areas of that electorate they are paying more for their fuel because this Government has ripped apart the fuel price equalisation scheme. That is one of the reasons why people in remote electorates such as Capricornia and the Northern Territory are being unfairly victimised with the cost of fuel. Almost everyone who has spoken in this debate has spoken about what fuel costs at the petrol pump. The subject of this legislation is the resource rent tax. The honourable member for Capricornia claims to have great experience about risk and reward. What he has ever risked and what his rewards have been I am not quite sure. Maybe he has a lot of experience in that area. He can enlighten the House about it if he wants to. When I was dealing with all sorts of minerals exploration and development companies on the introduction of a new minerals royalty regime in the Northern Territory my proposal was for a profit related tax based on the income generated from the development of minerals. Unfortunately, the industry does not seem to be swayed in this area by arguments that reach for rationality and logic. The industry prefers a royalty because it knows exactly where it stands. It wants a fixed royalty, not a profit-related royalty, because it can then say: `We know exactly where we are, we can count the cost and if we ever happen to strike it rich-the one in a thousand chance-out of a particular strike, we can at least keep a fair bit of the money with a royalty rather than with a profit-related regime'. I have a particular interest in the Bill since the two Australian off-shore fields that will be principally affected by this legislation are off the Northern Territory-the Jabiru and Challis oil fields. We usually find that when this Government does anything to further dampen mineral exploration, development or activity it is directed-directly or indirectly-at the Northern Territory. The poor old Territory, so often criticised by this Federal Government for its reliance on Federal coffers, held high expectations for the benefits to be reaped from the Jabiru and Challis fields. Darwin was to have been the home base for the off-shore oil industry, creating employment and investment for our part of Australia. But a considerable uncertainty now hangs over that, one that this Government, I believe, has not even addressed. Perhaps the Minister for Resources and Energy (Senator Gareth Evans) would like to use this opportunity to explain how the resource rent tax will affect current revenue sharing arrangements as set down in the off-shore constitutional settlement. The resource rent tax proposal was announced and introduced almost three years ago in mid-1984, yet the Territory and the States still do not have any clear idea of what the Federal Government intends to do about revenue sharing. Furthermore, during the inordinate amount of time that the Government has taken to bring on the legislation, circumstances have changed considerably-radically, one might say-in the oil industry. It was conceived at a time when the oil cartel, OPEC, was maintaining its grip and maintaining a fairly stable but high price structure. Today is no longer the case. This Government's determination to find every means to extract dollars from the industry to prop up its disastrous record of economic management threatens the very livelihood of the oil exploration industry. We have heard from the Minister what would seem to be very reasonable justification for the introduction of the petroleum resource rent tax. In summary, the argument is that it is the duty of government to extract maximum benefit for the community from community-owned resources such as oil. But that is not the only responsibility of government; there is also a responsibility to ensure the future prosperity and development of oil exploration. Let me remind this House of some alarming facts. The most recent report of the Australian Bureau of Statistics reveals that in the last quarter on-shore and off-shore petroleum exploration was down 68.3 per cent and 63.4 per cent respectively. That is a drop of $157m on the same quarter in 1985. It has meant the loss of some 3,500 jobs across Australia. I do not claim that the Government has brought this situation about single-handedly, although it has certainly done its bit to worsen the situation. The collapse of the OPEC agreement on oil pricing has been a major factor. Since plans to introduce the resource rent tax were announced, the domestic price of Bass Strait crude has fallen from $43.71 a barrel in January 1986 to $29.37 a barrel in March 1987. Over the same period Australia's production outlook has changed dramatically. In March 1984, the Bureau of Mineral Resources estimated that Australian oil production would rise by about 30 per cent by 1989 and hold at that level, before beginning to decline in 1996. This assessment was apparently based particularly on over-estimates of reserves in the Jabiru field off the Northern Territory, the speculation being that Jabiru contained 150 to 200 million barrels. This led some to believe that reserves off the north-west coast could be as high as 1,000 million barrels. Thus, the Government decision to pursue resource rent tax was made in the heady atmosphere of considerable optimism, not to say a touch of euphoria-at least euphoria for revenue raisers. But current estimates are for less than 20 million barrels at Jabiru and possibly 40 million barrels at Challis. This means that, instead of the anticipated 95 per cent self-sufficiency in crude for Australia in 1990, we can expect only about 65 per cent self-sufficiency in that year. The implications are considerable. At current world prices, and current dollar values, the oil import bill for Australia in 1990 could be as high as $3 billion, compared with just a $44m import bill in 1985-86. I need hardly emphasise what this will mean. We can be sure that, given the deterioration in Australia's terms of trade and escalation on gross foreign debt to more than $100 billion under this Government, a fast escalating fuel import bill will be a sure step in the direction of the Treasurer's banana republic. The priority now is to maximise our economic resources to reduce and, if possible, head off that oil import bill. I return now to the Government's justification for the resource rent tax. No one would argue with the premise that petroleum is a community resource and that the community has a right to share in the profits available from the development or the utilisation of that resource, but we should bear in mind that in 1985-86 oil producers contributed more than $1 billion in company tax and royalties, better than $200m in State royalties, plus the $4 billion which went to the Government from the crude oil excise. We also need to bear in mind that a strong oil exploration base is essential to reduce future oil import bills. The Government has to stop viewing the industry as a bottomless well and as some sort of milch-cow from which it can extract the funds to oil its extravagant expenditures. It has to realise that there is a point at which the exploration industry will simply cease to explore rather than take the risks, with little or no certainty of overall profitable return. The Government has completely failed to take into account the cost of failures in exploration in seeking to impose this tax upon the successes. The resource rent tax concept, in effect, will take more tax from large fields and less from small fields. Thus, the likely effect of the tax will be to shift exploration away from projects which are most likely to add significantly to national reserves and towards lower risk and lower volume prospects. In short, it will dampen the overall risk-taking position of explorers, and Australia will be the loser. I concede that probably neither Jabiru nor Challis would have been developed under the excise-royalty regime, and that further exploration on the same permit would not occur without the resource rent tax deductions. But that is more of an indictment of the total tax regime than it is a plus for resource rent tax. This Government has to take notice of the warnings that it has been receiving from the industry for some time. In April last year the Economic Planning Advisory Council was warned in no uncertain terms that the Government would need to cease its reliance on oil revenues. I quote: The Federal Government cannot continue to rely on the petroleum production industry as a major source of revenue beyond the short term. If no major discoveries are made, and if prices flatten out or fall in Australian dollar terms, the urgency of restructuring the tax base to find an alternative source of revenue will increase. We have now reached that situation, yet we are debating a Bill which will have as its main effect a dampening of future exploration. Small wonder that the Australian Petroleum Exploration Association now spends most of its time and effort putting submissions to this Government on alternatives for a future tax structure. Like other areas of Australian industry, it has concluded that the Hawke Government does not have the courage to tackle what is a priority task for the whole of Australia. Mr LEE(Dobell)(6.10) —Before addressing the details of the Bills before the House, the Petroleum Resource Rent Tax Assessment Bill, the Petroleum Resource Rent Tax Bill, the Petroleum Resource Rent Tax (Interest on Underpayments) Bill and the Petroleum Resource Rent Tax (Miscellaneous Provisions) Bill, I wish to make a few remarks in response to the comments made by the honourable member for the Northern Territory (Mr Everingham). I agree with his comment that there is real anger in the community about the current price of fuel. I also think the community is getting sick and tired of politicians of all political persuasions claiming to belong to the party which will deliver low petrol prices. The community at large is becoming very cynical about political parties, whether they are from my side of politics or from the conservative side of politics, which promise lower petrol prices but which never deliver. The important thing is to look at the record. The facts will speak for themselves. Mr Moore —They do. Mr LEE —I wonder whether the honourable member for Ryan will agree after I have quoted the record of the Fraser-Howard Government. The figures I will give have been prepared by the Australian Bureau of Statistics, the Government's official statistical body. They are the average retail prices for super grade throughout Australia. In 1975 the price of supergrade petrol on average was 15.6c a litre. By the time the Fraser Government was thrown out of office, in March 1983, the price of petrol had risen by 176 per cent to 43.1c a litre. I often wonder where people such as the honourable member for Franklin (Mr Goodluck) and others, who claim to be launching crusades to keep the price of petrol low, were during the Fraser-Howard years when the price of petrol rose by 176 per cent. During the last four years of Liberal-National Party government petrol prices rose by 21.2c a litre. During the first four years of this Labor Government petrol prices have gone up by only 11.4c a litre. As I said before, those figures speak for themselves. I will let the Australian community judge which party has the least worst record on petrol prices. But as I said at the start of my speech, no side of politics is free of blame. As the honourable member for Franklin has made a contribution in this debate, I suppose it is important to remember that the State which has the highest petrol franchise, that is, the State tax levied on petrol, is the only Liberal-governed State in Australia, Tasmania, where the levy is 7c a litre. I often wonder what the position of the honourable member for Franklin is on that. I agree with one part of the speech made by the honourable member for Franklin-his attack on petrol discounting. In my electorate of Dobell on the central coast of New South Wales the price of petrol last weekend was only 49.9c a litre. In the last few weeks it has fluctuated between 49.9c a litre and 59.9c a litre. I, for the life of me, cannot understand how such massive fluctuations in the price of petrol can be justified. Often it is the areas of smaller population concentration which seem to miss out on petrol discounting. My view is that government should take action to prevent discounting so that all Australians share in a lower average price of petrol. That is something I agree with the honourable member for Franklin about. Turning to the detail of the legislation, it is important for us to remember why a tax on the exploitation of mineral resources is different from a tax on companies and other forms of production in our economy. The fact that mineral resources are not renewable is the reason it is different from any other form of production. If someone extracts a barrel of oil from Bass Strait that barrel of oil has gone forever. It is not like someone who owns a hotel, produces cars or has a clothing factory which makes shirts. One can always obtain the factors of production, such as wool or cotton and more labourers. But once a barrel of oil is extracted from Australia it is gone forever. One cannot get it back. That is why I believe that the community is reasonably able to expect secondary taxation to be contributed by the petroleum industry. This legislation will provide that secondary taxation. The State governments' levies and royalties and the Federal Government's excise are imposed for that very reason-because it is believed that these industries should make a special contribution to the Australian community. Mr Ian Cameron —There is nothing wrong with the freight charges in Queensland. Mr LEE —We are led to believe by people such as the honourable member for Maranoa (Mr Ian Cameron) that people on his side of politics are opposed to secondary taxation on the extractive industries. I ask them to explain why conservative governments, when they have been in power, have also levied secondary taxes on the petroleum and minerals industries. They have done so for many decades. The levy which stands out as the greatest revenue-raising levy was the Fraser-Howard Government's crude oil levy of the late 1970s and early 1980s. As the honourable member for Maranoa is following me in this debate, perhaps he could also explain to us why Sir Joh Bjelke-Peterson, the Queensland Premier, seems to be able to raise quite a deal of revenue from rail freight charges. If rail freight charges are not a disguised form of secondary taxation on the extractive industries, I do not know what is. Perhaps the honourable member could explain to us why he supports Sir Joh Bjelke-Peterson's outrageously high freight charges in Queensland. I suppose that Sir Joh would tell me I do not have to worry about that. Another Queensland member of this House, the honourable member for Dawson (Mr Braithwaite), remarked that he thought the petroleum and mineral industries are overtaxed and that they should have to pay only the normal rate of company tax. As I explained earlier, that is quite unfair because, unlike car manufacturers and shirt producers, once the extractive industries take away the nation's resources there are none to take their place. The principle of a resource rent tax has been supported by the Australian Labor Party since 1977 but we have to go back further than that in history to find the origins of the tax. It was Labor's great Minister for Minerals and Energy, Rex Connor, and the Labor Prime Minister of those days, Gough Whitlam, who first started arguing for a more equitable contribution from the mining industry to the nation. A very important report was commissioned by Minister Connor, prepared by Mr Tom Fitzgerald, entitled `The Contribution of the Mineral Industry to Australian Welfare'. The result of the debate which followed the tabling of the Fitzgerald report in 1977 was that Paul Keating, the honourable member for Blaxland and the then shadow Minister for Minerals and Energy, announced that Labor's policy for following elections would be to apply a secondary, profits-related tax to the extractive industries. This legislation implements that promise, which has been made by the Labor Party at each election since 1977. Perhaps some of the people in the community who claim that this Government is not a real Labor government could explain to me why a resource rent tax is not a great achievement for the Hawke Labor Government. The legislation applies only to off-shore petroleum discoveries. On-shore industry is excluded from the legislation. The legislation will apply only to fields where permits have been issued after 1 July 1984. So the Bass Strait and North West Shelf fields will not be subject to the resource rent tax. As the honourable member for the Northern Territory pointed out, the only field currently producing which will be subject to the tax is the Jabiru field in the Timor Sea, although it is hoped that the Challis field will be subject to the tax in the not too distant future. As both Jabiru and Challis are marginal fields, the impact of the resource rent tax will be quite minimal. The second reading speech of the Minister for Resources and Energy (Senator Gareth Evans) indicates that no revenue is expected prior to 1989-90. That is the beauty of the resource rent tax. It is a profits-based tax, which the honourable member for Capricornia (Mr Wright) explained in quite some detail. It is not a tax based on production, on the output from a field. So if we have a bonanza discovery in the league of Bass Strait or the North West Shelf which proves to be quite profitable, that field will be expected to make a major contribution to the Australian community, whereas fields whose production and exploration costs exceed their receipts will be exempt from the resource rent tax. Not only is it a fairer system of taxation but also it makes economic sense not to discourage investment in the more marginal fields. If we compare that with a production based tax such as the current Federal excise and State royalties, it is crazy to have a system where we apply a flat rate of tax to every barrel produced because that hits the jackpot discoveries at the same rate of taxation as the marginal fields that are in trouble. I was interested in the comment of the honourable member for the Northern Territory that he had proposed a profits based tax to the industry. I take it that that was when he was the Chief Minister of the Northern Territory. His comment was that the industry was not persuaded by rationality. Listening to his comments today, I am convinced that he has lost his power of rationality because he intends to oppose the Bills along with the rest of the Opposition. These Bills will not affect retail prices in the community because they do not apply to the on-shore field or the fields where permits were issued before July 1984. In addition, they will replace the existing Federal Excise and State royalties. If ever one needed a case study which demonstrated why we need a resource rent tax, the Bass Strait field is it. Some of the fields in Bass Strait are among the 10 most profitable in the world ever. It is important to remember the history of the Bass Strait fields. The initial investment decisions for Bass Strait-- Mr Ian Cameron —What is wrong with making a profit? Mr LEE —The honourable member for Maranoa would know all about investment decisions, given his property speculation in the Noosa area. I doubt whether the honourable member for Ryan (Mr Moore) will be making any strategic investment in anything that the honourable member for Maranoa has anything to do with. The initial investment decisions regarding Bass Strait were made when the international market price of oil was $US1.70 a barrel. The price peaked in 1981 at $US36.30 per barrel, an increase of over 2,035 per cent in 11 years. Because the price of oil went through the roof, because of the actions of the OPEC group, Esso Australia and the Broken Hill Proprietary Co. Ltd were given massive windfall profits. Since Esso and BHP were exploiting community resources, if there were a similar discovery at some time in the future the Australian people have a right to expect a fair return on their resources and this Government will ensure that next time the Australian people will receive that return. Mr Humphreys —Joh won't get his hands on that money. Mr LEE —As the honourable member for Griffith suggests, the Queensland Premier will not get his hands on any of that. Lastly, I address my remarks to the comments made by the honourable member for the Northern Territory on the decline in the self-sufficiency of the oil industry. I acknowledge that that is a serious problem and it has rather severe implications for our balance of payments situation. The honourable member for Dawson suggested that these Bills will discourage exploration, yet a similar profits related tax applies in the United Kingdom and Norway and it does not seem to have discouraged exploration in those countries, so I do not know why it should discourage exploration in Australia. He quoted the United States system as a country which does not slug the oil companies and exploration has flourished. We have to look at the reasons why the oil industry is not taxed particularly highly in the United States. I do not think it is because the Government wishes to encourage oil exploration, given the current glut; it has more to do with the influence of the oil lobby on the United States Congress, and its use of targeting particular members for special privileges. Mr Martin —Just like in Dallas. Mr LEE —The honourable member for Macarthur obviously studies it-not too frequently I am sure. The way to encourage greater petroleum production is not to provide companies with a reduction in taxation but to provide long term stability. Given the likelihood that this Government will be re-elected for its historic third term, we will ensure that the industry gets stability in government. It is important, if investment decisions are to be made with confidence, that the petroleum companies know what rate of tax will apply to future discoveries. The current system is a total mess. We have old oil, medium term oil and new oil each slugged at a different rate of excise. Because there has been a series of ad hoc decisions by governments of varying political persuasions, we have nothing but a mess. The industry does not know what any government, if it is under some fiscal pressure, will do to the rates of excise which apply. The resource rent tax will provide a means of coping with the bonanza field, the battlers and everyone in between. Whether people strike the jackpot or make a very minor profit, they will know what rate of tax will apply. It will give