Wednesday, 1 April 1987 Madam SPEAKER (Hon. Joan Child) took the chair at 10 a.m., and read prayers. Debate resumed from 25 March, on motion by Mr Hurford: That the Bill be now read a second time. Madam SPEAKER —I understand it is the wish of the House to debate the Appropriation Bill (No. 3) concurrently with the Appropriation Bill (No. 4) and the Appropriation (Parliamentary Departments) Bill (No. 2). There being no objection, the Chair will allow that course to be followed. Mr CARLTON(Mackellar)(10.01) —The Appropriation Bill (No. 3), the Appropriation Bill (No. 4) and the Appropriation (Parliamentary Departments) Bill (No. 2) ask the Parliament to appropriate additional moneys beyond those asked for in Appropriation Bills late last year following the Budget. The Opposition does not object to the passage of these Bills but, on behalf of the Opposition, I move: That all words after `That' be omitted with a view to substituting the following words: `whilst not declining to give the Bill a second reading, the House- (1) condemns the Government for its continued mismanagement of the economy which has seen: (a) interest rates for business, farmers and home owners soar to record levels; (b) inflation rise to almost 8 times the average rate of the major 7 OECD economies; (c) Australia's overseas debt surpass the $100 billion mark; (d) the value of the Australian dollar cut by one-third, and (2) calls on the Government to implement significant and genuine expenditure cuts of the order of $4 billion in its May economic statement as a first step to restoring balance to its policies and reducing interest rates'. In the course of this debate I shall take the opportunity of looking at some fundamental problems in the Australian economy and doing it as far as possible in a way that is not politically partisan. The country faces a very grave economic crisis, and I think it is important for us to understand just what the origins of this crisis are and how we can sensibly, as a parliament and as a nation, face up to them. I think it is fair to say that not all the economic problems that face us in Australia today are the fault of the Hawke Government or result from the Keating Budgets. For many years, I have been one of those at the forefront of acknowledging that the Australian economy has suffered from some underlying structural problems. These problems basically have stemmed from the fact that the country has been too reliant on rural and mineral commodity exports to make up for deficiencies in other areas. In other words, whenever mineral commodity prices have been good around the world and there have been abundant markets for rural products, Australia has been fortunate enough to be able to rely on the income from its sales of those commodities abroad to make up for its rather poor performance across its export manufacturing and export services areas. The amount of investment, attention and managerial effort that has been devoted to those other sectors has for many years been inadequate. Additional to that, there have been structural rigidities in those parts of the economy that might have improved our performance in manufacturing and in the export of services. I refer particularly to a somewhat overprotective environment in Australia over a very long period. There was excessive protection in some areas of manufacturing, excessive protection and regulation within the financial markets, a high level of government intervention creating excessive cost structures in the basic functions such as communication and transport, and excessive cost inputs in other industries which has made Australia less competitive than it should have been. One of the principal areas of rigidity in the economy which has made us less productive has been an 80-year-old industrial relations system, which whilst it might have served us well in earlier days, in different times, has in more modern times come to reduce the productiveness of industry, particularly the productiveness of manufacturing industry, transport and communications. Those underlying problems have been with us for a very long time. When the Fraser Government took over in 1975 many of those underlying problems had been obscured by a period of economic and industrial lunacy. In 1975 when the Fraser Government came in the country had suffered major setbacks. It was a period of economic and industrial lunacy. During the three years of the Whitlam Government spending in real terms-that is after inflation-had gone up by an average of 10 per cent. Wages had gone up by over 30 per cent in just one year. There was a period of what could only be described as industrial mayhem. It is not to the credit of the present Prime Minister (Mr Hawke) that he was the head of the trade union movement during that period, a period when he was also supposed to be supporting the Labor Government. In one particular year during the Whitlam Government we had six million man days lost in strikes. It was the most disgraceful strike period in Australia's history. We had a period of raging inflation. The period from 1972 to 1975 left very deep scars on the Australian community, not just regarding the manner of the departure of that particular Government, but deep economic scars some of which are still with us. The Fraser Government, which is much maligned not only by the present Government but also by a number of people in the community who supported most of its objectives, actually achieved quite a lot. The most important thing it did was to reintroduce a climate of fiscal responsibility. The Fraser Government came in during a period when inflation was raging and government expenditure had averaged 10 per cent in real terms over the previous three years. It was the job of the Fraser Government to clamp down on public expenditures and try to get the Budget back into shape. It also came in with the objective of trying to make the old industrial relations system work-the then 70-year-old system-because it was believed that it could be got to work in the way that it worked under Albert Monk as President of the Australian Council of Trade Unions. It was felt by the Fraser Government that the period under Mr Hawke, the present Prime Minister, was an aberration of history. It was genuinely felt that it was possible to get that industrial relations system back into working order. A number of changes were made in industrial legislation to try to do that. For example, secret ballots were introduced for union elections which were court controlled or Commonwealth Electoral Office controlled. Sections 45d and 45e were inserted into the Trade Practices Act so that secondary boycotts put on by unions could be dealt with in the ordinary courts. Those sections have certainly been quite successful. The Fraser Government also began the process of reform of financial markets. In 1979 it set up the Campbell Committee of Inquiry into the Australian Financial System, which was one of the very few committees of inquiry in Australian history which actually had a clear cut set of philosophical riding instructions. It was not, like most previous important committees of inquiry, made up of representatives of the various competing interest groups. It is also fair to say that before the Fraser Government left office the momentum created by Campbell had had its effect in legislation, certainly in public debate, and or course it was a valuable head of steam that was taken up by the now Treasurer (Mr Keating) in his subsequent further deregulation of financial markets. Looking back on that period of the Fraser Government, it can be seen that it certainly brought back a climate of fiscal responsibility. It made useful changes to the existing industrial relations system and it began the process of financial deregulation. Looking back on it, compared with its predecessor government and also compared with the present economic crisis, its position in history is improved day by day. The industrial relations reforms carried out by the Fraser Government were not enough to deal with the deep-seated underlying problems of that system. As a result in 1981-82 we had the metal trades wages break out. There was about a 25 per cent unearned increase in incomes in that industry which, under the centralised system, spread across to other industries-exhibiting yet again one of its faults-many of which were unable to cope with such an increase. Indeed, the initiating metal trades industry could not cope with that and there were very severe employment implications within that industry. In retrospect it is quite clear that the Fraser Government did not sufficiently attack some of the areas of protection and overregulation in the Australian economy. I was one of those during that period who fought very strongly for a more open market view. I make no secret of that; it is all on the public record. I believed at the time that the Fraser Government was not sufficiently deregulatory and that in some cases it was supporting an excessive degree of protection. That is a matter of public record and it has certainly been a part of my political life and my political objectives to move towards a more open market economy. It is also fair to say that most current day business critics of the Fraser Government-that is, critics in retrospect-strongly opposed changes to existing protective systems at the time of that Government. I am well aware of that because as one of those active in the move towards a more open economy, I am very well aware of those institutions, bodies and people within the business community which were strongly against moving towards an open economy. Many are currently critics in retrospect of the Fraser Government. I say that merely in passing. Some people in the business community still oppose some of the proposals we have for freeing up the labour market, but they are increasingly few in number. Towards the end of its period in office the Fraser Government suffered from three major economic shocks. Two of these shocks were external; one was internal. I point out with some sorrow one major element of the disinformation campaign that is conducted by the Prime Minister and the Treasurer in this House. They come out with statements which are clearly absolutely untrue. On 30 March in the House of Representatives-earlier this week-the Prime Minister said this in answer to a question: The first fact to note is that the Leader of the Opposition walked out of the Treasury office after ha-ving, in his five years of economic stewardship of this nation, no external crisis imposed upon him . . . That is an incredible statement from the Prime Minister of this nation. There were three major shocks-two of them external and one internal. The first one was the world recession. The Gov-ernment is quite fond of quoting the effects of the decline in the terms of trade on the present economic situation, but may I say that the combined effects of the world recession in 1981-82 on Australia, plus the effects of the most devastating drought in living memory, had an effect on Australia's economy which was far in excess of that currently being suffered because of a decline in the terms of trade. Far from there being no external shocks or crises imposed on the Fraser Government, as the Prime Minister quite untruthfully claimed on Monday, in the last two years of the Fraser Government the United States of America, West Germany, Italy, Canada and the Organisation for Economic Co-operation and Development as a whole experienced negative growth. The contraction in the economies of the OECD countries in 1982 was the most severe ever recorded by that organisation. By contrast, during the four years of the Hawke Government the United States of America has recorded growth in excess of 4 per cent on average and the OECD countries have recorded growth in excess of 3 per cent. That is the record and it is quite clear. It is clear also that the total cost to Australia in terms of loss of export income as a result of the recession, from my calculations, is to the order of $10 billion in current dollars. We acknowledge that there is a loss of national income due to a decline in the terms of trade at the moment of about $6 billion, and that is a severe blow, but the Fraser Government, because of the world recession and the drought, suffered a loss of national income externally to the extent of $10 billion in current dollar terms. So it was a far more severe shock. The difference was in the period of preparation that had gone on up to those shocks. The third shock, incidentally, was the wage break-out I mentioned earlier. That was internal and imposed through the excessive power of the trade union movement, making use of the existing industrial relations system. Indeed, that was the evidence, if we needed it, that that old system could not work for much longer. Before those shocks occurred, the Fraser Government's fiscal record was excellent. The expenditure increases under the Lynch and Howard Budgets were very minor. For example, in the 1976 Budget there was a minus 0.9 per cent real increase in expenditure; in the 1977 Budget it was 2.5 per cent; in the 1978 Budget it was 1.5 per cent; in the 1979 Budget it was minus 0.9 per cent; in the 1980 Budget it was 3.5 per cent; and in the 1981 Budget it was 2.6 per cent. It was only in 1982, in the recession Budget, when things were very difficult and a number of steps were taken to try to revive the economy, that the increase was 6.9 per cent-still less than the first Keating Budget. So the average increase in real terms over the seven years of the Fraser Government was 2.1 per cent. It was due to the prudence of the then Treasurer, now Leader of the Opposition (Mr Howard), in being very careful in putting money away during the good years that Australia was able to cope with that very grave recession and drought. Had the present Treasurer been in that position at that time and carried out the profligate spending programs that he undertook when he got into office, we would have been no better prepared as a nation to face that recession and the drought than we were prepared to face the current problem of the decline in the terms of trade. That is the essential point: A whole period of six years of prudence before the recession enabled Australia to survive that recession, even though there were major underlying structural problems in the economy of a long-standing nature. All this should have taught Australia four things. It should have taught us the need for fiscal prudence in the good times. It should have taught us the basic need for fundamental reform of the industrial relations system, because it had not worked in 1981-82. We still have the same system now and the threat of a wages break-out is still with us. It should have taught us that there was a need for greater deregulation in the Australian economy, and it certainly should have taught us that there was a need for investment in a whole lot of areas of export potential outside rural and mineral commodities. The recession led to the defeat of the Fraser Government, but basically the policies of the then Treasurer, now Leader of the Opposition, had prepared the country to cope with that recession. The incoming Government had these benefits: The end of the world recession; and the rains came down, so the drought went. It also had in place the 12-month wage pause on rises in incomes which was imposed by Fraser because of the crisis; and it inherited the momentum coming out of the reforms of the Campbell Committee of Inquiry into the Australian Financial System. Unfortunately, the first period of the new Government was sullied by a major disinformation campaign as to its inheritance. It is not to the credit of anybody that this was taken up so widely. The present Prime Minister, the present Treasurer and a number of people in the Press Gallery who did not understand the figures-many of them did but a majority of them did not or did not bother to-used the $9.6 billion deficit figure dishonestly to discredit the current Leader of the Opposition. It was a shameful episode. It is to the discredit of all those who took part in it. The facts illustrate the extent to which the fiscal responsibility of the present Leader of the Opposition helped our national recovery. Let us look at this supposed figure of $9.6 billion. It was actually a forward estimate produced by Treasury in February 1983 for the financial year 1983-84. So it was well in advance of the financial year. Such a figure is not normally published, because of its uncertainty. Such a figure was not published the following year by the present Treasurer because, he said, it was too uncertain a figure. Nonetheless, such a figure was used in 1983. The fact is that the last Howard Budget, which was brought down during the recession, had a deficit of $4.4 billion-nowhere near the $9.6 billion figure. It was 2.7 per cent of gross domestic product-nowhere near the 5 per cent inheritance consistently and untruthfully claimed by the Prime Minister, even this week. The present Treasurer, in the 1983 Budget, had a deficit of $7.9 billion, 4.2 per cent of gross national product, much higher than the percentage in the previous Howard Budget, after he increased spending by $7.6 billion. The present Treasurer did not inherit a spending problem; he actually created it. If the $9.6 billion forward estimate of deficit were correct the extra spending by the now Treasurer of $7.6 billion would have left a deficit of $17.2 billion. If the present Treasurer had not spent $7.6 billion more the deficit would have been $0.3 billion. This shows the cyclical nature of the 1982-83 deficit. It also indicates the profligate nature of the 1983 Budget. We see that the careful preparations of the then Treasurer for the recession had paid off and it would have been quite possible for the now Treasurer in 1983 to have brought in virtually a balanced Budget if he had not increased spending to the extent he did. There was no $9.6 billion legacy at all; that is a piece of disinformation which is of no credit to the Government. I have here the glossy booklet produced for the Australian Council of Trade Unions at taxpayers' expense, `Accord: The First Two Years'. It is a very good record glossily presented. It shows inflation, interest rates and unemployment falling. None of these things derives from the Labor Government's decisions. It did one good thing, which was to float the dollar to continue the momentum of the Campbell-Howard reforms. A second piece of disinformation came out. It concerned the devaluation of the dollar. The Government is embarrassed because under its stewardship the value of the dollar against the trade weighted index-that is, all the people we mostly trade with-has gone down by one third. In other words, the value of Australia Ltd on the world stock exchange has fallen by one third under the Hawke Government. Of course, in that same period Australia has lost its first class international credit rating with the two major agencies. It is claimed as an excuse that the dollar was overvalued under the Fraser Government. There is proof that it was not. When the Hawke Government was elected it devalued the dollar by 10 per cent and then it managed the value of the dollar upward by about the same amount. Then, in December 1983, it floated the dollar and for 13 months the dollar stayed up at the same high level it was at under the Fraser Government. It stayed up for 13 months in free float on, if you like, the world stock exchange. It was only when there was a severe loss of confidence in the economic management of the Hawke Government at the beginning of 1985 that the dollar started its disastrous decline. The dollar was not overvalued under the Fraser Government at all, as this chart I have with me and all the figures show. It was the fiscal irresponsibility of the first two Keating Budgets that dug Australia's economic grave. In 1983, when we should have been putting money aside and being prudent for external shocks to come, we spent an extra $7.6 billion, a 15.7 per cent increase or 7.4 per cent after inflation-a deficit of $7.9 billion. It could have been nearly zero. In 1984 expenditure went up again by $7.3 billion, up 12.9 per cent or 6 per cent in real terms. In other words, in his first two Budgets the present Treasurer, not following the road of the previous Treasurer, did not prepare us for any shocks that might come. We could have had a major rise in oil prices. We could have had an international recession. We could have had a drought. What hit us was a decline in the terms of trade worse than we had suffered over the last 20 years. There has been a decline in the terms of trade. The warnings were there. They dipped substantially over a period. We were unprepared for it because we had spent all the money and we had borrowed very severely. This was a totally mistaken macroeconomic policy. Added to this, the Treasurer introduced a totally mistaken tax policy which was anti-investment, which was inflationary and which left serious distortions in the tax system. This added to inflationary pressure and killed off investment. The signals were there for a very long time that we were heading into trouble. Because of a combination of pride and pigheadedness the Treasurer refused to act. The Budget in 1985 warned of the problems of the terms of trade. The Treasurer did not act. In November 1985 the balance of payments was bad, inflation was up, wages went up too much and the dollar plunged. Still the Treasurer did nothing. As late as 9 May 1986 he told the Economic Planning Advisory Council that everything was all right. A few days later, after some more bad figures, he told us that we were heading towards being a banana republic. In July 1986 the dollar fell again. The Prime Minister declared a state of war in relation to the economy but subsequently the Government introduced a weak Budget. It did not fix the economy. It did not restore international confidence. That is why we now face a mini-Budget in May. If this mini-Budget does not peel about $4 billion off the forward estimates in a genuine expenditure cutting exercise, confidence will not be restored yet again. There has been a failure to tackle the whole issue of reform of the industrial relations system. I do not have time to deal with that. The constant cry of the Government has been that the Opposition has put up no proposals on economic policy and does not debate these matters in the House. Today my speech is one of a long series of speeches I have made on the subject and a long series of speeches made by the Leader of the Opposition (Mr Howard) and the Deputy Leader of the Opposition (Mr N.A. Brown), who is responsible on our side for labour market issues. I have here a long list, with dates, of all the times we have put forward serious economic proposals. The lengthiest proposal was put out recently, on 14 December-a statement on the economy in which we called for decisive action to stop economic drift. We called for the implementation of a new budgetary framework and an initiation of the necessary structural changes in the economy, asking for a completely new Budget early in 1987 to include substantial spending cuts and genuine taxation reform to restore incentive to individuals and businesses and to remove the current bias in the tax system against families. We asked for an immediate announcement that anti-investment taxes, such as the fringe benefits tax and the capital gains tax, would be repealed. We asked that a fresh application be made to the Australian Conciliation and Arbitration Commission which, if proceeded with, would have headed off the very poor decision that was handed down a few weeks ago. We also proposed the scrapping of the insane legislation to implement the recommendations of the Hancock Committee of Review into Australian Industrial Relations Law and Systems which would further entrench trade union power. We asked for an all-out war against unnecessary regulation at all levels of government, including the scrapping of the notorious identity card, so as to provide the maximum incentive for investment and enterprise. We asked for the removal of the remaining foreign investment controls except in certain strategic areas. We also asked for a boost in immigration with priority given to those with entrepreneurial capacity and skills required to boost private investment. Over and over again in this House and outside it we have put forward responsible, clear proposals for this economy to recover and time and time again the Australian Labor Party, the Government has rejected those proposals. As a result, we have inflation at 10 per cent; the highest interest rates, in real terms, in our history; a $100 billion overseas debt, and little prospect of recovering from that situation in the foreseeable future. Madam SPEAKER —Is the amendment seconded? Mr MacKellar —Yes, I second the amendment. Mr O'KEEFE(Burke)(10.32) —I sat here and listened with amazement to the deception that was portrayed by the honourable member for Mackellar (Mr Carlton) in his contribution to the debate. I think that the honourable member conceded one thing; that is, this Government inherited what he said were underlying structural problems which had existed in our economy for a long time. How right he is. Those underlying structural problems arose directly through the policies of Liberal-National Party conservative government in Australia over many years. The honourable member described the revelation of the $9.6 billion deficit projection as a `shameful episode'. I agree; it was a shameful episode. In case the honourable member needs reminding, let me say that just a few weeks before the March 1983 election when the Fraser Government was still in office and its Treasurer, the present Leader of the Opposition (Mr Howard), became aware of that projection, he was advised and in fact made, by the Prime Minister of the day, to sit on it; it was not to become public knowledge. It was not to become public knowledge in Australia that you knew that you had a forward estimate of a deficit in the 1983 Budget of $9.6 billion, while you were telling the people of Australia during the election campaign that it would be around $4 1/2 billion. I agree with you; it was a shameful episode. You also stand in this House-- Madam SPEAKER —Order! I suggest to the honourable member for Burke that he speak through the Chair. Use the words `They also stand in this House'. Mr O'KEEFE —I take the point, Madam Speaker. Honourable members opposite, and in particular the honourable member for Mackellar this morning, have alluded to the capacity of the current Government to somehow bring down a 1983 Budget result which would have countermanded that which was already in train. Let us simply straighten this out for the record. The Government was elected in March 1983. Consistent with his promise during the campaign, the Prime Minister (Mr Hawke) set in motion, within days, the first steps to turn around the Australian economy by holding the National Economic Summit Conference in April 1983. We are talking, Madam Speaker, about March and April of 1983. The end of that financial year was 30 June. So the decisions that had been made in the previous Budget, the spending programs already put in place by the government of the day, were beyond any repair for that financial year. For the shadow Treasurer to allude in this place to the possibility of the newly elected Labor Government turning around the projected $9.6 billion deficit is to partake in a shameful episode of deceit. We have to look at why this sort of deficit existed. Why had we shifted, as a nation, to a heavy reliance on overseas debt? Why were we, as a nation, so badly exposed to the terms of trade, and why are we now so reliant on the performance of products such as iron ore, coal, wheat, wool and such commodities in the international market? One simply has to admit the fact-I wish those on the other side would admit it-that during the years of the Fraser, Menzies, McEwen, Holt, Gorton and McMahon governments, over the last 30 years, we as a nation wound back our manufacturing sector. We held an artificially overvalued dollar in place by the use of the Reserve Bank mechanism to maintain our commodity markets at the expense of our manufacturing sector. Through that process we lost many hundreds of thousands of jobs. Let it not be forgotten that when this Government came to office in March 1983 the major problem facing this country was poverty and unemployment. Families and young people were thrown on the unemployment scrapheap by the policies of the previous Government. It has taken nearly five years to turn that around, and 800,000 jobs have been created since March 1983-an effort far beyond the expectations of the Government of the time. I hasten to add that many of those jobs have been filled by women. We have been able to bring about the increased participation of women in the work force and, as demonstrated by the equal opportunity legislation debated in this House late last week, the Government obviously stands very proudly behind this policy. After talking about the economic performance of our predecessors and about the honourable member for Mackellar's reference to shameful episodes, I guess I have also to look at where we sit now as a nation-we discuss these Appropriation Bills today in this context-and where we go from here. It is clear to the economic pundits, to those who lead our labour movement, to those who lead the manufacturing and investment sector in this nation and to the international economic commentators and experts that this Government has put this country on the right track, that this Government has made the hard decisions and that the benefits of those decisions are starting to flow through. We are not talking about giving back free lunches to the business sector, we are not talking about giving back cars and expense account perks to business executives and we are not talking about returning pensions to millionaires as the means by which we can fund some sort of economic turnaround in this country. We are not talking about those sorts of proposals. If one wants those sorts of proposals put in the words of those on the other side, they are proposing to abolish the capital gains tax that we have put in place. In other words, the high flyers on the stock market who make all these capital gains will have the tax removed from their profits. They will remove the assets test and, put in simple terms, that means that pensions will be given back to millionaires. Their own former Prime Minister, Sir William McMahon, was a classic example of someone who publicly advertised the ways that one could structure one's investments to retain one's pension. They are talking about removing the fringe benefits tax which, put in other words, is giving back free lunches and perks to executives. They are not the real measures that this economy requires. In fact, they are not even the real agenda of those on the other side of the House. Mr Barry Jones —Billy got the old age pension and child endowment. Mr O'KEEFE —As the Minister for Science at the table says, it is true that the former Liberal Prime Minister received the age pension, child endowment and all the benefits from his investment strategy. I do not wish to be distracted by my honourable colleagues because I want to focus now on an article on the front page of the Australian Financial Review of Monday 23 March which outlined the Liberal Party's secret agenda. I reiterate the term `secret agenda'. Mr Jenkins —It's not too secret now. Mr O'KEEFE —It is not too secret now, as the honourable member for Scullin interjects. We come to the question of shameful deceit. I want to analyse the secret agenda and contrast it with something that is very close to my interests, that is the area of Broadmeadows, Craigieburn, Coolaroo and Bethal where we have a substantial number of new housing estates and a large public housing sector. The people living in those areas are totally exposed by these proposals for the reform of our economy. Number 1 on the agenda is `cut pensions and tighten eligibility'. In outer Melbourne we have one of the highest areas of dependence on social security for family subsistence. People living either on or under the poverty line are right in the gun of this secret agenda. The plan of the Liberal Party secretariat is: . . . while many cuts should not be announced before an election- in other words, do not tell anybody; it is a secret agenda- apparently because of public outcry- of course there would be public outcry- they should be planned in detail beforehand. They could then be put into effect immediately. That is the secret agenda leaked from Liberal Party headquarters. Let us take education. In Broadmeadows the most significant development in 30 years in my opinion was the opening of the Broadmeadows College of Technical and Further Education. That college was projected to have enrolments in the vicinity of 5,000 students somewhere down the track. In its first year it opened with 2,500 students. It finished its first year with 5,000 students. It now has 7,500 students 12 months after operation and it is bursting at the seams. People in that area are just thirsting for a chance to improve their skills and their education capacity, and to move into the work force with a real chance. They are grabbing at an opportunity, and I just make the point that this Government took the establishment of that TAFE college from the bottom of the priority list to the top. There is no embarrassment anywhere about having done that as it was badly needed. But what is in the secret agenda about training schemes and education opportunities? The Opposition will abolish training schemes and cut back on those sorts of opportunities. There will be a very direct effect from these sorts of proposals. I say only one more thing about the economy and its direction, and that is about the floating of the dollar, particularly as it relates to Australian industry. I note that the honourable member for Mackellar did acknowledge that that was a positive reform by this Government. As he correctly said, it flowed from the recommendations of the Campbell Committee of Inquiry into the Australian Financial System, recommendations which his Government simply was not able to implement. The floating of the dollar is proving to be the turning point in our position as a world trader. For the first time in a decade, many Australian made products-I reiterate, Australian made products-have a real chance of competing. It is taking time, but it is leading to a number of benefits. Local goods and services are beginning to replace imports, which have become more expensive. Australian businesses are beginning to sell more overseas and local production is being boosted. Those who have been taking their money out of Australia-we know who represents them-who have said `If I don't get it my way I will take my money elsewhere'- Mr Hollis —John Elliott. Mr O'KEEFE —John Elliott, as my colleague mentions, is one. These people say: `I will take my money elsewhere if you are not going to do it right'. Mr Ansett, the great champion of small business in Australia, is taking his money out of the country. Honourable members opposite have to stand up and be counted. Who are they in here for, who are they barracking for? Also, companies which have relied on selling imports to Australia have now had to either lower their prices or make products in Australia. We are seeing some real changes in investment taking place and nowhere more so-I quite proudly report this to the Parliament-than around Broadmeadows, Gisborne, Sunbury and Kyneton, areas in the north-west industrial corridor of my electorate. I make the point that one cannot come into this House and deceive people by reeling forth statistics and saying: `This is what would have happened if only it could have happened'. Honourable members opposite have to face up to the fact that what they allege is not the way it was, that this Government inherited a situation which required the toughest and hardest economic decisions that any government has taken in many decades. I finish with a comment on Broadmeadows. A very clear picture can be painted. It is often said that the grass is greener on the other side of the hill. I can tell the House that for Broadmeadows the paddock was pretty bare. I simply say to the House that the secret agenda is not on. I will not stand by and see that paddock become barren again. Mr MacKELLAR(Warringah)(10.47) —The honourable member for Burke (Mr O'Keefe) said one correct thing, and that was that one cannot come into this House and deceive people. But he has tried to do it yet again, I am afraid. The completely specious figure of $9.6 billion deficit has once again been trotted out. The honourable member knows that not to be a fact, and the Government knows it not to be a fact. I only need to say that the present Treasurer (Mr Keating) will not allow the forward Budget projections to be discussed publicly to show just how unreliable that figure is. I will be dealing with this later in the speech, but I point out right at the start, so that anybody reading or hearing the speeches made in this debate will understand it, that yet again this is part of a conscious effort by the Government and its members to implant into the minds of the people a completely false figure to allow the Government to excuse itself for some quite inexcusable policy decisions that it has made since it took office. Another thing which I think needs some comment was the honourable member's very great praise for the Government in terms of employment generation. I just remind the honourable member, who is leaving the House now, that if he looks at the statistics he will find that one in four young people in Australia under the age of 25 cannot get a job. If he is proud of that statistic, if Government members are proud of their employment generation record, I ask: What are they going to do about the fact that one in four young people under the age of 25 who are seeking a job simply cannot get one? The Government, and any government for that matter, is in the business of good news, often with exaggeration and, as we have heard today, deception. Equally, I believe, no Opposition can afford the luxury of playing up bad news at the expense of good news, because the ultimate public result of this activity is a loss of direction and a lack of perception about our national problems. Goodness knows, we have enough national problems. This week we find that the news coming out of the United States of America for Australia is good. Yesterday's report from the New York Conference Board has brought a ray of hope. We welcome this news, but it brings with it several aspects which should cause some reflection by the Government. First, the news has come on the heels of the Government saying to itself, after much urging, that the Opposition and the critics of the Government are right when they point to the desperate need for the Government to tackle the Budget deficit. We know that the problem was caused in the first two years of the Hawke Ministry. They were a disaster, and consciously so. They have been pointed to by my colleague the honourable member for Mackellar (Mr Carlton) in his contribution this morning. Another contributor, Terry McCrann, who is a very much respected commentator, put his concerns this way: The real total Federal deficit has barely fallen from its 1983-84 peak of $8.4 billion. He continued: So much for Mr Keating's fiscal restraint, and whether or not he is prepared to come clean and initiate the policy changes necessary. As my colleague has pointed out, the May exercise has to pass a few tests. He continued: The first is that the Government must deliver real cuts in spending-not the essentially phoney process of the last Budget of deferring spending. I want to emphasise that matter. He continued: Secondly, there has to be an iron-clad commitment-in May-to no new spending programs in the main August Budget. Terry McCrann pointed out that in May 1985 the Government knocked off $1.3 billion but that in August it put it back. We, of course, do not want any more tricks like that. When, however hesitatingly, the Government has looked like biting the bullet, the effect has been to improve our international standing. That should be some encouragement to the Government to make real cuts and to do a real job in May, as it unerringly should. Last year I appealed to the Government to take early action. I wrote to the Press, and I am glad to say that the Australian Financial Review actually published my letter, which said, in part: The basic point is that the Government has placed too much reliance on monetary policy, having left itself with a weak budgetary strategy. Thus the Government has deprived itself of one of the major instruments of effective economic management. The fact is there has to be a balanced relationship between revenue and expenditure objectives and a mutually supportive relationship between monetary and budgetary policy. On the expenditure side, the Government has given an excessive priority to conciliating its free-spending supporters as it faced the election of 1984 and important elections that year in Western Australia and last year in South Australia. Research is showing an innovative profligacy in the expenditure of taxpayers' funds. Grants to the Union of Australian Women to produce plastic shopping bags, to the Trades Hall Council in Victoria for an artist in residence, to the People for Nuclear Disarmament for a peace mural at Gympie and to the Humanist Society of Queensland to hold a peace picnic are the tip of the iceberg. In addition, of course, we now have the marvellous example of the grant to produce a female surfboard. The Government's `sock the rich' taxation policies, propounded in the non-wage income sections of the accord, largely ignored at the time by the business community, have been sustained, but they provide no revenue match for the Government's expenditure blowout. This has incapacitated the Government's fiscal policy and the Government has been forced to place excessive reliance on monetary policy. High interest rates have now prevailed as a major determinant of economic directions. The loss of export income is an added irritant, but, if it is contributory, it is not the fundamental cause of the problems, as the Treasurer and the Prime Minister (Mr Hawke) would seek to suggest. Rather, it is the loss of control over the budgetary instrument which is so fundamental to the crisis in national economic management. The Government is caught in the cruncher. This bad budgetary policy of running irresponsible deficits has been paid for in a very special and a very sacrificial way. The chief payers have been those who have had large borrowings. We have all seen those dramatic television segments recording the stress to individual farmers, encouraged to borrow and expand land holdings for a more economically viable farm, hit in the middle of the venture by those dreadful interest rates. Those are the people who are paying for the huge deficits used to fund worthless enterprises. I raised in the House last year the problem of the cost of non-custodial parents passing their responsibilities on to the taxpayer. The Attorney-General (Mr Lionel Bowen) acknowledged the problem publicly for the first time by way of an answer to those comments. To his credit, he has had the Government do some real homework. Today we see the beginnings of the Government's facing up to the problem and putting obligations back on parents-where they belong. Of course, there will be special problems of adjustment; there will be the need for margins for compassion and sensitivity. I thought that the Attorney-General's speech was a good, if belated, start. I mention this because the previous speaker for the Government talked about those people in need in his electorate. We have to get away from the welfare mentality in this country. We have to encourage individuals to accept their personal responsibilities and not just look to the Government at every stage of their lives to provide them with any sort of income whenever they need it. There are those people in the community-and we all know them and we all have compassion for them-but there are also a great number who are bludging on the system. We know that the Government has passed the cost of its indulgent Budgets on to the home owner. The interest rates in the housing area have been corrosive in their social effects. The banks have been pushed by the Government to subsidise first home owners because of their inability to pay their mortgages. That is the effect of the Government holding first home owners' interest rates down, but opting out of its obligations to contribute to the operations. The banks have to fund the operations and that means passing the costs in the form of higher interest rates on to individual band clients. If honourable members do not think that high interest rates are having a social impact, they should go back to the electorate and talk to the people who are being affected. I know that the public find it hard to understand the relationship between the excessive Budget deficit and the low dollar. I know that people find it difficult to see how the low dollar contributes to higher interest rates. The Government trades on this understandable ignorance. The Prime Minister is a past master at glossing over the responsibility of the Government as the prime contributor to the problems. The Government has been repeatedly warned by commentators and by economists, but it has been slow to act. Instead, in Question Time, day after day, we have been treated to a diatribe about the so-called Fraser deficit. We on this side of the House were not responsible for the overspending in 1983-84 and in 1984-85 and for the failure of the Government subsequently to institute effective restraints. That is a truth the Government, try as it might, simply cannot shake off. The potential for economic recovery is considerable. Even the poor terms of trade in the primary sector can be surmounted by effective government policies. The Government knows in all conscience that it was these errors of commission in its first two Budgets which lost it its golden chance to put strength and stability into the Australian economy. Meanwhile, we are not here to say that the situation is without remedy. On the contrary, as recent international figures show, there is a route to economic recovery. The fact is that if the Government did the right thing for Australia the whole country would do well. That is the message coming to us. The fact that our dollar is improving against the United States dollar but not against other currencies is of qualified significance. But as so much of our debt outlay is in United States dollars, the change is important and its value as a boost to our external situation is to be greatly welcomed. But these figures show that the opportunities for Australian improvement, given sensible economic policies, give one some optimism. The first and the second Hawke Budgets underestimated the problem building up on the international front. Starved of government for seven years, the Hawke Government wanted to spend money to ensure its popularity. Also there was a case for pump-priming the Australian economy-unemployment and particularly the young people needed to be addressed. Here I believe I again need to make the point about an issue which has been the subject of a great deal of justification by the Prime Minister for the strategy he chose. The general prevailing argument is to convince the electorate that the mess we are in today is an inherited mess. We heard the contribution from the honourable member for Burke, the previous speaker, who was fully involved in that issue. The case rests substantially on this so-called legacy of a $9.6 billion deficit. When the Prime Minister came into office he made a great deal of the phoney $9.6 billion deficit which projections showed could occur if one of the longest droughts in recorded history did not break, if farm income continued to fall, if the farm related business slump was sustained and if no corrective action was taken. The Prime Minister has worked exceedingly hard to create the myth that this figure of $9.6 billion was a real figure. But as we know, and as I have pointed out earlier in this speech, it happens every year that these projections are brought on early in the year in order to lower budget options. The drought at that stage had a massive effect. Fortunately for Labor, and for Australia, it was ended virtually when the Labor Party took office. Farm income and business expectations changed. Drought losses were reduced and the economy turned up. Labor used the issue to ensure that it could go on a spending spree, whereas the Hawke Government, if it had been responsible, would have shown restraint in the Budget deficit and budgeted for a deficit of under $6 billion. In fact, the first Budget deficit of the Labor Party went to virtually $8 billion. Anybody who looks at the record of the Fraser Government and argues that Fraser would have ended the year with that kind of deficit knows full well that the truth is very severely being tested. This Government tests the truth very severely day after day in this Parliament. It is not only the $9.6 billion deficit myth which has been perpetrated, and has continued to be perpetrated by the Government and its supporters; it is the present myth that it is seeking to perpetrate-the myth about an alleged $16 billion credibility gap from this side of the House. Members of this House and the public must not be allowed to be duped by these figures which under any rational analysis simply cannot be sustained. The Government after four years in office has to accept the responsibilities for its own actions. It simply cannot keep blaming predecessor governments and using mythical figures to sustain its arguments. I guess Australians can be fooled some of the time, but not all of the time. Time is very quickly running out for this Government and its efforts to perpetrate another myth about the alleged spending cuts being put forward by this side of the House. It is a fact that the Government has had four years in office; it is a fact that the country's economy is in a mess, and it is a fact that it is the Government's own responsibility to try to do something about this. Mr HOLLIS(Throsby)(11.04) —I am pleased to take part in the debate on the Appropriation Bill (No. 3) 1986-87, the Appropriation Bill (No. 4) 1986-87 and the Appropriation (Parliamentary Departments) Bill (No. 2) 1986-87, and to exercise the freedom associated with such a debate. In talking about the expenditure of gov-ernment funds, I would like to address a few remarks to the Opposition's Waste Watch Committee. Before doing so I will answer some comments made about me by Senator Michael Baume in the other House on Monday evening. I draw attention to an article which appeared in the Illawarra Mercury today where it is claimed: Member for Throsby Mr Hollis and his Federal Labor colleagues were using stand-over tactics to discredit the Opposition's Waste Watch Committee and its chairman Senator Michael Baume . . . It further claims that Senator Baume objected to attempts made to stand over him. I point out that there has been no attempt by me or any other member of this House to stand over Senator Michael Baume or anyone else. It appears that I upset the Chairman of the Opposition Waste Watch Committee by revealing that he kept a Commonwealth car waiting for an hour and a half while he attended a recent dental appointment. His first claim was that I was wrong, that it was not an hour and a half but an hour and 20 minutes. He has now got the hour and 20 minutes that he kept the car waiting down to one hour. Of course, after some name calling of me for finding him out, Senator Baume, as the Liberals always do, started to blame the workers. He made comments about people employed in the Commonwealth car service. As I have said to the Illawarra Mercury, my information came not from the transport office or from anyone in the Commonwealth car service but from a member of the public who actually saw the car arrive much earlier than 10.15. She passed the car several times while it was waiting and then waited to see who came out. It was a member of the public who happens to be a constituent of mine. She has work in Canberra and she passed this information on to me. If this person gives me permission, I will mention her name. The point of my raising this issue is not personally to criticise a member of the other House-I will not revert to name calling of members of the other House-but, as we are talking about government expenditure today, to highlight the fact that those who set themselves up to judge others and to comment on the waste of taxpayers' money-- Mr Snow —That is right. Mr HOLLIS —The honourable member for Eden-Monaro agrees. Those people must be prepared to set an example. I would have thought that anyone who was so critical of the supposed misuse of public money would have been scrupulous in setting an example. It is just common sense that if one is to set oneself up as an authority on or to oversee expenditure one has to be scrupulous in setting an example. Senator Baume said that it was an inconsequential matter. It is about as inconsequential as the issues that the Waste Watch Committee members raise all the time. That is how inconsequential it is. In his attack on me, Senator Baume said: `The whole question of the use of the cars by senators and members of the House could become the centre of an unfortunate public airing'. Shock, horror! Why should the public not be aware of the use of the cars if we have nothing to hide and we are not ashamed of anything? I use a Commonwealth car when I am in Canberra, as other members do and we can justify the use of those cars. If I used the car for trips to the coast for me and my mother I would be a bit worried about it too, but that is by the by. It is important that senators and members have cars available. Many members come from the far corners of Australia. We do not have our own cars with us and we also have time constraints, but there are rules involved in the use of Commonwealth cars. It is not true, as Senator Michael Baume claims, that it is easier for the driver to wait. The normal procedure is for the driver to drop a person at his destination and then to return so that he can be allocated to other duties. The person gives the time that he feels he will be through the appointment, or he telephones the transport office here. So it is not true to say that it is easier for a driver to wait, whether it is for an hour, an hour and 20 minutes or an hour and 30 minutes. I do not want to prolong the debate about the use of cars. It is true, as the claim says, that the debate about cars could become the centre of an unfortunate public airing. Herein lies the difficulty. I suggest that the Waste Watch Committee has been giving certain items of expenditure this public airing without providing all the details. I accept what Senator Michael Baume has said about cars. Unfortunately, journalists give the general public half, a quarter or a tiny bit of the story. As part of their profession, they highlight those items which they think will be of most interest and then they run the story. My criticism of the Waste Watch Committee is that it does not fully check its facts and it very selectively quotes examples of so-called expenditure waste. The vast majority of projects criticised by the Waste Watch Committee are projects funded under the arm's length principle. This is especially so of the Australia Council grants of which it is so critical and also most of the research grants. The government of the day does not decide on the actual recipients of these grants. This is the whole concept of arm's length funding. Who gets the grant is decided by those involved in a particular industry. If members of the Opposition want to do away with the arm's length funding principle they should come out here now and say so and not hide behind criticism of the Government. I have been involved with the Caucus arts committee. Various people from the arts community have come to us over the last two years and said that there has to be peer assessment within the industry and we have to retain the arm's length funding principle. When the Opposition parties were in government they maintained the arm's length funding principle as well. As we are talking about some of the projects of the Waste Watch Committee I notice that the speaker who preceded me in this debate, the honourable member for Warringah (Mr MacKellar) also selectively threw in a couple of so-called waste examples. This is what members of the Opposition are doing. They are not explaining the grants. They sprinkle a few about. The honourable member for Parkes (Mr Cobb) is an expert at this. He throws the ball in-homosexuals, lesbians, et cetera-to the debate and talks about the waste of government funding. I do not know about all the projects, but I turn to a couple that I do know a little about. Two Illawarra projects were mentioned as almost having reached the famous ten that were singled out by the Waste Watch Committee and announced last week. I would have thought that the Waste Watch Committee would be worried about mentioning Illawarra projects. In a blaze of publicity last year it suddenly revealed many projects, most of which were in the Illawarra area and on checking, the vast majority were found to have been funded under the Fraser Liberal Government and most of the criticisms were found to be inaccurate. The Waste Watch Committee talked about money being allocated for a conference which was never held, when the conference was held and a report was produced. Money supposedly went to purchase a bus which was purchased under the Fraser Government seven years previously. The Waste Watch Committee threw out all sorts of examples. The information that is supplied by the Waste Watch Committee in almost every case is incorrect. I have mentioned a couple of cases in the Illawarra Mercury. One is Redback Graphix. Redback Graphix got its start under the wage pause scheme of the Fraser Government in the early 1980s when it received funding through the Australia Council. I know this personally because all grants are administered by an outside official. I happened to be the outside official in this case. I used to sign the cheques for Redback Graphix in my previous job, so I know its history. In its report last week, the Waste Watch Committee stated: Redback was the subject of much controversy during its time in Wollongong because it was constantly receiving Federal grants while operating as a private enterprise. It does not say that these grants were made under the Fraser Government when Senator Baume was Parliamentary Secretary to the Treasurer. I ask you! This is what he is criticising. The other matter that the Waste Watch Committee criticised was the allocation of $41,410 for a project which it claimed took two academics at Wollongong University to write the history of the Australian Labor Party. Mr Goodluck —Crikey! Mr HOLLIS —The honourable member for Franklin should let me finish. The sum allocated to the project was allocated over a three-year period-a point that Senator Michael Baume fails to acknowledge. The project has been evaluated and reviewed twice. As I said before, the Federal Government did not allocate the money, the allocation was made through the Australian research grants scheme. The Australian Research Grants Committee comprises a chairman plus 11 other committee members, most of them professors at the leading universities in Australia. The Committee operates independently of the Government and a substantial number of the present Committee members predate the Hawke Labor Government. The award was highly competitive. Many more applications were received than there was money available, and the projects were judged purely on their merit. Do Senator Michael Baume and his Waste Watch Committee wish to impugn the integrity of the Chairman and members of the Australian Research Grants Committee? Senator Baume is wrong in his allegation that two academics from the University of Wollongong are the recipients of the award. The members of the Waste Watch Committee never check their facts; they just run on a tangent. In fact, only one academic, Professor Jim Hagan, is associated with that university. The other academic, Professor Turner, is associated with the University of Sydney. It was a joint award to the two academics from two different universities. The two universities concerned, which are highly esteemed in the academic world, have judged this project to be worthy of their support and endorsement, without which the award would not have been made. It is not a project to mark the Australian Labor Party centenary, as Senator Baume would have people believe. Instead, it is an independent research into the history of one of the major political parties of our nation and one which has done much to mould the history of our nation and-I might add-will continue to do so. As such, this project is part of a general program of research into the political life and history of our nation. It is not a case of the ALP contemplating its navel but the work of two independent and highly respected researchers getting on with their job as professional historians. The ALP-and this is important-did not ask them to do this work; in fact, the ALP was not consulted on the matter. Senator Michael Baume's remarks are the statements of an intellectual philistine. They show his utter disregard and ignorance of what constitutes history and historical research. Professor Hagan and Professor Turner have embarked on a very critical historical inquiry and will most certainly produce a very different work from that which would be expected were the ALP to write its own history. The work is being written by two men with a long and highly respected record of research with distinction in the field of political history. The study will contribute to the art and science of politics, of which Senator Michael Baume might presumably be considered to be a practitioner, albeit not a very intelligent or well informed one. Of course, the Australian research grants scheme is funding two studies on Malcolm Fraser-not one, but two studies. This point was not raised by Senator Michael Baume or the other members of the Waste Watch Committee. Mr Snow —That is right; and we have not objected to it. Mr HOLLIS —We have not objected, as the honourable member for Eden-Monaro said. Indeed, it is odd that a practising politician cannot recognise or identify historical research which is likely to be of considerable interest and value not only to the general public but to his own Party. I suggest that we will all become better politicians, better practitioners of the art and science of politics, and will come to a better understanding of the political process of our nation's political history, which necessarily includes that of all political parties, not just our own. Senator Michael Baume has also claimed that my so-called attack on him was the result of a Cabinet decision. He really flatters himself if he thinks that the Cabinet is concerned about him and does not have more important things to worry about. A Cabinet meeting was supposed to have been held at which the Opposition Waste Watch Committee was on the agenda, and from that the Ministers hot-footed it back to the Caucus and told all Caucus members to get up and attack Senator Michael Baume and the Waste Watch Committee. I do not know how long the Waste Watch Committee has been going-a year or so-but in all the time it has been going I have never once heard it raised in Caucus. I am not privy to what goes on in Cabinet meetings, but I suspect that this matter has not been raised there. The members of the Cabinet have more important things to worry about. It is simply not true to say that this matter was raised in Caucus. To my knowledge, it has never been raised in Caucus. I raised the issue because, as I said, if Senator Baume is going to set himself up to criticise this so-called government waste, he should set an example. I conclude by saying that, if the Waste Watch Committee is so concerned about waste of government money, the members of the Committee should have been in the Senate corridors last night when the Senate Estimates committees were meeting. I do not know how many public servants being paid upwards of $50,000 a year were waiting around to appear before those committees. If we are to talk about waste, those are the sorts of things we have to look at. As the honourable member for Perth (Dr Charlesworth) said last night, we have to look at some of the proceedings in this House and streamline them if we are to cut costs. We should look at the fact that all these public servants being paid huge salaries are dragged before Senate Estimates committees. Mr COBB(Parkes)(11.21) —We are debating the Appropriation Bill (No. 3) 1986-87, the Appropriation Bill (No. 4) 1986-87, the Appropriation (Parliamentary Departments) Bill (No. 2) 1986-87 and the amendment in regard to the first Bill. Those Bills, as one flips through their pages, deal with extracting many millions of dollars from the taxpayers, all of which will add to our increasing debt. Our overseas debt now is in excess of $100,000m. The Government insists on doing very little about this, but borrows more and sets record levels of debt, which will only force up interest rates and force up taxes, because more money will have to be collected eventually. This will force business profits down and it will put more employees out of work. It will cripple even more the farmers right across Australia, particularly the wheat farmers in the electorate of Parkes. Overall, it will provide less incentive for people, both in the Parkes electorate and right across Australia, to get out there and have a go, invest capital, take a risk and work outside the hours of 9 to 5. It is very lamentable when the Government's policies have that effect. On flicking through these Appropriation Bills today, I can open them at nearly every page and see enormous examples of waste; money spent on dubious projects. In many cases there is even blatant funding of philosophical left wing groups, even in the most unexpected areas. My eye was caught by one grant of several thousand dollars to be spent on the United Nations Committee to Eliminate Racial Discrimination. In 1985-86 a few thousand dollars was spent on that, and that amount has been more than doubled this year. Anybody who looked at that would think that it was for a very fine ideal, and I am sure that in many ways it is. There is probably no finer ideal than to promote harmony among people, races and different groups around the world. However, it seems to me that the Government is becoming obsessed with concentrating on what is going on in South Africa, as if that were the only country in the world which commits sins. I am the first to admit that the system of apart- heid is absolutely indefensible. There are many wrongs in South Africa and the white Government could be doing much more in that area. However, it is not the only country in the world which makes mistakes. In fact, I believe other countries are far worse. We have only to look at some of the countries in northern Africa, such as Zambia, Tanzania, Uganda and Ethiopia. The Government of Ethiopia has killed hundreds of thousands of people by trying to implement its Marxist policies; forcing people off the land-- Mr Peter Fisher —Starving them to death. Mr COBB —Starving them, as the honourable member for Mallee said. When I was in South Africa in January and February this year, along with one member of the Australian Labor Party, I happened to call in at one of the refugee camps at Phalaborwa in the north-east of South Africa. I had heard that there was a refugee camp there, so I asked whether I could go in. I happened to be in the town looking at a phosphate mine and it was arranged for me to go in. There were 2,000 refugees from Mozambique in the camp. About 30,000 refugees have come in in recent times. Only a few short years ago, Mozambique, while it could not be described as a rich country, was a country which was doing very well. It is a very beautiful country, with enormous natural resources. Many people from around the world used to take their holidays in the capital of Maputo. Since the Portuguese have pulled out of Maputo one cannot even buy a carrot. The streets are deserted. People are dying of starvation. The Frelimo Government-if one can call it that-that has taken over is shooting people, raping women, burning crops. The country is absolutely destroyed. Mozambicans are fleeing. And which country are they going to? Dr Watson —To South Africa. Mr COBB —Yes, as the honourable member for Forde correctly says, South Africa. The pitiful specimens that I interviewed there through an interpreter told some horrific stories of the hardships they had suffered. Little children had their mother and father dead, perhaps had left a brother behind and their sister had been raped and shot. From person after person that I interviewed I got the same story. To come out of Mozambique into South Africa involves something like a five to eight day trip, according to where one starts from. The people have to travel up to 100 kilometres through Kruger National Park. Regrettably, as they go through the lions pick up a few on the way. One woman told the story that she had had a baby on the way. She was in a group and had to keep moving so she had to leave the baby behind. We can only guess what happened to that. Yet the South Africans, for all their faults, are looking after these people, getting no credit for it on the international stage and being made the pariahs of the world, particularly by this Government. The South African Government was feeding these people. Admittedly, the meals were not all that flash. The food was only mealie, a sort of maize mixture that is boiled up. The South Africans were feeding and looking after the people who had came in. People in Australia seem to think that the racial discrimination in South Africa is purely between white and black. The picture is painted that the blacks in South Africa are one homogenous group like Aborigines in Australia. The situation is much more complex than that. In fact, there are not even two or three groups of blacks in South Africa as there are in many of the states to the north which have been given their independence. In those countries there has been one man one vote and then one tribe rules the other and chaos reigns. In South Africa the situation is much more complex. It is almost unique in the world. There are nine or 10 different main black groups such as the Zulus, the Xhosas, the Sothas, the Tswanas, the Swazis, the Ndebeles, the Vendas and others. Even the Zulus are not a homogenous group; they are divided into 200-odd different tribes. In some cases the tribes are divided into different clans. In the last couple of days we have read in the newspapers of one Zulu tribe fighting another tribe. Tragically, 19 people were killed. So there are problems in South Africa. I repeat: I am not saying that the White South African Government is perfect, far from it; it has lots of faults. But it also has lots of problems and the problems in South Africa are far greater than anywhere else. There are language problems. There are four main groups of black languages, 23 sub-groups of language and numerous dialects. What has Australia contributed to the situation? Bishop Tutu was invited to Australia recently and now we have had this fellow Tambo coming out. I do not think by any stretch of the imagination he is representative of black people's thinking in South Africa. Such people have no mandate to speak for more than a small percentage of the black people in South Africa. That is the story I got not only from the whites, as one would expect, but also from the coloured people, the Indian people, and particularly the black people in South Africa. Where are the people such as Chief Buthelezi? Where are the people such as I had lunch with? I sat down with the Mayor of Soweto, Nelson Botile, a man elected by the black people. One would not find anyone more anti-government, anti-apartheid than him but he rejects entirely the credo that fellows such as Tambo are advocating, namely violence. One could not get anyone more anti-apartheid than Mr P. S. Ndlova, the Deputy Secretary-General of the United Workers Union of South Africa. He also rejects Tambo completely. It is interesting to look at this fellow who has been invited here by the Australian Government. He has been President of the African National Congress for 20 years. Out of the 30 members on the executive of the ANC at least 23 are members of or affiliated in some way with the South African Communist Party. Joe Slovo, the Chairman of the South African Communist Party, is on the ANC executive and he has been backwards and forwards to Moscow like a yo-yo. He even had a big hand in writing its freedom charter. The present Australian Government has set up what has been called a slush fund of $674,000 under the special visits program within the Department of Foreign Affairs. Tambo has been invited out as a guest of Bill Hayden and the Australian Government as part of that program to bring opponents of apartheid to Australia. Mr DEPUTY SPEAKER(Mr Blanchard) —Order! Will the honourable member please refer to members by their constituency or their title. Mr COBB —Mr Deputy Speaker, I thank you for your guidance in this area. I would have no objection to the visits if there were some balance but where are the opponents to communism, for example? Surely everybody here would admit that communism is causing oppression in many countries around the world. Why pick out fellows who are anti-apartheid to bring here? Mr Langmore —What about Bishop Tutu? Mr COBB —Bishop Tutu certainly does not speak for the black people. Every black person I spoke to in South Africa said: `Tutu does not speak for us. He has never come to us for a mandate as Chief Buthelezi has'. Mr DEPUTY SPEAKER —Order! The honourable member will address the Chair. Mr COBB —The only audience Bishop Tutu gets in South Africa is at a funeral. His audience these days is on the international stage. Mr Peter Fisher —He has more acceptance from some whites than he has from the black people. Mr COBB —He has. Sadly, the right of freedom of expression is rapidly disappearing in Australia today. We have a fellow such as Tambo coming into Australia as a guest of the Government and yet we have Rotarians, for goodness sake, being excluded. I refer to