the industry and the Australian people for the first time a fair, equitable and economically responsible return on our country's petroleum resources and I support the Bills wholeheartedly. Mr IAN CAMERON(Maranoa)(6.26) —Mr Deputy Speaker, I was hoping that you might have suspended the sitting so that people could listen to my great speech on a full stomach, but that is not to be, I guess. I first remind the honourable member for Dobell (Mr Lee) that the only person who has broken any promises on fuel is his Prime Minister (Mr Hawke), because when he was campaigning in 1983 he promised to reduce the price of fuel by 3c a litre. All that has happened since then is that it has gone up by 15c a litre, so that is an 18c a litre broken promise that this Prime Minister has delivered to the people of Australia. Mr Deputy Speaker, as you well know, the people of this country are sick to death and fed up with the ever increasing taxation which this Government has imposed on the fuel industry and oil producers. Since the Government announced its intentions of introducing the extra tax on crude oil in June 1984, it has introduced a whole raft of new taxation measures which apply to oil companies. We have a new fringe benefits tax-- Mr Martin —It doesn't apply. Mr IAN CAMERON —It does apply. All companies producing crude oil have to pay it. The iniquitous capital gains tax also applies since it was introduced, and there are other taxes as well. The company tax rate has gone up by 2 per cent from 47 to 49 per cent. This is another burden on the oil producers. The honourable member for Dobell does not want anybody to make a profit. He wants to drag the profits out of these companies before any profit is shown. That is a disgusting arrangement. Mr Price —You want to drag it off the pensioners. Mr IAN CAMERON —I have nothing against the pensioners. The pensioners are against honourable members opposite because all they have had to suffer is an increase in the price of fuel at the pump. This Government has moved from excise to a tax at the well head. Honourable members opposite should tell me how much the excise has gone up. The poor pensioners have to pay more for fuel for their lawn-mowers and the cars they drive. Honourable members opposite hate pensioners, that is their trouble. They will have no way of being elected at the next election, and the sooner they wake up to that fact the better. We are debating the Petroleum Resource Rent Tax Assessment Bill, the Petroleum Resource Rent Tax Bill, the Petroleum Resource Rent Tax (Interest on Underpayments) Bill and the Petroleum Resource Rent Tax (Miscellaneous Provisions) Bill. Those Bills cover various things to do with more taxes which this Government has to collect because it is rapidly spending every dollar it collects and is borrowing billions of dollars to continue to let Australia gurgle down the hole that has been dug by this socialist Government. One has only to look at the figures on oil exploration to realise what is happening with this resource rent tax. The tax was announced in June 1984 and the Government has taken almost three years to bring these Bills forward. As has been mentioned, the tax applies only to off-shore fields, but basically to the new fields of Jabiru and Challis in the Arafura Sea. These people go out hundreds of miles off-shore, with the enormous off-shore rigs-they are a huge investment, millions or billions of dollars of investment-to find and drill for these fields. Yet, having done all that, they are faced with an extra tax on the production of their product. It is the policy of the National Party of Australia and the Liberal Party of Australia to withdraw the resource rent tax at the well head. Our intention is to gradually withdraw this tax so that companies will be put back in the position where they are paying taxes on profits, not taxes on unearned profits, or taxes on production at the well head. This is the economic position we have to get back to if Australia is to get up and start moving. Sitting suspended from 6.30 to 8 p.m. (Quorum formed) Mr IAN CAMERON —Madam Speaker, I am pleased that these government members have dragged themselves away from their dinner tonight to listen to my speech. I am sorry that I was rudely interrupted at 6.30 by the dinner suspension, and I am sorry that we have taken these people away from their dinner and their nice red wines. That reminds me that this Government imposed an extra sales tax-from 10 to 20 per cent-on wine. I ask: Why is it necessary to introduce this new tax when an industry, such as the oil industry, is down on its knees? Dr Theophanous —Oh! Mr IAN CAMERON —Well, it is. The price of oil has dropped by half in the last 18 months or so and the Cooper Basin and Roma gas and oil fields in my electorate of Maranoa have suffered as much as those in other areas, where we have seen 25 per cent decline in exploration and a 56 per cent decline in the past 12 months. Seismic activity has dropped by 57 per cent. There is nothing we need more than new discoveries. Mr Cohen —The kangaroos are up. Mr IAN CAMERON —The Minister for Arts, Heritage and Environment is here advising me on kangaroos. I thought that I advised him mostly on kangaroos. I must thank him for the work he has done in that area because we are trying to keep kangaroos under control. Mr Hand —What about your views on the pensioners? Why don't you tell us what you said about pensioners? Mr IAN CAMERON —The honourable member for Melbourne does not know anything about the pensioners in his electorate. He is not interested in them and he does not look after them. He would have to live in Maranoa to get some decent fresh air and to see how pensioners are looked after. I look after pensioners more than any other-- Mr Hand —Madam Speaker, I raise a point of order. I find that comment about me and pensioners in my electorate offensive, and I ask that it be withdrawn. It is not true. The honourable member misled this House earlier-- Madam SPEAKER —Order! The honourable member will resume his seat. He does not have a point of order. Mr IAN CAMERON —Thank you, Madam Chair. I turn again to oil. World oil prices have also fallen, from $US43 a barrel to $US29-a 33 per cent drop. I would have thought that that reason alone would have been good enough for the Government not to impose new and additional taxes on the oil industry. Mr Katter —That is right. Mr IAN CAMERON —Yes, and the honourable member for Kennedy agrees with me. I am pleased about that, because he has exploration rigs criss-crossing the wide expanses of Kennedy, and the same goes for Maranoa and for the Cooper Basin, which is bigger than Victoria. There is a whole stack of roughnecks working out in that industry, looking for more oil, drilling and finding more oil, which is more to the point. But of course the whole industry has been on the downturn since the Australian Labor Party came to government. Unfortunately the international oil producers seem to have more interest in looking for oil overseas. The Broken Hill Proprietary Co. Ltd is now drilling in the China Sea of all places, rather than drilling here in Australia. That is the sort of situation we have got ourselves into. The balance of payments is severely affected by the oil situation. If we find more oil that will obviously keep our balance of payments down and that is most important in our present economic situation. I have always disagreed with the import parity pricing of oil and I hope that when we are returned to government at the next election, whenever that might be-it could be next weekend or the weekend after-we will start reducing these taxes. As we know, the price of oil has collapsed and the companies looking for it have found it very difficult to carry on in the present situation. It is difficult for them to raise new capital, particularly for those in the high risk exploration industry. Oil production is now 20 per cent lower than it was in 1983-84 and Bass Strait oil production in 1992 and 1993 will be just over half that of the 1985-86 figure of nearly half a million barrels a day. I think this is very important because by that time Australia will be only 65 per cent self-sufficient. If we add that on to our present balance of payments situation, of something approaching $15 billion a year, we can see the precarious situation we are in. I would have thought that under those circumstances any government would be out trying to encourage the oil industry to look for more fields. But what do we see here tonight? We see the Government introducing a new Bill to impose new taxes to drive the industry away from Australia. As I mentioned previously, that is where the companies have gone. Fifty companies have gone to other parts of the world looking for crude oil. I have already mentioned BHP and the China Sea. It has had some success, but I would much prefer it to be spending its exploration budget here in Australia. We are looking at a $3 billion increase in the amount of crude oil which we will have to import in the 1990s, and this is very important because it will affect our balance of payments. We are presently looking at a $44m difference in the balance of payments. We are actually importing about $1.2 billion worth of oil and exporting about the same-a difference of $44m. If we take that equation forward we will see an enormous difference unless we find new oil supplies to replace those that we are rapidly using. Of course, corporate taxes have gone up. As I mentioned earlier in my speech, not only have company taxes risen by 2 per cent to 49 per cent but we have also seen the fringe benefits tax introduced, and companies, including oil companies, have to pay that. In addition, the capital gains tax, which we will abolish when we are elected to office at the next election, is something that really works against large companies such as oil companies. The other thing that has been lost is the 20 per cent investment allowance. We heard some previous speakers talk about the way that oil was found in this country. Oil was found by government offering tax incentives of 100 per cent write-off to oil companies to go and look for oil. The first commercial oil flow in Australia happened to be in the electorate of Maranoa at a place called Cabawin, where I live. Those early explorers-in that case the Union Oil Development Corporation, an American company-were encouraged to come into Australia. When I was at school all the geologists were telling us that we would not find oil in Australia. But because the government of the day was prepared to give those explorers some encouragement, they came into Australia. They drilled many wild-cat holes; many of them were not successful. But eventually Union Oil found oil at Cabawin and then moved to Moonie. The Moonie oilfield, which is within about 20 miles of where I live, was the first commercial oilfield developed, and it is still producing oil. Those are the sorts of risks that oil companies have to take. We have to continue to encourage companies, both local and overseas, to look for more crude oil because, more than anything, it is a product that we need to help us to continue. Of course, there is now a difference in the taxing arrangements. This Government has moved from taxes at the well-head, as the world price dropped, to the excise area. We have seen a drop in the crude oil excise from $3.94 billion in 1985-86 to $1.2 billion in 1986-87. That is what I call the well-head tax. That tax is paid before any funds are taken out from the profits. It is a tax paid whether a company shows a profit or not. These are the sorts of expenses that we in the National Party of Australia and the Liberal Party of Australia intend to get rid of. This is the sort of tax, be it in the farming industry, oil production, factory production or whatever industry, that we must get rid of if we are to get this country that we all love up and running again. Excise on liquefied petroleum gas has risen from $80m to $103m. Petroleum royalties have dropped slightly because of lack of production and also lack of price. The excise on petroleum products has risen from $2.88 billion to $5.64 billion. This is the add-on tax that the consumer pays. It applies to the previously mentioned pensioners with their little old Victa lawnmowers and to people pulling up in their motor cars to fill up with petrol. Those people have faced an enormous increase in excise on petrol, which is now about 18c to 19c a litre. Of course, farmers have been exempt from paying this tax on diesel, but many people do not understand that 40 per cent of the fuel used on-farm is petrol, so farmers continue to pay an enormous increase in taxation in that area. Of course, farmers also pay the well-head tax, which is what we are talking about tonight. Farmers will pay a percentage of that tax, whether or not they show a profit. Presently they pay between $250m and $300m in well-head taxation. These are the taxes that we intend to do away with when we come to office. It is not only the farmers who have to pay this. Even the fishermen are being levied, who never use the roads. The bicentennial road development program is collecting 2c from every litre of petrol and fishermen are having to pay that tax. The National and the Liberal parties guarantee that we will get rid of that after the next election. The National Party has a policy, which we have enunciated, to deregulate the market for crude oil. We intend to move to spot pricing rather than the Arab light oil prices, et cetera. We guarantee to move to a spot price that will reflect the current price of crude oil. We also promise to withdraw from the crude oil excise, as I have mentioned. We will abolish fuel excise indexation. The worst aspect of taxation introduced by this Government has been the indexation of these excise taxes. It does not apply just to fuel; it applies to beer and tobacco. We are seeing an enormous rip-off in taxation in this area. The National Party is certainly committed to abolish that indexation. We will maintain the full excise rebate for diesel used on-farm and extend the full rebate for all farm fuels. As I mentioned previously, that would apply to petrol, as 40 per cent of fuel used on-farm is petrol. We would reintro- duce an extended fuel freight subsidy arrangement. This Labor Government purports to support primary industry and the people who live in inland Australia. But what has it done since it came to office? It has done absolutely nothing. It withdrew the freight subsidy scheme on petrol. No wonder it costs 10c more to buy a litre of petrol in Goondiwindi, Cunnamulla or Charleville than it does in Sydney or Melbourne. The fuel rebate subsidy that we introduced as a government has been withdrawn by these socialists because they do not believe in equity in these areas. We live inland and produce the export goods that help our balance of payments, which help is so sorely needed by this country; yet we are penalised by this Government for doing so. Mr Katter —Absolutely, and the airline subsidy. Mr IAN CAMERON —They are talking about closing down air services. Australian Airlines is withdrawing from services in western Queensland. Much of that is due to the extra high price it has to pay for fuel, which means that it does not show any profit on those routes. I also mentioned the fishing industry. It is just ridiculous to think that the fishing industry is paying 2c a litre towards the bicentennial road development program. I have never yet seen a boat sailing down a highway. But fishermen are expected to pay this tax. We also intend to remove the sales tax on oils and lubricants used on-farm. This Government has introduced more taxation. It is the highest taxing, highest spending Government since Federation. We have seen an enormous amount of tax go on to a drum of oil, which now costs the primary producer between $400 and $500, of which $150 is tax. Madam SPEAKER —Order! The honourable member's time has expired. Mr MARTIN(Macarthur)(8.17) —I am almost tempted to offer the honourable member for Maranoa (Mr Ian Cameron) an extension of time to complete what he was saying. The Petroleum Resource Rent Tax Assessment Bill, the Petroleum Resource Rent Tax Bill, the Petroleum Resource Rent Tax (Interest on Underpayments) Bill and the Petroleum Resource Rent Tax (Miscellaneous Provisions) Bill will give effect to the Government's decision to introduce a petroleum resource rent tax on profits from certain off-shore petroleum projects. A couple of things need to be said about that at the outset. Firstly, it relates to off-shore petroleum projects and secondly, it is a tax on profits. I will have a little more to say about each of those issues later on. As we heard earlier in the debate on this group of Bills, petroleum resources are, in the most basic sense, community property. Accordingly, this Government believes that the community as a whole should share in the potentially high returns from the exploitation of these scarce, non-renewable resources. Contrary to what has been said by members on the other side, the legislation is not aimed at trying to stifle exploration, nor indeed to take away the incentive to derive profits in the petroleum industry; far from it. As we are aware, there are some real problems in the world market for petroleum products. As far as Australia is concerned, those problems have to be shared equally here. The Government recognises that the participants in petroleum projects who do not earn high profits in relation to the amount invested and the risk involved, particularly when oil prices decline, should be able to operate secure in the knowledge that excise and royalties that are based on production will not apply. I come back to one of the first points I made. We are not concerned about a tax that is based on production, because the Government has come to believe that that is not an appropriate way to go with a resource such as petroleum. As I have indicated, that tends to stifle incentive and stifle exploration for the resource. The Government, therefore, firmly believes that this resource rent tax related to achieved profits is a far more efficient and equitable secondary taxation regime than the excise and royalty system that is the present system. I think it has to be emphasised-I do not know that it has been said in this debate to date-that the proposed tax actually replaces the existing system and is not an addition to it. That is a very important point and I am sure that there will be honourable members on both sides of this House who will probably agree that there are times when there is a need to continue an on-going review process of all taxation measures. Certainly this Government is committed to that process. With respect to petroleum we emphasise that the tax is not an addition to what already exists but rather replaces an existing system. In contrast to a production based secondary tax regime this petroleum resource rent tax will be payable only in respect of projects earning a high rate of return on outlays. Therefore, those companies that are not earning this high rate of return will not be penalised. In fact, they will not be affected. How does it work and how did it come to be put into place? Unlike some governments around the world, as would be the circumstance if those on the other side were returned to power, this Government believes in discussing with those people affected in the industry many of the issues it plans to put into practice. Certainly this was the case in the petroleum industry when no fewer than three discussion papers were prepared and subsequently discussed with those participants in the oil industry. These three papers were: A paper released in December 1983 entitled `Discussion Paper on Resource Rent Tax in the Petroleum Sector'; a paper in February 1984 entitled `Effects on Exploration of RRT with Full Exploration Loss Offsets'; and finally a paper in April 1984 entitled `Outline of a ``Greenfields'' Resource Rent Tax in the Petroleum Sector'. As I have indicated, comments have been sought from those people in the petroleum industry and the result of that is the four Bills that are introduced tonight in this package. In terms of the general application of the tax it is to apply to a person's taxable profits from the recovery of petroleum in off-shore areas where the Commonwealth's Petroleum (Submerged Lands) Act 1967 applies other than in those areas covered by production licences granted on or before 1 July 1984. That tax therefore, will not apply to the North West Shelf permit areas or Esso Australia Ltd and Broken Hill Proprietary Co. Ltd Bass Strait permit areas. Rather, excise and royalty arrangements will continue to apply in those areas. During the course of the debate this afternoon some of my colleagues on this side of the House, particularly the honourable member for Dobell (Mr Lee), made reference to the Bass Strait area. Some comments were also made from honourable members on the other side about that particular production. I believe that the honourable member for Maranoa also made some comment about whether or not this particular tax regime was going to stifle exploration in the Bass Strait. He made reference to the fact that those supplies are dwindling. It is a fact of life that the supplies of petroleum presently available from the Bass Strait are dwindling. (Quorum formed) Madam Speaker, I was saying with respect to the general application of these particular Bills that the petroleum resource rent tax is profit based rather than production based and therefore will only apply when there is an excess of project related receipts for a financial year over both project related expenditure for the year and undeducted expenditure. This afternoon my colleague the honourable member for Dobell spent some considerable time discussing this point but interestingly some comments have been raised by Opposition members about the actual levels of petrol pricing. Just prior to my speaking on these Bills, the honourable member for Maranoa again raised this issue saying that there is discrimination against country purchases compared to the cities and so on. It is interesting to look at statistics because statistics are wonderful things when one is talking about all sorts of things. In respect of the average retail price of supergrade, if one extrapolates the statistics from December 1975-that would seem to be a good year to start with-who was in government at the time? That is right, it happened to be a Liberal-National Country Party coalition. The price of petrol in December 1975 was 15.6c per litre. It was not a great deal, but by March 1983-again a familiar time for us all because that is when that Government happened to go out-the price was 43.1c per litre. Mr Price —How much? Mr MARTIN —I cannot believe it either. In December 1975 it was 15.6c per litre and in March 1983 it was 43.1c per litre. If those mathematicians amongst us were able to calculate that immediately they would tell us that that is a 176 per cent increase. If one compares the last four years under the Fraser Government with the four years under the Hawke Government, again some very interesting statistics arise. In the last four years of the Fraser-Howard Government there was an increase in the price of petrol of 21.2c per litre, which was a 97 per cent increase. By comparison, between March 1983 and March 1986 when honourable members know who was returned to power-the Hawke Government, which had been running the country so effectively-there was only an 11.4c per litre increase, which is only a 26 per cent increase. Mr Price —Twenty-six per cent compared to what? Mr MARTIN —As the honourable member for Chifley rightly asks, it was a 26 per cent increase compared to a 97 per cent increase. Yet honourable members on the other side have the temerity to come in here and criticise this Government in terms of it adopting and continuing to stand by the import parity pricing policy which-who put it in; do not look at us-the Opposition put in and which we have retained. It is important, when considering the four Bills that are before us, to make a few comments about the import parity pricing policy, and some comments were made. The question was posed: Why, when there have been massive falls because of world oil price falls, have not the falls been passed on to the average Australian motorist? It is important for us to realise, in a sense of equity and fairness, that any government-irrespective of its political persuasion-would dearly love to be able to do that. However, the economic circumstances in Australia have been such that it has not been possible to pass on that fall and the value of that fall to the average Australian motorist. I have indicated in this House on a number of occasions that if any government were faced with the economic circumstances that this Government has faced, and faced with the responsibility of having to provide services for average Australians, it should not be expected to take a massive decrease in the revenue that is redistributed to those who need it. I believe that that is a very firm and appropriate position that has been taken by the Government. As the Prime Minister (Mr Hawke) has often said in this place, it is one on which this Government will be judged by the majority of Australian people. I would point out that the principle contained in this series of Bills has been Australian Labor Party policy for quite a period. Mr Lee —Since 1977. Mr MARTIN —My colleague the honourable member for Dobell reminds me that it was first introduced into Labor Party policy in 1977. I will quote again from the speech he made this evening. As he rightly pointed out, a great deal of criticism has been levelled at the Labor Party for not invoking more parts of its platform, and there has been the suggestion that this was an area in which we should not get involved. Quite clearly, we have become involved in it. It is something that is not aimed, as the honourable member for Maranoa suggested, at taking away profits or trying to do something about profits. Rather, it looks at the whole question of equity. It in no way-because it is not production based; rather, it is profit based-takes away the incentive for oil exploration companies to go into an area, whether it be Bass Strait or anywhere in Australia, and continue this great tradition of looking for resources and more ably putting them to the benefit of the Australian people. I conclude on this note: It is considered regrettable-that seems to be the word of the day-that the Opposition, I believe, has seen fit to oppose the four measures that have been introduced by the Government. I believe that, if we are fair dinkum in talking about the redevelopment of Australia, this is one way to go. As I have said, incentive will not be stifled. The ability of producers to look for new oil fields will not be stifled in any way. The expenses that the companies encounter along the way of exploration will be tax deductible. Therefore, to say that the Government is imposing yet another tax-the same old drone that we get from the Opposition-that it will be a disincentive to business in this country, is patently not true. I believe that this series of Bills will lead, again, to the development of a fairer and equitable situation regarding resources in Australia. I can only echo the sentiments of a former Minister for Minerals and Energy in this country, Rex Connor. I am pleased that his successor, the Minister for Housing and Construction (Mr West), is in the chamber this evening. Mr Connor's vision for Australia's resources, their development and the fact that the revenue derived from them is redistributed for other things in this country is coming to a realisation. This Government is committed to the Bills. It is timely to debate them today. The legislation will not take away incentive; it will not stifle exploration; and it will not point the finger at this Government and suggest that it is a high taxing government or anything else. Rather, once again, it will be a useful piece of legislation that this Government will, I am sure, on behalf of the Australian people, see come to great things. I commend the Bills to the House. Debate interrupted. Madam SPEAKER —Earlier today the honourable member for Dawson raised, as a matter of privilege, reported statements of the Secretary of the Australian Council of Trade Unions, Mr Kelty. The honourable member for Dawson claimed that a statement attributed to Mr Kelty to the effect that he, Mr Kelty, had notified his legal advisers and would sue Mr Braithwaite or anyone else `who said he claimed more than he had spent' was an attempt to intimidate him, Mr Braithwaite, as a member of Parliament. There are precedents in this House and in the House of Commons for intimidation or attempted intimidation of honourable members to be regarded as a contempt or breach of privilege. House of Representatives Practice states: To attempt by any means to influence a Member in his conduct as a Member is a breach of privilege. So too is any conduct having a tendency to impair a Member's independence in the future performance of his duty. May states: To attempt to influence Members in their conduct by threats is also a breach of privilege. Later he says: Conduct not amounting to a direct attempt to influence a Member in the discharge of his duties, but having a tendency to impair his independence in the future performance of his duty, will also be treated as a breach of privilege. I have given careful consideration to the honourable member's statement in raising the matter and have examined the newspaper article to which he referred. I note the honourable member's concern at the statement attributed to Mr Kelty and also his concern that any such threat could intimidate other members should they be involved in such a situation. Whilst intimidation or attempted intimidation of honourable members is a well-recognised category of contempt, the information available to me in this particular matter does not disclose evidence of a prima facie case of breach of privilege or contempt and I have concluded that precedence should not be accorded to a motion on the matter. Mr BRAITHWAITE(Dawson) —With your indulgence, Madam Speaker, by way of reply: I respect the decision that you have made on this matter. It occurred to me over the weekend that this type of thing is becoming very prevalent in our parliamentary life, on both sides of politics, and the way it was given to you by way of a reference. If a person wants to silence somebody or to stifle a matter within the public arena, even in the Press, it is common practice these days to issue or threaten to issue a writ. While that practice may be condoned in a business sense, I felt that if that sort of thing was intruding on our parliamentary affairs, it was time to give a warning. That is why I made the reference. I made it in all honesty and I accept your decision on it. Madam SPEAKER —I thank the honourable member for Dawson. Debate resumed. Mr ROCHER(Curtin)(8.37) —This is a very curious time for a government to be introducing legislation of the kind we are called upon to consider tonight. Indeed, the more we may think about our current economic predicament, the more amazed we must become at the naivety, ignorance or plain prejudice of this Government's decision to pursue a so-called resource rental tax in, of all industries, the petroleum producing industry. It is even more curious that we should be considering this package of four resource rental tax Bills for the petroleum industry only three months or so after the joint statement by the Treasurer (Mr Keating) and the Minister for Resources and Energy (Senator Gareth Evans) announcing their response to the recommendations of the Gutman Inquiry into Taxation of Gold Mining. It will be recalled that the Government's original tax White Paper said of a gold tax: . . . there is little justification for the continuation of the exemption . . . and that the Government commissioned Gutman report recommended the phasing out of the exemptions. Yet the Treasurer and his colleague the Minister for Resources and Energy decided against the course of action. In the context of the discussion this evening we might well ask why. Most likely, it is because the importance of encouraging active exploration and development and of maximising production and the consequent export income generated by the gold mining industry outweighed the argument in favour of removing the industry's long-standing tax exemption. Proposals for a general resource rental tax-RRT-have been in circulation for over a decade, with the original academic proponents promising lucrative advantages for governments and assuring us that it would be economically efficient in that it would not distort resource allocation or interfere with the creation of wealth in the resources industries. As well, at that time it was maintained that an RRT would siphon off part of the resources wealth to the Government without inhibiting investment. Added to this supposedly rational economic view was the so-called moral argument that natural resources wealth is public rather than private and that an RRT would allow both private risk takers and the public to obtain if not a just then at least a fair reward from this national wealth. The general RRT proposal did the rounds of the then Labor opposition and eventually became a centrepiece of the Australian Labor Party's resources policy. I must say that even in the most propitious of economic climates I would have considerable reservations about the whole thrust of the so-called resource rental tax proposals. While having a certain and admittedly superficial appeal especially to that section of the community that regards mining as an affront to the memory of Henry Lawson-something which is permissible only if every possible dollar is squashed out of the mining firm concerned-after examination of the economic arguments and the supporting literature it becomes clear that there are some very serious problems with resource rental tax proposals either of the general kind or specific sectors. I am convinced that not only have the proponents of resource rental taxes made important mistakes in their economic analyses, but their proposals would also inhibit and distort investment activity in the resources sector. It is to go right to the heart of the broader RRT proposal to note that nowhere is the element of uncertainty in investment decisions more apparent than in the natural resources industry. There is an unfortunate tendency to judge the effect of resource rental tax proposals by calculating its effect on existing successful projects, and that after the fact. The key point is what effect RRT proposals will have on new investment decisions or, even more importantly, on decisions yet to be made somewhere even further down the track. The available evidence seems to indicate that, far from being a neutral tax on economic rents, resource rental tax proposals effectively discriminate against risky investments and are likely to distort the direction of investment in a certain manner which is quite predictable if one is at least acquainted with the evidence. Leaving aside the wider economic distortions of RRT proposals for a moment, it might be thought by some that whatever the negative impact will be a resource rent tax on the petroleum industry will result in significant revenue gains and might thus be partially excused as an emergency measure in troublesome economic times. Yet when we turn to the financial impact statement at page 3 of the explanatory memoranda we discover: It is unlikely that any petroleum resource rent tax revenue will be received before the 1989/90 financial year. The amount of revenue in any year is inestimable due to continuing fluctuations in world oil prices and the uncertainty inherent in offshore petroleum exploration. So what are we left with? It seems to me that it is a rather odd announcement supported only by the generalities in the second reading speech of the Minister Assisting the Treasurer (Mr Hurford). It will be recalled by honourable members that the Minister Assisting the Treasurer said that petroleum resources are community property and that the Government believes that the community as a whole should share in the potentially high returns from the exploitation of these scarce resources. In justifying these RRT proposals the Minister said: It strikes a reasonable balance between the objectives of satisfying the right of a community as a whole to share in the benefits of profitable offshore petroleum projects and of providing the participants with adequate returns for the risks they accept in undertaking offshore exploration and development activities. While terms such as `reasonable balance' and `adequate returns' may seem the very embodiment of sweet reason, in practical terms they will put vitally needed investment in doubt. As I said at the outset, this would be an odd proposal even in the most propitious of economic circumstances and there can be no one on either side of politics who seriously thinks that conducive economic conditions exist today. As well as the dubious accolade of being the biggest taxing and spending government in Australia's peacetime history, this socialist Government has achieved the lowest value for the Australian dollar and that occurred only last year. Other economic factors bearing down on decision makers in the private sector include interest rates on home loans of about 15.5 per cent; interest rates on Bankcard of 22.5 per cent; a prime rate of 21 per cent; and a small overdraft rate around 20.5 per cent. On top of that we have exceeded a $100 billion public debt. We suffer under the highest ever current account deficit, running at the moment at 5.9 per cent of gross domestic product and with more to come. This is the first Australian Government ever to lose our triple A credit rating overseas. We are suffering under inflation at around almost double the inflation rate at the last election. Inflation is still rising in Australia, while throughout the Organisation for Economic Co-operation and Development it has been falling. Australia's inflation rate of 9.8 per cent compares with an inflation rate of 1.3 per cent in the United States of America, zero inflation in Japan and an OECD average of 2.2 per cent, or of 1.7 per cent if we compare ourselves with our major trading partners. This economic summary presents the worst relative performance since the OECD was formed 26 years ago. With negative economic growth over the past year in Australia when gross domestic product fell by 0.5 per cent over the year to September 1986 and with a Budget forecast of 2.25 per cent in 1986-87 already scaled back and subject to further revision I lay further emphasis on our economic plight. On top of that we have the collapse of the Australian dollar to its lowest level under this Government, as I have already mentioned. On 5 March 1983 when this Government was elected we had a trade weighted index of 81.7 and on 23 February 1987 the trade weighted index was 53.6, a minus 34 per cent change. Our dollar remains chronically weak irrespective of the stabilisation activities of the Reserve Bank of Australia and the record high domestic interest rates which are crucifying many Australians in business. This is only a partial catalogue of the economic chaos this country has suffered due to the ineptitude of this socialist Government. When we come to examine the particular situation of the petroleum industry, we discover that it too is suffering specific major problems and that now is a particularly inappropriate time to complicate the burden it carries. Since plans to introduce the resource rent tax were announced in July 1984, the world oil price has fallen and the domestic price of Bass Strait crude oil has fallen from $43.71 a barrel in January 1986 to $29.37 a barrel in March 1987. The average price fell from $29.07 a barrel in the first half of 1986 to $22.85 in the second half of the year. Australia's production outlook has also deteriorated. The outlook for self-sufficiency has deteriorated with offshore exploration expenditure having fallen by 25 per cent between 1985 and 1986, and it is expected to fall by another massive 56 per cent in 1987. Australia has become progressively less attractive to exploration companies relative to many other countries, and the overall deterioration in our economic situation has had important flow-on effects for petroleum exploration within Australia and off-shore. The oil price collapse and the continuing volatility of world oil markets have had the effect of reducing the number of exploration prospects which have expected monetary benefit. That circumstance has more than halved company cash flows and makes it extremely difficult to raise equity capital on the stock market for higher risk exploration. All too often, acquisitions of reserves through takeovers and mergers have become more attractive than exploration. As is well known, sensitivity of exploration to the crude oil price is exquisite. In an RRT regime the exploration decision is extremely sensitive to both the RRT tax rate/threshold rate and the price of crude oil. A proposed resource rental tax rate of 40 per cent, as outlined in the Petroleum Resource Rent Tax Bill, will render all but a few very high risk exploration prospects unattractive at current prices. As the Australian Petroleum Exploration Association pointed out in its submission to the Federal Government in March of this year: The outlook for Australia's potential medium term crude oil production has changed dramatically since the RRT was introduced in July 1984. As APEA said, in March 1984 the Bureau of Mineral Resources had estimated there was a 50 per cent probability that at least 2.6 billion barrels of crude oil remained to be discovered in Australia, and about 1.8 billion barrels of this oil could be discovered and brought into production by the year 2000. The BMR also estimated that more than 50 per cent of the 1.8 billion barrels of undiscovered oil would be found by 1989. It was on this basis that the BMR considered there was a good chance that Australian oil production would rise by about 30 per cent by 1989 and then plateau at about this level before beginning to decline in 1996. APEA further noted: These assessments were based on an assumption that one billion barrels would be discovered off the North West Coast by 1989. Such assessments were apparently based on an overestimate of the reserves in the Jabiru field. Various other developments, including over generous market estimates of the potential of various speculative undiscovered fields, meant that the Government's original RRT decision was made in an atmosphere of what APEA aptly describes as `unwarranted optimism'. Government estimates in 1984 suggested that Australia would be as much as 95 per cent self-sufficient in crude oil in 1990. Recent revisions reveal that there is no reasonable expectation that we can reach anything like that and that Australia will be only about 65 per cent self-sufficient in 1990. If a number of developments in Bass Strait do not proceed, as has been anticipated for the time being, this figure could be as low as around 50 per cent. Using the current world price of oil and value of the Australian dollar, it appears that by 1990 crude oil imports could cost about $3 billion compared with a net crude oil import bill of $44m in 1985-86. This is at a time when our balance of payments deficit has ballooned from something like 3.8 per cent of gross domestic product or about $6.6 billion in 1983, to 5.9 per cent of GDP or around $13.8 billion in 1986, and when the J-curve is still a long way off. This is shown by a recent study by the National Institute of Economic and Industrial Research, commissioned incidentally by the Australian Council of Trade Unions. These are some of the problems which we on this side are hoping to stress. Bearing in mind that our 1986 current account deficit was the second worst of those of all the Organisation for Economic Co-operation and Development countries and that the OECD forecasts that Australia will still have a $1 billion monthly deficit for at least the next 18 months, and that we should still have the second worst deficit in the OECD in 1987, we simply cannot afford to contemplate an additional $3 billion net crude oil import bill; and we should be seeking to do everything we can to encourage exploration and the development of new oil fields and not, as this legislation clearly sets out to do, providing disincentives to risk-taking ventures. APEA also pointed out in its submission to the Federal Government: The radical change in production and self-sufficiency outlook, as well as the change in exploration economics and in perceptions regarding the ease of discovering oil in Australia . . . suggest that more attention needs to be given to encouraging exploration by removing impediments. Those comments are strongly reinforced when we recall that there has been a 35 per cent downturn in total private exploration expenditure, both on-shore and off-shore, in the past year. Granted, RRT applies only off-shore and the bulk of Australian undiscovered reserve potential is supposedly in off-shore areas. Nonetheless, we cannot ignore a severe slump in on-shore exploration activity, where there was a 55 per cent fall in drilling in 1986. We also need to remember that the relative attractiveness of Australia-that is, the combined productivity, tax