golfers. If one is a white person with a golf club one cannot come in; if one is a black person with a rifle one can. Mr Peter Fisher —Exchange students. Mr COBB —The honourable member for Mallee reminds me about exchange students. We have had Rotary exchange students coming to Australia to see how we conduct ourselves in Australia so that they can go back to South Africa and use Australia as a role model for their country. But oh no, now they are not allowed in. Someone such as Tambo is but school-children are not, and that includes Rotary black school-children. Such children have been here in the past. I think this Government has a sickening perversion of priorities in this area. An honourable member who spoke previously said that the Australia Council gave $5,000 to set up a Palestine Liberation Organisation office in Melbourne, for heaven's sake. The PLO is another terrorist group. But as I just said, Rotarians cannot even come to Australia. The African National Congress, with the blessing of this Government, in 1984, set up an office in Sydney in New South Wales. Its address is Trades Hall, Goulburn Street, Sydney. The New South Wales and South Australian branches of the Australian Labor Party have made donations to this group and to the South West African People's Organisation. Honourable members opposite are on a committee raising money for such organisations. Taxpayers' money has also been spent to bring two ANC members to work with the Australian Broadcasting Corporation to train in film production techniques. One wonders what they will film when they go back-necklacing no doubt. Tambo is here advocating a policy of violence. We all know about necklacing. A tyre is shoved around one's neck and around one's ankles. The tyre is doused in petrol. It is set alight and it burns away. Once a tyre is set alight there is no way one can put it out. If one is a strong person one's hands are cut off with a machete so one cannot remove the tyre or they are tied behind one's back with barbed wire. We have videos of this which honourable members can be shown. They show people holding up ANC banners and then putting tyres on people. When I was at Pietersburg in South Africa I spoke to a doctor who had done post mortems on 34 victims of necklacing in one outbreak last year. He told me one story that particularly stuck in my mind. An 86-year-old woman who was frail and who was blind was led by the hand by indoctrinated young children and told that she was going to a party. She was laughing as she went. They got her to the place and put the tyre over her. They did not have to tie her hands because she was so frail. The tyre kept slipping down; so they got a piece of thick wire-I suppose it would have been about No. 6 gauge-and shoved it straight through her abdomen, tied it around the tyre to hold it up on her and set her alight. This is the sort of thing they are doing. It is what Tambo is giving his blessing to. He has departed very much from what the ANC was years ago when even Buthelezi was a member. It has departed from the ways of Martin Luther King and Gandhi. It has departed from what Buthelezi these days is advocating. Tambo lives a life of relative wealth. He has good premises in London. The ANC gets $80m a year from Moscow. He has set up camps in various places. The cadres are trained in places like Libya, with the Palestine Liberation Organisation, and in Moscow. I remind honourable members that this advocacy of violence will do no good. Any group in the world which has come to power by terror has never been able to continue once winning government without continuing that terror. We only have to consider examples like Cambodia, Vietnam, Angola, Nicaragua, et cetera. The ANC has no support to speak of amongst the black people. It has to enforce the power it has by terrorising them, burning down their houses, necklacing which I have mentioned, burning schools and stores and doing other incredible things to try to get the support of black people because they have no popular support. Mr Peter Fisher —Have you got that letter? Mr COBB —The honourable member refers to a letter concerning the UDF-the United Democratic Front-the political arm of the ANC, which has been rechristened by some as `Uniroyal, Dunlop and Firestone' because of its methods. A letter was sent out by the UDF, which I should have here to table. It describes how its members go around each house and, unless one contributes 50 rand, which is about $40, and 10 rand per child per month, they threaten to burn the house down. That is the sort of tactics they use. The ANC has one of the most oppressive regimes on earth as its role model, namely, the Union of Soviet Socialist Republics. Its racist policies have no credibility at all. One has only to consider what the USSR is doing with the Moslems, the Jews and in Afghanistan. Tambo has said: The revolution in Afghanistan has been saved with the support of the Soviet Union. In 1985 at the ANC conference in Zambia he praised the Soviet invasion of Afghanistan. But he acts very differently when he is out here. He speaks very moderately. In the very short time I have left I will tell honourable members what Mr Tambo says when he is overseas. Writing in the World Marxist Review he stated that the ANC's plan calls for `the seizure of power in South Africa . . . through the terrible but cleansing fire of revolutionary war'. A report in the New York Times quotes Mr Tambo as saying: When Blacks learn that a White has died . . . that kind of thing comes like a drop of rain after a long drought. The Wall Street Journal quotes Mr Tambo as saying: The killing of White civilians would have the beneficial effect of getting White people used to bleeding. In an interview with Newsweek on 9 September 1986 Tambo apparently remarked: The ANC will no longer try to prevent death or injury to White civilians in South Africa and expect a bloodbath there . . . from now on, whether civilians are likely to die will not be a consideration. Jesse Helms, writing in the Washington Post, said: There is about Oliver Tambo the stench of burned flesh . . . The New York City Tribune stated: His aim is to get Americans to accept and even help the Soviet-backed attempt to violently overthrow the government of South Africa. We could substitute the word `Australians' for `Americans'. The same thing would apply. I am disgusted that the Australian Labor Party has seen fit to bring Tambo out here at taxpayers' expense. On a bipartisan note, I am also disgusted that Malcolm Fraser is putting him up at Nareen. Those actions are a betrayal of the moderate black people in South Africa and around the world. They are also a betrayal of the goal of peace and a step towards terrorism. Malcolm Fraser lost his trousers in Memphis because of his actions there. I think he has lost his brain in Australia in offering to put up this thug. I condemn him and the ALP for what they are doing. Mr LANGMORE(Fraser)(11.41) —We have just heard a speech the like of which I had hoped never to hear in this Parliament. It was a speech of abuse and distortion and cheap criticism. It was quite unworthy of this place. The central facts about South Africa are that it is the country which has the most brutal forms of repression on earth, practised by a quite undemocratic government, where 80 per cent of people do not have the vote and have extremely low incomes and where malnutrition is common. All the honourable member for Parkes (Mr Cobb) could do was criticise the opposition to that regime. There was not one word about how to achieve democracy, justice or peace in South Africa. His speech was worthless. I want to deal with the issues that are before the House, not irrelevant issues of foreign policy. I am concerned with the Appropriation Bills-Appropriation Bill (No. 3) 1986-87, Appropriation Bill (No. 4) 1986-87 and Appropriation (Parliamentary Departments) Bill (No. 2) 1986-87-and the opportunity they provide to speak about the state of the economy. Today I want to discuss the global economy, the impact of other countries on Australia and changes in policies which would improve the effectiveness of the global economic system and, therefore, Australia's economic position. The principal constraint on the Australian economy at present, as accepted by everyone, is the decline in our terms of trade. The collapse of commodity prices is a problem for all commodity exporting countries: Western countries like Australia, Canada and the United States, but also developing countries. After allowing for inflation, real commodity prices are at the level of the 1930s Depression, the lowest level for 50 years. Yet at the same time the prices of manufactured goods have gone on rising. For example, today exports of raw materials from developing countries will buy only half the volume of manufactured imports they did in 1974. That is, developing countries now have to export double the volume of commodities they did in 1974 to import the same volume of manufactured goods. Australia has the same problem. Our terms of trade have gradually deteriorated since the early 1950s and, in the last couple of years, have fallen by over 13 per cent. To cope with the consequent deterioration in our current account we have borrowed heavily so that our net overseas debts now total $81 billion. Australia's debt servicing obligation in this financial year, 1986-87, will be about $10 billion or close to a quarter of the value of our exports. This alone substantially worsens our current account. Australia is now one of the major debtor countries. The effect of this economic deterioration in developing and other commodity exporting countries is to force us to reduce our imports of manufactured goods. Therefore, growth of exports of manufactured goods from all countries has been retarded. There are many causes for the collapse of commodity prices, including growth in production of many agricultural products and minerals so that supply has increased, agricultural protection in Japan and western Europe, substitution of synthetics for natural products, changes in tastes and, perhaps most importantly, the much slower growth of Western countries than occurred in the 1950s and 1960s. Since 1983, industrialised mixed capitalist countries have been so preoccupied with reducing inflation that economic growth and employment growth have received less attention. Between 1960 and 1973 real income per person grew by 3.6 per cent in Western countries but declined to 1.9 per cent between 1973 and 1979 and even lower to 1.1 per cent between 1979 and 1984. With such slow growth, imports also grew very slowly. Throughout the Western economies the mutually reinforcing full employment strategies of the 1950s and 1960s gave way to beggar-my-neighbour deflation. One country's attempt to restrain demand reduced growth of its imports, causing falls in exports from other countries. Mutually reinforcing deflation became entrenched. Unco-ordinated attempts by single countries such as France, the United States and Australia, to break out of slow growth using expansionary budgetary policy caused massive trade deficits as our imports increased but exports stagnated or fell. The prospects for the global economy for the next few years are little better than in the past six, and could be worse, for one factor which has kept the global economy expanding gradually in the 1980s is about to be withdrawn. For the years 1981-86, high United States Budget deficits, high United States interest rates and the consequent over-valued exchange rate have led to rapid growth of United States imports. United States exports, however, have not grown similarly, so that America had an enormous trade deficit of $A250 billion in 1986. As in Australia, America has to borrow to cover that deficit and it has now become the world's largest debtor nation with overseas debts totalling about $A600 billion. The world is like a drug addict; it is addicted to the American market. There are whole industries in both industrialised and developing countries which sell almost entirely to the United States. For example, each year Brazil exports to the United States around $1 billion worth of shoes. Volvo and Saab sell half their production to the United States. The Japanese sell more vehicles to the United States than they sell at home. This will not continue. The large devaluation of the United States dollar since September 1985 will gradually reduce the American trade deficit at the cost of jobs everywhere else. If economic activity in the rest of the world does not pick up, a severe global recession is possible. Sir Jeremy Morse, head of Lloyds Bank, and not given to wild comment, is reported to have been asked recently whether the United States trade deficit could be closed without a massive global depression. He did not answer directly but mentioned words such as `disaster' and `apocalypse'. The global economy is obviously extremely complex and has innumerable sources of resilience. A crisis may be avoided by muddling through, but there are many proposals for policy change and reform of the system which would improve prospects. Innumerable proposals have been made for reforming the international economic system, but several have political momentum and a few, while being resisted by major countries, are so important that they are worth supporting. Reductions in real interest rates would be of great benefit everywhere, not least in Australia. The principal influence on global interest rates is the United States. This is quite obvious in Australia where interest rates move principally in conjunction with those in America, the perceived risk of devaluation and our own inflation rate. Australian officials and bankers who believe that the size of the Australian Budget deficit determines interest rates have not been observing the real world. Since Labor won government the annual Budget deficit has been steadily reduced while interest rates have gone on rising. The size of the Budget deficit is relevant in part because people believe it to be so, but it is of secondary importance in influencing interest rates behind United States rates, the risk of devaluation and our own inflation rate. Interest rates in the United States have fallen substantially during the past five years. Long term rates are down from 12.9 per cent in 1982 to 7.3 per cent late last year. Inflation rates in the United States have also fallen from 6.1 per cent in 1982 to 2 per cent in 1986. So real interest rates remain high. These high real interest rates are the result of a pincer of contractionary monetary policy combined with expansionary budgetary policy. Borrowers in the United States and the rest of the world are suffering because of excessively generous tax cuts in the United States and indulgence of the armed forces. To simplify but, nevertheless, to get to the central point: If the United States tax cuts had not been so large or the massive increases in military expenditure had not occurred, real interest rates everywhere would now be lower. The United States Administration has accepted that the Budget deficit must be reduced, but it continues to try to achieve this by cutting into desperately needed welfare, health, education and other community services rather than curtailing its lavish and wasteful military spree or stopping regressive tax cuts. In a very real sense, Australian home buyers are suffering because the rich in the United States are paying less tax and the military-industrial complex is allowed to buy every weapon it wants. A new President in 1989 will have to change these priorities. Australians have a lot at stake in the United States presidential election. In the meantime, we must hope that the overall Budget deficit is not cut by too much and that monetary policy is relaxed. Literal application of the Gramm-Rudman Act, which sets tight targets for reduction in the Budget deficit, would depress the United States economic growth rate, retarding recovery everywhere. The United States would be encouraged in this strategy if Japan, West Germany and other balance of payments surplus countries stimulated demand. The United States, Australia and other deficit countries have been urging them to do so, and they tentatively agreed at the meeting of the G5; that is, the Group of Five-the United States, Japan, West Germany, France and Britain-in Paris on 22 February. That meeting was notable for agreement among the G5 to increase its policy co-ordination and also, unfortunately, for its failure to identify adequate policies for doing so. If the massive United States trade deficit of about $A250 billion in 1986 is to be reduced without decimating other countries' exports, leading to another deep recession, imports by the trade surplus countries must increase. Both Japan and West Germany have particularly low inflation and economic growth rates, but their conservative governments are resisting more expansionary policies, fearing renewed inflation. They also argue that the appreciation of their currencies offers adequate opportunities to exporters in the rest of the world. Of course, they offer a major encouragement. Even if Japan and Germany eventually increase their growth rates, that stimulus to global demand would alone offset no more than 10 per cent of the United States trade deficit. Additional policies are obviously required. There would be a significant acceleration of world growth if more Western governments made growth of employment their top priority goal, using demand stimulus as their instrument. This is no more than a naive hope, however, as long as conservative governments with neo-classical free market economic advisers predominate in the West. There is more realistic hope, though, of relief in the debt crisis, for all creditor countries, especially the United States, recognise the massive losses they would suffer from extensive default. Developing countries now have debts totalling $A1,500 billion and they have had to slash their imports to try to cope with this. There is growing recognition in the West that the cuts forced on developing countries' imports, while they try to pay interest on their debt, have reduced the creditors' exports. For example, United States Senator Bill Bradley estimates that 800,000 Americans lost their jobs because the Latin American market dried up and economic growth in the region stopped. To avoid crises, the major lending country governments joined together in the Paris club to negotiate rescheduling-which means delaying interest and repayments-with borrowers in danger of defaulting. Up to 1982 there were only two or three reschedulings a year, but the number has increased rapidly recently. The number peaked in 1985 with 21 reschedulings, with a total value of $A27 billion-a small though useful trifle when compared with the total debt of $A1,500 billion. In October 1985, United States Treasury Secretary Baker launched a strategy for renewing lending by commercial banks, for commercial bank lending to developing countries virtually stopped in 1982. Baker called for $A30 billion of new commercial bank lending over a three-year period to the 15 most indebted countries, supported by an additional $13 billion of lending by the World Bank and other international banks, on condition that debtor nations liberalised and privatised their economies. The Baker plan at least and at last demonstrated recognition of the debt crisis by the Reagan Administration but involved no financial commitment by the United States Government. The only concrete result of the plan so far has been a $9 billion package of loans to Mexico, but since even this has been very difficult to obtain, despite intense Administration pressure, bankers believe it will be the only outcome of the Baker plan. Senator Bradley launched an alternative plan in June 1986 for debt forgiveness. Bradley argues that the cost to the United States of lost imports is so great that debtors should be allowed to write off 3 per cent a year of their debts for three years and have interest rates reduced by 3 per cent, allowing them to stimulate their growth rates. This would obviously involve losses for the commercial banks-but so as to prevent even greater losses from default. Another more recent proposal has been made by Representative David Obey and Senator Paul Sarbanes, the past and present chairmen of the Congress Joint Economic Committee. They advocate the establishment of a new `special facility' at the International Monetary Fund to buy and then restructure Third World debts from the banks using funds borrowed from surplus countries. The facility would purchase loans at a discount from their face value, so reducing the total level of debt, replacing short with long term debt, and substantially reducing interest rates. While the Bradley and Obey-Sarbanes proposals are still being considered, the stakes are rising. At the end of February Brazil announced suspension of interest payments on two-thirds of its $US108 billion debt. Commercial banks will lose $US500 million a month for as long as this suspension of payments continues. Peru has unilaterally set interest payments at a maximum of 10 per cent of its exports. Such policies will force a further US response. The credit ratings of major United States banks such as Chase Manhattan and Manufacturers Hanover were downgraded last week because of their `continued vulnerability to lesser-developed countries' exposures'. Chase Manhattan, America's third largest bank, has $6.4 billion in loans to Argentina, Brazil, Mexico and Venezuela, and exposure which amounts to 108 per cent of its equity and loan-loss reserves. The motivation for national and international intervention to at least ease the dangers is therefore growing. One important step which is readily available is a new issue of special drawing rights, or SDRs, by the IMF. SDRs are international money created by the IMF, in much the same way as the Reserve Bank creates money in Australia. SDRs are issued to members of the IMF in proportion to their membership quota, but could be allocated instead to developing countries to increase their international financial reserves, allowing them to increase imports. This idea is supported by all developing and many Western countries but is opposed by the leading G5 countries and by Australia. The Australian Treasury argues that a new issue of SDRs is not needed because there is sufficient global liquidity, and that an increase in reserves would be inflationary. But this neglects the fact that the excess reserves are held by surplus countries, while deficit countries like Australia and the capital-importing developing countries are having to restrain imports so as to minimise increases in debt; and that inflation rates in most countries are now lower because of the collapse of commodity prices. Australia has a record of being amongst the last countries to accept any new idea for international financial reform. Yet our current account deficit is now so large that we must recognise the importance of expanding global economic activity so that both the volume and price of our exports increase. A new issue of SDRs and the Bradley and Obey-Sarbanes proposals are realistic means of moving towards that goal. Australia should become an effective advocate of such global financial reforms and international reflation. An international conference to discuss the international monetary and financial system as the end point of a careful process of the preparation for reform would also be of value. These issues are more important for Australia than for most countries because our future is being in part determined by international forces. Yet international financial policy is too often left to the technocrats. This must stop. Anyone concerned about economic development in Australia or developing countries should include support for international monetary reform on their agenda. Dr WATSON(Forde)(12.00) —I rise to speak on Appropriation Bill (No. 3) 1986-87 and Appropriation Bill (No. 4) 1986-87, and of course on the amendment moved by the honourable member for Mackellar (Mr Carlton). During debate on the corresponding Bills at a similar time last year I spoke of the incorrect monetary and fiscal policy of this Government and also the lack of incentive provided for business, farmers and families in this country. At the conclusion of that address I quoted the thoughts of the famous historian, Sir Arthur Bryant, on the decline of the Roman Empire. I would like to repeat that quotation: Rome had grown out of greatness of individual character. It became a community in which individual character counted for nothing compared with an abstraction which proved, in the hour of testing, capable of nothing. By sacrificing the individual to the state the rulers of the Roman world undermined the real virtues which sustained it. They turned active and self-respecting citizens into inert and selfish ones. They discouraged the capitalist from thrift and foresight, the trader from enterprise, the craftsman from his hereditary skill, the husbandman from pride in the soil, the mother from maternity, and the soldier from courage and self-sacrifice. They made the moral shell which protected society so soft that it could protect it no longer. A creeping inertia paralysed everyone and everything. Sad to say, in my opinion nothing has changed in this last year to make this observation, which was applicable to the Roman Empire and I believe to Australia last year, any less applicable this year. I wish to address just a few issues, in particular inflation and interest rates. I wish to address those matters not only abstractly but also as they concern my constituents. When the coalition left government the inflation rate was falling, and in fact it continued to fall in the early months of the present Government because of the policies established under the Fraser Government. The fact is that the change in the inflation rate for the quarter ending September 1982 was something like 3.5 per cent. In the December quarter of 1982 the change was 3.1 per cent; in the March quarter of 1982 it was 2.2 per cent; in the June quarter of 1983 it was 2.1 per cent; and, in the September quarter of 1983 it was 1.6 per cent. The underlying inflation rate increase, as shown by the Treasury in chart No. 3 of its March 1987 Round-up, peaked in June of 1982, at a little over 3 per cent per quarter, and continued to fall in September 1984, to a little over one per cent. In addition, the quarterly increase in average weekly earnings slowed from a 2.4 per cent increase in September 1982 to an 0.1 per cent increase by June of 1983. Nominal and real labour costs in the non-farm sector were falling when the coalition left office. The wages pause had all these positive effects, and it was these effects which in fact provided the foundation for this Government's job creation program. The current situation is substantially different. In the March quarter of 1986 the inflation rate rose by 2.3 per cent. In the June quarter of last year the increase was 1.7 per cent, in the September quarter it was 2.6 per cent, and in the December quarter it was 2.9 per cent. For the year as a whole, the increase was 9.8 per cent. The inflation rate in Australia compares extremely unfavourably with the inflation rate of our major competitors. Countries such as West Germany and Japan actually have deflation, a negative inflation rate. The inflation rate in the United States is a little over one per cent; in France, it is 2 per cent; and, in the United Kingdom and Canada, it is something like 4 per cent. In the Organisation for Economic Co-operation and Development as a whole inflation is just over 2 per cent. The gap between Australia's inflation rate and the rates of our competitors continues to increase and remain substantial. Even the latest Economist in the Parliamentary Library, dated 14 March, shows that wholesale prices in Australia continue to outstrip the wholesale prices of our competitors. In many countries wholesale price have in fact been decreasing-they have been negative. But for the three months covered in the report in the Economist it was over 10 per cent in Australia. No one else in the Western world comes close to that increase in wholesale prices. It is no wonder that the expectations of increasing consumer prices continues when we have wholesale prices in Australia outstripping wholesale price increases in other countries. Why is this increase in prices important? It is important to our families because every time parents go to a supermarket they find that there are increases in the prices of the goods they are buying, and when their wages are not increasing it simply means that their living standards are being eroded. Increases in prices also feed into our business and farming sectors. How can we compete with other countries producing farm products when we cannot control the inputs into our costs of production. If we cannot control costs, we simply will continue to be uncompetitive. Expectations of inflation are important not only because they erode the living standards of our country and reduce our competitiveness but also because they form the foundation for future interest rates. In the latest Economic Planning Advisory Council paper, No. 26, entitled `Interest rates and economic adjustment' the following summary is made: The rise in real interest rates in Australia over the last decade has been strongly influenced by corresponding trends in the major industrial countries. However, interest rates in Australia, especially at the short end, have risen to levels above those in most other countries, both in real and nominal terms. It goes on to say that there have been three principal reasons for this. The first of those reasons is exceptionally important-market expectations of continued higher inflation in Australia. As I remarked in Parliament the other day, the Managing Director of the National Australia Bank, Mr Nobby Clark, predicted that inflation will be something like 10 per cent next year. Nominal interest rates, the interest rates which we pay for our housing loans, the interest rates which every Australian pays for his car loan or personal loan for a washing machine, a drier or a refrigerator are determined by not only the real interest rates which the honourable member for Fraser (Mr Langmore) spoke about a moment ago but also a combination of the real interest rates and the expected inflation rate. If our real interest rate remains constant-and over history it has remained pretty constant-the difference between inflation rates in countries is also reflected in interest rates. In other words, the real interest rate remains constant, as the honourable member for Fraser said, between many countries, but the differences in our nominal rates between Australia and other countries such as the United States of America is directly related to our expected inflation rate. We are paying more interest because the Government is not adopting policies which will reduce our inflation. I refer again to the latest Economist magazine. Tables on inflation rates and interest rates show that Australian interest rates are the only one which are in significant double digits. Interest rates in Australia for corporate and government long term bonds are around 15 per cent, whereas in most other countries they are under 10 per cent. Switzerland has interest rates of less than 5 per cent. West Germany and Japan have interest rates of under 6 per cent. A moment ago I referred to the inflation rate in West Germany and Japan as being negative. So there is a direct correlation between the inflation rate in Australia and interest rates. I might add, of course, that the cost of money to businesses and farms, being so high, feeds right into the costs of production of our goods. Along with inflation, which affects many other kinds of inputs to the production process, interest rates reflect capital input costs and these also make us less competitive. Let me refer to my own electorate for just a moment. Interest rates, particularly housing interest rates, have been affecting Australian families for over 15 months. At this time last year I referred to a paper in my own area, the Albert and Logan News, which on 19 February 1986 had the headline `Own home dream now a nightmare'. In that article the journalists were reflecting on the problems that young couples were having and the fact that in my area there were two repossessions a week due to people being unable to meet their interest payments. Nothing has changed in the last 12 months. In fact, repossessions are getting greater. I received a call from a lady in my electorate who referred to her problems and asked what I could do about them. Unfortunately, given the Government's policy, there is very little any back bencher can do about such problems. This lady's husband had lost his job because the firm he was working with had gone out of business; it could not afford to pay its capital costs. But he did not go and bludge on the Australian community. He went out straight away and got another job and in doing so he took a cut in salary from $1,400 a month to $1,050 a month after tax. Interest rates on their house had gone up and their house payments had gone up from $370 to $550 a month. By the time they took transport costs into account-the husband had to travel to work-electricity, telephone, rates and health care they were left with $30 a week for food. Mr Braithwaite —A severe reduction in the standard of living. Dr WATSON —One heck of a reduction in the standard of living. High interest rates are literally taking the food out of the mouths of our children. It is about time that this Government and this Treasurer (Mr Keating) understood the human suffering that they are heaping upon the Australian community. I wish to conclude with some reference to another item that came to my attention. I notice that about another $9m is being appropriated for administrative and salary payments in the Department of Social Security. I recently wrote to the Minister for Social Security (Mr Howe) about a war widow in my electorate. Because of a social security change introduced on 1 November 1986, this war widow's pension became regarded as extra income when social security allowances were being assessed. My constituent had been looking for a job when she became ill. She was unable to attend a job interview during that period and lost her entitlement to benefits. They were not restored when her health returned. The woman concerned had been nursing her husband on a full time basis for the previous 10 years. He died from a disability which was associated with his war injuries. When I was growing up in Australia I understood that war widows were to be rightly regarded as special people in Australia. Their pension has been regarded as some recognition of their husband's sacrifices. It has always been recognised as compensation, not as some form of income support. Unfortunately, the Minister in the last week has rejected the claim. I will read from a section of his reply. I will refer to the lady as Mrs X. It states: I can appreciate Mrs X's distress at the loss of a significant portion of her former income through circumstances beyond her control, namely her unfortunate and untimely injury, but I am unable to vary the decisions already taken. It may be of interest to Mrs X that her war widow's pension is $24 per fortnight more than the normal social security widow's pension which is an alternative in her circumstances. In other words, this woman's sacrifice for 10 years in looking after her husband, which could, of course, have been paid for by the taxpayer, and this man's sacrifice for his country, was worth $24 a fortnight. Ten years of her sacrifice was worth 50 per cent of a grant to the Wild Women Surfboard group. This Government has no compassion. It has no understanding or appreciation of the sacrifices made by our men and women. Rather, it is driven by ideological zealots such as the Socialist Left Minister for Social Security (Mr Howe), the colleague of the Minister for Local Government and Administrative Services (Mr Uren), who is at the table. It is driven by radical zealots to alter radically our value system and to tear down those things that have made Australia the great country she is. I can only refer again to the quotation that I started with: They turned active and self-respecting citizens into inert and selfish ones. They discouraged the capitalists from thrift and foresight, the trader from enterprise, the craftsman from his hereditary skill, the husbandman from pride in the soil, the mother from maternity, and the soldier from courage and self-sacrifice. That quotation about the decline of the Roman Empire was true for the Roman Empire and, as I said last year, it reflected the malaise that was overcoming Australia. I am sad to say that, one year hence, it is in my opinion an accurate reflection of what this Government is doing to our country. Ms JAKOBSEN(Cowan)(12.18) —In speaking in this debate on the Appropriation Bills it is a pleasure to follow some of my colleagues who have already spoken, in particular the honourable member for Fraser (Mr Langmore), whom I heard. I wish to say how sorry I am that the honourable member for Forde (Dr Watson) has such a biased and unrepresentative view of this Government's capacity for compassion and caring. This is the most caring and compassionate government that