and cost mix compared to that in a number of other countries-has declined for oil exploration. That fact clearly confirmed by the large number of Australian-based companies which have expanded their petroleum exploration interests overseas. There are other areas of concern. One I want to mention in these final moments of my speech is that the RRT proposal is structured to tax projects and not individual companies. Mr DEPUTY SPEAKER(Mr Leo McLeay) —Order! The honourable member's time has expired. Mr O'KEEFE(Burke)(8.57) —During the speech of the honourable member for Curtin (Mr Rocher) I could not help noticing the chuckle from the honourable member for Charlton (Mr Robert Brown), who is the chairman of the Government's economic policy committee. I know that he will want to make some of the points I am about to make and I apologise to my colleague for stealing his thunder. I wondered whether the honourable member for Curtin was speaking for or against the Government's legislation. He has just made a speech that I am sure will come back to haunt him within the Opposition ranks over the forthcoming weeks. I am not quite sure which side of the hexagon of factions which make up his side of this House at the moment he sits with or represents, but he missed a very serious point. He spoke of the trade weighted index, the resources issue, self-sufficiency and petroleum exploration, but he did not speak of the efforts of his Government during the early 1980s to talk up a resources boom and to talk up investment in a number of these areas without reference to the substantial decline in world prices for crude oil. The simple facts of the matter are that exploration in this industry has nothing to do with incentives or disincentives by government; it is governed mainly by market perceptions and, in the Australian petroleum industry, by the prices that can be extracted from the end user. I want to comment on this during this debate. We are debating the Petroleum Resource Rent Tax Assessment Bill, the Petroleum Resource Rent Tax Bill, the Petroleum Resource Rent Tax (Interest on Underpayments) Bill and the Petroleum Resource Rent Tax (Miscellaneous Provisions) Bill cognately. This package of Bills gives effect to the Government's decision to introduce a petroleum resource rent tax on profits from certain off-shore petroleum projects. These resources are community property and the Government believes that the community as a whole should share in the potentially high returns from exploitation of this scarce non-renewable resource. I cannot help contrast the Queensland Government's proposals to sell off and lease parts of the Great Barrier Reef, another great natural resource. As an aside, I welcomed the assurance in Question Time today from the Minister for Arts, Heritage and Environment (Mr Cohen) that this Government simply will not allow the Queensland Government to proceed with these proposals. We are faced with the fact that every major country is entitled-every country is entitled-to protect its community assets. These off-shore petroleum assets are entitled to be explored under the control of the Government, and they are entitled to return a reasonable return to the community. We believe that the resource rent tax, related to achieved profits-I emphasise the point that it is a major shift in policy; it is a shift to tax the profits that are made; it is not simply a levy on the oil that is turned out-is a more efficient and equitable taxation regime than the excise and royalty system that it replaces. I go to the claim alluded to by the honourable member for Curtin (Mr Rocher) that this will lead to disincentive for the industry. The Minister in his second reading speech made it very clear that this proposed tax replaces the existing system; it does not add to it. It cannot be claimed down the line that there are additional costs to production that will in turn flow on to retail petroleum outlets. In other words, it is nonsense for anyone now to go out into the community and start telling consumers that because of this Bill there will be an increase in petrol prices. (Quorum formed) Before I was interrupted by the honourable member for Mayo (Mr Downer), who is another one of those who sit opposite who must be in one side of the hexagon of factions that are represented on that side of the House-I am not quite sure which one-I was thinking that were he to intervene I might mention that he should make his contribution now because I understand that Mr Ian McLachlan from the National Farmers Federation has the seat of Mayo lined up as his way of entering the Parliament. We had better hear a contribution from the honourable member as soon as we can. I was making the point that the Opposition will no doubt go out and attempt to claim that this legislation will lead to an increase in petrol prices. I was making the point that this legislation involves no additional tax. It is, in fact, a change in the proposals and it replaces the existing system; it does not add to it. So there are no additional costs and there can be no claims that there will be. I make this point because the community is very sensitive-and rightly so-to the issue of petrol prices. Just recently I received a questionnaire from the Australian Automobile Chamber of Commerce which, in effect, was complaining about the relationship between the oil companies, the producers, and those who man the petrol retail outlets-the service station owners. Clearly, it is very concerned about the pricing policies of these companies and it wants to move towards a more independent system. It wanted to know my response. I made the point in my reply that its claim that these matters have been ignored by the Government and the political parties is a wrong one. The point ought to be made that the major shifts in petrol pricing policies occurred during the period 1976 to 1983 with the introduction of import parity pricing and a greater reliance on petrol excise as a form of general government revenue. This is a fact of life in our economy, inherited by our government and I can assure the House that it is high on our agenda for redress as economic circumstances permit. I give an example of country petrol prices. We are often told that things like excise and freight levies and this sort of thing are the reasons for prices being at the level they are. In the city of Bendigo-and I notice that the honourable member for Bendigo (Mr Brumby) is present and he can confirm this for the House-petrol prices last week were 52c a litre. Mr Brumby —And today? Mr O'KEEFE —Today, they have risen to 58c. Mr Brumby —Fifty-nine cents. Mr O'KEEFE —I am corrected by the honourable member for Bendigo; it is 59c. There is no rational reason for that. There is no rational reason why petrol should rise 7c a litre in Bendigo-100 or so kilometres from Melbourne-to 59c. It was simply a decision by the petroleum companies to change the price irrespective of the consumer, irrespective of the effect on country people. One of my colleagues from the other place Senator Cooney, who has a broad ranging interest in western Victoria, tells me that at Portland, where there is a major store of imported crude oil and petrol, the prices are several cents dearer than they are some 50 kilometres down the road at places such as Hamilton and Warrnambool. In other words, there is no rationality in the different petrol prices around Australia. The position of the Federal Government is one whereby we are able to impose a maximum wholesale price on petrol, but we have no control over the retail pricing policies of the companies. What I want to discount before we even start is the claim that is starting to be made by members on the other side of the House that this tax will lead to some sort of flow on, and an increase in petrol prices. I also want to refer to what we call the $3 billion of soft money that was achieved through the shift to import parity pricing. That was the great failure of the Opposition. In its time in government, under Treasurer Howard, it introduced import parity pricing and ripped into Government coffers an extra $3 billion straight off the top of the petrol pumps. What was done with that money? Was it used to reduce the deficit? Was it used to do all the things it is now saying should be done? No, it was left in the system to fund unemployment benefits caused by throwing people on to the unemployment scrap-heap. The result was a $9 billion deficit at the end of the former Government's show. It was a boost to revenue that was not treated responsibly. The way the system was introduced made it, as I describe it, `the great tax of deceit'. It was the great exercise of deceit carried out by a government during the late 1970s. The Opposition's deceit, as my colleagues in the House know, can be no better highlighted than by today's front page of the Australian Financial Review. I quote from an article on `The Liberal Party's secret agenda': The plan says that while many cuts should not be announced before an election-apparently because of public outcry-they should be planned in detail beforehand. What an exercise in deceit-as was the way the former Government dealt with import parity pricing. We acknowledge the effects of petrol prices in the community and we are moving towards a new approach to encourage exploration and self-sufficiency. The new regime operates on a payment by result system. Evidence of the fact that we recognise the importance of petrol pricing policies has been the approach of this Government to the rural sector. The country task force of the Prime Minister (Mr Hawke) has gone to great lengths to emphasise the importance of fuel to the rural sector, to country people. Because of those representations the Government has maintained the diesel fuel rebate and full deductibility of motor vehicle costs when the use of the motor vehicle can be substantiated for business use. We are prepared to accept that petrol and related costs are reasonable and acceptable deductions in that sort of system. I want to make another point about petrol pricing which goes right back to the heart of the system that was introduced under the Howard-Fraser regime. I wish to look at it particularly in the context of the fringe benefits tax. There has been much discussion of petrol prices. It is fair to say that one example above all shows the way the system operates unfairly. All those who bleat for those with company cars and the rest-remember that honourable members opposite would abolish the fringe benefits tax and give back company cars and the rest-never point out that those cars are fuelled by petrol which is fully tax deductible. So the cost does not come out of the after-tax dollars. The ordinary worker, as my colleague the honourable member for Charlton (Mr Robert Brown) recognises, pays for his petrol with his after-tax dollars and usually buys it with his take home pay on the way home from work. We have been talking about the petrol pricing policies of these companies. Last week employees at the Ford factory in Broadmeadows told me that the price of petrol goes up 2c a litre on pay day as they leave the plant because the workers have to fill up their petrol tanks to go to work. But the Opposition supports those sorts of policies, that sort of approach from business. No wonder Mr McLachlan wants to replace the honourable member for Mayo (Mr Downer) with himself. An article in the Melbourne Sun published on 11 March reports two of Australia's leading accounting companies, Hungerford's and Price Waterhouse, as saying that business is `disturbed by the Liberal-National parties' promise to tear up Labor's tax reforms'. The Opposition's own people are making these comments. They say that businesses have adjusted to the capital gains tax and the fringe benefits tax and do not want any more tinkering. They know that the Opposition's promises to abolish this, that and everything else without doing the sums, without making the $14 billion add up, are both irresponsible and disconcerting to the business sector. Leading firms are now saying to the Opposition: `Forget about it, fellows'. The business sector will not wear it. It knows that it will not wash. It knows that the sums do not add up. This legislation has been introduced to change the approach to the taxing of a resource, petroleum, which is mined off-shore. It changes the approach almost to a payment by results, a system which is more efficient and more equitable. I reiterate the point that the measure does not in any way add any costs to the petroleum exploration industry. It is a system which replaces the existing regime. So let us not have any more emotional junk claims that the Opposition so often runs around with. Let us not have Opposition members out there talking about potential increases in the cost of petrol because I say to the Opposition right now that if it does it will be hoist on its own petard. Its performance on import parity pricing, its performance with the $3 billion of soft money and its exploitation of the ordinary worker while it prospered from and encouraged fringe benefits has not gone unnoticed in the general community. Mr DOWNER(Mayo)(9.17) —Listening to the speeches from honourable members on the other side of the House, it strikes me as being rather curious that the Government should introduce this legislation, the Petroleum Resource Rent Tax Assessment Bill, the Petroleum Resource Rent Tax Bill, the Petroleum Resource Rent Tax (Interest on Underpayments) Bill and the Petroleum Resource Rent Tax (Miscellaneous Provisions) Bill, with no apparent rationale for doing so. After all, everybody on the other side of the House and everybody on this side of the House knows that the Australian economy is in a state of great crisis. One would expect that in a time of great crisis a government would do everything in its power to kick-start the economy. But the Government is doing nothing of the sort. This legislation is yet another example of this Government introducing new taxes on the few productive industries we have left in Australia, thereby inhibiting their development. It is a decision which, by any measure, would have to be described as irrational at a time when, as the Prime Minister (Mr Hawke) puts it, we are faced with the economic equivalent of war. We all know how vital the oil industry is to the Australian economy and how vital petrol and diesel prices are to the productive sectors of our economy. The Government is introducing a secondary tax on this very important aspect of the economy. Many speakers in this debate have referred to the extremely high taxes which already exist in the oil industry. One only has to look at the trend in excises over the last four years, since the Hawke Government has been in power, to see what effect those excise increases have had on ordinary Australians. At the time of the 1982-83 Budget, the Fraser Government's last Budget, the level of excise was 6.15c per litre. At the time of the 1986-87 Budget, the Hawke Government's most recent Budget-perhaps its last Budget-the level of excise was 23.88c per litre. So the excise on petrol has increased from 6.15c to 23.88c per litre during the life of the Hawke Government. Obviously, this has had an enormous effect on the Australian inflation rate, which we all know is now four times greater than the Organisation for Economic Co-operation and Development average. It is ironic that the Government should have presided over this increase when, during the 1983 election campaign, the now Prime Minister promised a 2c per litre reduction in petrol prices. It never happened. It is not surprising that farmers, for whom petrol prices are so vastly important, Australia's small business sector and the ordinary Australians who drive their cars to and from work every day feel profoundly cynical about this Government which has increased petrol prices so much yet which promised to reduce them in its first election speech by 2c per litre. The international market in oil prices, as everybody knows, has fallen. When one goes to countries such as Britain, the United States of America or the Federal Republic of Germany, one can see the very positive effect that that fall in oil prices has had on their economies, yet Australia has moved in the opposite direction. We get the repeated argument from people such as the Minister for Science (Mr Barry Jones), who is at the table, that Australia's petrol prices are relatively low by international standards. That may be so, but the simple fact is that in Australia, where we once had a significant competitive advantage in the area of fuel prices, we have allowed that advantage to be eroded. The Government talks about the international trade crisis, yet it has allowed that advantage to be eroded and it has been further eroded by the enormous devaluation of our dollar. My electorate, which is in a hilly area of southern Australia and is therefore cold in winter, is an area where heating oil is a very important commodity for my constituents. The price of heating oil this year has gone up by some 25 per cent over last year because of the devaluation of the Australian dollar. We have a situation where we once had an advantage in oil pricing and petrol pricing and we have thrown it away because of the stupidity of the present Government's policy. Let us get back to the Petroleum Resource Rent Tax Bill. The resource rent tax which will be introduced by this Government will only make matters considerably worse because it will impose a new burden upon those people who are prepared to put money up front and to go out and explore for oil. It will put a new burden on the risk takers in the oil industry, apparently because the Government, for reasons of its own, resents and despises these people. We get arguments from the Government that the resource rent tax will enable the community to benefit from the activities of the oil explorers. After all, the community is already benefiting enormously from their activities through a very high level of corporate income tax, the excises that already exist on the development of old oil resources and the whole range of State and Federal royalties that are imposed on production. The figures for 1985-86 show that over $1 billion went into the Commonwealth Treasury's coffers from oil explorers and $200m into the coffers of the States. The Government says that that is not enough; it wants still more to fund that whole range of absurd projects that the Government is throwing the taxpayers' money at. People also argue-this argument is equally false-that this resource rent tax is a profit based tax. It is not, because it does not recognise the traditional and natural structure of companies. If it were a profit based tax, it would be a tax on the returns of companies after all their costs had been recovered. Yet we all know that under this proposal unsuccessful expenditure on dry wells will not be deductible. It is also an extremely economically inefficient tax. The Treasurer (Mr Keating) boasts that he is some kind of economic rationalist, but I wonder how he rationalises the economic inefficiency of a tax which will penalise those explorers who choose a wide geographical spread for their exploration as against those explorers who choose a narrow geographical spread. Why the Government would want to introduce a taxing policy which will discriminate against explorers with a wide geographical spread is way beyond the comprehension of most economists and most people who have examined this Bill. The resource rent tax will not help the Australian oil industry at a time when that industry should at least be allowed to wend its way towards success. It will exacerbate the crisis which is already existing in the industry in four different ways: At a time when production from the industry is down, it will push it down further; at a time when Australia's level of self-sufficiency is declining, it will push that down further; at a time when Australia's exploration expenditure in the oil industry is falling, it will make that worse; and at a time when our overall economic situation is one of great crisis, it will exacerbate that crisis in its own way. When the Government first talked about this proposal in 1984 the production outlook, as foreshadowed by the Bureau of Mineral Resources, was extremely heroic. There was a view in the Bureau of Mineral Resources and in the Government that Australia had enormous production potential and there was no need to worry about it. The overestimate for Jabiru alone, which this resource rent tax will tax, was extremely heroic. It was a vast overestimate, as the honourable member for Curtin (Mr Rocher) has already pointed out. By February 1987 the Government was saying that the estimates for production for 1989-90 would be some 20 per cent below what the estimates had been in 1984, but no allowance is made for this by the Government, the people who advise the Government or the left wing economists who give the Government support; they just march on with this stupid proposal. Let us look at the self-sufficiency argument. In 1984, when the resource rent tax was first proposed, it was estimated that by 1990 Australia would be 95 per cent self-sufficient in oil. That estimate also proved to be extremely heroic. The outcome for 1990 would appear to be that we will be only 65 per cent self-sufficient. By 1990 we will be importing some $3,000m worth of oil, whereas in the last financial year of 1985-86 we imported only $44m. At a time like this, in one of Australia's greatest trade and balance of payments crises, one would think that the Government would worry about the fact that imports will increase from $44m to $3,000m. One would think that that would be a matter of concern, but it is not. The Government is still going ahead with this secondary tax on oil exploration, regardless of the consequences. When one looks at the exploration expenditure, the argument is exactly the same. The projections in 1984 turned out to be extremely heroic. In the last calendar year there was a 35 per cent downturn in exploration expenditure and in the off-shore exploration, which will be affected by this tax proposal, the downturn was some 55 per cent. It seems to me to be utterly absurd that this Government should introduce legislation such as this in a climate of that kind. We should look at what Esso Australia, one of the biggest oil exploration companies in Australia, has said about the effect of this proposal on oil exploration. It said: Esso . . . believes that exploration under . . . RRT will continue to fall short of its potential . . . Does that not matter to the members of the Government and their advisers? I would have thought that that would be a matter of fundamental concern to any government, yet this Government has completely disregarded the advice that has been given, at a very high cost to the ordinary consumers and the people of Australia generally. This resource rent tax will come in at a time of very real economic crisis; a crisis which the Prime Minister described in his very expensively organised television address to the nation in July last year as the economic equivalent of war. These companies offer some hope and opportunities for Australia, yet they have been hit not only with this new tax but also with a whole range of other innovative taxes introduced by this Government. Those companies have to face an increase in corporate tax from 46 to 49 per cent; one of the highest corporate tax rates in the Western world. They have to face the punitive fringe benefits tax, which obviously increases their costs and reduces the incentive for them to invest, like their multinational companies, in our country. Those companies also face the invidious capital gains tax, and the effect of that is the same. The Government should try to remember, in the whole debate about oil exploration-it seems entirely blind to this-that we have to compete with other countries for the oil exploration dollar. Let us just contemplate what some of those countries are. They are countries such as Canada, the United Kingdom-with its very successful conservative Government-the United States of America and Norway. It is argued by the Government that some of these countries have a resource rent tax, so let us not need to worry as everything will be all right, and if we have one as well, so what? Of course it is a damaging tax for Australia. We had a competitive advantage; we are throwing it away. In any case, look at the comparative cost structures of those countries and Australia's. While we have an inflation rate of 9.8 per cent and we have had no resource rent tax, the United States has an inflation rate of 1.1 per cent, which gives us some idea of the competitive disadvantage we suffer from when it comes to attracting investment in the oil industry. The United Kingdom, which I admit has a form of resource rent tax, has an inflation rate of only about 4 or 5 per cent-less than half of ours. Again the argument is the same. Again, a multinational company looking to expend dollars on oil exploration is going to do so in a country with a better cost structure and therefore the potential for a better rate of return than Australia has. The Organisation for Economic Co-operation and Development average inflation rate is 2.5 per cent compared with Australia's crippling 9.8 per cent, an inflation rate which has been seriously exacerbated by the oil pricing policies of this Government. Finally, I think it is important to remind the House of the arguments the Government pursued in relation to the gold tax. We all remember the decision last December when the Government said that it would not introduce a gold tax, and this is what Senator Gareth Evans, the Minister for Resources and Energy, said on 16 December 1986 in relation to the gold tax: . . . the Government has concluded that the importance of encouraging active exploration and development, and of maximising production and the consequent export income generated by the gold mining industry, outweigh the arguments in favour of removing the industry's long-standing tax exemption. I am not going to get into a debate about the gold industry. The Government made its decision on that and the community welcomed that decision, but the fact is that it used that argument in relation to the gold industry and that it contradicted that argument by introducing this resource rent tax in the oil industry. I find that completely illogical and totally incomprehensible. The oil industry does need to be encouraged. We do need to encourage-to quote Senator Evans's words from his gold tax statement-`active exploration and development'. That is why the Government did not introduce the gold tax in the gold industry. Why has it not applied the same logic to the oil industry as far as the resource rent tax is concerned? I am not arguing that the oil industry should be exempt from corporate tax; I am arguing that, in the interests of sanity and economic development, we should cast aside these sorts of absurd new taxes. In the gold industry the Government wanted to maximise production. It wanted very importantly, and rightly, to get that industry to generate exports. Why does it not want to achieve those things in the oil industry? The simple fact is that Senator Evans's statement on the gold industry makes an utter absurdity of this particular resource rent tax proposal that the Government is bringing before the House today. I think it is an extremely regrettable proposal; I think it is an ill-considered proposal; and, what is worse, I think it is an ideological proposal which is going to do very real damage to oil exploration in Australia. It is going to affect our balance of payments situation and it is going to affect the overall state of our economy. If this is to be one of the pieces of legislation which will form the general epitaph of the Government, I think it is highly appropriate. It is an anti-production, anti-development, anti-profit and anti-export tax, and the Government deserves to be condemned for the irrationality of that decision. Mr ROBERT BROWN(Charlton)(9.35) —I am pleased to have the opportunity to make some contribution to this discussion of the Petroleum Resource Rent Tax Assessment Bill and cognate Bills after the contribution that has just been made by the honourable member for Mayo (Mr Downer) because there are three particular issues I would like to take up in relation to the contribution that he made. The first one is the reference which he repeated and which had been made by other members of the Opposition concerning the increases that have taken place in relation to excise taxes on petrol. What they have failed to do at the same time is to suggest that to a very large extent those excise increases represent, balance out and compensate for the reduction which has taken place in the crude oil levy as a result of the import parity pricing system, so that the effect of that on the price of petrol has been almost negligible. So let me put that argument to rest. The second issue is that he indicates, quite correctly, that his legislation makes no concession for dry wells. Of course it does not. The purpose of this legislation is to relate to projects, and of course projects which involve dry wells stand by themselves. One of the positive advantages of this sort of approach is that, to a very large extent, the gambling element might be encouraged to be lifted out of the exploratory exercises in the petroleum industry. As the honourable member for Mayo would know, as a result of people exploring in areas which were most unlikely exploration sites, a lot of dry wells have been found. It was not so very long ago that people were talking about the unlikelihood of oil being discovered in Australia because of the antiquity of this continent. Of course, to a large extent the oil is being found mainly in the off-shore shelf areas, certainly not on the mainland or in the older areas of the western or eastern plateaux. There was a possibility of oil being found in the central lowlands, between the eastern highlands and the western plateau, and some oil has been discovered there. Natural gas has been found in areas which would not have been anticipated many years ago. There is a possibility that this approach will take that gambling element out of the exploration program. Of course, exploration programs in the petroleum industry have always had a very substantial gambling element. The third issue I would draw attention to is the claim that the reduction in the number of exploration wells in some obscure way is related to this legislation. Mr Braithwaite —Of course it is. Mr ROBERT BROWN —The honourable member for Dawson repeats the claim and says: `Of course it is'. In countering that, let me say that of course it is not. Exploration activity in 1986 slumped to only half of its 1985 level. Last year it was known that this legislation was coming in this year, so there was a reduction of 50 per cent in the exploration activity in 1986 compared with 1985 and the Australian Petroleum Exploration Association expected only 136 exploration wells to be drilled this year, 1987, compared with 264 last year. It is quite legitimate on the part of the Opposition to try to maintain that in some way that development has been related to this legislation. The more enlightened among those opposite-the honourable member for Mayo and the honourable member for Dawson (Mr Braithwaite)-know that that simply is not the case. In fact, the Minister for Resources and Energy (Senator Gareth Evans), in his second reading speech made this point: On the basis of current world oil prices- honourable members know that that is more relevant than the question of this resource rent tax- it is unlikely that any petroleum resource rent tax revenue will be received- from this particular legislation- before the 1989-90 financial year. What nonsense are Opposition members talking about? If they want to come in here and argue against the petroleum resource rent tax, they can do so by all means, but let them not believe for one moment that they are going to mislead or confuse Government members. They are not going to misrepresent this legislation. Of all people in the community, let me assure them absolutely that they are not going either to confuse or mislead those people in the petroleum industry. I heard the honourable member for Mayo make certain claims and, if those claims are endorsed by the honourable member for Dawson-- Mr Braithwaite —Hear, hear; absolutely. Mr ROBERT BROWN —I have heard him endorse those. He now compounds his mistake and compounds his foolishness by claiming that the claim made by the honourable member for Mayo was one of substance. He will now lose credibility among those people for whom he speaks because people within the petroleum industry know that those blokes opposite are not on the right track. They know that those fellows opposite are not on the right track. Opposition members know that, due to the continuing fluctuations in world oil prices and the uncertainties that are inherent in predicting success in off-shore petroleum exploration and subsequent production, the amount of revenue likely to be obtained in any year from this legislation cannot be projected. I say again to the honourable member for Dawson that people within the petroleum industry, people who have been involved in exploration, know that the points that I have just made are points of substance. They know that the points that the honourable member for Dawson has attempted to make and the endorsement that he has given to quite spurious, inadequate and inaccurate claims by the honourable member for Mayo simply represent and reflect the inadequacy either of his understanding or of his belief that he can make spurious claims of that kind and have them accepted by people in the industry and in the wider community who know better. As honourable members know, this legislation makes provision for a number of aspects of the Government's approach to the whole question of resource rent taxation in the petroleum industry. It establishes, for example, all of the requirements as far as the revenue provisions are concerned. It establishes all the principles that are to relate to the expenditure conditions-- Mr Braithwaite —Squeezed the last drop of taxation out of it. Mr DEPUTY SPEAKER(Mr Mountford) —Order! The honourable member for Dawson will remain silent. Mr ROBERT BROWN —Mr Deputy Speaker, if I respond to some of those interjections by the honourable member for Dawson-- Mr DEPUTY SPEAKER —Please do not respond. Mr ROBERT BROWN —I will follow your advice, Mr Deputy Speaker, and I appreciate the spirit in which you have offered me the advice. But, if I were to respond to some of those interjections from the honourable member for Dawson, it would have the effect, as Hansard reporters know, of having them recorded in Hansard. The reason I am not responding is that I do not want to cause him any embarrassment when people read the Hansard. But, if he persists with those interjections, I will respond and they will then be recorded for posterity and he knows that he does not want to see that any more than anyone else wants to see it. The important provision relating to the expenditure requirements of this legislation is that any accumulated items of expenditure in the past will be carried forward into the future. Not only will they be carried forward into the future, but they will be carried forward at a compounded rate. (Quorum formed) I am sure that neither you, Mr Deputy Speaker, nor anyone else will mind my referring to the fact that, because of the powerful case that I am presenting, I am honoured and complimented by the fact that no less than the Deputy Prime Minister (Mr Lionel Bowen) and the Treasurer (Mr Keating)-and everyone else-have come into the chamber to hear it. Mr Snow —How many Opposition members are there? Mr ROBERT BROWN —I have looked at the Opposition side and, if it were not for the fact that at least six members of the Government are sitting on the Opposition side, there would be no one there except the honourable member for Dawson, who has now decided to keep quiet because every time he interjects and exposes his ignorance on this issue, I shall respond to his interjection in order to make sure it is recorded in Hansard for posterity. I was saying that the expenditure provision will mean that expenditure will be carried forward into subsequent years and that it will not only be carried forward, but also at a compounded rate. It will be carried forward at the level that it had reached in the previous year, together with the addition of the long term bond rate plus 15 per cent. The claim has been made that insufficient provision has been made in this legislation for the cost of the actual exploration program. Mr Braithwaite —Are bad debts allowed? Mr ROBERT BROWN —As the honourable member for Dawson should know, a number of items of expenditure are not included. The honourable member for Mayo referred to one of them, dry wells. As the honourable member for Dawson should know, there are separate requirements and regulations relating to bad debts, taxation and depreciation provisions. If he stops interjecting, I might get to some of them and be able to explain to him the fundamental points in this legislation. I initially intended to be fairly soft on the Opposition as far as this question was concerned but in view of the interjections and the attempts to frustrate my contribution to this debate, I have decided that I should make a few other observations. I want to place in context how the Government sees this issue. I said as early as 1981 that what the Commonwealth Government had to do was to decide whether it would leave in all of those areas of resource development the type of taxation vacuum that had been left by the Fraser Government and by previous governments which allowed the State governments then to step in with a whole array of charges, royalties, duties and freight charges, all of which were intended to fill that vacuum. The situation has progressively developed so that the only area that remains outstanding is that of off-shore oil exploration. When the present Treasurer was opposition spokesman for resource development, to a very large extent at that time he was the architect of the whole concept of an adequate project-related non-discretionary profit-related resource rent tax. What we are seeing at present is the implementation of precisely that concept. People on the Opposition benches have put forward the claim that in some way this represents a tax on top of the previous existing taxes, but that is far from the truth. It has been emphasised that rather than being an addition to existing taxes it will replace the excise and royalty system that exists at present. Not only will this legislation replace the existing system but also it will not affect existing oilfields in the North West Shelf and the Bass Strait. They will continue to be affected, as they have traditionally, by the existing taxation system which is related to them. It is only in those new areas of oil exploration, discovery, development and production where these new provisions will exist. What this Government is doing at present is slotting into place the last part of a very significant and major mosaic of taxation reform as far as the Commonwealth is concerned. We have got into place the fringe benefits tax, the capital gains tax, the elimination of negative gearing and the entertainment tax, and the substantiation requirement. We are trying to get into place the Australia Card to chop out some of the last vestiges of taxation evasion and social security fraud, and we are now slotting into place one of the last elements of this exercise that the Government has been involved in-an exercise that has been designed to equalise the whole of the taxation system in Australia to make sure that the contributions to the national revenue made by people in the productive sector or in the private household sector are equal to their capacity to pay. That is what we are intent on doing at present. I repeated before the concern that has been expressed in the community generally about the inadequacy of Commonwealth taxation provisions in this area. I am not the only one to have done this. I indicated the pioneering role that has been played by the present Treasurer when he had specific responsibility in this area. We can even go to the report of the Senate Standing Committee on National Resources tabled in the Senate in 1981. I remind the House that the Committee consisted of six members from both sides of the Senate. Members of the present Opposition were represented on that Committee as well. Let us hear what it had to say. The Committee stated: The Committee believes that any review of the current taxation applying to resources based industries should include consideration of the use of a resource rent tax or other variable tax on profit. Where an industry's profitability provides a return on its investment significantly greater than that necessary to call forth the investment in the first place then there are valid reasons for considering a higher rate of tax on that `excess' return on investment. This is particularly the case where, in the provision of services such as electricity to industry, there is some justification for believing that the full value of the resources used to provide that service are not being recovered from the purchaser. The Senate Committee quite clearly renewed that plea for the national Government to look again at the possibility of levying a resource rent tax and in the process it also considered ways by which the various State governments had stepped in, as I said before, to fill the vacuum which had been created by a reluctance on the part of consecutive Commonwealth governments to do something about this resource rent tax area. We have claims, for example, from the Queensland Government about it being a low tax government. By the time we include those effective de facto resource rent taxes which are in the forms of rail freight, the tax level increases substantially. Mr DEPUTY SPEAKER(Mr Cowan) —Order! The honourable member's time has expired. Mr PETER FISHER(Mallee)(9.55) —I am sure that the House will agree that the honourable member for Charlton (Mr Robert Brown) was excellent on preparation but light on fact or understanding of the Petroleum Resource Rent Tax Assessment Bill 1986, Petroleum Resource Rent Tax Bill 1986, Petroleum Resource Rent Tax (Interest on Underpayments) Bill 1986 and the Petroleum Resource Rent Tax (Miscellaneous Provisions) Bill 1986 that he was discussing. He talked about a mosaic of tax reform. I suggest to him that what we are really talking about with these Bills is simply more taxation because of government greed, excessive spending and a massive overseas debt. The debate this evening is being conducted in a totally farcical atmosphere. We know that the Prices Surveillance Authority has failed miserably, particularly in the area of fuel pricing. Last week in my constituency fuel prices varied from 48c a litre to 62c a litre in a distance of some 300 miles. We now have the giant hoax of the Minister Assisting the Treasurer on Prices (Mr Barry Jones) dealing in prices of biscuits and haircuts but refusing to look at government services and charges where, of course, no action will be taken by this Government. No more significant charges on industry occur than in the area of petroleum pricing. If the Government had any real concern it would cut excise, inflation would drop and I am quite convinced that in turn interest rates would come down. This Government has not got the courage to do that and what it is determined to do with these Bills is milk the motorists further and so further hamper and kill off some of our industries. I am sure the nation remembers what the Prime Minister (Mr Hawke) said in March 1983. I think his quotes are worth looking at. In March 1983, before the Federal election, the Australian Labor Party promised to cut petrol prices by 3c a litre. The Prime Minister, in his policy speech at the Sydney Opera House on 16 February, said: . . . Labor will reduce the price of petrol by cancelling the January 1 price increase of $3.23 per barrel. This would have the effect of reducing the price of petrol by the order of the three cents a litre. We know what happened: Just 26 months after Labor came to office in this place petrol prices had been increased by over 10c a litre and since then by another 13c a litre as a result of price increases and indexation. So much for the Labor Government's responsibility in this area. We know now that two thirds of costs are Government charges. The Government has even taken some of the fuel excise off the contribution that is supposed to be made to the national road network. The petroleum resource rent tax is a profit based tax designed to replace the present crude oil excise and the royalty system in those fields to which it will apply. The tax is to apply only where there is an excess of project related receipts for a financial year over both project related expenditure for the year and undeducted expenditure of previous years. Theoretically the resource rent tax may look like an improvement on the present system which is production based, but there are enormous problems both with the concept and with the Government's proposed implementation of this tax. The Opposition has opposed and will continue to oppose this resource rental