Australia has seen for many years. I would like firstly to express my confidence in the Government's economic policies and its capacity to place Australia on a more secure footing. I point out to the honourable member for Forde, with all his bleating about inflation and interest rates, that interest rates and inflation under this Government have never reached the heights that they reached under the Fraser-Howard Government. I am sure that many of my electors and other electors within Australia are already aware of this fact. Mr Humphreys —Fancy talking about Malcolm Fraser! Ms JAKOBSEN —That is right. It is hard to resist, though, in present company. I am certain that the Government's economic policies have placed Australia on a more secure footing. The commodities price reduction, or terms of trade downturn, which impacted so drastically on Australia's export earnings, was a crisis of significant proportions, given this country's reliance on primary industry. Many people on our side of politics have been pointing out for some years that the strategy of digging up Australia and shipping it overseas-or living off the sheep's back, as the Prime Minister (Mr Hawke) put it the other day-has not been a wise one. The terms of trade downturn showed that to be true. If Australia had had a more diversified economy and trade policy, the downturn in commodities prices would not have affected this country so badly. Ironically, the devaluation of the Australian dollar, which so many people feared, ensured that our primary and secondary industries can now be more competitive on the world market. Now the necessary process of reconstruction of Australian industry is well under way, thanks to the efforts of the Minister for Industry, Technology and Commerce, Senator Button, and export growth is already occurring at an encouraging rate. To summarise: The Government responded quickly to the crisis imposed by the erosion of Australia's terms of trade and the associated fall in the value of the Australian dollar. It took the tough decisions necessary to improve the country's economic position and asked all Australians to tighten their belts. The `Buy Australian' campaign was launched to boost import substitution and thereby assist local producers and manufacturers. As a consequence of these actions and a concerted reduction of the Budget deficit, the Australian dollar has strengthened considerably and export growth is steadily improving. This strategy is already having a positive effect on the current account deficit. The foreshadowed May economic statement will underwrite these improvements and pare government spending in non-essential areas. I look forward to a gradual but continuing stabilisation of our economy with consequent benefits to families, home buyers, businesses and workers. Of course, interest rates remain too high, but the Government has no intention of keeping them up artificially, as the Opposition would have people believe. On the contrary, every attempt has been made to reduce government demand for money so that the pressure on interest rates can be reduced gradually without adversely affecting the value of our currency. I take this opportunity to mention our Government's excellent record on housing assistance, as evidenced by the housing package announced yesterday by the Treasurer (Mr Keating) and the Minister for Housing and Construction (Mr West). In the review of housing assistance measures, the Treasurer and the Minister for Housing and Construction said: With the savings banks housing subsidy due to expire on 31 March 1987, the Government has reviewed the outlook for housing finance and activity. In so doing it has consulted widely with representatives of the housing and finance sectors. As a result of this review, the Government has decided that: it will not renew the subsidy arrangement with the savings banks; the 13.5 per cent ceiling on savings banks interest rates for housing loans made prior to April 1986 should remain; the Savings Banks Regulations will be amended to reduce the reserve asset ratio from 15 per cent to 13 per cent of deposits; the income limits for the First Home Owners Scheme are to be raised; They talked about public housing, which I will mention later. Their statement continued: The decision not to renew the subsidy with the savings banks should be seen against the background of the very high level of savings banks' lending for housing-currently in excess of $9 billion . . . compared to $4 billion in the March quarter 1986. As most honourable members will remember, there was a time when we were concerned that savings banks would not have sufficient funds to lend people who required money for housing. Accordingly, the statement continued: The high level of lending is the direct result of the Government's decision on 2 April 1986- which was much criticised by the Opposition then and now but was lauded, quite rightly, by members of the Government- to deregulate savings banks interest rates on new housing loans. This has significantly improved the longer term profit prospects of savings banks, and has encouraged savings banks to compete aggressively in the market for housing loans. . . . . . . the Government's decision will enhance the competitive position of the building societies, enabling them to lend more. If there was criticism of the Government position on subsidies to the banks, it was mainly from building societies. In my electorate many people have borrowed through building societies and some of these have said that they would prefer the building societies also to have a subsidy or that there be no subsidy at all to the banks. Now that position has been redressed, and I am sure the building societies are very pleased, as their borrowers will be. The changes to the first home owners scheme are very important to the people in my electorate. Cowan is primarily an area of home buyers and 1,315 local families have been assisted by the first home owners scheme since it commenced in 1983. The change to the scheme that was announced yesterday by the Ministers will mean that even more families in my electorate will be able to access this particular form of assistance. The changes are twofold. They will provide significant help to first home buyers and will give a substantial boost to the housing industry-which of course means more jobs. The major beneficiaries of the revised income limits will be low and moderate income families presently experiencing difficulties in affording their own home and for the very first time more generous income limits will apply to families with dependent children. This is a particularly important initiative given the Government's emphasis on family support. The changes will mean that a significant number of families who would have been eligible for only a portion of the maximum assistance will now receive the full grant under the scheme. I will detail those changes as they appear in the Ministers' Press release: Revised income limits to apply are: applicants with two or more dependent children will be eligible to receive a $6,000 grant if their taxable incomes are less than $26,000, and for a reduced benefit for taxable incomes up to $34,000. applicants with one dependent child will be eligible for maximum assistance of $5,500 if their taxable incomes are less than $25,000, and for a reduced benefit for taxable incomes up to $33,000. joint applicants with no dependent children can qualify for a maximum grant of $4,000 if their taxable income does not exceed $23,000. A reduced benefit is available to taxable incomes up to $31,000. The Ministers' Press release also covers single applicants without dependent children who can qualify for up to $4,000 if their taxable income does not exceed $11,500. A reduced benefit is available if their taxable income is less than $15,500. The Press release goes on: The new limits for joint applicants compare with the previous limits of $20,000 to $27,900 and for single people from $10,000 to $13,950. Mr Hollis —Keep up the good work. Ms JAKOBSEN —Thank you. It is nice to see the honourable member for Throsby in the House. I heard his speech and I forgot to acknowledge it. I am terribly sorry about that. The Government has recently made some changes to the amount of funds which will be available for public housing. In the same Press release the Minister for Housing and Construction and the Treasurer indicated that the Government has decided to provide $700m for public housing under the Commonwealth-State Housing Agreement to the States and the Northern Territory in 1987-88 and at least $700m a year will be provided to the States as grants from the Commonwealth in 1988-89 and 1989-90. They also say: More than 40,000 public rental allocations and over 14,000 home loans are being provided under the CSHA this financial year. Public housing funding will also generate about 20,000 additional dwelling commencements. As part of the $700 million funding level, the Local Government and Community Housing Program will receive at least $11 million a year, and the Crisis Accommodation Program $14 million a year, for the next three years. The Ministers also state in their Press release: The Government also decided to allow all States to nominate up to 60 per cent of the loan component of State Government borrowing program for public housing. This is available at the highly concessional rate of 4.5 per cent repayable over 53 years. Obviously, this provision is a very strong incentive for State governments to become involved in public housing and to assist people on low incomes into affordable rental housing. The housing Press release makes it clear that the actual level of State Government borrowing programs will be determined at the Premiers Conference in May. I am certain that the Western Australian Government will be pushing very hard to try to nominate more than 60 per cent of its borrowing because it always chooses to put a lot of money into public housing. Many Western Australians benefit from this in terms of their economic situation. Housing is a very important factor in the cost of living and the way people cope with society and its pressures. A job is also a crucial determinant of a family's economic welfare. Unemployment under this Government is now 8.2 per cent compared to 10 per cent when Labor first came to office. In the past four years more than 750,000 new jobs have been created across Australia. I recall the Prime Minister commenting in Question Time the other day that people were sceptical when this Government first promised to create 500,000 new jobs. Now we have exceeded that undertaking by 50 per cent and we have created 750,000 new jobs. In the electorate of Cowan, 38 community employment program projects have been approved including some sponsored by schools, community groups and local councils. State government departments also have an involvement in community employment program projects but these 38 community employment program projects do not include any of those. The projects have ranged from cycleways and tree planting to community research and construction. As a result of these projects many local people have had an opportunity of working and improving their chances of gaining other employment in the future. The community employment program is a very worthwhile program. I personally support almost every project that goes forward from my electorate because I know the value of people having a job, even in the short term, and its importance to their self-esteem when it comes to looking for work in the future. The Hawke Government has worked consistently on tax reform since attaining office. An amount of $4 1/2 billion is being returned to taxpayers by way of tax cuts. The purpose of the tax reform process was to pull down high marginal tax rates and to restore fairness and credibility to the Australian tax system, which many people here will recall was being rorted by a large number of people in our society prior to that tax reform process taking place. Tax reform has happened. Our tax cuts are a fact. They have already been paid for. Let us compare this record with the wild and boundless promises of the divided Opposition. They are without foundation as are their claims. They are illusory-they come and go; the members and the claims. The Opposition's strategy on taxation is one which resembles kite flying. It puts up a suggestion and waits for it to be shot down. Whoever is pulling the strings on this puppet Opposition has a very shaky hand indeed. The Government has done an excellent job in an economic sense. I am very pleased to have the opportunity to speak on these Appropriation Bills. The inflation rate and interest rates are a concern to members of the Government as well as to the Prime Minister. We would like to see them brought down. We are doing everything possible to bring them down. I know that the Prime Minister will pursue this policy as will the Treasurer. The Appropriation Bills before the House deserve my commendation and also the commendation of all members of this Parliament. Dr HARRY EDWARDS(Berowra)(12.34) —The honourable member for Cowan (Ms Jakobsen) has just used the phrase `the wild and boundless tax promises of the Opposition'. I will come back to that. But before I do I would refer to the difficult and quite frightening situation Australia is in today which the honourable member made no reference to or showed any consciousness of, a situation which is largely the result of the Hawke Government's policies. And I would look at the policy measures necessary to get Australia back on the path to economic balance and recovery and to achieve a reversal of the decline in the living standards of recent times. I recognise there are no quick fix, no easy, no overnight solutions. The adjustment process now facing the Australian economy is enormous. I use that word quite deliberately. It is going to be a very long haul and even more protracted than it need be if this Government does not face up now to the really tough, the really heavy, policy processes that are absolutely essential. The obvious starting point is the continuing massive deficit situation in the balance of payments and the relentlessly increasing overseas debt which, as everybody knows, exceeded $100 billion at end September last. One may then focus the predicament of this country this way: It will need quite a measure of plain good luck, as well as the most stringent wage restraint and very tough Budgets, that is fiscal policy, just to stabilise-not to reduce, not to cut back but just to stabilise-Australia's presently relentlessly increasing foreign debt at about 40 per cent of gross domestic product within five years. That is what confronts us. They are not just my words; that is perhaps the most optimistic scenario in a study of this problem-I refer to paper No. 22 `External Balance and Economic Growth'-by the eminent body, the Economic Planning Advisory Council. When one looks at the dimensions of the present economic mess-the balance of payments deficit not fundamentally changed and relentless debt increase, to which I have referred; the devalued Australian dollar, which is very vulnerable to change in the fragile international fiscal balance and to any prospect of global recession; inflation at 10 per cent and as likely to increase as decrease, the Organisation for Economic Co-operation and Development notwithstanding; wages, measured in actual wages, increasing at a rate in excess of 8 per cent; interest rates still 7 to 10 percentage points above the rest of the world, and if I had the time I would read out the tabulation in the most recent issue of the journal the Economist of 21 to 27 March; business profits lower in the half year to end December last than in the corres- ponding period for 1985, and they are the latest figures; the investment outlook for 1987-88, one of significant decline, in excess of 12 per cent in real terms; and the desperate plight of the rural sector, to mention the main factors-one can only marvel at the complacency, the sense of extreme gradualism and the persistent failure of the Prime Minister (Mr Hawke) and the Treasurer (Mr Keating) to tell it as it is, a failure reminiscent of their behaviour prior to the `banana republic' outburst last May which was followed in June by the Prime Minister's truthful account of the situation as one of `a situation akin to war', as surely it is. The brutal facts are that the dimensions of the mess and the enormity of the adjustments necessary call for two main policy thrusts. The first is a degree of income and wage restraint of an order of severity quite beyond, I believe, anything this Government or its Australian Council of Trade Union backers might, indeed could, contemplate as reasonable or feasible. We have witnessed the Minister for Employment and Industrial Relations (Mr Willis) prattling away about the `good' wage outcome the Government has achieved-at a much too high 8 per cent. An outcome of the order of, say, half that or what is really desirable, a wage-salary freeze, is of course ruled out by the unions. The leader in the Age newspaper put it only yesterday: . . . the unions appoint themselves the final arbiters of the decision . . . Witness the meetings this week to consider the national wage case decisions. Not only that, but it also states: . . . some are already formulating claims in defiance of it, as if it did not exist. The leader went on: This imbalance of power says a great deal about what is the matter with Australia's wage-fixing and industrial relations systems. Indeed, it does. But this Hawke Government will not do anything significant to change it and that is a primary task for the Howard Government when it attains office after the next election. The dimensions I referred to of the economic crisis and the enormity of the adjustments necessary call, secondly, for a commitment to fiscal discipline and budgetary restraint-in plain language, taking the axe to government spending and borrowing-beyond anything which I am convinced has even crossed the mind of this Government, this Prime Minister and this Treasurer. There is to be a May statement. The purpose of the May statement is to initiate the fiscal process of reducing government spending. Doing this in May rather than in August can yield a full year of expenditure saving from the decisions taken. What is the nature of the setting; what are the dimensions of the problem the Government seeks to address? We are not told. We are not given any account at all of what the Government is setting out to achieve, of what in any quantitative sense is the fiscal task the Government seeks to address. The Treasurer never ceases to accuse the Opposition of having `no fiscal policy' and of `a credibility gap' of the order of $16 billion, or is it now $18 billion? It does not matter. It is absurdly false and misleading. I will come back to that. The truth is that the boot is on the other foot. It is the Treasurer who has the credibility gap. It is this Government and the Treasurer in particular that have no fiscal policy, no quantified forward view of the fiscal, budgetary requirements to achieve the massive readjustment of the Australian economy that has to be effected. The Treasurer has spoken in general terms, and then only in passing, of the need-I will quote from one of his answers to a question-`to rebalance our external accounts by producing more, importing less, and producing more for export' and of the essential requirement `to lift investment', and thence of the necessity to reduce public sector demands on resources to accommodate this. What is the order of magnitude involved? This Treasurer says not a word. Without entering into lengthy argument, I would say that what is involved is three to four percentage points of GDP in respect of restoring external balance and a minimum of two to three percentage points in respect of additional investment. I stress that the latter is necessary to achieve the former, to achieve the turnaround in the balance of payments. That indicates a redeployment of resources-not necessarily all from the public sector; one should look, in part, to additional saving, that is, a reduced proportion of private consumption expenditure-of the order of, in current terms, $13 billion to $18 billion. Expressed as a cut in one fell swoop of current Federal Government spending at $75 billion, that would represent a cut in the order of 20 per cent. Is that what the Treasurer is looking at, the order of the problem he is addressing? Probably not, as that is the order of cut advocated by the radical right-it actually advocates 25 per cent. The Treasurer ought to come clean. He mutters something in general terms, which I have quoted, but does not spell out the implications, if he has thought them through, which sometimes I doubt. That is where the credibility gap lies. Why does the Labor Party-the Government-not tell the Parliament and the people just what are the parameters of its fiscal policy if it has in fact thought it through? Recognising the gravity of the nation's situation and the enormity of the adjustment task-from which there is no escaping; this Government, this Prime Minister and the Treasurer persist in not telling it as it is-one might suggest a minimum requirement target, of fiscal policy and axing of government spending given effect over a period of years, not in one fell swoop, of the order, in current terms, of $10 billion. I draw the House's attention to the amendment the shadow Treasurer, the honourable member for Mackellar (Mr Carlton), has put down in relation to the second reading of this Appropriation Bill (No. 3). He calls for the Government to make significant and genuine expenditure cuts of the order of $4 billion in the May statement as a first step to restoring balance in its policies. Debate interrupted. Mr DEPUTY SPEAKER(Mr Cowan) —It being 12.45 p.m., the debate is interrupted. In accordance with sessional order 101a, the debate may be resumed at a later hour. The honourable member may continue his speech when the debate is resumed. Sitting suspended from 12.45 to 2 p.m. Mr HOWARD —My question is addressed to the Prime Minister. I remind the honourable gentleman of his promise in November 1984 that interest rates would fall in 1985. I remind him that since he made that promise savings bank home loan rates have risen from 11 1/2 per cent to 15 1/2 per cent; Bankcard rates have risen from 18 per cent to 22 1/2 per cent; and overdraft rates have risen to a record 20 1/2 per cent. Will the Prime Minister now explain to the Australian people what he meant in November 1984 when he said that his Government had `ploughed the field and sown the seeds and would soon harvest the crop on interest rates'? Mr HAWKE —I thank the Leader of the Opposition for his question. I will not repeat what I said yesterday about the facts of record interest rates being the product of the Leader of the Opposition's stewardship when he was Treasurer. Those facts are on the record. I simply remind the Leader of the Opposition of a couple of relevant considerations when it comes to this question of interest rates. Firstly, I pick up the analogy he referred to of sowing the seeds and reaping the harvest. The unfortunate fact is that we have had to have a tight monetary policy in this country, despite the enormous efforts of our farmers-I pay them full tribute-and miners. They have sown the field and have harvested, but the prices they have received for the products which they have so effectively produced have been massively reduced. This Opposition one day will understand and accept the fundamental economic fact confronting this country; that is, that we have had more than $6 billion slashed off our national income. That is of the order of $1,500 per Australian family. That unavoidable and unpalatable fact has been faced by this Government, and as part of the appropriate mix of macroeconomic policies we have had to have a tight monetary policy which has produced high interest rates. No government in its right mind would want to have interest rates at a higher level than is necessary for one day longer than is necessary. It is not good politics to have interest rates higher than they need to be. This leads me to the second point I would like to make. I remind the Leader of the Opposition of his record in regard to what is an appropriate interest rates policy. He took the position before the State election in South Australia that of course the ceiling on mortgage rates should be removed. He said quite clearly that the ceiling on housing interest rates should be abolished. I am not quite sure for what reason-perhaps he has read a different economic text book, or someone has recently got to him-but he now says that we should not do that, that we should keep the 13 1/2 per cent ceiling on interest rates. If the Leader of the Opposition is going to talk about consistency in regard to interest rates, he should examine his own policy and explain to the people, even if he cannot explain to himself, why he has jumped the position in regard to housing interest rates. Mr Howard —Ha, ha! Mr HAWKE —The giggleometer will not help the Leader of the Opposition. The position simply is that this Government had in 1986, as it has in 1987, the monetary policy which is appropriate to protect the real interests of this country. Mr CUNNINGHAM —Can the Prime Minister assure the House that security arrangements in his office are adequate? Mr HAWKE —I thank the honourable member for McMillan for his question, which is particularly appropriate on this of all parliamentary days. I can assure all honourable members, including you, Madam Speaker, that until very recently I have been more than satisfied with security arrangements in my office. However, I should report to the House a security scare which took place this morning. I was at a meeting in the Cabinet room this morning when a very urgent message was passed to me. The message was that two burly strangers of an agitated demeanour had burst into my office and demanded to see me immediately. On responding to the message I was astonished to find the Leader of the National Party of Australia and the Deputy Leader of the National Party hovering in the corridor, claiming to have come to see me in response to my urgent invitation. When I explained that there had been no such invitation, the two honourable members looked appropriately puzzled, but I am pleased and enormously relieved to be able to report to the House that I invited them into my office and we sat down and had a pleasant and relaxed discussion on a range of matters of topical interest. Madam Speaker, I will not say what we talked about. Telephone calls have been a matter of some topical interest lately, particularly to the honourable member for Kooyong. I conclude by suggesting to the honourable member for Groom that he could perhaps assist the Leader of the National Party who, I may report, on leaving my office was overheard to mutter to his Deputy: `I'd still like to know who made that'-expletive deleted-`telephone call'. Mr SINCLAIR —With the same agitated demeanour, may I express my thanks to the Prime Minister for his cappuccino hospitality. I ask the Treasurer a question. Was Monday's release of up to $900m in bank reserves designed to give greater flexibility in housing lending? Given the state of the farm sector and the fact that it has been nearly crippled by this Government's continued high interest rates policy, and knowing that the reserve assets ratio remains at 13 per cent of deposits, will the Treasurer now make a similar release to help Australia's family farmers? Mr KEATING —I think that the Leader of the National Party of Australia misunderstands the nature of the so-called release that he alluded to. There has been some discussion in the Press of late about changes to the statutory reserve deposit arrangements between the trading banks and the Reserve Bank of Australia. In that case the Reserve Bank holds, at a diminished interest rate, trading bank assets. The liquid and government securities ratio of the savings banks is entirely a different matter. The LGS ratio is the requirement of the savings banks to keep a certain proportion of their assets in essentially government paper. In other words, it is their money; it is money which is held not by the Reserve Bank but by the banks in securities other than housing. It was and is the Government's view that as the securities structure of the savings banks is sound, because it is invested mostly in mortgages, we could afford in prudential terms to have a lower LGS requirement on the savings banks than the par requirement on the trading banks. We are not releasing anything; we are saying to the savings banks that if they wish to have a little more flexibility in the investment of their funds or the placement of their assets, they can shift some of their assets out of government paper into housing, which would allow them over time, as they dispose of government securities, to invest about another $900m in housing assets. But we are not freeing up any funds to them. It is their money which, in relation to the SRDs, is an entirely different matter. The right honourable gentleman asked me about the farm sector. The view was being put by the farm community recently that if the Government were to reduce the SRDs in lieu of an extension of the savings bank subsidy, that reduction in the SRDs, that enhanced profitability for the banks, ought to be shared with the farming community and not go just to housing. I understand that point but the Government did not do that. It did not change the SRD structure. This has all sorts of other monetary policy implications and asset ratio implications. What the Government did was to change the LGS ratio of the savings banks. In other words, the savings banks are a little freer to invest their own funds into housing away from government securities. So any implication to be drawn about the farm sector is wrong. There is no implication for the farm sector. My colleague the Minister for Primary Industry has often been through the structure of the farm sector debt and I have nothing to add to what he said about the structure of that debt. Mr CHARLES —I ask the Minister for Foreign Affairs: Is it correct that there is evidence of Libyan activity in the South West Pacific? If so, how is this activity viewed and does it have the potential to cause concern to the Australian Government? Mr HAYDEN —The activity and presence of Libyan interests in the South Pacific does cause some concern to this Government. There is evidence of some activity by and on behalf of Libyan interests in the South Pacific. This is clearly associated with efforts to establish influence for Libya in that region of the world. I think this is symptomatically exemplified by the statement of the Secretary of the Libyan Peoples Bureau in Canberra, Mr Shaban Gashut, recently that it was the intention of Libya to establish a full time residential diplomatic representation in the South Pacific. If one pauses for a moment, one will quickly conclude that the commercial relationship between Libya and countries of the South Pacific is nil or practically nil. It is not a member of the region and does not share regional interests and concern. Therefore, its interests must be exclusively, or near enough to exclusively, political. I think we all understand what Libya's political interests largely are. In the past two weeks, and as recently as yesterday, officers of my Department have spoken with the Secretary of the Libyan Peoples Bureau, Mr Shaban Gashut. The Government's concern at activities which have the potential to introduce tension into the region has been put to Mr Gashut in the clearest terms. I discussed these matters with Mr Gashut late last year and I have no doubt that he understands the Australian position. I can assure the honourable member that the Government will keep this matter under constant attention. Mr HOWARD —I refer the Prime Minister to the report in yesterday's Melbourne Age that the Government would be selling public assets if this was justified. Is the Government in fact examining the possibility of selling publicly owned assets? If so, what criteria will be employed to determine whether such sales are justified? Mr HAWKE —I thank the honourable gentleman for his question. I simply say to the Leader of the Opposition that, unlike the Opposition, my Government is not a captive of any privatisation ideology. We have adopted a calm and reasoned approach on this matter. Part of the normal Budget process is to analyse and to assess carefully all priorities, including the allocation of all public capital. Over time, clearly, the needs of the economy and the community generally change and so too will an efficient use of public capital. That analysis-- Mr Carlton —Ha, yes! Mr HAWKE —It is no good the temporary shadow Treasurer laughing as though he is deriving some pleasure from that. What we are saying is that we are not captives of some stupid, blind ideological position which assumes that times do not change. We will in fact undertake an appropriate analysis and, to the extent that in our judgment of the overall budgetary situation disposal of some public assets is required, that will be done. Having said that, let me say this: The Leader of the Opposition and the shadow Treasurer need not get some smug satisfaction from this as though they can say that in that position there is not some fundamental difference between us. There is, because we take the view that there are some enterprises in this country which, whatever the changing economic circumstances may be, would still properly remain in the public domain. I need say no more than advert to an issue which of course is one of the many which cause a fundamental division between the Liberal Party and the National Party. The logic of the blind ideology in the Liberal Party is that it should dispose of Telecom. As my distinguished and very able colleague, the Minister for Communications, has made clear on many occasions, if the Liberals were allowed to have free rein with their ideological insanities and disposed of Telecom, it would be very largely the people whom the National Party purports to represent in rural Australia who would pay the price. I say to the people of rural Australia that we in the Australian Labor Party stand between them and the ideological vandalism that the Liberal Party would impose upon them. Mr SIMMONS —Can the Treasurer inform the House of the benefits of the Australia Card in attacking tax avoidance and evasion at all levels? Mr KEATING —The Australia Card Bill currently before the Senate will, if passed, enable the Commonwealth to recoup approximately $1 billion by clamping down on tax avoidance and evasion and welfare fraud. The Australia Card, with a photograph, will provide a unique high integrity identification system which will prevent multiple claims upon the social security system as well as enable the Australian Taxation Office to cross-check and match by computer information which is given to it by a range of institutions. Despite these substantial benefits, the Liberal and National parties in the Senate are now arguing their opposition to the Australia Card against the overwhelming force of public opinion. A poll published in the Bulletin today shows that support for the Australia Card in the community generally is 69 per cent. It shows that the support level of Liberal and National Party voters is running at 57 per cent; so even a majority of the Opposition's supporters is in favour of the Australia Card. This is a strong public warning to the Opposition. Today on the radio program AM the Leader of the Opposition fabricated some puny reasons for continuing to oppose the Bill in the Senate. In this program it was exposed that when he was Treasurer in 1979 he supported an investigation into the identity card system. AM sourced this view of the then Treasurer to a letter dated 30 August 1979 to the then Prime Minister attaching lists of outstanding submissions pertaining to Cabinet decisions on tax avoidance and evasion. The letter referred to Cabinet decision 8,862 of 31 May 1979 referring to the establishment of an interdepartmental committee chaired by the Public Service Board to report on an identity card system. On radio today the Leader of the Opposition said: I think that along with everybody else I thought it was worth looking at. He continued: I am afraid I am a bit hazy as to the level of my passion in responding to the Cabinet's decision. But in 1985 on the Sunday program the passion was somewhat higher. He then said: I personally see some merit in having an ID card providing the civil liberties concerns that people have voiced can be looked after and provided the Government can satisfy the community that there is some cost benefit in it . . . I mean the United States has had a social security card for generations and yet the United States economy is the most deregulated economy in the world. So in 1979 the Leader of the Opposition was in favour of an identity card. In 1985 he was in favour of it. But now, all of a sudden, it has disappeared from view. What is the reason? Why can he not stand up and support another of his personal views? As he was incapable of acting on the report of the Campbell Committee of Inquiry into the Australian Financial System, as he was incapable of floating the exchange rate, as he was incapable of deregulating the financial system, as he was incapable of establishing a consumption tax as Treasurer, as he was incapable of introducing an identification card, now he is still too weak as a leader to get through his Party a policy in which he personally believes. That is the reason why yesterday, apparently, in his own committees in the shadow Cabinet he was talking about trying to fabricate a tax system which does not have a consumption tax. The National Party is running him on that. The Leader of the Opposition has been run by every errant force in Federal coalition politics. He is sitting up there swaying with the breeze. He has stood for all these noble objectives but has never put any one of them into place-and never will. Mr Carlton —Madam Speaker, I take a point of order. The Treasurer's answer is hardly relevant to the question that was asked. Mr KEATING —The honourable member will rip up another sheet of paper if we are not careful or stamp his foot and throw his handbag at us. Mr Carlton —Madam Speaker, I take a point of order. I find the Treasurer's remark offensive and ask that it be withdrawn. Madam SPEAKER —The Treasurer will withdraw. Mr KEATING —Of course, Madam Speaker, I withdraw. The new leadership of the Liberal Party consists of a sort of `giving Australia what it needs, the times are made for us' policy. But whenever the test has been put on John Howard's leadership, whether as Treasurer or Leader of the Opposition, he has failed. He is failing on the Australia Card. Mr Porter —Madam Speaker, I raise a point of order. The question clearly related to the supposed benefits of the identification card. The Treasurer has not given us one benefit of the ID card. Instead, he has dealt entirely with the stance of the Leader of the Opposition. Madam Speaker, I ask you to rule him out of order on the question of relevance. Madam SPEAKER —The Treasurer will answer the question. Mr KEATING —I will wind up on this point: On 2 March the Leader of the Opposition said: Firstly, the integrity and independence of the Liberal Party come first. I will never surrender the role of the Liberal Party as the senior partner in the Coalition. I would forfeit any right to any respect. How right he was then. He is now forfeiting his stance on the Australia Card in the light of pressure within his Party and from the National Party on all aspects of taxation policy, including the Australia Card. Mr HUNT —The Minister for Primary Industry will recall that when he said in August 1985 `This Budget will bring interest rates down' the prime lending rate was 17.75 per cent. Does the Minister accept that the prime rate has remained above that level and that the Australian rate is now almost 11 per cent higher than the United State prime rate, to the disadvantage of Australian farmers, small business and prospective home buyers? As the Australian dollar has now appreciated to more than 70c against the United States dollar, what excuse does he offer the family farmer and others for the breach of his 1985 promise that interest rates will fall? Although it is April Fools' Day, I invite the Minister to address himself seriously to this question: When will the farmers and others witness a significant fall in interest rates? Mr KERIN —I guess the short answer is that as long as the Opposition's policies are not in place we have some chance of bringing about a sustained drop in interest rates. I would have expected that by now the Prime Minister, the Treasurer and I, on many occasions and in many forums, would have explained satisfactorily to the Australian public or to anyone with an ounce of intelligence what is the economic situation, what are the economic causes and effects of various factors affecting this economy and what are the effects of the plans and the policies that we have in place. I would have thought that quite a few of those things would have got through to honourable members opposite. It seems to me that about the only group these matters have not got through to is Her Majesty's Opposition. The Opposition simply cannot understand that things change over time. If one looks at the relationship between the value of the dollar and interest rates one sees quite clearly that every time the dollar moves up interest rates drop a bit. The 90-day bill rate has dropped-I have just confirmed it with the Treasurer-by about 3 per cent to 16.2 per cent. The 90-day bill rates, the long term rates, are the first rates to drop. Overdraft interest rates are sticky upwards and downwards. The last rates to move are the very long term housing rates. I can read the figures as well as the honourable gentleman opposite. I reinforce the point constantly made by the Prime Minister and the Treasurer that we take no perverted delight in having high interest rates which affect people so disadvantageously. There is no policy alternative to high interest rates at present. They are not designed to maintain a high exchange rate. They are designed to squeeze down on imports. They are designed to squeeze down on demand. I would have thought that the mob opposite, who used to pretend to be monetarists, would have understood what monetary policy is all about. We are all about tough monetary policy. We are also applying tough fiscal policy, basically because we are responsible and because we do not believe in voodoo economics. Nor do we believe in putting forward to the people a complex of policies which would guarantee distress to hundreds of thousands of people-in other words, guaranteeing more unemployment-which was the policy mix the former Government gave to people. We are coping with difficult times. We have put in place policy settings which will lead to a drop in interest rates. We have had a terms of trade decline of 20 per cent, our revenue from external sources is down by $6 billion to $8 billion a year and we have had an effective devaluation of 37 to 38 per cent. Those things are impacting upon the economy. They are directly affecting interest rates, the cost of imports and the rate of inflation-not wages and not a lot of other ideological nonsense which the Opposition persists with because it cannot understand the facts. Mr ALLAN MORRIS —Is the Minister for Social Security aware of media reports describing the case of a Newcastle man who turned down a job because he estimated himself to be better off financially on the dole? How does the social security system deal with claims that wages are not enough for an individual to go off the dole? Mr HOWE —I thank the honourable member for his question. People who are receiving unemployment benefit are legally required to accept suitable work if offered. Suitable work clearly relates to award wages. In a case such as the one which has been mentioned, where someone is offered a job paying an award wage, he is expected to take it. In such cases, following the Commonwealth Employment Service advice that the job has been refused, payment of benefit is suspended for between two and 12 weeks and eligibility is reviewed. The Department of Social Security is placed at a considerable disadvantage in cases which are drawn to the attention of the media or in cases where someone appears on the media making assertions about what has occurred in relation to his situation with the Department of Social Security. In the Social Security Act there is a provision for confidentiality. The Department simply is not able to respond in many of the cases that have appeared in the media without there being some breach of confidentiality. In some cases this means that the facts are presented in a heavily distorted way. Often they are not presented in a complete way. For example, a person appeared on national television recently and described the attitude of the child of the marriage towards work and the unemployment benefit and proceeded to give the child something of a lambasting. I was subsequently written to by the other partner in that marriage and a totally different picture was painted. If an individual case is exploited by the media it is often quite damaging to the people concerned, and certainly it places the Department of Social Security in an invidious position. Turning to the example that was referred to last night, I simply make the point that the Government introduced, with the support of the Opposition, the family income supplement scheme. In fact, I think that the scheme was initiated by the Opposition. With the significant rises that have occurred in the supplement we are talking-over and above the facts that may have been presented last night-about eligibility for a payment of up to $17 a child. According to Press reports, the person concerned was not aware of eligibility for family income supplement, and the facts were not presented in a complete way. The Government is concerned about the integrity of the social security system. It is concerned to ensure that the work test is properly administered. The facts, as I have suggested, are that people who fail to accept appropriate work at award wages are taken off benefit for a period by the Department. The Department intends to pursue the question of the work test in a rigorous way. No government, certainly in recent years, has administered the unemployment benefit more rigorously than this Government. In the period since high unemployment began, no government did less than the Fraser-Howard Government. I cannot think of a single measure that was successfully carried through by the Fraser-Howard Government in the administration of the benefit. I can think of a very large number of measures which were deliberately lifted under the administration of the Fraser Government when it lost control of the number of the unemployed in the period 1982-83 when we had a massive blowout and all of the systems in the Department of Social Security were placed under massive stress. It is very difficult to discuss particular cases. To do so is not helpful to the public climate and the climate of development of public policy in this country. I hope that in the debate in this Parliament we will steer away from such individual cases. Mr RUDDOCK —My question is addressed to the Prime Minister. I have noted statements outside the Parliament on the Government's attitude to the African National Congress and violence in pursuit of political objectives. Can the Prime Minister assure this Parliament that he has asserted, and will continue to assert, on behalf of the Government and all Australians, an abhorrence of the practice of apartheid and an abhorrence of the use and advocacy of violence in pursuit of political objectives? Mr HAWKE —I thank the honourable member for his question. It has, as I think the honourable member would accept, a particular relevance in the context of the visit to this country of Oliver Tambo, the head of the ANC. The Government believes that Australia has a strong moral obligation to play its part, and to play a prominent part, in international efforts to bring about peaceful change in South Africa. I know that the honourable member who asked the question shares that belief. In the context of that abhorrence, the Government established a program in 1983 under which prominent opponents of apartheid visit Australia. Mr Oliver Tambo is visiting Australia at this time under an invitation extended under that program. Again, as I think the honourable member knows and accepts, the African National Congress is one of the major organisations representing the disenfranchised majority in South Africa. The visit by Mr Tambo is enabling the ANC's views to be put to the Australian public. It is appropriate that all honourable members and the people of Australia should know that those views similarly have been made known in a number of Western countries and to major Western governments. I think that the honourable member would know, and he would appreciate, that Mr Tambo has recently met with George Shultz, the United States Secretary of State, and he has met with Foreign Ministers of the United Kingdom and the Federal Republic of Germany. Let me say, in direct response to the honourable member's question, that I had very useful discussions with Mr Tambo when he arrived in Canberra yesterday. I can assure the honourable member of these things: I informed Mr Tambo of the Australian Government's continuing desire to do all that we can to bring about the ending of apartheid. I said that I believed I was speaking not only for the Government but also for the great majority of Australian people. I also told him that the Government could not condone the use of violence in that process, whether it is perpetrated by the ANC or the South African authorities themselves. I said, and again I would think that the honourable member would agree with me, that we understand that the South African Government's persistent refusal to dismantle apartheid and to negotiate fundamental reforms for the majority black community in South Africa has of itself-that institutionalisation of violence in apartheid-led to a situation in which black frustration is increasingly expressed in violent ways. That does not endorse it or condone it, but it is some explanation. I can see that the honourable member appreciates that fact. I can say that Mr Tambo expressed his appreciation of the Australian Government's efforts, since the Nassau Commonwealth Heads of Government Meeting in 1985, to bring about change in South Africa. I make the point-I have no doubt that the honourable member for Dundas would agree with me-that what it is important to understand not only in this country but in all countries which are concerned with trying to get the evolution of a democratic non-discriminatory South Africa is that the majority blacks in South Africa and their organisations want to see a new South Africa within which there will be a proper, constructive and fruitful place for the whites. I expressly raised this question with Mr Tambo. I was reinforced in that understanding as I am sure the honourable member would be, by Mr Tambo's assurance to me that that is precisely what the ANC and the other organisations want, because they understand that the interests of the blacks themselves would be diminished if in fact the accumulated experience, capital and expertise of the white population in South Africa were to be destroyed or substantially diminished. The simple fact of the matter-again, I think that the honourable member would share my view on this-is that there are only two alternatives as far as South Africa is concerned. One is the path of violence and of bloodshed, and inevitably the destruction of the economic infrastructure within South Africa, or, secondly, there is the alternative route of negotiation and the recognition on the part of the whites of the obvious interests and rights of the blacks in South Africa, and contemporaneously with that a recognition by the black majority of the rights of the whites in South Africa. All the efforts of my Government-I am reinforced in this by the knowledge that many in the Opposition share this view-are directed towards creating that environment in which the route of negotiation will be possible. Mr HOWARD —Madam Speaker, I seek your indulgence to say on behalf of the Opposition that we certainly share the Prime Minister's strong denunciation of the system of apartheid in South Africa. However, the sentiments expressed by the Prime Minister would have greater force in this community if his Government were also to invite Chief Buthelezi to Australia to get the other black point of view from South Africa. Mr HAWKE —Madam Speaker, if I may also have your indulgence, I appreciate the observations of the Leader of the Opposition about endorsing our position. A possible visit by Chief Buthelezi is under consideration. Mr CAMPBELL —I ask the Minister for Trade: In the light of Press reports that the Japanese Ambassador to the United States has told Tokyo that Japan should forget economic rationality and take political decisions in its trade dealings with the US, can the Minister tell us what potential damage this could do to Australia and what he is doing about it? Mr DAWKINS —I thank the honourable member for Kalgoorlie for his question. As I warned yesterday, very disturbing consequences would flow from any escalation into a trade war of the trade friction between the United States and Japan. These countries are our two largest trading partners and it is inevitable that if their trade relationship were to disintegrate into a trade war it would have serious consequences for us. This recent alleged suggestion by the Japanese Ambassador to the US that the Japanese Government should give more attention to political factors rather than commercial factors would of course be very disturbing to us. We have repeatedly sought and received assurances from the Japanese Government. Indeed, the Prime Minister received a personal assurance from Prime Minister Nakasone concerning Japan continuing to purchase on the basis of price and quality and not allowing its trade disputes with the United States or any other country to be settled at our expense. That assurance was reiterated as recently as January during the meeting of the Australia-Japan ministerial committees, and the Japanese Minister of International Trade and Industry, Mr Tamura, has certainly given that assurance to me, and to Senator Evans on his recent visit to Japan. We place a very high value on these assurances and we expect them to be honoured. It needs to be stressed that we do not seek these assurances just for our own interests; it is very much in the interests of Japan itself that it continue to buy our competitively priced raw materials because at a time when its steel industry particularly is under pressure as a result of currency realignments it is all the more important that it should source its raw materials from the cheapest, most reliable and highest quality sources. Of course our officials will continue to monitor this carefully but I would say that it is very much in our interests that these two great economic powers resolve these questions as quickly as possible. It is bad enough for the United States to damage the prospects of our farmers and the farmers of other nations through its subsidy war with Europe, without putting pressure on Japan to divert its sourcing of raw materials away from countries such as Australia. It is perhaps important to remember that Australia is one of the few countries with which the United States has a positive trade surplus, and a significant part of that surplus with Australia is made up of our large purchases of defence equipment. Indeed, we are the second largest client for United States defence equipment and one hardly has to make the point that our capacity to continue those sorts of purchases will be heavily compromised if we are not able to sell our traditional exports to the world. Mr SLIPPER —My question is to the Minister for Arts, Heritage and Environment. In his joint statement with the Treasurer and the Prime Minister dated 20 March 1987 regarding the Federal Government's export control powers and their use in relation to silica mining at Shelburne Bay it was stated that mining would be contrary to the national interest, chiefly because of its impact on the environment. The statement went on to say that the Government's decision followed detailed and careful consideration of the proposal. I therefore ask the Minister: First, who were the environmental experts who advised the Government on this project; second, when was the investigation carried out; third, was the investigation carried out on site; and, fourth, will the Government make public the report that it received on the environmental impact? Mr COHEN —The Government received a range of advice on Shelburne Bay from its own departmental experts, through the Great Barrier Reef Marine Park Authority and others. I remind the honourable member that although the decision was based on environmental grounds, there was also strong opposition to the Shelburne Bay project from economic interests who saw the situation emerging where we might have gained some small benefit because of the few jobs created there but lost them in other areas such as Cape Flattery, just south of that region. Also, a number of newspapers in that region, including the Townsville Daily Bulletin, strongly supported the Government's position in this regard. Mr Young —And the honourable member for Herbert. Mr COHEN —And the honourable member, of course. The area is very fragile and there was a great deal of concern from those people who have studied that region that a major operation in the area would be very damaging to the environment. Mr Sinclair —There was no basis whatsoever. That is what you have just said. Mr COHEN —Obviously the right honourable member has some problem with his hearing. I will take the other aspects of the question on notice and will provide a full reply to the honourable member as soon as possible. Mr CLEELAND —My question is addressed to the Minister for Communications. In view of a Press statement made on 31 March 1987 by the honourable member for Goldstein criticising the ultimatum by Aussat Pty Ltd and its timing relative to the Government's aggregation proposals, how does the Government intend remote commercial television services-RCTS-to be provided if the eastern zone licensees do not meet the deadline of 31 March 1987, which has been imposed by Aussat? Mr DUFFY —I thank the honourable member for McEwen for his question. I am advised that Aussat has been negotiating with the eastern zone RCTS licensee for some time, apparently without reaching agreement. I can understand the concerns which have led Aussat to take the action that it has. It may be of interest to the honourable member to know that I have met also with Satellite South East to discuss the matter. At the time of that discussion it was quite clear that there was some doubt whether the consortium of regional stations considered itself capable at that stage of delivering the RCTS service, and it was a matter that it was going to consider. The steps that the Government may take to ensure that the eastern zone services are established will obviously depend on the response of the licensees to the recent proposals by Aussat. It will also depend on steps which might be taken by the Australian Broadcasting Tribunal which is responsible for the implementation of the licensing procedures. I have written to Aussat on this matter and Aussat has agreed that no decision will be taken until the Government has had an opportunity to consider it. The honourable member for Goldstein, the shadow spokesman on communications, in his Press statement yesterday-- Mr John Brown —Not a bad bloke. Mr DUFFY —He is not a bad bloke, as the honourable member for Parramatta interjected. But one wonders on whose behalf he is speaking in his Press statement-whether it is on his own behalf, whether it is on behalf of the Liberal Party and the National Party or on behalf of the Liberal Party and the National Party with the Queensland branch of the National Party speaking separately. I think that what he attempted to do was to create concern in the minds of people in remote areas by suggesting that the major television networks may provide the remote area television service via a 30-watt transponder in a national beam. This matter of the capability of the current licensees to provide the service is being considered and is something that we will address if they do not decide to go ahead with it. I do not know how the honour- able member for Goldstein, in his Press statement, came to the extraordinary view that somehow or other, if there was an a alternative method, it would be a national beam which would result in additional costs for larger dishes. The standard for direct home-to-home satellite services requires delivery in a spot beam. That standard will continue to apply. Where the honourable member dreamt up that national beam concept at this stage is something that I have no idea about. The Government believes that those people who established reception facilities on the basis of the Homestead and Community Broadcasting Satellite Service-HACBSS-signal should not be asked to accept a lower power commercial television signal. Another interesting point raised by the honourable member for Goldstein was his suggestion that maybe the Commonwealth Government would fund the Remote Commercial Television Services. That is another little figure that can be added to the $16 billion credibility gap that is already there because this Government does not intend to fund it. It has never said that it would fund it. The satellite is there. There are licensees to provide the service and if they decide that they cannot provide the service, this Government will be forced to make other arrangements. Mr YOUNG(Port Adelaide-Minister for Immigration and Ethnic Affairs) —On behalf of the Special Minister of State (Senator Tate) and for the information of honourable members, I present the Government's response to report No. 2 of the Joint Select Committee on Electoral Reform-the operation during the 1984 general election of the 1983-84 amendments to the Commonwealth electoral legislation. Motion (by Mr Peter Morris) proposed: That the House take note of the paper. Debate (on motion by Mr N.A. Brown) adjourned. Mr COHEN(Robertson-Minister for Arts, Heritage and Environment) —On behalf of the Minister for Resources and Energy (Senator Gareth Evans) and for the information of honourable members, I present the report of the Technical Working Group relating to the application of the best practical technology to water management at Ranger uranium mine. Motion (by Mr Young) proposed: That the House take note of the paper. Debate (on motion by Mr N.A. Brown) adjourned. Mr HOWARD(Bennelong-Leader of the Opposition) —I seek leave to make a personal explanation. Madam SPEAKER —Does the Leader of the Opposition claim to have been misrepresented? Mr HOWARD —Yes. Madam SPEAKER —Please proceed. Mr Young —We will have to change Standing Orders; this is happening every day. Mr HOWARD —That would be very good, you lot are so hopeless on it. In the course of Question Time the Treasurer (Mr Keating) sought, through an answer, to maintain the proposition that there was an inconsistency in the attitude I, my Party and the coalition are now taking on the identity card and previous attitudes that I have taken on the ID card, namely in 1985 and in 1979. I have had the opportunity this morning to refresh my memory by obtaining access to the interdepartmental committee report that was prepared in 1979 when the Fraser Government looked at an ID card system. Mr Cohen —Why are you looking at me? Mr HOWARD —It is better than looking at some others. It is worth informing the House, as I freely acknowledge, that along with other members of the Fraser Cabinet we decided to look at an ID card. I do not shirk that, and why should I? We established an IDC and that IDC, amongst other things, visited the United States of America to look at the system that was operating there. The overwhelming recommendation of the IDC was against the introduction of a national identity card system. It is worth reading-- Madam SPEAKER —Order! The honourable member has shown the House how he has been misrepresented in regard to the ID card. The Leader of the Opposition is consistently attempting to debate issues with the indulgence of the Chair. Mr HOWARD —This issue goes to the very heart of political combat in this chamber. There has been a pattern of misrepresentation by the Treasurer and the Prime Minister (Mr Hawke), and I am silenced on it. Madam SPEAKER —Order! The Chair gives indulgence to honourable members of this House to make personal explanations which are supposed to show how they personally have been misrepresented. Mr HOWARD(Bennelong-Leader of the Opposition) —Madam Speaker, I seek leave to make another personal explanation in relation to a comment this morning, by the compere of the AM program, John Highfield. Madam SPEAKER —Please proceed. Mr HOWARD —After I had been interviewed on the ID card, Highfield's concluding remarks were: `Opposition Leader John Howard exercising the politician's prerogative to change his mind'. I have been misrepresented in that my attitude on this issue has not changed. My attitude has always been that one had to look at it according to cost-benefit analysis, and in 1979 the unanimous advice of departments was that it could not be supported on a cost-benefit basis. In September 1985, just after I became Leader, I applied the same criteria-- Madam SPEAKER —Order! The Leader of the Opposition is once again debating the issue. Mr HOWARD —With great respect, Madam Speaker, Highfield, the Treasurer and the Prime Minister have all argued wrongly and consistently that I have changed my view. I am giving evidence to show that I have not. Madam SPEAKER —Order! The honourable Leader of the Opposition may use other forms of this House if he wishes to debate the issue. With the indulgence of the Chair he must show the House how he personally has been misrepresented. He has done so on the AM program misrepresenting his stance. He may not now go on to debate the issue. Mr HOWARD(Bennelong-Leader of the Opposition) —Madam Speaker, I seek leave to make another personal explanation. I claim to have been misrepresented by the Treasurer in Question Time today to the extent that he said in his answer that I, on the AM program this morning, had fabricated the reasons for the stance I took in 1979. That is wrong because the stance that I took in 1979 was that this proposal ought to be looked at. I strongly supported it being looked at and when we got the report of the IDC, the Cabinet decision was taken for the reasons set out in the IDC not to adopt the proposal. There is no fabrication. There has been no inconsistency. The Treasurer is again misleading the Parliament. Madam SPEAKER —Order! The Leader of the Opposition will resume his seat. I point out to the House that the indulgence of the Chair is given for specific personal explanations. It is not given for debating points. It is not given for political points to be debated and it will be a pity if the indulgence of the Chair continues to be used in this matter. I ask all honourable members to be careful that their personal explanations are exactly that-personal explanations. Mr HOWARD —With your indulgence, Madam Speaker, I hope that the same injunction will in future be applied to Question Time. Madam SPEAKER —It has been applied to those on both sides of the House who have attempted to use the indulgence of the Chair for personal explanations. Both sides of the House have been treated equally. 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 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 radio- active substances and to immediately disallow the regulations that permit the irradiation of food here in Australia. by Ms Jakobsen,Mr Kent,Mr Lamb,Mr Milton and Mr Scott. 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 proposals 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,Mr Hawker and Mr Slipper. 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, we the undersigned citizens of the Federal Division of Fisher 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 Mr Slipper. 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 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 and Mr Scholes. To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. This petition of the undersigned citizens of Australia respectfully showeth that: (1) A cessation of the testing of nuclear weapons would break the cycle of research, development and deployment of nuclear weapons and prevent the acquisition of new and ever more lethal weapons of mass destruction. It would thus be a major and significant step towards ending the arms race and beginning the disarmament process; and (2) The Soviet Union has extended its unilateral moratorium on nuclear weapons testing until August 6 this year and has again invited the United States to cease its nuclear testing program. Your petitions therefore urge the Australian Government to put the strongest pressure on the United States Government to join the Soviet Union's nuclear test ban. And your petitioners, as in duty bound, will ever pray. by Mr Kent and Mr Milton. To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The Petition of certain citizens of Australia respectfully showeth: that the Bill of Rights is a dangerous piece of legislation which gives us no new legally enforceable rights that the Bill of Rights leaves out vital rights such as the right not to belong to a trade union, the right to own private property, the right to a private education that the Bill of Rights gives dangerous new powers to a Federal Government Commission to investigate in private, without legal representation and with criminal penalties for refusing to co-operate that the Bill of Rights deals with our rights; therefore we, the people, should say whether we want it by a referendum. Your petitioners therefore pray that you will oppose the Bill of Rights, support Liberal amendments to improve it in case it is passed, and pledge to repeal it should it become law. by Mr Hawker. To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The humble petition of the undersigned citizens of Australia sheweth that whereas: 1. They are completely satisfied with the design of the existing Australian National Flag. 2. They are aware it properly reflects the immutable characteristics of Australia, namely: (a) The Union Jack, itself the creation of three Christian Crosses, represents the Nation's historical origin and the source of its language and law; (b) The Southern Cross on an azure blue background signifying its geographical location on this planet Earth; (c) The large star depicting the advent of Federation in 1901. 3. They know the Flag has been a source of inspiration to generations of Australians in peace and war. 4. They recall that millions of native-born Australians and newcomers to these shores from other parts of the world have become united under its proud symbolism. 