tax because it is an additional tax on the petroleum sector that cannot be justified if exploration is to be encouraged. On top of this, the resource rental tax will be an administrative nightmare for both the Government and the oil industry. Mr Braithwaite —Absolutely. Mr PETER FISHER —I remind the House, as the honourable member for Dawson does, that a resource rent tax in respect of certain mineral based activities has been in the ALP policy since 1977. Following the election of the Hawke Government, the then Minister for Resources and Energy (Senator Walsh) and the Treasurer (Mr Keating) set about to introduce the tax. The legislation to give effect to that decision was introduced into the House of Representatives in the Budget session some two years after it was mooted. There are four Bills in this package. The first two Bills are the most significant-the first Bill provides the framework for the tax and defines where the tax will apply, how it will apply and how it will be paid, and the second Bill formally imposes and declares the rate of tax at 40 per cent. The other two Bills are complementary to the package. This resource rental tax, introduced as an excuse for an extension of the current Federal Government's attitude that petroleum resources are community property and that the community as a whole has a right to share disproportionately in the returns from the exploitation of these non-renewable resources, makes it a social oil. Of course, this attitude overlooks the fact that the community already benefits substantially from a profit based, relatively high company tax rate of 49 per cent. It also disregards the fact that the community also benefits from non-profit based taxes such as sales tax, payroll tax and fringe benefits tax-not to mention the royalties and production excises also imposed on the oil industry. Mr Braithwaite —They tax everything. Mr PETER FISHER —The Government taxes everything. I have already mentioned the 23c that is taken off each litre of oil by government taxes at both the State and Federal levels. That is a most significant figure. What the Government has steadfastly chosen to ignore is that, because of the oil price drop, there are no longer any windfall gains to tax. In nearly three years since the tax was announced, the price of oil has fallen and no windfall now exists to the taxation system. There are two major reasons why the resource rental tax should be abandoned. Firstly, the changed pricing conditions which apply now, vis-a-vis 1984, have reduced gains to producers and, therefore, act as a disincentive to further exploration and production. Mr Braithwaite —That is a good reason. Mr PETER FISHER —It is a good and most significant reason, but it is no more significant than the second one which is the imminent decline in Australia's level of self-sufficiency and the effect that that will have on our economy. It is obvious that any taxation revenues coming from secondary tax at the moment are a penalty to profit and a disincentive to future investment in the industry. What has happened to this industry in the past 18 months? We know that the world oil price has fallen and that the domestic price of Bass Strait crude oil has fallen from $43.71c a barrel in January 1986 to $29.37c a barrel in March 1987. The average price fell from $29.07c a barrel in the first half of 1986 to $22.85c in the second half of the year. We also know that the domestic price has fallen from $35.36c in July 1984 to $29.07c in March 1987. Of course, the effect of this collapse has been to reduce commercially recoverable crude oil reserves and to reduce the number of anticipated worthwhile exploration prospects. Company cash flows have been more than halved. Now it is nearly impossible to raise equity capital on the stock market for high risk exploration. Mr Nehl —There is no incentive. Mr PETER FISHER —There is absolutely no incentive at all. The four rental tax Bills will remove further the incentive that already applies, as the honourable member for Cowper says. The proposed resource rental tax rate of 40 per cent, with the proposed threshold rate, will render all but a few high risk exploration prospects unattractive at current oil prices. The sensitivity of production to the level of producer return was shown in 1986 when the oil price dropped dramatically and Esso-BHP shut production in Bass Strait because it had become uneconomic. Marginal producer realisation dropped to its lowest level in 10 years at around $3 a barrel and, at that point, export ceased. In order to lift producer returns to levels that made production viable, the Government made temporary concessions at that time to the industry. The on-shore excise was suspended and the top rate of old oil levy was reduced from 87 per cent to 80 per cent. Of course, those figures indicate the ridiculous nature of introducing the Bills at this time. The Government's 1984 estimate suggested that Australia could be 95 per cent self-sufficient in crude oil in 1990. Recent estimates that I have seen point to Australia being only 65 per cent self-sufficient in that year. If Bass Strait developments do not proceed, that figure could well be as low as 50 per cent. This introduces very real reasons for concern at the nature and intent of the Bills. At the current world price of oil and the current Australian dollar value, crude oil imports in 1990 could cost some $3,000m compared with a net crude oil import bill of only $44m in 1985-86. Mr Braithwaite —Won't that make a mess of our balance of trade? Mr PETER FISHER —It would not only make a mess of our balance of trade but also, if the Government were still in power-heaven help us-we would see further taxation measures imposed on the Australian community to pay for the bad policy initiatives that are being undertaken in the Bills. I have outlined the basic reasons for the Opposition's rejection of the legislation: The changed pricing conditions, which apply now vis-a-vis 1984 when the resource rent tax was announced, give rise to reduced incentive for exploration and production and highlight the effect on the Australian economy of a decline in petroleum self-sufficiency. In order to boost Australia's level of self-sufficiency, more exploration and more development work need to be done-not less. The volume of the work that is needed will not proceed while the level of producer realisation is as low as it is at present. We must also recognise that producer realisation is affected by the price level as well as the tax level. As we have little power to exert on the price level, if we are to effect producer realisation, it must, therefore, be via the taxation levels. By getting rid of the resource rent tax, we would provide a significantly greater incentive to exploration companies to go and explore while still ensuring that the community gained a return on the asset through normal taxation and the royalties system. In claiming that producer realisation affects exploration, I think it is as well to review the recent performance of the exploration sector. Off-shore exploration expenditure fell by 25 per cent in the year 1985-86. The industry expects it to fall by a further 56 per cent in 1987. We know that total private exploration expenditure declined by 35 per cent between 1985 and 1986. There was also a fall of 55 per cent in on-shore drilling in 1986. Mr Braithwaite —All because of the taxing policies of this Government. Mr PETER FISHER —As the honourable member says, it is due to the taxing policies of this Government. Mr Robert Brown —Is that right? Mr PETER FISHER —The thing that the honourable member for Charlton failed to recognise in his speech was that price is a critical factor in exploration and in decision-making regarding exploration. Petroleum exploration expenditure in Australia has always tracked the import parity price. There is ample data available to suggest, on a world-wide basis, that exploration activities are directly related to earnings which are the functions of oil prices and tax regimes. Exploration should thus be responsive both in the short and longer terms to any reduction in taxes which results in increased cash flows or expected returns. The industry, in its submission to the Government on tax reform, drew attention to a number of cases where relatively modest changes in taxation have had a marked effect on exploration spending. I suggest that the four Bills will have a more drastic effect on the amount of spending that takes place in the development of this very vital resource. Mr Nehl —Disastrous. Mr PETER FISHER —It will be disastrous. As other honourable members on this side of the House have said, when speaking to the Bills, the significance of oil prices on our cost structure and their accompanying effect on inflation and interest rates is one that this Government is obviously attempting to ignore. I am convinced that if this Government wished, for instance, to do something about the tragic situation that exists in rural areas-- Mr Nehl —They don't care. Mr PETER FISHER —As the honourable member for Cowper says, I am sure that the Government does not care about the economic and social ills in our rural communities. I am quite sure that if it did care, there would be one major step that the Treasurer could undertake on Monday morning that would bring immediate alleviation of the problems of our rural industry. Mr Nehl —Bring interest rates down. Mr PETER FISHER —The Government says that it cannot bring interest rates down. I suggest that, if the Government made a major and radical cut to fuel excise, and removed indexation, we would see an immediate downturn in the rate of inflation and an almost immediate downturn in interest rates. It would make us more competitive. Some of the very major problems that we are facing in our rural industries would be alleviated and, more importantly in relation to these particular Bills, it would ensure that there is a reliable supply of locally-produced crude oil in the future. I oppose these Bills. I believe that, if the Government had any consideration for the future of Australians and for the future of our competitive industries, it would remove these Bills from the House. Mr McGAURAN(Gippsland)(10.11) —I am very pleased to follow the honourable member for Mallee (Mr Peter Fisher), with his thoughtful contribution. I think the honourable member for Mallee and my colleagues on this side of the House have stressed the importance of the Petroleum Resource Rent Tax Assessment Bill, the Petroleum Resource Rent Tax Bill, the Petroleum Resource Rent Tax (Interest on Underpayment) Bill and the Petroleum Resource Rent Tax (Miscellaneous Provisions) Bill, which are before the House, to the very fabric of the underlying basis on which our economy is so dependent. Mr Hollis —Come on! Mr McGAURAN —I hear mocking laughter from the honourable member for Throsby. This is the man whom dairy farmers in New South Wales have on record as arrogantly and superficially dismissing their concerns. That is in a Hansard, I understand, that has done the rounds of many a dairy farm in New South Wales. His mocking laughter about the importance of fuel is to be expected. Mr Nehl —He wouldn't know. Mr McGAURAN —As the honourable member for Cowper says, he would not know that farmers' fuel consumption is about 40 per cent petrol. So they pay the same excise and State government charges as do road users. One major impact on the inflation rate of some 10 per cent which this Government is trying to dress up as being merely grocery price rises has its basis in fuel pricing. Mr Braithwaite —More than four times that of our competitors. Mr McGAURAN —As the honourable member for Dawson says: `More than four times the inflation rate of or major trading competitors'. The price of fuel is of absolute importance to primary producers as well as to all consumers and road users. I refuse to allow myself to be distracted by the inane interjections of the honourable member for Throsby. I simply make the point that he is completely out of touch with the concerns of primary producers and road users. By necessity, the four pieces of legislation before the House are of some complexity. They are, nonetheless, of abiding interest and importance to all members of this place, because they very much set an economic framework for the future. If we are to stand aside and allow exploration for fuel to diminish, as this Government seems quite prepared to do, we will pay the price in the future. At a time when our current account deficit is in worse shape since certainly anybody can remember and more likely since figures were kept we badly need some export income of the type that an active and healthy fuel exploration industry can bring us. As the member for Gippsland with one of its principal centres being Sale, I probably am more aware than most members of the human loss and the human suffering caused by the current downturn. In fact, it is true to say that Sale has been the city in Australia most affected by the recent oil exploration downturn. Late last year I introduced to the Minister for Resources and Energy (Senator Gareth Evans) a delegation from the Sale City Council led by Mayor Peter Synan. That delegation realistically knew, and certainly knows even today, that the Government is not going to manufacture or bend its fuel pricing policies simply on the concerns of one city, but it was an attempt to show the human face and some of the very real losses that the Sale municipality, as well as the community, had lost in hundreds of lost jobs. Mr Braithwaite —A lot of good workers are out on those rigs. Mr McGAURAN —There are a great many good workers, as the honourable member for Dawson reminds the House, his having visited them as a guest of Esso on some occasions. Debate interrupted. Mr DEPUTY SPEAKER(Mr Cowan) — Order! It being 10.15 p.m., I propose the question: That the House do now adjourn. Mr McVEIGH(Groom)(10.15) —I take this opportunity in this adjournment debate to praise the results of the Northern Territory's National Party election campaign. To say the National Party did not perform to expectations is to deny the good vote we did gain in certain metropolitan and outer metropolitan seats. Overall, we ended up with 17.86 per cent of the vote. I repeat `overall' because there has been a tendency for political journalists and watchers alike to translate the total figure of 17.86 per cent to a national figure. This is wrong and incorrect, to say the least. I acknowledge that there were some seats which the National Party polled poorly in because our natural constituency was not located in these outer rural areas, such as MacDonnell, Stuart and Victoria River. Yet in the seats which do identify with the values and policies the National Party stands for, we did remarkably well. For instance, in Katherine, a diverse area of voters, we polled nearly 29 per cent of the vote, and the Labor Party has a big defence base building program going on there-an inbuilt constituency. In Araluen, an area consisting mainly of hobby farmers and townspeople, we polled 27.52 per cent of the vote. And in Flynn, much like Araluen, the National Party polled 25 per cent of the vote. Let us be honest with ourselves: When we put these percentages in the perspective of a new party without a party structure to speak of, set up only two months before a snap poll was called and challenging well-established parties, we did very well indeed. To say the National Party will not be able to translate its rural image to the city slickers of Sydney and Melbourne is to deny the reality of the Darwin vote-the major centre of population for the Northern Territory. Mr Martin —Oh! Mr McVEIGH —The honourable member does not understand. Sure, in the Aboriginal areas we got only 5.6 per cent of the vote. The National Party does not believe in discrimination against anyone. The Government does not score at all. We did very well in Darwin. If the critics want to be fair and logical they will say that, as we got 29 per cent of the vote in Darwin, we will get 29 per cent in Sydney. That is what they were saying. They said: `If you can't get the vote in Darwin, you won't get it in Sydney or Melbourne'. I am just suggesting to honourable members that, if we got 29 per cent of the votes in Sydney and Melbourne, we would be picking up a lot of seats for the National Party. In Ludmilla, a seat containing a Royal Australian Air Force base and a large Aboriginal reserve, we polled over 23 per cent of the vote; in Wanguri, a sitting Minister's stronghold, the National Party won over 24 per cent of the confidence of the people; and in Port Darwin the National Party polled over 19 per cent. Even in the area where one would expect the Country-Liberal Party to be strong, the young struggling family area of Leanyer, the Tuxworth Nationals picked up a swing of well over 18 per cent. In the 19 days of electioneering available, and with a three-month old party, the Nationals managed to achieve the same polling results that the Queensland Liberal Party, with 40 years of experience, achieved in the last State election and half the Labor Party vote, with its 70 years of existence, in Queensland. It is not too bad for a young party to achieve the results that the Liberal Party and the Labor Party in Queensland have only been able to achieve over a lifetime. This was achieved despite being denied equal time on the Territory Australian Broadcasting Corporation station, which was biased against the Nationals. We were not guaranteed the same time. That is the only Territory-wide communication link. And it was achieved despite block voting by the Aboriginal community against the National Party. This election result has not slowed down the National Party movement, it has not marked the beginning of the end of the Joh push, nor have the wheels fallen off the Joh bandwagon. We did well in the metropolitan areas of Darwin, we did well in Katherine and we did well in the Alice Springs electorate. We are obviously a very strong force if we look at the total results, with only three months to establish our party and with a natural inclination to follow previous voting patterns. The Nationals will achieve the desired results on the national level, as we have in the Queensland scene. We have a clear view of what is needed for Australia and what the average, hard working, over taxed Australian wants from a reformist government. We are ready to embrace the challenge the people of Australia are ready to issue us with and to make this the strong, proud nation we all want it to be. I conclude, Madam Speaker, by asking that we all be honest and clear. We got almost 30 per cent of the vote in some of the Darwin electorates. If those armchair critics who have tried to confuse the issue were fair they would say that if that result were transferred to Sydney and Melbourne we would do very well indeed. Madam Speaker, I suppose one of the disadvantages would be coming into this Parliament and not having you here as Speaker. I would hope, Madam Speaker, that whoever follows you fills your job with equal charm. Madam SPEAKER —Order! The honourable member's time has expired. Mr HOLLIS(Throsby)(10.20) —It was interesting to listen to the honourable member for Groom (Mr McVeigh). Maybe when the election is called the Joh Nationals will be put to the test. I issue a challenge and ask that a Joh candidate be put up against me in Throsby. Rest assured that the Throsby electorate contains more than 2,000 voters so the Joh Nationals will have to have more than 25 per cent of 2,000 voters to get a candidate up in Throsby. Today the honourable member for Dawson (Mr Braithwaite) raised in this Parliament a matter of privilege which, Madam Speaker, you ruled on this evening. The honourable member for Dawson claimed that outside forces were threatening members of this House. He claimed that a threat to sue him was in fact clearly an attempt to intimidate him. Actually, I thought this claim a bit strange coming as it did from a member of the Queensland National Party. As I understand it, the President of the Queensland National Party has himself been doing a bit of directing, to say nothing of intimidation, of late. Tonight I raise a matter that could be a matter of privilege but it is not my wish that it go to the Privileges Committee. Instead, I wish to share it with the members of this House. I suggest there has been an attempt to intimidate me. It is outrageous. This afternoon I received a votergram signed by one V. P. White, State Councillor of the Small Business Persons. It commenced: Has anyone threatened your existence or your safety because of the Australian Card Legislation? It went on to refer me to a letter in the Australian of 16 March. I had a look at this letter which was a rambling one full of the usual scare tactics and misinformation about the Australia Card. The votergram continued: The day could quickly arrive that being an M.P. who voted for a reduction of people's liberties could be regarded by some Australians as the actions of an `adversary' to the Australian people. What I want to know is whether Mr White himself is or some of his cronies are threatening my life or my safety? His votergram suggests this. Has the Right in Australia reached the stage where if one does not agree with it one's existence or one's family's safety, is threatened? I would suggest that this is a much more serious matter than the matter raised by the honourable member for Dawson today. Also, there is the suggestion that because one does not agree with or votes against a matter which it supports one becomes an adversary to the Australian people. I notice that my colleagues the honourable member for Dobell (Mr Lee) and, as usual, the honourable member for Macarthur (Mr Martin), who is always here when I speak, are here. My colleagues and I on this side of the chamber will not be intimidated by the likes of V. P. White. My support for the Australia Card is well known. I support it because it will do much to eliminate the tax cheats and welfare fraud which together cost the honest taxpayers of Australia $2m a day. The Opposition's blocking of the Australia Card legislation is costing the honest Australian taxpayers $2m a day. This is not the first time the small business lobby has used intimidation against me. Last year the Nowra branch of the Small Business Association organised a public meeting in Nowra to which it invited Waste Watch Baume and the honourable member for Gilmore (Mr Sharp) but it did not bother to invite me. One wonders why! I did not mind this. This group and a Mr Graham Hurst as well as Senator Michael Baume went public and in the newspapers started criticising me for not attending this meeting, which they had not even invited me to. Then they