5. They are certain that any change to the Flag will produce division in the Australian community. Your petitioners therefore pray that your honourable House will: Propose and pass a motion that ``the existing Australian National Flag be changed only with the approval of the Nation as expressed in a Referendum''. And your petitioners as in duty bound will ever pray. by Mr Hawker. To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The humble petition of the undersigned citizens of Australia respectfully showeth: That in the light of the Labor Government's failure to act to correct the many anomalies in the Assets Test on pensions brought to its notice, the Labor Government's legislation should be repealed before it has an unduly unfair impact on pensioners. Your Petitioners therefore humbly pray that the House of Representatives in Parliament assembled should immediately seek the repeal of the Labor Government's iniquitous and unfair Assets Test. And your petitioners, as in duty bound, will ever pray. by Mr Hawker. To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. This petition of the undersigned citizens of Australia respectfully showeth that we strongly oppose the introduction of the ``Australian 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 the Members of the House of Representatives in Parliament assembled. The humble petition of citizens of Australia shows- That the people of New Zealand and the New Zealand Government have given an example to the world in their efforts to achieve a nuclear free South Pacific, and such decision being endorsed by the people at a general election. Your petitioners therefore pray that the Australian Government support the principled stand taken by the New Zealand Government and urges it to condemn any efforts by the U.S. Government to impose economic or other sanctions on New Zealand in retaliation for their stand on nuclear vessels. We further urge the Australian Government to urgently implement its policy to promote the development of zones of peace and nuclear free zones in the Indian and Pacific Oceans. by Mr Kent. To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The humble Petition of the undersigned citizens of Australia respectfully sheweth 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 Ruddock. To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. We, the undersigned, are deeply concerned that Australia's important horticultural industry is being severely disadvantaged by unnecessarily rising production costs. Many Federal and State Government regulations, excessive taxes and charges are damaging the ability of horticultural growers to maintain supplies of food and plant products to Australian families at a realistic cost. Widespread unemployment will result if horticultural producers are further depressed. The undersigned humbly petition the Parliaments of Australia, its States and Territories, to take all measures within their powers to reduce the burden of imposed costs and regulation, allowing Australian horticultural growers to develop production potential so the nation, as a whole, can share the benefits of the resulting growth and prosperity. And your petitioners, as in duty bound, will ever pray. by Mr Slipper. To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The humble petition of certain electors of the electorate of Kennedy respectfully showeth: That we hereby protest of the fact that legislation may be introduced to have vitamins and mineral formulations available to the public only on doctors' prescriptions. This we feel is a further invasion of our individual rights and your petitioners humbly pray that the honourable members in their wisdom allow these formulations to remain available on shop shelves other than as chemist only lines. And your petitioners, as in duty bound, will ever pray. by Mr Katter. To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The humble petition of the undersigned citizens of the State of Queensland respectfully showeth that: The legislation to tax fringe benefits is iniquitous, inequitable and unfair; It will severely disadvantage both employees and employers; Employees will clearly lose many fringe benefits as a direct result of the additional heavy taxation burden being imposed upon employers; Employers will be forced to pay even higher levels of taxation to provide fringe benefits for employees. Your petitioners humbly pray that the House of Representatives, in Parliament assembled, urge the Government to: Immediately abandon the Fringe Benefits Tax. And your petitioners, as in duty bound, will ever pray. by Mr Slipper. To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The petition of certain citizens of the Federal Division of Fisher in Queensland respectfully showeth: 1. They are completely satisfied with the design of the existing Australian National Flag. 2. They are aware it properly reflects 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 remains sacrosanct from change''. And your petitioners, as in duty bound, will ever pray. by Mr Slipper. To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The humble petition of the undersigned citizens of the Shire of Caboolture in the Federal Division of Fisher respectfully showeth that: The requirement for people receiving unemployment benefits to present their claim forms personally every two weeks to the Department of Social Security is causing considerable hardship for those people in the Caboolture CES District. The distance from the Caboolture Shire to the Redcliffe Department of Social Security office imposes an unnecessary financial burden in the form of travel expenses on the unemployed. The time involved in the process reduces the time available for the unemployed to seek work actively. We the undersigned call on the Federal Government to implement measures that would allow unemployed people in the Caboolture CES District to leave completed forms at the Caboolture Job Centre for collection by the Department of Social Security. And your petitioners, as in duty bound, will ever pray. by Mr Slipper. To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The petition of certain citizens of the Federal Division of Fisher in Queensland respectfully showeth: That the current policy pursued by the Hawke Government is causing an intolerable increase in home loan interest rates beyond the capacity of families to pay. That consequently this policy is causing grave hardship throughout Australia and is contributing to social problems and the breakup of the family unit. That unless the Government act urgently the Australian dream of home ownership is fast becoming shattered for many of our citizens. Your petitioners therefore humbly pray: That the Government make home loan interest rates tax deductible therefore alleviating the present crippling burden of current high interest rates on home owners and home buyers. And your petitioners as in duty bound will ever pray. by Mr Slipper. To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The humble petition of the undersigned citizens of the Federal Division of Fisher in Queensland respectfully showeth: That the proposed Australian Bill of Rights Bill 1985 will endanger the Federal system of Australia, the State and Federal Criminal justice systems, the State and Federal Police Forces, the State and Federal education systems, the independence of the churches and religious associations, marriage and the family, children, the unborn, the handicapped, the aged and the infirm, employer and employee relationships and Australian society generally. Your petitioners, therefore, humbly pray that the House of Representatives, in Parliament assembled, urge the Government to: Repeal the Bill of Rights legislation forthwith. And your petitioners as in duty bound will ever pray. by Mr Slipper. To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The humble petition of the undersigned citizens of the Federal Division of Fisher respectfully showeth that: 1. That we, the undersigned, are totally opposed to substantial Federal Government funding presently being wasted on undesirable, inefficient and incompetently run Government projects that are unacceptable to the vast majority of decent Australians. 2. That Government grants should not be directed toward projects that are of no, or dubious, worth to the improvement of Australia. 3. That public funding should not be used in encouraging lifestyles contrary to the Australian family way of life. 4. That public moneys should not be given to minority groups to support projects that are of a direct political nature. Your petitioners humbly pray that the House of Representatives, in Parliament assembled, urge the Government to: Halt forthwith the public funding for the abovementioned purposes. And your petitioners as in duty bound will ever pray. by Mr Slipper. To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The humble petition of the undersigned citizens of the electorate of Fisher respectfully showeth that: Whereas the present Government of the Commonwealth of Australia has purported to present the Title Deeds to Ayers Rock in Central Australia, in reality the joint property of the people of the Commonwealth to an Aboriginal Land Council on 26 October 1985, Whereas opinion polls and statements of representative groups, Members of Parliament and respected individuals show clearly that the Commonwealth Government had no mandate from the citizens of the Commonwealth to act in such a disgraceful manner, Whereas the present Government claims to be totally opposed to apartheid (separate development) in South Africa but purported to hand over Ayers Rock to an Aboriginal Council in support of a policy of apartheid (separate development) which has been shown to be detrimental to the Aboriginal people of Australia, Whereas it is pursuing this policy making it a crime for most white and many Aboriginals to enter, without permit, large areas of the Commonwealth designated apartheid (i.e., set aside for separate development), contrary to our democratic traditions and experience of freedom of movement for citizens of all racial origins within Australia, Whereas Australian citizens have no present means available to them to prevent this violation of their natural rights to unfettered common ownership of, and access to, a treasured natural asset. Your petitioners humbly pray that the House of Representatives, in Parliament assembled, urge the Government to: Seek means available for the protection of the people's interests to reverse this outrage and preserve the democratic traditions of Australia, And your petitioners as in duty bound will ever pray. by Mr Slipper. To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The petition of certain citizens of the Federal Division of Fisher in Queensland respectfully showeth: That the actions of trade unions have gone beyond their traditional goals of protecting workers conditions and rates of pay and have reached the point where they are seriously affecting the economic health of the nation and the people. Your Petitioners therefore humbly pray: 1. That all Governments throughout Australia acknowledge and protect the Right to Work on behalf of all Australians. 2. That the total sovereignty of individual governments be recognised as a fundamental requirement of a workable, balanced Federal system of government. 3. That all necessary steps be taken to protect the citizens of Australia from any inducement, compulsion, threat or intimidation to join any trade union. 4. That there should be no preference in employment for people who are members of trade unions. 5. That the supremacy of elected governments over the sectional interests or trade unions be recognised, and 6. That the provision of essential services be maintained, free from industrial disruption. And your petitioners as in duty bound will ever pray. by Mr Slipper. To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The humble petiton of the undersigned citizens of the Federal Division of Fisher respectfully showeth that: The proposed capital gains tax penalises small business, discourages long-term investment, hinders capital formation and will freeze existing investment patterns and limits the investors' ability to adjust to changed market conditions. Your petitioners humbly pray that the House of Representatives, in Parliament assembled, urge the Government to: Immediately abandon its ill-considered capital gains tax proposal. And your petitioners as in duty bound will ever pray. by Mr Slipper. Petitions received. Mr DEPUTY SPEAKER(Mr Leo McLeay) -Madam Speaker has received a letter from the Deputy Leader of the Opposition (Mr N.A. Brown) proposing that a definite matter of public importance be submitted to the House for discussion, namely: The need for a scheme of compulsory work for unemployment benefits. 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 N.A. Brown(Menzies)(3.04) —The coalition parties in this Parliament have firmly committed themselves in government to introduce a scheme of compulsory work for the dole. We have done that for three reasons. The first reason why we say it is essential that such a scheme should be introduced is that it would be good for the unemployed. It is good that the unemployed should have work experience, on the job training and the discipline of regular working hours and it is bad that the unemployed should be condemned to a period of uselessness and unconstructive activity while they wait for some job to turn up under the flagging economic policies of this Government. It is in the interests of the unemployed themselves that there should be such a scheme. The second reason why we say it is essential that such a scheme should be introduced is that it would be good for the community as well. The community in this financial year is paying out over $3.5 billion in unemployment benefits. This represents an increase of almost half a billion dollars on what was appropriated last year. We are talking, therefore, not just about some side-show but about the commitment of billions of dollars of taxpayers' money, billions of dollars of the community's own assets. We say that the community as a whole has some entitlement and some reasonable expectation to get some return, if that can be done as a matter of practicality, on the money that it pays out for unemployment benefits. It is good, therefore, that the community, if it is possible to implement a practicable scheme along these lines, should get some return, by way of the value of community work, on the money that it invests. We say that such a scheme can be constructed in such a way that the community gets some return on the enormous amount that it pays out on unemployment benefits. The third reason that we give in support of such a scheme, which will be amplified in more detail by my colleague the honourable member for Riverina-Darling (Mr Hicks), is that it would take a substantial step towards reducing at least one area of social security fraud. We say, for a whole host of reasons which the honourable member will elaborate upon, that we do not need an Australia Card to stamp out social security fraud. We need action, and we need tough action, but we do not need an Australia Card to achieve that objective. The honourable member will develop that argument in further detail. I put to the House that all of the evidence, all of the public opinion, all of the logic and all of the common sense is on the side of having a compulsory system of working in return for unemployment benefits. These arguments become more apparent if we look briefly at the history of this proposal and the most craven way in which it has been abandoned by the Government. Honourable members will remember the Churchillian evocation of the Prime Minister (Mr Hawke) in June last year when he gave his address to the nation. He said, amongst other things, that we were in a wartime situation and that such were the economic problems in this country-most of which had been forced on us by his Government-that we had to take stringent steps. One of the stringent and stern steps that the Prime Minister in June last year made it perfectly clear we had to take was to introduce a scheme of working for the dole. I would defy any reasonably minded person reading the Prime Minister's statement on that occasion to come to any conclusion other than that what he was advocating was a scheme of working for the dole. The Prime Minister started that part of his speech on this subject by announcing a change. It must be emphasised that he was clearly stating that something new was about to come and some new scheme was about to be unleashed on the country. He said: The time has come, we believe, when this two-way responsibility- the responsibility of the community to the unemployed and vice versa- will best be served by providing as far as possible the opportunity, particularly for the younger recipients of unemployment benefit, to undertake some community work in return for that benefit. It must be emphasised that at the time the Prime Minister made that statement we already had the voluntary scheme known as the volunteer youth scheme. So the Prime Minister was announcing a new scheme under which there would be a compulsory element requiring recipients of unemployment benefits to do some community work in return for those benefits. The second instalment in this history was that the Prime Minister, having made that statement, was very clearly clobbered by the left wing of his Party and by the trade union movement. The trade union movement came out-and honour- able members will remember Mr Halfpenny's words-and said that it would not tolerate any scheme under which unemployed people were required to work in return for the dole. The unions put up their arguments, they had their conferences, and they promoted that usual parasitical attitude that so many people in the extreme left wing of the trade union movement advocate that people should not be encouraged to stand on their own feet, that they should not be encouraged to rely on themselves, that they should be encouraged to keep their hands out for the government dole, and that they should be encouraged to do nothing and to give nothing in return. That was the argument from the trade unions, and from the left wing of the Labor Party in this Parliament and outside. Beyond any shadow of a doubt, within the ranks of that Labor Party and within the ranks of this Government that argument carried the day. The Prime Minister was clobbered and the Government gave in. It is very clear that the Government lost whatever semblance of courage it had at that time to introduce some scheme of the sort that we are now advocating. Instead of a scheme of working for the dole, what has the Government come up with? It has come up with a thing called the community volunteer program. We previously had the volunteer youth program and now we have the community volunteer program. About this scheme we can say three things: First, it is a smokescreen to make it perfectly plain that the Government lost the courage of introducing a real work for the dole scheme; second, because it is completely voluntary it will not achieve the essential objectives of a real work for the dole scheme; and third, the Government has done nothing more than dress up the old volunteer youth program. The Government has given projects under that scheme more money and it has given the scheme a new name, and it says that it has solved the problem. We say that it has not solved the problem. We say that it has caved in to extreme left wing pressure. We say that the public, like the Opposition, demands that a positive step be taken towards introducing the desirable sort of scheme that we are now advocating. By setting up this so-called community volunteer program, the Government has done nothing but promote yet another bromide to give the false illusion that something is being done about this urgent problem. If there were any doubt about whether there was a backdown let us look at one of the Ministers in the present Government who more frequently than others expresses his honestly held views. The Minister for Industry, Technology and Commerce (Senator Button) expressed views on this subject before he was rolled in the Cabinet and before the left wing took control of this issue. Senator Button gave an interview to a magazine which you, Mr Deputy Speaker, would not be aware of but which I will tell you about. The magazine is called Playboy. It is a magazine which some people recommend as reading. In 1985 Senator Button gave an interview to this magazine and he was asked specifically about what he thought of a scheme of working for the dole. He said-and these are his views: . . . you should have to do something for the payment you get. You should be engaged in study or training of some kind, or work. He made it perfectly plain that that was his view. The interviewer asked him: What if you're out of work, like a lot of people are? Senator Button replied: In my view, if they want the allowance, they should work for it. That is exactly what we say; it is exactly what the Government has abandoned. Our position is summed up very accurately by Senator Button's words: . . . if they want the allowance, they should work for it. Another Minister-I must concede one who was not a Minister at the time this decision was made-has also spoken frankly on the subject. The Special Minister of State (Senator Tate), before he got caught up in the machinations of this Government, expressed his views in 1985. He is reported as saying: Unemployed people should be made to do community work in return for their dole . . . dropping cheques in letterboxes every fortnight without demanding anything in return had fostered a ``cargo cult mentality''. It is a cargo cult mentality when people are told: `Your country can survive and you can survive not by making any contribution, not by doing any work in return for the dole, but by going along and putting your hand out for the government payments-whether it is in the form of unemployment benefits or anything else'. We say to them that if they are to have a cohesive society where people work together they must make a contribution. That should, beyond any doubt, make it perfectly plain that there is an overwhelming case for the introduction of a compulsory work for the dole scheme. Not only is there an overwhelming case for it but it is a case which some members of the Government themselves pursued until they were clobbered by the left wing. What sort of prospect is there of this community volunteer program being of any success? We know the Government's track record with the traineeship scheme. My colleague the shadow Minister for Education, the honourable member for Tangney (Mr Shack), made it perfectly plain the other day in a debate on a matter of public importance that this was a phoney and a fizzer because the Government said that we would have a traineeship scheme and that we would have 10,000 young people on the job in traineeships by June 1986. It also said that by 1988-it has only eight months to go-it would have 75,000 positions, if you please. That is not 75,000 in total but 75,000 a year. That was to be the annual intake. According to the latest figures we have, on the job, in place, under that scheme there are some 3,600 young people. The Government could make the community volunteer program successful even if it were a worthwhile scheme. Once several months have passed its record on implementing this scheme and achieving anything constructive under it will be as dismal as its record on the traineeship scheme. The public is on our side because the Australian national opinion survey, promoted and financed by this Government, came up with interesting results. Of all people interviewed 85 per cent believe that the payment of the unemployment benefit should be conditional on doing work or undertaking some sort of activity of a constructive nature. So the public is on our side. Young people interviewed in that survey had the same view to an overwhelming extent because they know that it is so essential. Such a scheme should be introduced. The Government has failed to do it. The community wants it and the only prospect of having such a scheme implemented will be with a new government in this country. Mr DEPUTY SPEAKER(Mr Leo McLeay) -Order! The honourable member's time has expired. Mr HOWE(Batman-Minister for Social Security)(3.19) —Once again we have heard from Opposition members the view that a compulsory work scheme would be good for the unemployed, that it would be good for the community and that it would combat fraud. But beyond that view which one way or another the Opposition has returned to frequently in the past, we have learned absolutely nothing in the debate so far about what the Opposition means-or what the several oppositions mean-by compulsory work for the dole. Not a single item of information has been given to this House or given to the Australian people. Opposition members have no idea what they mean. They understand from some opinion polling that there is a view in the community that it would be a good thing if people were required to work for the unemployment benefit. They know that the prejudice exists in the community. All they are about-let everybody in this House be quite clear about it-is exploiting the prejudice. The repeated use of the word `dole' rather than `unemployment benefit' is simply a way of loading in, coming in on the back of that particular prejudice, simply reinforcing it and saying to all the people in the community who might support in principle, in theory, some idea of compulsory work for the dole: `We are on your side'. As soon as we ask this Opposition, or any one of the various factions within the Opposition what they mean, we find they have very great difficulty in telling us. Let me refer to two statements made by the Deputy Leader of the Opposition, the honourable member for Menzies (Mr N.A. Brown), within a day or so of one another. He stated: The Opposition's work for Unemployment Benefit Program on the other hand will be both compulsory and comprehensive . . . What could be clearer than that? Everyone who is on unemployment benefit will be put to work. This is going straight back to the sixteenth or seventeenth century. We are going to create work houses for the 500,000 or 600,000 people on unemployment benefits at any one time. They are comprehensively going to be put to work. That sounds clear enough. There are some problems with it, but that seems very clear. But two days later, what does the honourable member say? He says: . . . basically what we would do would be to say, OK look there won't be a community job for everyone to do, but if a job comes up we will expect someone who will be selected to do that job. Now if there's no job for you to do, well, of course you can stay on the dole and you continue to get it. On 2 March the honourable member suggested that everyone who is unemployed-no selection at all-whether it is for a couple of days, weeks or years is going to be put to work. Then someone says: `Look, you can't do that; it is going to cost an absolute fortune'. So a couple of days later he comes back again to the concept of selecting the people who are going to be required to work for the dole by some kind of notion of a lottery; that is, if a person's marble comes out and it has his name on it he is conscripted-that is what we are talking about-to go and work for the dole, but if a person's marble does not come out he will not be required to do that. Has anyone in this House heard anything so absurd, so lacking in any development in terms of a concept? No one in the Parliament ought to be bemused for a moment. While members of the Opposition talk about this proposal of compulsory work for unemployment benefit being put forward as good for individuals who are unemployed, good for the community and so on, that is not what it is about at all. What it is about, essentially, is an exploitation of certain attitudes in the community and reinforcing those attitudes towards the unemployed. Secondly, although the honourable member did not say so, it is about saving money. The significant fact in the honourable member's speech was the reference to the scale of unemployment benefit which is currently running at something like $3 1/2 billion. That is a fact. Unemployment benefit does represent a major element in the social security program because a very high proportion of social security is locked in in terms of the aged, the disabled and those groups in the community who do have considerable respect and support. The honour- able member knows that he can get only at certain areas. What the honourable member opposite wants to do is to get his hands on some of that money and take it away from the people who are unemployed. That is the hidden agenda that is there. It is not very hidden, but it is very clear in terms of what the honourable member is about. What he is about is taking money away from people who happen to be unemployed and diverting it somewhere else. He is not interested in any sense and that is why we never have a concrete scheme. There is never any development of this concept to any stage at all because the Opposition is not on about helping the unemployed or the community; what it is on about is trying to make credible the incredible economic policies of the Opposition. That is what it is on about. It is on about giving credibility to the incredible in terms of the Opposition's policies. It is increasing costs. The scheme is designed to save money but, as I will argue in a minute, what it will do is increase costs. It will put additional millions of dollars, perhaps hundreds of millions of dollars, on top of the bill that members of the Opposition are running up as they try to develop their arguments. Let me turn to the question of compulsory work for unemployment benefit. The Government is prepared to look at any proposition. If a proposition came from the Opposition, we would have a look at it. Let us have a look at some of the problems that are associated with compulsory work schemes. Firstly, they are likely to displace people who are already working. These compulsory work schemes are not designed to create additional jobs, they are designed to take away jobs from people already in work, particular people in the community sector. That is the sector of the community that the honourable member has targeted. Members of the Opposition are on about getting into the community sector and displacing people who work in that sector. They are not interested in whether the jobs are productive or unproductive. The honourable member said nothing about that. He talked about these jobs somehow adding to the value or wealth of the community but said nothing specific about that. There was no suggestion at all that he might need to justify this kind of scheme in terms of it being productive in any real sense. Indeed, the honourable member for Richmond (Mr Blunt) suggested the other day that a person who is unemployed ought to go and collect waste, go and clean out the waste paper basket. Apparently, any kind of work will do. He suggested that he would put the unemployed on to it irrespective of whether it could create work, add any value or be productive. The fundamental proposition-I say to all honourable members of the House that it is hidden-is not made explicit, but the real purpose is to save money. Honourable members should remember that. That is what members of the Opposition are on about. They have got to cut back on this burgeoning welfare bill, as they see it, and they can do it by compulsory work. We have had a look at a comprehensive scheme because we are not prejudiced; we are prepared to look at any proposition on its merits. We have done some costings on a comprehensive welfare scheme in terms of work for the dole. The scheme was designed to cover something like 750,000 to 800,000 people who are currently on unemployment benefit for more than three weeks in any 12 month unemployment benefit period. Vast numbers of people will be on unemployment benefit for more than three weeks. We find that that will require an extra 1,000 staff within the Commonwealth Employment Service. This is the Opposition that wants to cut back on the public sector. The total annual cost for that comprehensive scheme has not been described by the honourable member, but we should remember that he talked about such a scheme as being a comprehensive scheme. This scheme will cost $700m. The administrative costs for CES staff alone will be $35m. The employment-related costs and costs for the supervision of people would be absolutely massive. Who will look after the people who are out working in the community on these compulsory work programs? It has been estimated by the Department of Employment and Industrial Relations at $484m. This includes the costs of materials that people are going to have to use to work. There are very substantial travel cost reimbursements of $181m for the participants. That is $700m on top of the $3 1/2 billion that we are currently spending on unemployment benefit. That is really quite outrageous. We have an Opposition that is constantly telling the Government: `You must save money', yet it comes up with a heavily biased ideological proposition such as this which is designed to exploit community prejudices in respect of unemployment and on top of $3 1/2 billion is added another $750m. As usual there is nothing of any substance in what is being proposed. Members of the Opposition have not been looking at schemes that might exist in other countries or the experience of other countries. For example, the United Kingdom and Canada have both opted for voluntary schemes, such as the one introduced by the Minister for Employment and Industrial Relations, rather than compulsory schemes. Even in the United States of America, which is often held up as a model for compulsory work for benefit schemes, such schemes are primarily targeted at single parents with dependent children. Unemployment insurance schemes cover the bulk of the unemployed. When people talk about Workfare, they are not talking about the unemployed, they are talking about what we in Australia call supporting parents. Such schemes are limited to a minority of states; only eight states in the United States have compulsory work schemes. Where they have such schemes, only a minority of the relevant target group is involved. Only in one state, West Virginia, is compulsory work the primary component, and that still only caters for 40 per cent of the relevant target group. The Government is concerned to ensure that the unemployment benefits system is administered effectively, efficiently and in a way which is designed to eliminate fraud, which was mentioned as a third possible advantage of compulsory work. We have brought in a number of measures during the current financial year which, together, have been extraordinarily successful in achieving the Government's objectives. The number of persons in receipt of unemployment benefit last Friday, 27 March 1987, was 592,892. This represents a decrease of 27,086, or 4.4 per cent, compared with the figures four weeks earlier. As the various measures are coming in, we have broad evidence that those measures collectively are biting. If we look at unemployment benefit growth from November 1985 to March 1986, we see a growth of 58,800 in the number of beneficiaries in the peak period of the year. If we look at the same period a year later, from November 1986 to March 1987, the rate of increase was 36,800, or a drop of 22,000; indicating the very significant effect of the measures that the Government has introduced. The Opposition's matter of public importance simply fails to come to terms at all with the details of how to run any kind of scheme designed to help the unemployed. Help the unemployed! The concept of the honourable member for Menzies seeking to help the unemployed is an absolute joke. It has no credibility whatsoever. When has the honourable member for Menzies ever said anything in this place which was designed to help people in difficulty, particularly the unemployed? Mr Hand —Kick the weak! Mr HOWE —It simply represents, as the honourable member for Melbourne suggests, an attempt to provide some justification for an attack on the unemployed, which would be a very high priority of a coalition government. The community volunteer program, which the Government has sponsored, has been established and is showing considerable promise of operating very well. The honourable member for Menzies suggested that somehow there was nothing new in what was proposed, but the new scheme not only will provide substantial opportunities to extend, particularly to country areas, projects established under the previous scheme but also will allow for the funding of new, innovative projects. Mr DEPUTY SPEAKER(Mr Leo McLeay) -Order! The Minister's time has expired. Mr HICKS(Riverina-Darling)(3.34) —I am sure that there is no one in this House who would say that there are not genuinely unemployed people in Australia. The first thing we have to recognise is that, for one reason or another, people are unemployed. But the very sad thing about it is that it is due to the Government's policies and, despite some of the media hype at the moment, more people will become unemployed. I think everyone in Australia would realise that. This matter of public importance raised by the Deputy Leader of the Opposition, the honourable member for Menzies (Mr N.A. Brown), is important to the way we think on these matters. We all know that the Prime Minister (Mr Hawke) is a very pragmatic person and I thought that he would have seen that there is something in this. The Government, along with the Prime Minister, saw a general malaise developing, particularly among the young unemployed, whose unemployment rate is extremely high. Fifty per cent of unemployed people are under the age of 25 years. That is a terrible indictment of the Government, particularly with its youth employment programs and all these fancy schemes which cost the taxpayers millions of dollars. Of the total work force under 25 years, 17 per cent are unemployed. A lot of Australians were very pleased one night last June to see on television the Prime Minister making an address to the nation. I will repeat what the honourable member for Menzies said a while ago, because it is important that all honourable members be reminded of what the Prime Minister said. He said: . . . while society has a responsibility to the unemployed, this is a two-way process. The time has come, we believe, when this two-way responsibility will best be served by providing as far as possible the opportunity, particularly for the younger recipients of unemployment benefit, to undertake some community work for that benefit. Mr Peter Fisher —Who said that? Mr HICKS —That was the Prime Minister. Like all thinking Australians who were watching the television that night, I thought: `You beaut, at last the Prime Minister has come to his senses'. But we all know what happened then. Within 12 hours we had another statement which was slightly watered down and within 24 hours it had become a voluntary scheme. This scheme to undertake some community work in return for the unemployment benefit had been forgotten. It was a bit like the MX missile fracas, where a telephone call was made and the Prime Minister was all for the testing, but within 24 hours he was all against the testing. We have had the same thing with this employment scheme. Simon Crean-`Simon says'-and Bill Kelty had got to the Prime Minister and it was all off. The Minister for Social Security (Mr Howe), in an address to the University of Western Australia on 27 March, said: This would require developing a program for income maintenance for the unemployed which does not simply act as minimalist safety net but is converted into a springboard. In this regard, the program must be recognised that the current unemployment benefit scheme locks people out of work and locks them into a culture of poverty. There would not be one person in the community who would not know of people who have been locked out of work and locked into cultural poverty because of the unemployment benefit scheme. The Minister for Social Security, who is at the table and has had a lot to say there today, is also a victim of the `Simon says' cult. Despite what the Minister has said today, there are groups of Aborigines who insist on their people working before they can get the unemployment benefit. This is commendable and something which all Australians could learn from. Once again we are victims of the Australian Council of Trade Unions' policy and as victims of that policy a new scheme called the community volunteer program has been brought in. It is intended to provide $3.1m in 1986-87 for 15,000 to 20,000 unemployed people. The Minister has just told us that there are 592,000 unemployed people in Australia. Helping this 15,000 to 20,000 will not do too much, but I suppose the Government thinks it is a start. The voluntary participation volunteer youth program will use referral agencies and, therefore, there will be more bureaucracy. The Minister spoke about bureaucracy in relation to the scheme the Opposition has put forward, but I assure him that this one will have even more. The Federal Government claims that the coalition's work for the dole scheme will cost $700m. Certainly it would cost $700m if the present Government undertook this scheme. Everything seems to be overpriced, with inflation and one thing and another. There is nothing to stop unemployed people from carrying out voluntary labour now, without $3.1m being spent on more of the mumbo-jumbo that the Government seems to go on with. For example, at the corner of my street is a block of Legacy units which need landscaping, lawn planting, tree planting and windows washed. I do not see anyone going down there to do it, although the unemployment figures in my area are very high. Mr Hand —Some people do it. Mr HICKS —I agree with the honourable member for Melbourne that some people do it, but plenty of people who could do it do not do it. There are nursing homes to be cared for, woodchopping, picking up papers, et cetera. The Minister said that we expect people to pick up papers, empty garbage cans or pull up weeds. Goodness gracious me! Everyone else has to do it. To put up a smokescreen, the Government has suggested an identity card to stop social security fraud. The coalition opposes this, the Law Council of Australia opposes this and private enterprise opposes this because it will cost $2 billion. Of course, we in this House all know that this will not combat fraud in the area of social security. It will not be effective. It will cost $1,000m. It will require 42 new Medicare offices and employ 2,150 new public servants. What a gross invasion of privacy this is. Identity problems cause about 0.6 per cent of social security overpayments. The rest are mainly due to beneficiaries not informing the Department of Social Security of a change in their circumstances. I give as an example a dole recipient, or an unemployment benefit recipient as the Minister for Social Security likes to call it, now working but still collecting the dole. The card will not touch the cash economy, which is estimated to involve $800m. We all know how this matter could be fixed: We could require strict and positive identification of all claimants. We will require prime documents-birth certificates et cetera. Under Labor, credit cards and drivers licences are accepted. There are many things we could do to overcome this problem rather than bringing in an ID card. When I was in a small village in my electorate the postmistress asked me: `When is the Government going to do something about social security rip-offs?' I asked: `What is the problem?'. She said: `There are people here working and collecting social security benefits as well. I put up with it for a while but now they are waiting on their passports so they can go on their holidays to Bali'. I said: `You had better tell me who they are'. She said: `Oh no, I could not do that'. I said: `There are plenty of members of parliament, and I bet you are in the same position, who could not take a month off to go to Bali and if they could get away they could not afford it'. I refer to the case of a gentleman with a job and living with a woman with two children in a de facto relationship. For some reason or other-there may be family pressure-the couple is going to get married but the man is going to give up his job because there is no point in his working while the family is receiving all the benefits it is now receiving. The reason such people are collecting all these benefits is that the Government is not doing its job of checking out what is going on. I know young people who cannot help being out of work but they sit watching television all day. The parents cannot do anything about it. They are absolutely demoralised because of this. If unemployed people could work two days a week to qualify for the payment of social security benefits it would lift their dignity and give them a feeling of well-being and support for the community. I am one of those people who believe that young people under the age of 18 years-I will not call them children-should not get the dole. I believe that if any money is to be provided it should be provided to the family. This Government has denigrated the role of the family. If the money were provided to families young people under 18 years would not have to collect the dole and they could be kept at school much longer so that they could then obtain a job. I am talking as the father of four children who has been through all this. The Minister has said that the scheme will cost $700m. As I have said before, it will not cost $700m if we take it on. We on this side of the House believe in the well-being of all people-the breadwinners who are out of work, the young people, all Australians. The coalition believes that people should work for the dole. There are genuinely unemployed people but the Government is doing nothing for the young people of this country or those who are out of work when it does not give them any dignity. Work is dignity. If the Government cannot find work for the unemployed it should not operate a system under which they lose all dignity. Mr STAPLES(Jagajaga)(3.44) —When I first heard the subject of today's discussion of the matter of public importance, the need for a scheme of compulsory work for unemployment benefit, I thought it was an April Fools' Day joke by the Opposition, a payback for the good natured jest the Prime Minister (Mr Hawke) and the Leader of the National Party of Australia (Mr Sinclair) were involved in earlier today which we heard about at Question Time. The subject of the matter of public importance was not the April Fools' Day joke, it was the Opposition. It is sad that the Opposition is not a joke only on 1 April; it is also a joke on every other day of the year. Australia lacks a credible opposition; it lacks an alternative. One of the dangers of an early election is that there is no alternative government. That is more appropriate as the subject of a matter of public importance at this time. Opposition members cannot even decide who is the leader of the Liberal Party of Australia, who is the Leader of the National Party of Australia or even who is in the National Party. They cannot decide on any of their policies. Even on the floor of this very chamber, as with the Equal Employment Opportunity (Commonwealth Authorities) Bill the other night, they could not even decide who in their Party supports their policies. This is the third debate on a matter of public importance in which I have been involved since we came back to this place in February. To let people know what happens, at 12 o'clock the Government gets word through the Speaker that she has received a letter notifying a proposal for the discussion of a matter of public importance. I would not mind a grievance debate or a genuine debate on a matter which is of real importance to the people of this country but I have wasted my time on three occasions in as many weeks to debate proposals put forward by the Opposition. I would not mind debating matters of public importance if the Opposition had policies and credible alternatives to put to the people of Australia, but it has not. The debate on housing policy was an absolute joke. The debate on the alleged failure of the Government to provide expanded opportunities for young people was a joke. It was the Opposition which raised unemployment, particularly of young people, to an art form. Most of the increases came when the Deputy Leader of the Liberal Party (Mr N. A. Brown), who spoke first for the Opposition in this debate today, was the Minister. Now we have this April Fools' Day joke. What is the Opposition's solution? It is dole bludger lotto, work lotto, pulling marbles out of a barrel to see who will work for unemployment benefit. I could have been at the Government's industry committee talking about the Inglis report. This Government is investigating ways to build on its record of creating jobs and real wealth in this country. It is not indulging in a witch hunt and scapegoating as have the two Opposition speakers in this debate today. I might consider them more kindly if there were the thinnest hope of their having any concern, compassion or real constructive element in their proposition for work for the dole or unemployment benefit. The hand over the heart speech of the Deputy Leader of the Liberal Party was a joke. The Opposition wants community employment program projects, for which at present people are paid at award rates for valuable work in the community, to employ people at slave rates. They want slave rates and they want servants to go around the community picking up their litter after them, carrying out their garbage, washing their cars and doing their windows. They want a pool of 700,000 people to be low-paid servants for them. They are not interested in constructive work or in helping people. This proposal is the greatest falsehood that has been perpetrated in this House for many days. I find it quite despicable. Opposition members are involved simply in a dole bludger bash. They do not like the idea of people being supported by the state; that is what it is all about. They do not like people being supported by the private sector. Opposition members when in government created this unemployment situation. They are interested only in punishment and scapegoating. This is a two-bob populist approach, ripping up the community with dole bludger rhetoric. That `dole bludger' term came out of the mouths of members of the Fraser Opposition. Opposition members want to turn Australians who have wealth and security against the poorer Australians, the people in the weakest position in our society. They want to turn people in Australia who have jobs and security against the sole parents, against migrants, against women. They want to turn people especially against migrants who are the latest arrivals. Opposition members are nothing but a front and puppets for the New Right and for the white shoe brigade. Today, in the newspaper we saw that the President of the Australian Small Business Association, Mr Peter Boyle, said `the unemployed should get the dole for no more than 10 weeks a year, and school leavers should not get it'. Opposition members mouth off the policies of the New Right. They are a fraud. There is no evidence to support the proposition they have put forward. There is no evidence that the scheme has any value to the community, to the Government or to the individual concerned. Opposition members gave no cost to the program. They criticised the Government's estimate but gave no cost to their program-because they had not thought it out. They have not costed it. The policies that have been thought out and put down would cost the people of Australia $16 billion extra next year if the Opposition got into office. They will not, so the people do not have to worry about that. However, people should worry about the concept of it. The amount of $16 billion, on average, is $1,000 for every man, woman and child in Australia, but it would not be concentrated on every man, woman and child; that cost would be concentrated on the poorest people. And the Opposition lets the people in the white shoe brigade and the New Right get away with it. The Opposition wants to make the poor unemployed pay for its scapegoating. It thinks it is a good idea for some people to live on $99.20 a week or, in the case of a 16- or 17-year-old, $50. Let us see Opposition members do it. I do not think they could. They want to punish people because there are no jobs for them. They are covering up their own inadequacies. They are whipping up the unthinking members of the community and others who are as callous as they are. As I said, they just want a great big pool of cheap servants. We should not worry about the Australian Nationwide Opinion Polls Pty Ltd survey the Opposition quoted, which was commissioned by this Government to research community attitudes to issues affecting young people, because it quoted only part of the survey, it says on page 36: `There is groundswell support for working for the dole'. The Opposition should have read on one or two more sentences. The survey continued: It is based however on the belief that it would be constructive in terms of building confidence, motivating young people and providing experience. There is very little consideration evident of the practicalities and costs of implementing a compulsory scheme. That is exactly the point on which the Opposition has been laid bare in this chamber today. Opposition members have exposed their lack of understanding. There would be some excuse for the general community not understanding the complexities, implications and costs of such a scheme, but there is no excuse whatsoever for the Opposition not understanding them because it has been in government for 30 of the last 37 years. It should know. It should be able to come into this place and provide to us the costs of implementing such a scheme. But Opposition members have not. They have had 25 minutes to do it, yet they have not done so. There is some excuse for the community. The community does not understand the problems and implications that can occur in regard to the issues facing government but the Opposition should understand and it does not. That exposes what a cheap, shallow fraud this whole exercise is. It is an ideological band-aid. Band-aids do not cure problems; they just cover them up. I said at the beginning of my speech that the Opposition has no policies. It has no employment policy. Its education policy is a recipe for disaster and will not add to employment or help the economy. It has no industry policy to compare with our policy. Our policy has produced jobs. It has no training policy. Our training policy has produced hundreds of thousands of jobs. Its industrial relations policy is a recipe for conflict, wage rises and inflation. It has no economic policy, no taxation policy and no social security policy. By comparison, our employment, industrial relations, economic, industry, education and social security achievements and active policies have created phenomenal growth, jobs, constructive development and wealth. We have provided three-quarters of a million jobs and reduced unemployment by 2 per cent since we came to office. Our performance in these two areas is far better than the Organisation for Economic Co-operation and Development average figures. I seek leave to incorporate in Hansard a table that clearly shows that. Leave granted. The table read as follows- International Comparison of Employment Growth and Unemployment Rates* 1983 1984 1985 1986(e) % % % % Employment growth Australia... -1.8 3.3 3.0 3 1/2 United States... 1.3 4.1 2.0 2 1/4 Canada... 0.8 2.5 2.8 3 United Kingdom... -0.5 1.8 1.3 (b) OECD Europe**... -0.4 0.2 0.5 (b) Total OECD***... 0.5 1.6 1.2 1 1/4 Unemployment rate Australia... 9.9 8.8 8.1 8 United States... 9.6 7.5 7.2 7 Canada... 11.9 11.3 10.5 9(b) United Kingdom... 11.6 11.6 11.8 11(b) OECD Europe**... 10.2 10.7 10.9 11 Total OECD***... 8.8 8.4 8.3 8 1/4 * Source: OECD Employment Outlook, September 1986/OECD Economic Outlook No. 40, December 1986. ** Four major European countries. *** Total of 12 countries. (e) Forecast figure. Mr STAPLES —We do not believe that compulsory work for the dole is appropriate because most of the genuine unemployed really are looking for work. We have developed schemes for weeding out those who are not genuine. Compulsion would put us in danger of contravening important international conventions. The immense costs have already been pointed out. Between 15,000 and 20,000 unemployed young people are expected to participate in the community volunteer program in 1987. There are advertisements in the paper today, as there will be on Saturday, for innovative projects. I invite honourable members to look at those advertisements. Mr DEPUTY SPEAKER(Mr Leo McLeay) -Order! The honourable member's time has expired. The time for the debate has concluded. Debate resumed. Dr HARRY EDWARDS(Berowra)(3.54) —Prior to the suspension of the sitting for luncheon I had drawn attention to the critical, indeed the dangerous, situation of the Australian economy and the consistent failure of this Government, the Prime Minister (Mr Hawke) and the Treasurer (Mr Keating) to tell it as it is. The situation confronts the Government and this country with an enormous adjustment task. It requires, inter alia, a commitment to fiscal discipline, to budgetary restraint-in plain language, to taking the axe to government spending and borrowing to a degree beyond anything which I am convinced has even crossed the minds of this Government, this Prime Minister and this Treasurer. There is to be a May statement. But what are the dimensions of the task the Government seeks to address? We are not told. As I said earlier, the Treasurer never misses an opportunity to accuse the Opposition of having `no fiscal policy' and further of a vast, so-called credibility gap. I say that the boot is on the other foot. It is the Treasurer who has the credibility gap. In all his glib talk he does not put forward any quantitative forward view of the fiscal requirements to achieve the massive readjustment of the Australian economy that has to be effected. In point of fact, what is involved is a redeployment of resources towards investment and restoring the external balance of the order of five to six-plus percentage points of gross domestic product-$13 billion to $18 billion in current terms. I had reached the point just before lunch of suggesting as a minimum requirement, target, of fiscal policy an axing of government spending-not in one fell swoop, but to be given effect over a period of years-of the order, in current terms, of at least $10 billion. I put forward that figure as a back bench guesstimate. It has no status as coalition policy, to which I am not privy-I stress that. The determination and commitment of this coalition, when we achieve government, to take the axe to wasteful and excessive government expenditure is total, single-minded and irrevocable. I remind the House that the Australian people, as surveys have shown, recognise this and place the coalition way out in front in that regard as compared with the Hawke Labor Government. I say again that it is this Government and this Treasurer, the honourable member for Blaxland, who have the credibility problem-not the Opposition, or the Leader of the Opposition, the honourable member for Bennelong (Mr Howard). If one were to enter a figure for the axing of government spending, such as the minimum $10 billion I have referred to, into the false and misleading tabulation of the Treasurer, which he constantly flourishes in this place and which is the basis for his oft-repeated barb of a `$16 billion credibility gap' that charge would fall to the ground. I have in front of me a rough tabulation I have scribbled out. It shows on the one side, the `credit' side, an `axe to government spending' of at least $10 billion. Also accepting the Treasurer's figure in his paper for broadening the indirect tax base, which is in accord with our standing 1984 policy, of $2 billion, the total comes to $12 billion. On the other side, the `debit' side, I have the cost of tax changes which the Opposition proposes and which have been speculated about to the order of $5.5 billion to $6 billion. I include a company tax change, which the Treasurer has insisted on including but I have reduced the figure to a more realistic $1.5 billion. I have then added the cost of abolishing the fringe benefits tax, the capital gains tax, the lump sum superannuation tax and assets test, which comes to $0.8 billion. Miscellaneous items, as included in the Treasurer's paper, also come to $0.8 billion. Finally there is the existing deficit which is $3.5 billion. The total is $12.1 billion to $12.6 billion-which balances the other side. I am passing over, leaving out, a claim which the Treasurer includes of a cost to revenue of a wages freeze because that would be offset by the saving in respect of Public Service salary increases. So there is no credibility gap but a balance. It is the Government that needs to come clean and dispel its credibility gap. Let the Government tell us what the dimensions of the enormous readjustment problem confronting this country are. What actual fiscal policy has the Government in mind? We are not told. The Hawke Government inherited some advantages as well as, perhaps, some problems from the previous Government. Notable among those advantages was the wages pause. There was also, from nature, the breaking of the drought. The Government has dissipated those advantages and, by its ill-judged policies, it has compounded the readjustment task of this nation. Now it has to confront that task. As I said at the outset, there are no easy, quick-fix overnight solutions. My concern is whether the Hawke Government really appreciates the dimensions, the enormity, of what has to be done. I have a further concern, and that is whether its principal constituencies-the Australian Council of Trade Unions and the high spending lobbies-will, in practice, permit it to do what is required. Perhaps there was something to be said for an early election. Certainly, the sooner the Hawke Government is defeated and a Howard government takes over the reins, the better for the long term future of this country. Mr KENT(Hotham)(4.02) —The Appropriation Bills represent the Additional Estimates and require the appropriation of moneys to meet additional expenditures to the allocation made in the 1986-87 Budget. As the Minister for Community Services and Minister Assisting the Treasurer (Mr Hurford) said in his second reading speech, the amounts requested represents 0.05 per cent of the total estimated outlays. This proves that our Budget is right on target, and so are our economic policies. The honourable member for Berowra (Dr Harry Edwards) put before the House a load of economic mumbo-jumbo. He cited figures and statistics, relevance and irrelevance to try to completely confuse the people of Australia. He talked about the cuts that the Opposition would undertake. I will return to that later. However, he did not specify in which areas the Opposition intends to make cuts and by how much. Would it make cuts to the education of Australian children? We know that it would cut the pensions of women aged 60 to 65 years and leave them without any income. We are aware of those plans. I will deal with them later when I explain the Government's policies. Before I start to consider our Government's achievements, let us cast our minds back a few years to March 1983 and remind ourselves from where we started out. It has been said before, but it cannot be repeated often enough, that the Hawke Government inherited the biggest economic mess from its predecessor-the Fraser-Howard Government. When we came to office just over four years ago, we inherited a $9.6 billion Budget blowout-a $9.6 billion Budget deficit due to overspending and economic mismanagement by the Treasurer in the Fraser Government, John Howard. In addition to the almost $10 billion deficit, we also inherited an inflation rate of over 11 per cent and unemployment of the same magnitude. Nearly one-quarter of a million Australians lost their jobs in the last 12 months of the Liberal-National rule under Fraser and Howard. These merely added to the 750,000 who were already out of work by that time. Altogether, the Fraser Government consigned about one million Australians to the scrapheap of unemployment during its seven years in office. On top of the record level of unemployment and inflation, the infamous duo-the Fraser-Howard duo-managed-or more appropriately, mismanaged-to create unprecedented high interest rates and a record number of business bankruptcies. In short, they brought Australia to the brink of economic collapse. It is no wonder that the people of Australia threw the Fraser Government out of office in 1983. By then, however, the damage had already been done. We will not let anyone forget Mr Howard's miserable record. Figures and statistics for the period 1976 to 1982 demonstrate the extent of the damage done to the Australian economy by the policies of the honourable member for Bennelong and the Leader of the Opposition (Mr Howard). If he ever gets back into government, and I do not think that he ever will, the situation will be even worse, as this time his credibility gap has increased from $9.6 billion to $16 billion, and so would Australia's deficit. However, I do not believe that the people of Australia are so gullible. While they might not pay that much heed to statistics, they certainly cannot forget the very hard economic times which the Fraser-Howard Government was responsible for creating. Placing statistics to one side for a moment, I would like to describe my experience as the member for Hotham in this regard. Back in 1982, scores of people came to see me in my office asking for my assistance to help them find a job. Many of these people were tradesmen, boilermakers, fitters, even plumbers, who had lost their jobs because of the policies of the honourable member for Bennelong, who was then the Treasurer and is now the Leader of the Opposition-the man with the $16 billion credibility gap. I did all that I could to help those people in my electorate who had lost their jobs as a result of the economic recession presided over by the honourable member for Bennelong. But in most cases I was unable to help them. Simply, there were just no jobs available. I contacted manufacturers in my area and they told me that not only did they have no vacancies but also they would be forced to retrench even more workers unless something happened. Something happened on 4 March 1983. The Hawke Labor Government was elected to office by the Australian people and given the mandate to pull the country back from the brink of economic collapse. In terms of employment alone, our aim then was to create 500,000 new jobs. The Hawke Labor Government has surpassed this target. The situation today is quite different from that of 1982-83 when the Opposition was in office. As well as being evident in the statistics, I can confirm that now I seldom get people requesting my assistance to help them find employment. Instead, I have received calls from manufacturers complaining that they cannot get enough workers to fill the vacancies in their factories. We have achieved this under deteriorating international economic and trade conditions. It is by now a widely known fact, even among members of the Opposition, that the prices of Australia's export commodities have fallen on the world market to the extent of some $7 billion. While the loss of revenue of that magnitude unavoidably affects our domestic economy and our standard of living, it is clear that the reason this situation has arisen is because, for too long, consecutive post-war Liberal and National Party governments relied almost exclusively on our mineral resources and rural commodities and failed to develop and diversify our export base. It is no good them coming into the House now and blaming our Government for the situation-not that they are in here at the moment. They are not interested in economic debates. They are too busy scheming against each other. Mr Braithwaite —Would you like a quorum? Mr KENT —Please yourself. In spite of impediments like these over which the Hawke Labor Government has had little influence or control, we have nonetheless planned and implemented a number of significant reforms. In addition to the creation of 772,000 new jobs since April 1983, the Government has been active in reforming our social welfare system and providing assistance to those most in need. Although our achievements have been substantial, I will mention just a few. Under this Labor Government, spending on welfare has increased from 41 per cent to 44 per cent of Commonwealth outlays between 1982-83 and 1986-87. Together with various other initiatives-such as the establishment of the Social Security Review, increases in the real disposable income of social security recipients, increases in the rate of pension, an increase of 70 per cent in the additional pension/benefit and the family income supplement, and a doubling of the mothers/guardians allowance-it demonstrates the high priority which the Hawke Labor Government has given towards providing assistance to those in greatest need. In the area of community services, we have introduced a number of new programs and services designed to assist the aged, disabled and youth. Our commitment to young people through the provision of incentives for further education, training and job skills is evident in the achievements of the Priority One program. Children's services have also received assistance. During our term in office the number of Commonwealth funded child care places has more than doubled. During our term in office we have introduced the most far-reaching changes to our taxation system in Australia's history in order to bring equity back into the system. This has been achieved with the introduction of the capital gains tax, the fringe benefits tax and changes to marginal income tax rates. On the industrial front we have achieved unprecedented industrial peace and wage stability. Our policy for the revitalisation of our manufacturing base and industry restructuring has been occurring in this climate. It has not been an easy task but it is one which successive conservative governments have shirked. The steel industry, which was in a state of absolute crisis when we came to office, has been significantly restructured and is now on a healthy footing again. Similarly, the Button car plan is assisting the motor vehicle industry to sort out problems which have been developing for decades. While we were busy putting this country back on to the road of recovery, what were the honourable members opposite doing? They have now had four years in opposition; four years in which to work out and produce their policies. What have they come up with? One word-`incentivation'. One work; a gimmick. At least that is what they have come up with publicly; and they have even forgotten that word since they invented it. Who remembers `incentivation'? They were so busy racing around the corridors with knives in their hands-and some of them in their backs-that they forgot about `incentivation'. They forgot that one word-the product of their four years of labour. However, while they were busy conspiring against each other-Bjelke wanting to knock off Sinclair and Andrew wanting to knock off Johnny Howard-- Mr DEPUTY SPEAKER(Mr Blanchard) —Order! The honourable member will refer to members by their proper titles and by their constituencies. Mr KENT —Bjelke was wanting to knock off the right honourable member for New England (Mr Sinclair) and the honourable member for Kooyong (Mr Peacock) was wanting to knock off the Leader of the Opposition, the honourable member for Bennelong (Mr Howard). However, they still found the time to do some destructive scheming against the people of Australia. While they were in a state of absolute disarray, they still agreed on one thing-how to damage the future of this country. Members of the Opposition, while disagreeing on practically everything, agreed on a secret hit-list, a highly secret plan on how to attack the living standards and well-being of the Australian people if by some chance-a remote chance-they get elected to government. However, disunited as they are, the secret plan was leaked by them as soon as it was put together. It was on the front page of our newspapers for everybody to see. An article on page 1 of the Australian Financial Review of 23 March, headed `The Liberal Party's secret agenda', states the Opposition's proposals: Cut pensions and tighten eligibility. Abolish all employment programs. Impose a new personal and company tax. Freeze public service numbers. Abolish the first home owner's scheme. Abolish fringe benefits tax, capital gains tax. Cut bounties to manufacturing by 20 per cent. Abolish the superphosphate bounty. Cut the Medicare rebate and end bulk billing. Increase charges for pharmaceutical benefits. Increase in the eligibility age for the female pension to 65- that means leaving widows and women between 60 and 65 years of age without any support- Privatisation targets: Commonwealth Bank, Qantas, Telecom and Medibank Private. Abolish lump sum superannuation tax and assets test. Prepare for a general strike. The last item of the Opposition's secret agenda is `Prepare for a general strike'. I say that Opposition members should prepare for a revolution if ever they get the opportunity to put their plan into action, especially if they want to abolish the pension for women between 60 and 65 years of age. With a program like this one, members of the Opposition will need a coup d'etat to become the Government as the Australian people will never vote them in. Mr BRAITHWAITE(Dawson)(4.16) — Obviously in debating these Appropriation Bills we are allowed quite some latitude to discuss various points about the economy. It is fair enough on this occasion to reveal what has happened in the last four years of this Government and to wonder where we are now and how the economy affects everyone who calls himself an Australian, everyone who is proud to live within our shores and work towards a greater Australia. Such people want to find out how they are being treated. Four years down the track I doubt whether any Australians anywhere, whether they be aged, young or middle of the road, could claim that their standard of living is better than four years ago, that their way of life has improved to any extent. Indeed, they are worse off. Mr Kent —Do you remember seven years ago? Mr BRAITHWAITE —I remember; in fact, I was part of the Government the honourable member criticised. I remember the promises made by the Australian Labor Party at that time. So many promises were made, such as that there would be full employment, a reduction in the price of petrol, and everything would be rosy. They were the types of promises made to the people of Australia four years ago. I ask the honourable member to listen a bit more intently to see where we are at the moment. There is no doubt in my mind that Australia, as large as it is and with its population so spread out, is unique in many ways. We are unique in that, as our national anthem says, we have wealth. I think we would all agree with that. Our primary industries, our minerals and everything else indicate that we have a great degree of wealth. There is no question about that. Unfortunately we have forgotten that the national anthem also mentions that Australians have to toil to produce that wealth. The last four years has seen a decline in the way in which Australians have been prepared to apply themselves to the task of making this a wealthy country. We lack the productivity, and that has been evident over this time. The Australia that I have just described, with its uniqueness, can survive only if we are prepared to trade with our neighbours, with the rest of the world, on a fair and equitable basis because we must trade in order to maintain standards of living for the 16 million Australians who live within our boundaries. I wish to begin my contribution to this debate by comparing where we stand in a trading sense. I refer the Parliament to the last indicators of our trading record published by the Australian Bureau of Statistics. I want to give honourable members the results of the three complete years so far under Labor and the schedule to date. The balance on capital account plus balancing item, which is currently known as the current account deficit, totalled $7,283m in 1983-84, $11,009m in 1984-85 and $13,822m in 1985-86. We have surpassed that 1985-86 figure already in 1986-87. The figures show that Australians are spending more and increasing their foreign debt to the extent of that amount a year. In the face of those figures it is not surprising that last September our debt reached the grand figure of $101 billion. Mr Milton —It is all these takeover bids. Mr BRAITHWAITE —It is not the takeover bids. What I am trying to tell the honourable member is indicated in the figures I have just given to him. If that interjection by a government member is an indication of the awareness of government honourable members of the economic situation in Australia, maybe we should expect these results under Labor. I will give a comparison of those four years. In June 1983 Australia's net foreign indebtedness was $22 billion. It took Australia 82 years since Federation to reach that figure of $22 billion. Within the three years to June 1986 under Labor, that figure had trebled to $66 billion. Maybe a part of that was due to the takeover philosophy. Mr Milton —That is right. Mr BRAITHWAITE —I said part-a very small part. I have the honourable member's attention, so he might learn a little more about how the debt has accumulated. It has