started criticising me for not responding to their non-existent invitation. Of course they forgot to say that they had never even bothered to send me an invitation, or even telephone my office. Despite my writing to Mr Hurst several times asking for the date on which they sent the invitation, they did not even respond to any of my letters. It seems the only thing the Small Business Association knows about is intimidation and cheap threats. Some of us are not impressed with this tactic. It will take more than a threatening votergram from V. P. White of 138 Merrylands Road, Merrylands, NSW, 2160 to intimidate me. Mr HODGMAN(Denison)(10.25) —Madam Speaker, because of a short but enforced absence from the House, and properly so, last week I did not have the opportunity to address the chamber on some matters in relation to legislation which has now passed this House and gone to the Senate. I am very clear that under the Standing Orders I shall not reflect on the vote in the House but I do want to raise some matters which I hope honourable senators in another place will look at when they come to deliberate and vote upon the Lemonthyme and Southern Forests Commission of Inquiry Bill 1987. I am very pleased to see that the honourable member for Bass (Mr Smith), who spoke in that debate, is present in the chamber. I want to speak about some of the legal aspects which I would hope the Senate would look at and carefully consider. The first and fundamental question that needs to be looked at is whether the legislation is constitutional. From a legal point of view it is quite interesting. The Bill appears to be based on the foreign affairs power of the Constitution contained in section 51 placitum (xxix) and also the corporate power. My personal view is that, insofar as it does not relate to land which is currently on the World Heritage List and the Bill in fact relates to National Estate and private property, clearly in respect of that the legislation is unconstitutional. Secondly, in relation to either the corporate power or the export power, my view is that the legislation would be unconstitutional in relation to the taking of timber which is purely for domestic consumption or even interstate trade but not bound for export. So the first question I think the Senate, as the protector of the States, should look at is whether the legislation is constitutional. I am pleased to see the honourable member for Bass is nodding his head in agreement. If the Senate does not think the legislation is constitutional it should reject it or alternatively refer it to the appropriate Senate committee to ascertain, having taken proper legal advice, whether it is constitutional. The Senate carries out a most important role in relation to delegated and subordinate legislation. I encourage the Senate to look at the question of the constitutionality of Acts of this Parliament before it simply gives them the Senate imprimatur by passing them. Thirdly, I ask whether the Senate will look very carefully at the right of entry upon private property contained in clause 14 of the Bill. The clause is extremely widely drawn and effectively would enable the right of forcible entry on to any private property anywhere in Tasmania which may contain forestry resources. A member of the commission of inquiry or another person who is authorised in writing for the purpose of this clause may do this. It gives the right to enter using such assistance and such force as is necessary to enter and inspect any private property in Tasmania. That is the widest power enforceable, I believe, of entry to private property I have seen in any legislation. Clause 17 needs to be looked at carefully. It radically and unjustly changes the law in relation to the granting of injunctions in a manner never before seen in Australia. Fourthly, I suggest that the Senate look at the severe limitation of payment of compensation which, I believe, contravenes the Constitution. Fifthly, I refer to the denial of any compensation whatsoever to those who suffer loss or damage, including loss of employment in a secondary or tertiary capacity. Lastly, I point out that this legislation is not only most unconstitutional but it denies basic and fundamental Australian rights in a manner which I believe is totally unacceptable. I ask the Senate to look at it with a fine tooth comb. I have already asked the Law Council of Australia to do likewise. It should be rejected. Madam SPEAKER —Order! The honourable member's time has expired. Mr MARTIN(Macarthur)(10.30) —On several occasions during the last 2 1/2 years I have spoken about the contribution which has been made to Australian society by the Surf Lifesaving Association of Australia. Tonight I would like to put on record some words of praise for one such surf lifesaving club that operates within my electorate. It is the Fairy Meadow Surf Lifesaving Club of which I happen to be not only the patron but also an active member. On 15 March this year a very significant event took place involving a number of members of that particular club. The veterans squad of people who have been tied up with the surf lifesaving movement for some time were subjected to the rigours of going for their Surf Lifesaving Association bronze medal. I am very pleased to be able to report that that veterans squad was most successful and was commended by the Surf Lifesaving Association as being a well drilled outfit, one which performed all the tasks necessary for a Surf Lifesaving Association bronze holder. That squad spent some two months in training. It is interesting that these people all had an active interest in surf lifesaving, both through junior and senior associations with the Fairy Meadow club. But because of one reason or another they had never attempted the surf bronze medal which is, of course, a prerequisite for anybody wishing to participate as a surf lifesaver on the beaches of Australia. Those five gentlemen as I indicated trained extremely hard and were very successful. It is important that this contribution to the surf lifesaving movement should go on record because those same people have continued an active interest in the surf lifesaving movement over many years. In fact, they have put their children through the Fairy Meadow Junior Surf Lifesaving Club or still have their children going through the surf lifesaving club. Those five gentlemen were Bruce Allen, Ray Camilleri, Jim Milne, Peter Patterson and, dare I say it, the erstwhile member for Macarthur, Stephen Martin. The honourable member for Throsby (Mr Hollis) indicated that he did his bronze in Bellambi in 1956. He must have been a very young man-- Mr Lee —The test was rigged. Mr MARTIN —The test was rigged, as the honourable member for Dobell said. In my era when one was growing up on the beaches of Wollongong, one either went into the surf lifesaving movement when one reached the age of 13, or went surfboard riding. I chose the latter rather than the former and consequently I never had the opportunity to go through the bronze medallion test. I was very pleased to participate because it gives one first hand experience in what is necessary in surf lifesaving, which I am sure every member of this House agrees is a very important community activity and contributes a very worthwhile service to the public of Australia. With respect to the Fairy Meadow club I would also like to pay tribute to a number of those gentleman who participated in the bronze test this year; I refer in particular, to Bruce Allen and Peter Patterson. Both of those gentlemen have had a long association with the Fairy Meadow junior club. In fact, Bruce Allen was the President over the last couple of seasons of the junior surf lifesaving club and has indicated that he will not be standing for re-election in the coming year. He, along with the secretary, Ashley Neil, have done a magnificent job in bringing the young people of the Fairy Meadow- Balgownie area into the surf lifesaving movement. They have spent many valuable hours coaching and taking these children to surf carnivals and participating in a range of activities associated with surf lifesaving in the Illawarra region. They, along with the rest of the committee from the 1986-87 season, are to be congratulated. They have left a wealth of talent to go into the senior ranks, not only in the Fairy Meadow Surf Lifesaving Club but also, I am sure, to represent the Illawarra district in the not too distant future. My congratulations go to them. I thank the examiners and the coach of the Fairy Meadow senior squad for taking us through our surf bronze. He had to put up with a lot. It was not easy to swim around those buoys three times in the one day, and I was the youngest and the fittest of them all. Madam SPEAKER —Order! The honourable member's time has expired. Mr WHITE(McPherson)(10.35) —I wish to spend a couple of minutes tonight raising the question of the Kennedy report which was a very exhaustive report into the Australian tourism industry. The recommendations were released by the Minister for Sport, Recreation and Tourism (Mr John Brown) in December 1986. Apart from a few copies, the report has never seen the light of day. Here we are, four months later, with no report having been tabled or published-certainly not to my knowledge. It was promised in January. It was promised in February. It was promised in March. Here we are nearly at the end of March, and no report in sight. Mr Rocher —What have they got to hide? Mr WHITE —I am not sure what they have to hide but what is happening-and the honourable member for Curtin raises the point-is that many of the recommendations of the Kennedy committee are being implemented, I might say, with a great deal of confusion. The problem is that nobody really knows whether those recommendations are good or bad because nobody has been able to see the reason behind them and why certain action has been taken. I have read the report as I have one of the few copies that is in circulation. It seems to me that the recommendations generally are sensible and I support the thrust of the report. It will make a leaner and more efficient Australian Tourism Commission. Most of the report dealt with the Tourist Commission. But the restructuring of that Commission is now causing a great deal of concern and confusion in the tourism industry and in the Australian Tourist Commission itself because no one knows why certain action has been taken. Plans are being made for the Commission to move from Melbourne to Sydney. Many members-I do not know how many-have received redundancy notices. No one knows what the new structure will be or the reasons for it. We see in the papers that advertisements have been placed calling for people to come forward for certain positions. No one knows when this move is to take place, or when it is to be completed. No one knows how much it will cost and where that money will come from, whether it will come out of the promotion budget of the Australian Tourist Commission or whether it will come from another source. As a result, the move of the Australian Tourist Commission to Sydney is becoming an absolute shambles. The great tragedy is that at this time we should have that Commission knowing exactly what it is doing and where it is going; we have great opportunities overseas to use that Commission properly to promote Australia and encourage overseas tourists. The Tourist Commission is a scene of great confusion and concern because no one understands the reason why it is being restructured, although the recommendations seem to be quite sensible. The Minister is, as usual, very quiet on the matter. Mr Peter Fisher —Where is he? Mr WHITE —He is probably sick or away as he usually is. Mr Martin —He has been ill. Mr WHITE —But he is here today and he had a big party on the Gold Coast over the weekend to attend. He is not too bad if he can go to the Gold Coast for an hotel opening. He was warned that I would be speaking tonight, so do not look at me and ask me where he is; honourable members should be asking him where he is. The problem is that the Australian Tourist Commission is a very important and integral part of our tourist promotion for this country. I ask the Minister, and I hope that he has the courtesy to read these remarks: When will we see the report of the inquiry into Australian tourism which was done very thoroughly and at some expense? It is an insult to the members of the committee that some of their recommendations are being implemented without the report itself being made available to the public. Mr GEAR(Canning)(10.40) —I was invited by the Deputy Whip to say a few words tonight. The first thing that came to mind was a story I read today in the Australian of a leaked report from the Liberal Party which indicated that if the Opposition were to be elected $2,000m would be slashed off government spending, rising to $5,000m. This matter was canvassed pretty well in Question Time today. However, I believe it needs a little more elaboration, particularly as the Minister for Social Security (Mr Howe) is in the chamber tonight. Some of the points made in Question Time today by the Minister need going over. When we talk about equity in terms of social security provisions we should consider-- Mr Downer —The mastermind of the assets test. Mr GEAR —I will allude to the assets text because the honourable member for Mayo, of all people, should know about the assets test. He was the gentleman who talked about supporting the assets tests before he came into this place and then did a U-turn-a real Liberal. One cannot say much more about the Liberal Party than that its members support an assets test before getting into Parliament but then, as soon as they get here, toe the line. So much for principles. The honourable member's leadership qualifications were greatly enhanced by that. Social security provisions should go to people in need. In the cynical document that was leaked to the Press the Leader of the Opposition (Mr Howard), when talking about social security provisions, indicated that he is quite prepared to make sure that pensioners in need will have their pensions reduced by not allowing consumer price index increases to flow through to pensions. At the same time he will abolish the assets text and allow those people who have substantial assets once again to gain access to pensions. This stands in stark contrast to what this Government has been saying, which is that social security benefits should go to people in need rather than to those who, by definition, are driven by greed. The fact is that in the past people with substantial assets could organise their finances in such a way that not only did they have access to the rich assets they had but also they gained the pension. In many cases those people had built up their assets by taking advantage of the provisions of the taxation Act which gave tax-free status to the superannuation provisions they had availed themselves of while they were employed. So the old double-dipping arrangements were used. While they were employed they took advantage of the taxation system to defray taxation that was due by them by taking out superannuation. They then cashed it in and got a lump sum, paying virtually no tax at all. In fact about one per cent tax was all they paid. They invested that money and asked for the pension. What a ludicrous situation. Not only was it bad but it got to the stage where many pensioner magazines were openly touting these schemes. They were asking people to invest their money in these schemes which were guaranteed to give them no income but a high capital gain-there was no capital gains tax-and also allowed them access to the pension. In many cases millionaires were fighting for scarce social security dollars against people in real need. So I was very struck by this provision in the Liberal Party policy. I am looking forward to the next election campaign when the Opposition gets out there again and starts talking about the assets test. The assets test has now been in operation for three years. Mr Peter Fisher —It is an absolute disaster. Mr GEAR —I have had only one person in three years contact me about the assets test and I have been able to get the matter resolved. That just shows what an impact the assets test has had in the electorates. By the time of the next election people will have had experience of the assets test. We are quite happy to have it in operation. Fiscal responsibility says that we have to have it. When the times comes I am sure that the Australian people will agree with the Government. Madam SPEAKER —Order! The honourable member's time has expired. Mr PETER FISHER(Mallee)(10.45) —After four years of the Hawke Labor Government this former rich and strong nation is heading past $100 billion in foreign debts; high interest rates, inflation and massive government spending have weakened the economy; and our families, home owners, small business people, farmers and Australian workers are under threat. This Government has the audacity to call itself a Labor government. In recent months we have seen it prostituting itself to the speculators, the money manipulators and the buyers and sellers of paper to a sickening point. The media conglomerates are now paying back the Hawke Government in full for services rendered. No matter how bad the international situation is regarding low market prices or corrupt practices, the fact is undeniable that many domestic policy decisions which have been taken by this Labor Government or are in the pipeline are directly adding to the burden of rural Australia. Nothing has destroyed our viability more than interest rates. Despite numerous promises to the contrary, they have continued to rise to all time record levels. The truth is that between November 1984 and February 1987 savings bank home loans have gone from 11.5 per cent to 15.5 per cent; prime rates for business from 13.5 per cent to 18.25 per cent, and overdraft rates for small businesses and farmers from 14.5 per cent to 20.5 per cent. Australia faces the prospect of losing the expertise and services of a large proportion of competent rural producers and their support services in country communities if the situation is allowed to continue. The number of primary producers at risk at the start of 1986, as estimated by the Bureau of Agricultural Economics, was 12,000. Now, having had high interest rates for all of 1986, this number has increased substantially and is in the vicinity of 30,000. These producers cannot meet their interest and/or lease or hire purchase commitments and consequently are losing equity as well as suffering extreme stress. If no commodity price recovery or interest rate reduction occurs, financiers will be unable to support a larger number of indebted producers. A substantial collapse in land prices, particularly in the grain belt, is happening and bringing extra pressure on growers. The business support infrastructure in country towns, such as hospitals and schools, is also under threat, as is employment in service industries. The whole fabric of many rural centres is under extreme pressure. There must be changes in this Government's policy to arrest the drift of population from country to cities, which is already evident, in search of work. We have to stop a large section of the population losing their homes, heritage and livelihoods and needing to relocate and possibly retrain in different economic circumstances. We must halt the loss of technical expertise which will substantially affect rural industry's ability to help Australia correct its trade imbalance. This Government must show some concern for our producers and stop grinding the average Australian into the dust by imposing costs, interest rates and Government taxes and regulations. Generations of effort in rural Australia is under threat. Taxation is at criminal levels and today cannot be distinguished from confiscation and theft. Families and traditional values are being discriminated against and support for the family unit has declined alarmingly in recent years. Government policies are found wanting and the Minister for Social Security (Mr Howe), who is in the chamber at the moment, and the rest of the Government's Ministers are totally discredited in the eyes of the electorate. Tomorrow I will place a motion before the House to introduce policy initiatives to correct and restore economic health to this nation. A tragedy is taking place in rural Australia which has major economic and social implications for the whole nation, yet this Government does not seem to care. Mr CUNNINGHAM(McMillan)(10.50) —I rise to follow the honourable member for Mallee (Mr Peter Fisher), who continued with the normal procedures that we have been listening to for nearly 18 months. We have had a very severe downturn in the commodity price of our major rural product-wheat-and we have had a terms of trade problem on the world market with some of our other products, such as dairy products and sugar, but what the honourable member and other spokespersons for the rural sector have failed to do is give any recognition to the measures taken by this Government to rectify the problems in rural Australia and the basic problem with the economy, that is, that our dollar was overvalued for many years and we were totally uncompetitive on world markets, not just with our rural products but also with our manufacturing industries. We were going to have what the Fraser Government said would be a resources boom such that we would have a massive inflow of imports and we would not need the manufacturing industries. At the same time this had a massive impact on our farm sector. Honourable members opposite and the leaders and spokespersons for the rural sector have failed to point out the turnaround which has occurred. I see the honourable member for Mallee leaving the chamber because he does not want to hear about the real issues. I refer to a document which I tabled in the House a couple of nights ago. It is from the National Farmer of 18 March and refers to commodity and finance issues in relation to rural products. It has headings such as `Sheep and lamb prices move ahead' and `Wool surge continues', and it refers to beef sales. I quote from the document I tabled to put into perspective what is happening in the rural sector. Recognising that the wheat industry still has major problems which are not caused just by Government costs, as we hear from honourable members, it refers to some of the good stories that are around. It says that there was keen demand for lambs at the sales last week-that is, 5 March-where farmers received 134c a kilogram and that the price jumped to around 142c a kilogram on 12 March. It says that heavy lambs realised $38 to $47 a head. Lambs were selling at unheard of prices in Australian markets. I turn to beef. We have had no complaints from the beef industry, which is doing quite nicely. Its only danger at the moment is that the American market is being threatened because American producers are trying desperately to keep the Australian product off the American market. At present beef and wool farmers are doing nicely by any measure anyone likes to put. These figures show that the price being received for beef is as high as it has ever been. The article headed `Wool surge continues' shows a graph which clearly indicates a line moving upwards for all of last year for wool prices. As for the start of this year, there is not enough room on the graph to show the price of wool as it has gone so high. When this was printed, only a week or two ago, the price of wool was $6.59 a kilogram. Today it has gone to over the $7 mark. People from the National Party of Australia and other members of the Opposition are telling us that everybody in the rural sector is in crisis. They should recognise soon that they are destroying the very base of the wheat farmers who are desperately trying to convince their bank managers to stay with them for another 12 months. While there is talk of doom, gloom and crisis, the heads of banks in Sydney will not direct their managers in the bush to lend further funds, because all they hear is this sheep bleating from the Opposition and some farm leaders. It is time that they were honest, before they create a situation where wool growers, who have money rolling into their pockets, gobble up some of their neighbours in the wheat industry and buy their farms for practically nothing simply because the industry is being talked down incessantly, day after day, week after week. They should recognise that the problem is not right across the board. Madam SPEAKER —Order! The honourable member's time has expired. Mr SLIPPER(Fisher)(10.55) —Tonight I wish to refer again to the latest antics of that well-known puppet of the looney Left in this country. I refer, of course, to the Human Rights and Equal Opportunity Commission. In particular, I wish to emphasise a matter which was raised in the Courier-Mail on Friday, 20 March, under the headline `Doctor and hotel ordered to pay women in separate human rights decisions'. I can do little better than quote from the newspaper as far as these two most recent cases are concerned: Case 1-The Human Rights and Equal Opportunity Commission has ordered an Indooroopilly doctor to pay a woman $1000 damages-for asking her if she was married or single. The general practitioner said last night: `It's all extraordinary. I have done nothing wrong and I refuse to pay.' The incident which saw him summoned to a commission hearing happened in his surgery's waiting room when a woman requested a consultation. `She was aggressive and I had had a bad day,' he said. `For various reasons, including wanting to know who to contact if the patient is ill, I asked her if she was married or single.' The doctor said the woman refused to say what her marital status was, preferring to use the title Ms. The woman left without having a medical consultation. `The next thing that happened, I got a phone call saying I must come to see the Commission. I was told if I didn't go, I could face a $10,000 fine or six month's imprisonment.' `As the person being complained about, I have no right whatsoever. They can make as much trouble as they like and I can't do anything about it.' The doctor said that at the hearing, he insisted on his solicitor being present but was not allowed to tape record the proceedings. He said he and his solicitor noticed that the independent arbitrator hearing the case wore a `womens rights' badge. The doctor said he offered to apologise for any embarrassment caused to the woman, but the commission demanded he pay the woman $1,000 damages over the incident. He said that when he refused, the commission suggested he give $1,000 to charity instead. The Commission also wanted him to agree to it writing to the Australian Medical Association and the Medical Board, advising that his conduct breached the Sex Discrimination Act. `It is a dangerous precedent,' he said, `I am not going to pay a cent.' Who can blame that doctor for standing up for his rights as a decent citizen in this society against that expensive, ideological left wing extravagance known as the Human Rights Commission and the fanatics who staff it? The article continues: Case 2-A Gold Coast woman has been awarded $8,000 in closed proceedings before the Human Rights and Equal Opportunity Commission. The woman, who cannot be identified, was awarded the payment on Wednesday, after her union, the Federated Liquor and Allied Industries Employees Union of Australia, filed a complaint. The union alleged a Tugun hotel had discriminated against her by demoting her from a supervisor to a bottle shop attendant. The terms of settlement, some details of which were not be be made public, include: The payment of $8,000 in compensation to the woman; Disciplinary action against the manager responsible for telling the woman that `women just can't manage'; Seminars to be conducted by the Human Rights and Equal Opportunity Commission on paid time at the hotel on the issues of sexual discrimination and sexual harassment; An apology to the female employee issued on behalf of the hotel's proprietor; A written reference acknowledging the woman's ability to supervise. At a time when Australia is going down the economic plughole, when we are a country which is virtually bankrupt, the Government, represented in the chamber tonight by the Minister for Social Security (Mr Howe), is supporting wild extravagances such as the Human Rights Commission. In the year 1985-86 almost $6m was wasted on this fanatical extravagance. Australia is a country in real trouble, yet the Government comes into this place time and time again to defend the indefensible. Under the direction of the Australian Labor Party the Human Rights Commission has managed to hide itself and its operations behind secrecy. As more cases of bias surface, it is becoming apparent to all Australians that this heavy-handed, irrelevant body is not needed. Australians do not want the Human Rights Commission. The National Party of Australia does not want the Human Rights Commission. The Human Rights Commission should and will be abolished when the National Party is once again in government. Madam SPEAKER —Order! The honourable member's time has expired. It being 11 p.m., the debate is interrupted. The House stands adjourned till 10 a.m. tomorrow. House adjourned at 11 p.m. The following notices were given: Mr Sinclair to move- That, unless otherwise ordered, the following amendments to the standing orders be adopted for the remainder of this session: ``Omit Chapter XI, substitute the following Chapter: CHAPTER XI QUESTIONS SEEKING INFORMATION With or without notice 142. Questions may be asked with or without notice. Questions to Ministers 143. Questions may be put to a Minister relating to public affairs with which the Minister is officially connected, to proceedings pending in the House, or to any matter of administration for which the Minister is responsible. Questions to Speaker 144. Questions without notice may be put to the Speaker relating to any matter of administration for which the Speaker is responsible. Questions to other Members 145. Questions may be put to a Member, not being a Minister, relating to any bill, motion, or other public matter connected with the business of the House, of which the member has charge. Rules for questions 146. The following general rules apply to questions: (a) Questions shall not be unduly long. (b) Questions shall not contain- (i) statements of facts or names of persons unless they are strictly necessary to render the question intelligible and the facts can be authenticated. (ii) arguments; (iii) inferences; (iv) imputations; (v) epithets; (vi) ironical expressions; or (vii) hypothetical matter. (c) Questions shall not ask Ministers- (i) for an expression of opinion; (ii) to announce the Government's policy, but may seek an explanation regarding the policy of the Government and its application and may ask the Prime Minister whether a Minister's statement represents Government policy; or (iii) for legal opinion. (d) Questions shall not be asked which reflects on or are critical of the character or conduct of those persons whose conduct may only be challenged on a substantive motion, and notice must be given of questions critical of the character or conduct of other persons. (e) Questions shall not refer to- (i) debates in the current period of sittings; or (ii) proceedings in committee not reported to the House. (f) Questions may be asked to elicit information regarding business pending on the Notice Paper but discussion must not be anticipated. (g) The Speaker may direct that the language of a question be changed if, in the opinion of the Speaker, it is unbecoming or not in conformity with the standing orders of the House. (h) A question fully answered cannot be renewed. Rules for answers 147. The answer to a question without notice- (a) shall be concise and confined to the subject matter of the question; (b) shall not debate the subject to which the question refers; (c) shall not contain- (i) arguments; (ii) imputations; (iii) epithets; or (iv) ironical expressions, and (d) shall not exceed 3 minutes in length: Provided that, at the discretion of the Speaker, a once-only extension of 2 minutes may be granted on the ground of complexity or importance of the subject matter or interruption of disorder having occurred during the answer. Supplementary question 148. Immediately following the oral answer to a question, one supplementary question may be asked by the Member who asked the original question: Provided that the supplementary question is relevant to the original question or arises out of the answer given, contains no preamble, introduces no new matter and is put in precise and direct terms. Period for questions without notice 149. The period for questions without notice shall be not less than 45 minutes but shall not be concluded until a minimum of 16 questions are asked, excluding disallowed and supplementary questions: Provided that, in the event of major disruptions occurring during the period, the Speaker may conclude the period after 45 minutes irrespective of the number of questions asked to that stage. Notice of question 150. Notice of question shall be given by a Member delivering the same to the Clerk within such time as, in the opinion of the Speaker, will enable the question to be fairly printed. The question shall be fairly written, signed by the Member, and shall show the day proposed for asking the question. Order of questions 151. The Clerk shall place notices of questions on the Notice Paper in the order in which they were received by him. Reply to questions 152. The reply to a question on notice shall be given by delivering it to the Clerk. A copy of it shall be supplied to the Member who asked the question and the question and reply shall be printed in Hansard. Mr Peter Fisher to move- That this House- (1) condemns the Hawke Government for its failure to- (a) acknowledge that the current economic difficulties being experienced by the rural sector are not entirely the result of low market prices or adverse climatic conditions, and (b) alleviate the escalating and crippling costs imposed on productive Australians through record interest rates, high inflation and the 6 monthly indexation of basic inputs, and (2) calls on the Hawke Government to immediately- (a) abolish petroleum products indexation and radically cut fuel excise to achieve a rapid drop in inflation and interest rates, (b) hold discussions with financial institutions to develop joint arrangements that would allow waiving of interest payments in appropriate circumstances, and (c) amend the Rural Adjustment Scheme to ensure the flexibility and financial capacity to provide long-term low interest loans, and adequate rehabilitation grants. The following paper was deemed to have been presented on 23 March 1987: Acts Interpretation Act-Statement relating to failure to furnish periodic report within specified period-Fishing Industry Research Committee-Report for 1985-86. The following answers to questions were circulated: (Question No. 4709) Mr Tickner asked the Minister for Health, upon notice, on 7 October 1986: (1) What has been the cost to the Australian community by way of hospital and medical costs, doctor's fees, prescription payments and productivity losses from diseases and deaths due to tobacco in (a) each year since 1971-72 and (b) in total. (2) What is the estimated cost of these fees, payments, losses and costs in 1986-87. (3) Is he able to provide similar details relating to fires caused by cigarettes or matches used to light tobacco products. Dr Blewett —The answer to the honourable member's question is as follows: (1) and (2) I am unable to provide the information sought by the honourable member. There is no information available from Medicare benefits expenditure statistics relating to cause of disease or death as there is no requirement for doctors to provide these details for services rendered. Medicare Benefits Schedule items of service relate to the treatment provided rather than the cause of illness. Similarly, with the exception of a small number of drugs on the list of Pharmaceutical Benefits which may only be prescribed on authority for specified medical conditions, there is no requirement for medical practitioners to indicate on prescription the medical condition being treated. Accordingly, there are no data available which would identify the proportion of Pharmaceutical Benefits Scheme costs or prescriptions which relate to the treatment of tobacco induced medical conditions. No data on productivity losses are available to my Department. However, I am aware of papers prepared by the Centre for Health Promotion and Research, Sydney, and the Health Commission of New South Wales which make estimates of the economic costs of tobacco related disease and death. Copies of these have been placed in the Parliamentary Library. Applying Consumer Price Index (CPI) increases to the estimates made by the centre, the estimated costs to the community for hospital and medical costs, doctors' fees, prescription drugs and productivity losses in 1985-86 would be of the order of $1097 million. In addition, I am advised by the Department of Veterans' Affairs that during 1985-86, that Department paid out pensions of over one billion dollars to Veterans and war widows. It provided or arranged treatment for its beneficiaries, costing approximately three quarters of a billion dollars. That Department has advised that it is impossible-without a major exercise-to define the costs therein of smoking related disorders, but there are many war widows whose status is related to the smoking habits of their deceased husbands. It is estimated that 90-95% of Department of Veterans' Affairs expenditure on the four most common lung conditions among Veterans is related to cigarette smoking. (3) No. Such data are not available to my Department. However, again using the estimates derived by the Centre for Health Promotion and Research, and updating them by applying CPI increases, estimated costs of fire damage in 1985-86 attributable to smoking amounted to $112 million. (Question No. 4784) Mr Porter asked the Minister for Health, upon notice, on 17 October 1986: (1) On whose authority and at whose request did the Health Insurance Commission provide 500,000 pamphlets entitled `Explaining the Australia Card'. (2) What was the cost of this pamphlet and to which appropriation was the cost charged. (3) When was the decision made to produce these pamphlets. (4) Are the pamphlets issued from Medicare offices. Dr Blewett —The answer to the honourable member's question is as follows: (1) A pamphlet entitled `Explaining the new Australia Card' was produced by the Australian Taxation Office and distributed in September 1985. Questions relating to its production should be addressed to my colleague, the Treasurer. In late 1985 the Government announced that the Health Insurance Commission, through its network of Medicare offices, would be involved in the introduction of the Australia Card scheme. This produced significant public demand for information on Australia Card at those offices. Having established that no stocks of the Taxation Office pamphlet were available, the Commission reprinted the publication entitling it `Explaining Australia Card'. (2) The cost was $15,528.00 and was charged to the Commission's Australia Card appropriation. (3) The decision to produce these pamphlets was made in the last quarter of 1985, and they were distributed in January 1986. (4) Yes. (Question No. 5015) Mr Hodges asked the Minister for Housing and Construction, upon notice, on 18 February 1987: (1) What wordprocessing or computer equipment has been introduced into the Minister's Department and statutory authorities responsible to the Minister since 1982. (2) Why was the equipment purchased and were any specific targets set in terms of time or cost savings and improved efficiencies. (3) What has been the cost of purchasing the equipment. (4) Has the introduction of the equipment necessitated the purchase of new office equipment; if so, what have been the costs of the additional purchases. (5) Has the introduction of the equipment let to changes in work practices; if so, what has been the nature of the changes. (6) What has been the incidence of repetition strain injury (RSI) in the Minister's Department since 1982. (7) How many lost working days have been caused by RSI related illnesses since 1982. (8) How many persons have been forced to retire from the Minister's Department or statutory authorities responsible to the Minister as a result of RSI and what have been the compensation costs of this early retirement. (9) Has the introduction of the equipment (a) saved money and (b) improved efficiency in the Minister's Department or the statutory authorities responsible to the Minister. Mr West —The answer to the honourable member's question is as follows: (1) Since the beginning of Financial Year 1982-83 to date the following word processing and computing equipment has been introduced into the Department and Statutory Authorities within my portfolio responsibilities: mainframe computers mini computers micro computers communications controllers shared wordprocessors stand-alone wordprocessors peripherals for the above equipment. (2) The equipment was purchased to facilitate the more effective execution of the operations of the Department and the Statutory Authorities. Prior to purchase of equipment, assessments were made of the potential for time or cost savings and improved efficiencies. (3) Cost of purchasing equipment 1982-83 to date was $M17.5 (approx) (4) Yes-ergonomic furniture at cost of some $900,000. (5) The introduction of equipment has led to a reduction in the level of routine and repetitive clerical work, an increase in the use of keyboards and screen-based equipment by staff, and the development of policies on work with screen-based equipment and on prevention of RSI, including: improved postural and ergonomic training for staff provision of ergonomic furniture across the Department as resources allow development of rehabilitation programs for staff returning to work after conditions such as RSI. (6) From 1982 to end February 1987 the Department has had 266 cases of RSI (representing some 1.5% of personnel employed during this period). At end February 1987, 85 of these cases were still current. (7) Approximately 19,900 working days. (8) 13 persons have been retired on invalidity grounds due to RSI. The compensation costs amounted to some $200,000. (9) (a) Yes. (b) Yes (Question No. 5034) Mr Moore asked the Minister for Health, upon notice, on 17 February 1987: Why was a constituent of mine charged $11.57 for his most recent purchase of Dilantin, upon which his son is dependent, when a brochure entitled ``The Safety Net-Your Protection against high prescription costs'' states that the average cost for each prescription will be about $7.30. Dr Blewett —The answer to the honourable member's question is as follows: Under the new Pharmaceutical Benefits Scheme, the average cost of a prescription item is $7.30 with the maximum patient contribution being $10.00. Dilantin attracts the maximum patient contribution plus a special patient contribution. The application of special patient contribution provisions to Dilantin is the result of action taken by the manufacturer, Parke Davis Pty Ltd, to unilaterally increase the price of its product by an amount which the Government regards as unjustifiable in the light of cost and profit data, and therefore unacceptable. My Department has reviewed the price of Dilantin on a number of occasions, and has granted a further price increase with effect from 1 November 1986. However, at the same time the company further increased its price, and therefore a special patient contribution remains. I would stress that the special patient contribution for Dilantin was not introduced to discriminate against epilepsy sufferers, but was due to the unilateral action of the manufacturer, Parke Davis Pty Ltd, PO Box 42, Caringbah, NSW, 2229. I regret that a special patient contribution is necessary and, in the circumstances, I would suggest that your constituents complain direct to that company. (Question No. 5123) Mr Wright asked the Minister for Health, upon notice, on 20 February 1987: (1) Has his attention been drawn to publications being distributed by the Australian Natural Therapists Association claiming that the Government has circulated a draft bill which will take away the right of purchase of natural remedies from the public and which will require doctors' prescriptions for these remedies. (2) Are these changes being considered. (3) Will he invite the Association to meet with him to clarify the reasons for their campaign of misinformation. Dr Blewett —The answer to the honourable member's question is as follows: (1) Yes. (2) Amendments to the Therapeutic Goods Act 1966 are proposed, but they will not have the effects claimed by the Australian Natural Therapists Association. The public will not be required to obtain prescriptions for natural remedies, except for particularly potent preparations identified from time to time by the National Health and Medical Research Council, as is currently the case. Members will recall that on 19 February 1987 I circulated a letter to all Members and Senators, which corrected the inaccuracies in the Association's publications. (3) Yes. I propose to meet with senior representatives of the Association on 18 March.