accumulated because Australia cannot trade profitably with the outside world. Every Australian has to realise that our standard of living-the way we make our way in life-depends on how well we trade with overseas countries and what we import in return. The figures show that we are living beyond our means, that we are borrowing against the future and that we are leaving a dreadful legacy for our children and their children. Mr Milton —It is private debt, not government debt. Mr BRAITHWAITE —The honourable member mentioned government debt. That was a very healthy interjection. I mentioned that our foreign debt had tripled. Does the honourable member know how many times the foreign component of the Commonwealth Government's debt increased in those same three years? I will tell him; it was eight times. That comes back to another part of the economic policies of this Government-the manner in which it has been prepared to fund its Budget expenditures through borrowings to the extent of $25 billion over the last four years. Not all of that is foreign debt, but it goes to show the extravagances of this Government, along with the extravagances of the people of Australia, resulting in the building up of massive debts in our generation, not to pay for assets in the future that our children can enjoy but so that we can enjoy our lives today and keep our members in government. The debt we are leaving will be left to our children and our grandchildren of tomorrow. I make a comparison with Argentina because people, unfortunately, are making that comparison. Mr Milton —You can't make the comparison. Mr BRAITHWAITE —The comparison should not be made; I am glad that the honourable member agrees. The foreign debt component is almost the same. The only difference is that Argentina has a vastly bigger population than we have to service that debt now and into the future. Australia's debt rests on the shoulders of 16 million Australians, while Argentina's debt rests on the shoulders of 30 million or 35 million people. That is the difference and I am glad I have been able to acquaint my colleague with that fact. Australians are living beyond their means, but this Government has nothing to show in the way of policies to address that. We had a debate on a matter of public importance in this House only yesterday dealing with the factors of the standard of living, high interest rates, high inflation and all the other things that affect every Australian. Honourable members opposite should not say that they do not affect every Australian. Interest rates have a very definite influence on every Australian, every house owner and businessman who is trying to compete. Businesses that are being asked to expand to take advantage of the wonderful opportunities devaluation presents must first face the risk of servicing the money they borrow to invest. The figures mentioned in the debate yesterday indicate that interest rates have had a marked effect on the number of mortgages foreclosed, rentals and the number of people who just cannot afford the basic type of housing of which Australians have been proud. At the beginning of the four-year period Labor has been in office, more than 70 per cent of Australians lived in houses which they owned. I fear that today that figure is fast diminishing, particularly in light of the foreclosures I mentioned and the problems of interest rates. What disturbs me is that Ministers and the Government try to claim that this is due to outside pressures. I would be the first to admit that the current account deficit is more than ordinarily influenced by our terms of trade and the manner in which other countries trade against us in competitive markets. However, I am not here to suggest that the whole problem lies with international factors. I would be the first to admit that the practice of the European Economic Community in giving subsidies, the practice of the United States of America with its farm Bill and its enhancement program and the manner in which Japan protects its industries and expects everybody else to trade on a fair basis have a major influence on what we do. I am only too happy to acknow- ledge that the Government and its Ministers are doing all they can to bring about, through the 14 fair trading nations, an element of reality, particularly to agricultural exports. I believe the Government is making ground. Every time we go to the EEC and tell its members how its subsidy policies and the common agricultural policy are ravaging Australian primary industry and other industries, there is a message in that too. Perhaps, in the fullness of time, the 14 fair traders might just accelerate some meaningful conclusion to those difficulties. Whilst I admit that there is a problem there and whilst I agree that the Government is doing something, let us not forget what four years of Labor have done within the domestic scene. For instance, we only have to address taxation, industrial relations, inflation, devaluation, interest rates and regulation. Businesses in Australia have been hit particularly with the fringe benefits tax, the capital gains tax and negative gearing-all imposts at a time when industry is trying to get off the bottom rung of the ladder to participate in the marvellous advantages that it is told exist in the wide world. But how can it participate when it is paying an additional penalty of some $1.2 billion introduced by the Labor Government? Until we can give incentive to companies and to individuals to keep more in their pockets than they are spending in taxation, the Government will not get the revival that it seeks. It will not get that revival under the taxation policies that influence interest. I have mentioned the effect of the Budget and the effect of our trade deficit and overseas debt. Since 1982-83 this Government's expenditure in real terms has increased by some $6 billion. The tragedy of that figure is that nearly $2 billion is not recoverable because that is the additional amount that is now required to service the interest on our national debt. This year the deficit is estimated to be $7.5 billion. I have read that that is expected to blow out. That is 10 per cent of the Commonwealth Government's expenditure, and that is an indictment of that Government. If we compare how the average Australian is suffering in comparison with our competitors overseas, we find that Australia's rate of inflation is 9.8 per cent. In Japan it is minus 0.2 per cent, in West Germany it is minus 1.1 per cent and in France it is 2.1 per cent. No country in the list that I have has an inflation rate that come within 50 per cent of Australia's, and they are the countries that we are competing with. Our standard of living must be depreciated when we face an inflation rate of that amount. Interest rates in Australia, compared with 10.8 per cent in Italy-that is rather high-and 5.84 per cent in the United States of America, are in the vicinity of 16 or 17 per cent. Those factors influence the style of living of every Australian. Yet it is the deliberate policy of this Government to bring down the standard of living and to increase government influence, as any socialist society would require. I mention just one factor that demonstrates the way in which Australia is viewed by other nations. I refer to our currency valuation. Day by day the rest of the world is devaluing our currency, and therefore downgrading the functioning of our economy. Let us look at the value of the dollar over the past four years, particularly against the yen. The Australian dollar was worth about 210 yen in 1983 and today it is worth just over 100 yen. We have depreciated our currency by 50 per cent against the currency of one of our major trading partners. People say that devaluation is good for industry. I remind the Government that as of today, 1 April, the start of Japan's new financial year, the price of our iron ore has significantly decreased, as has the price of our coal. So there is no benefit at all from devaluation in respect of those commodities. So much more could be said as to what this Government has done in its four years. I come back to the point that unless we trade-and trade successfully-and bring our deficit into line, the standard of living of every Australian will be affected. Interest rates will continue to be high and all the other factors which reduce our standard of living will remain. The standard of living of every Australian is determined by his after tax buying power. We should compare that with what it was four years ago. The standard of living of all Australians is based on their ability to obtain a job that they want to do. The standard of living is related to the ability of a family to survive on a relatively low single income with the high taxation imposed on it. The standard of living depends upon a person's education-and education should be the right of every Australian. On just those simple formulas it can be seen that the standard of living has fallen significantly over the past three years, and it is the economic policies of this Government that are entirely to blame. Mr MILTON(La Trobe)(4.32) —Before I talk about the main points I want to raise in this debate, I must deal with several points raised by the honourable member for Dawson (Mr Braithwaite). First of all, on the question of our overseas debt, I point out that two-thirds of that debt is caused by private sources, not by the Government. It is totally incorrect to blame, as the honourable member did, the Federal Government for the various enterprises which private industry is engaged in, thereby increasing our overseas debt. I should point out that takeover bids do not create any income at all. All they do is cause the cost of goods produced by the workers in future to go up, and eventually Australians as a whole have to pay. The honourable member also made some reference to Argentina. Argentina is a country that economically, culturally and politically is completely different from Australia, and it is quite ridiculous to make comparisons with it. I speak in support of Appropriation Bill (No. 3), Appropriation Bill (No. 4) and the Appropriation (Parliamentary Departments) Bill (No. 2). I want to concentrate on the social costs of life on a low income. I think it is important to bring this information before the House and before the Government. I refer to the plight of families who do not have enough money to make ends meet at a time when the Government is considering cost cutting measures to be included in the May statement, which I suppose in some respects we can call a mini-Budget. A number of articles and reports have been published on the income and expenditure of low income families. I found the report entitled `When the Pressure is Really On' by Jenny Trethewey of the Brotherhood of St Laurence-I have a copy with me now-to be particularly interesting. The report was published in August 1986, so its findings are completely up to date. It is based on a study undertaken because of the call by the Prime Minister (Mr Hawke) to all Australians to accept a lower standard of living as a result of the 8 per cent decline in our national income, arising mainly from lower prices for our minerals and agricultural product exports. The report is only interim, but it shows that, based on the 50 families included in the research study, people on low incomes just cannot reduce their standard of living any further. The report underlines six basic facts, in which it is supported by the many other publications I have read on the problems of low income families. First, people living on social security benefits are now on incomes which barely cover their basic living costs. They are forced to cut back on basic necessities such as food, clothing and footwear; fuel and power; and medical treatment. Running a private car or holiday activities are out of the question. Secondly, one-fifth of Australian children are living in families reliant on social security or in receipt of low wages. Many of the 116 children involved in the study did not have enough to eat or to wear, did not receive essential medical treatment and were not able fully to participate in school activities. Thirdly, families on low incomes spend the highest proportion of their income on basic living costs. They cannot, for example, afford to bear the burden of a deferment of their expected indexed increases. They just do not have the flexibility in their budgets to forgo cost of living adjustments, as their incomes are totally committed to providing the basic needs of life. Fourthly, the incomes of many pensioner households will drop in the coming year, even without welfare cuts. This is because, although the base rate pension is indexed, other income receipts such as grants and allowances are not indexed. Fifthly, the high cost of private rental housing is a matter of great concern in the report. Finally, there is the problem of the poverty trap, which I have mentioned before in debates in this House. The report details cases of social security recipients who obtain work finding that their social security benefits are cut so that their work turns out to have a net worth of only $5 to $6 a day. Inevitably, they give up the unequal struggle and fall back on total social security support. The report gives details of the 50 families involved, but I want to inform honourable members of the case of one of my former constituents who, because of the electoral redistribution, is no longer in my seat of La Trobe but is in the seat of my friend and colleague the honourable member for Streeton (Mr Lamb). Mrs Olive Richards has kept detailed records of all items of expenditure on herself and her 17-year-old daughter since 1976. I want to make it clear that this is not a condemnation of the present Federal Australian Labor Party Government; it is a condemnation, if you like, of all governments which have been unable to address the problems of low income people. I will explain later how our Government has attempted to do that, but that more has to be done. Mrs Richards receives an English widow's and child's pension as well as the Australian pension but, as the records show, she is left with very little discretionary income. The main point made by Mrs Richards is that pension increases over the years have had little impact on her spending power and the living standards of herself and her daughter. Mrs Richards sent her records early last year to the Institute of Family Studies, which forwarded them on to Dr Bettina Cass as a case to be included in the social security review. The Director of the Institute, Dr Edgar, had little hope that politicians would take note of the plight of Mrs Richards but at least, by noting some of Mrs Richards's comments and details in this debate, I can back up the conclusions of the Brotherhood of St Laurence report and draw the attention of the Government to the desperate situation of people like her. Her figures show that in the year ending 31 December 1985 her total income was $5,606.31. Her house bills generally were $1,231.81. Thus, she and her daughter were left with $4,374.50 for food, clothing and other ancillary expenses such as medical and school costs. This amounts to $42.06 each per week for herself and her teenage daughter. In 1984 the net amount was $38.38; in 1983 it was $31.56 and it fell proportionately each year to $21 each in 1976. A similar pattern emerged in 1986. Mrs Richards has one dubious luxury-she smokes. Whilst I do not have time to cover all the matters raised by Mrs Richards, I will include the following quote from her submission: Since January of 1982 things quickly worsened, at the end of March (for the second time) I could not meet my house mortgage repayments $188.46 insurance included due 31st March. Principal balance after payment $271.79! I had to go and see Workers Compensation Board to pay off the house using my previous bit of life saving money. They paid $337.00 but all told with the State Savings Bank insurance, their solicitor etc it cost $500.38. A bitter blow to me. Because of my mental depression and stressful position (not known at the time) I rang and asked ``Why haven't I received the second half of the school allowance of $104.00''. This was in Dec-Dec 2nd. After a short while I was told I had not received the first half or even filled the form in. I could not believe it, but to cut the story short, I never got any money from them for 1983. Mrs Richards then explains that after visiting her doctor she found that she was suffering from stress and severe depression. That is not surprising, is it? The treatment for her depression took about six months to take effect. To use her own words: I have not had depression since. It is a most horrible thing to have and I never want it again. Mrs Richards went on to explain that in 1986 she received the secondary school allowance of $1,825 in three payments of $608.33 to help keep her daughter at school. The first payment was used to rebed and repoint the roof of her house, replace her worn out gas heater, replace garden fencing and provide front and back security doors and window deadlocks as her neighbourhood is liable to burglary. I have not quoted all the comments made by Olive Richards because some of them are very bitter. However, I think I have included sufficient details of her submission to show how desperate are the circumstances of people like herself and her daughter and the 50 families studied in the Brotherhood of St Laurence report. Only recently the National Institute of Economic and Industry Research Pty Ltd reported that the proportion of households living in poverty has risen from 11.5 per cent in 1981-82 to 12.4 per cent in 1985-86. The conclusions of the Brotherhood of St Laurence report are important because in conversations that I have had with Olive Richards the conclusions tie in correctly with her circumstances. The report states that there is a loss of self-esteem involved in seeking emergency relief and that there is an inability to attend leisure activities. Many of the families lead restrictive homebound lives and the lack of suitable clothing leads to children being ostracised at school and adults refusing social invitations. Leisure activities and social involvement are important ingredients in the upbringing of children. The restrictions suffered by children of low income families cause social problems in later life. Few of the families in the study could afford to allow their children to attend school excursions or camps. The children often suffered depression as a result. All the families suffered stress which caused the marriages to be at breaking point, particularly those families with preschool children or adolescents. The findings of the Brotherhood of St Laurence interim study is worth quoting because they are so important: Fundamentally, the families in the study did not have enough money to meet their needs. From this the following findings flowed: That families were often forced to cut back or go without basic necessities in order to afford the living costs to which they gave priority-rent and energy bills. Seasonal events which increased household costs, such as Christmas or school holidays, placed great strains on the families' budgets. The families' income level did not allow for regular saving. This left them with no capacity to cope with unexpected or large costs. The budgeting skills of the families did not compensate for an inadequate income. To manage, the families had to rely on assistance from relatives and emergency relief agencies, or enter into debt. The negative costs to children's development and family relationships of living on a low income. The Federal ALP Government is, of course, aware of the needs of low income families. I know that various initiatives have been taken by the Government such as increases in the mother's-guardian's allowance, increases in additional pensions for children, increases in rent assistance, indexation of income limits for fringe benefits eligibility and the introduction of a carer's pension. These initiatives and others are all contained in an answer provided by the Minister for Social Security (Mr Howe) on 26 March 1987 to a question on notice. The problem is that whilst these initiatives have helped specific groups in need, there is an overall lack of support as a result of the operation of poverty traps. I know that the Minister for Social Security is aware of the problems and has said, for example, that a different approach to unemployment assistance is necessary. The Government is developing a whole range of policies as part of the review of employment and welfare policies. My main reason for speaking in this debate is to underline the problems of low income families. I believe that it is vital that the May statement does nothing to worsen the plight of low income families and that the August budget should substantially increase the financial assistance for those families. In conclusion, it is important to point out that there is no doubt that low income families would not get any support from the Liberal Party. Its leaked policy documents make it clear that it plans to scrap the indexation of pensions and benefits, cut unemployment and supporting parents benefit and cut the Medicare rebate. These are just some of the Opposition's policies which will cut the incomes of social security beneficiaries in order to restore benefits, such as fringe benefits, for the wealthy and business people. Mr HODGES(Petrie)(4.48) —We are debating the Appropriation Bill (No. 3) 1986-87, the Appropriation Bill (No. 4) 1986-87, and the Appropriation (Parliamentary Departments) Bill (No. 2) 1986-87 which will provide for the appropriation of a little more than $418m to a number of Commonwealth departments. Before addressing some comments to a matter specific to my State of Queensland concerning the Australian Federal Police and the Health Insurance Commission, I want to make one or two comments about the appalling state of the economy under this Hawke socialist Government. It is an economy in a state of decline. Something has to be done in the not too distant future to pull it out of that serious state. Inflation is running at 10 per cent. Despite the refusal of the Prime Minister (Mr Hawke) to explain in clear terms to this House, after questions have been put to him, the inflation rate of 10 per cent is four or five times higher than that of our major trading competitors. Most of our major trading competitors such as France, the United States of America, the United Kingdom and Japan have inflation rates of less than 5 per cent. Interest rates in this country are putting businessmen-small business men in particular-and farmers out of business. High interest rates at levels of 18, 22 or 23 per cent are also causing great concern to home buyers. Many young couples in this country who have embarked on the purchase of their own home are walking away from those homes with nothing. Mr Blunt —And there will be more of them. Mr HODGES —More will be walking away unless something is done, as the honourable member for Richmond said. The massive deficits, both domestic and overseas, are causing grave strains on this economy. We have seen a government come to power in 1983 which brought down a 1984-85 Budget with a $7.9 billion deficit. That went to $6.7 billion in the next financial year, and $5.7 billion after that. Now we have a domestic deficit probably in excess of $4 billion this financial year. We have a Prime Minister who is known as the $100 billion man because Australia's overseas debt has risen in the last four years from $36 billion to $101 billion. The interest debt in government outlays is now No. 3 on the list of government outlays. Firstly, with social security at 27.8 per cent, 19.2 per cent of Commonwealth government outlays go to the States and 10 per cent of those outlays are taken up in interest payments. We are spending more on interest than we are spending on defence, education and health individually. That is after we were told some 12 months ago by the Treasurer (Mr Keating) that we were heading towards the conditions of a banana republic and told by the Prime Minister that we had a situation in Australia that was the equivalent of wartime. It is against that background of a shocking and declining economy that I want to make one or two comments about some Australian Federal Police raids that were made in Queensland on 3 March and 4 March this year. The Australian Federal Police raided 17 premises of Optical Prescriptions Spectacle Makers Pty Ltd throughout Queensland, I think from Townsville to the New South Wales border. They seized documents, patients record cards, appointment books, duplicate receipt books, referral forms, correspondence, attendance-pay books, et cetera. OPSM conducts businesses in 34 separate premises throughout Queensland. It makes spectacles. It fills prescriptions from eye specialists and does certain repairs and other works associated with spectacles. The search warrants that were tendered by the Australian Federal Police claimed that OPSM had committed offences against the Health Insurance Act and the Commonwealth Crimes Act. The case came before Mr Justice Pincus in the Federal Court of Brisbane in early March and he handed down a judgment on 13 March 1987. The judge found that the search warrants were invalid. In simple terms, the warrants were deficient in their preparation. Let me quote from Mr Justice Pincus's judgment. He said: Instead of stating the true object of the search in the warrant, it was, in substance, stated to be to look for some falsehood in a quantity of documents related to claims against the Health Insurance Commission. It does not appear too onerous a requirement that the warrants should have indicated, at least in a general way, what sort of falsehood was suspected and whether it was recent or ancient. If warrants in this form are permitted, that would also allow warrants for searches in patients' or doctors premises, looking among their medical records for quite unspecified illegalities connected with treatment for which reimbursement might have been claimed from the Health Insurance Commission. At least where the general character of the suspicion is capable of succinct statement, as here, it appears to me that the object of the search should be set out more specifically than by saying that some falsity is suspected. Apart from the invalidity of the search warrants, OPSM was cleared of any improper action. In essence, the procedure adopted by OPSM, in some instances at least, was that it was referring customers to eye specialists using referral forms provided by the Department of Health in a rather routine manner. In other words, it was referring without the referring optometrists having seen the patients in the first instance. They had not seen patients or examined those patients before referring them to the eye specialists. If a patient goes direct to an eye specialist or, indeed, to any other specialist without a referral notice, the specialist gets a Commonwealth subsidised consultation fee which is about $10 less than he would otherwise get. In fact, the lesser fee is equivalent to that claimed by a general practitioner and not a specialist. The referral system discourages people from automatically going direct to a specialist. The first point of contact by the patient is the general practitioner, an optometrist, an optician or a dentist, as is appropriate. I want to refer to Regulation 10 of the Health Insurance Regulations of 1973. It sets out the procedure for referral by general practitioners, et cetera, to specialists. This document talks about the prescribed information being provided on the referral. The information provided by the optician, optometrist, the general practitioner or dentist must state the name and address of the medical practitioner, the registered optometrist, the registered optician or registered dentist who is referring the patient to the consultant physician or specialist. It must have the name and address of the patient, the name of the consultant physician or specialist to whom the patient is being referred and, importantly, it must also be signed by the referring practitioner. It is clear from these regulations that it is not required by the referring doctor, optician, optometrist or dentist to see the patient that he is referring. Therefore, a referral to a specialist without examination is not in breach of the referral regulations. That is the important point that came forward in this particular case. I turn to the Commonwealth Department of Health's medical benefits schedule book. Item 310 (f) states: Medicare benefit is attracted for an attendance on a patient where the attendance is solely for the purpose of providing a letter of referral. However, if a medical practitioner issues a letter of referral without an attendance on the patient, no benefit is payable in respect of that service. I think it is quite clear that no benefit is to be paid or claimed by that particular general practitioner, optometrist, et cetera, if he or she does not see the patient at the time of referral. The matter in question concerning Optical Prescription Spectacle Makers is quite clear in that its method of referring patients was, in some instances, for those patients to see their optometrists but, in others, without an optometrist having even seen the patient. There is nothing unusual in a patient ringing a doctor and asking that doctor or optometrist to refer him to a specialist. It is not necessary for the optometrist or doctor to see the patient-that is the crux of this whole case-provided no fee is charged. Occasionally, doctors will charge an administrative fee of $2 or $3 to write that referral form. In the case of OPSM no fee at all was charged, either an administrative fee or a fee on the Health Insurance Commission. Indeed, OPSM having referred patients has no guarantee that those patients will return from the ophthalmologist-that is the eye specialist-with a prescription for glasses. If they have a prescription, that prescription may be taken by the patient to another optometrist, or the patient may require some other medication for the eye which would normally be provided by a pharmacist. So there was no guarantee to OPSM that it would receive any business back once the patient was referred to the ophthalmologist. The case was clearly put forward by OPSM in this matter before Mr Justice Pincus in Brisbane in the Federal Court. There was no doubt in the mind of the judge that OPSM was not in any breach of the Health Insurance Act or the Commonwealth Crimes Act. I should put on record some facts about OPSM because it now has to live with the stigma of the raids that were conducted on 17 of its 34 premises in Queensland. It has been operating in this country for 50 years. It is a highly reputable public company. It has 257 outlets throughout Australia. It has branches in the United Kingdom, Ireland, France, West Germany, Denmark, the United States of America and New Zealand and it exports to 50 countries. It employs thousands of Australians. I am led to believe that the Health Insurance Commission had made no approach to OPSM expressing dissatisfaction with its procedures for referrals. It is my understanding that the procedures for referrals were the same at the time those raids were conducted as they had been in past years. I say to the Minister for Health (Dr Blewett) that if the Health Insurance Commission, he or his Department was unhappy with the health insurance procedures, they should have amended the Health Insurance Act and Regulations providing for the referral of patients by general practitioners to optometrists. How was this investigation carried out? It was done in a fairly efficient manner in terms of the raids. Scores of patients were interviewed at their homes. Eye specialists' premises were visited and documents were seized. I understand that interviewing teams prejudged and accused OPSM of impropriety in its operations. The exercise was embarrassing for the public and for OPSM. The Health Insurance Commission and the Australian Federal Police were made to look like real asses. I understand that the raids were carried out in the morning. Officers of the Australian Federal Police arrived, warrants were produced, doors were closed and customers were kept waiting outside for some time, peering through the doors, wondering what was going on. I believe that this has had a very damaging effect upon OPSM. There were newspaper reports throughout Queensland and I quote some of the headlines: `Police launch raids on optometrists'; `Eye test raid papers must be returned'; `Spectacle maker under eyes of law'; and, in the Townsville Daily Bulletin `Optometrist under police scrutiny'. Another headline was `Police investigation' and so it goes on. That is very damaging to a reputable company. This ham-fisted approach by the Australian Federal Police ought not to go without some apology from them and from the Health Insurance Commission. I believe that the Ministers concerned, the Minister for Health and the Special Minister of State (Senator Tate), should offer a public apology and write individually to the eye specialists and patients concerned. I understand that the records of many hundreds of patients were involved. This gets back to the whole question of the cost, because we have the economy in a sad state and tens of thousands of dollars wasted in these raids. It is embarrassing to the Government, surely, and embarrassing to OPSM and to all of those people involved in the raids. Money was spent for staff and air fares throughout Queensland, and one has to ask a number of questions: Was the Attorney-General's Department consulted for an opinion before these warrants were drawn up; and who was responsible for the bungling raids that went on? I suggest to the Minister for Health and the Special Minister of State, who is responsible for the Australian Federal Police, that they conduct an inquiry into this matter and that some heads should roll. It is just not good enough that people in responsible positions in those departments should go about their business in this way, wasting public funds and causing the amount of embarrassment that they have to so many people throughout Queensland and the ultimate embarrassment, in my view, to eye specialists and to OPSM. Mr SCOTT(Hindmarsh)(5.04) —The matter I wish to raise could be regarded as an ongoing examination of the role of the Department of Health and its promotion of food irradiation processes in Australia. That is not to say that only the Department of Health is promoting food irradiation. We also have the Australian Atomic Energy Commission, the Department of Foreign Affairs and the Department of Primary Industry. I chose the word `promotion' with deliberate intent. The promotion of food irradiation has been and is being undertaken by a number of departments, but because the spotlights have been turned on that promotion, we now have various departments ducking for cover. The spotlights in question are: The Australian Consumers Association inquiry and the inquiry by the House of Representatives Standing Committee on Environment and Conservation. Additionally, hundreds of searching questions have been placed on the Notice Paper since April 1986. I turn to question No. 3822 to the Minister for Health (Dr Blewett) on 30 April 1986, which was replied to on 11 February 1987-almost 10 months later. The question began: Will the Government direct that no further promotion of food irradiation be undertaken until a Federal public inquiry is held; if not, why not. The reply, on 11 February, began: The Government has not been involved in promoting food irradiation. The rest of the answer referred to the fact that the Minister for Health had contracted the Australian Consumers Association to conduct a $90,000 inquiry into consumers' concerns about food irradiation. I return to the question of whether or not the Government was promoting food irradiation. I refer to a report, which is now freely available because it fell off the back of a truck, on a workshop on commercialisation of ionising energy treatment of food, held at the Australian School of Nuclear Technology, Lucas Heights, New South Wales, from 29 April to 10 May 1985. A Miss P. A. Wills, head of the radiation research and technology section of the Australian Atomic Energy Commission, was joint organiser, along with Dr Parsan Loaharanu of the International Atomic Energy Agency. The Lucas Heights experimental irradiator, known as GATRI, was used in the workshop exercises. Among those involved in this workshop were P. A. Wills, P. Moore, J. Button, M. Izard and J. Bird of the Atomic Energy Commission and D. Evans, A. Egan, S. I. Thrower and M. Eyles of the Commonwealth Scientific and Industrial Research Organisation. Other participants included members of the New South Wales Department of Agriculture, C. Saul of McCormick Foods Australia Pty Ltd and R. Clairs of Woolworths Ltd, plus overseas participants from Vienna, Pakistan, Bangladesh, Thailand, Malaysia, the Philippines, Korea and New Zealand. The workshop report concludes with the following recommendation: This Workshop recommends that those in attendance should seek to initiate and stimulate interest in food irradiation among food manufacturers and the community generally, and to this end should work towards forming a steering group/committee involving representatives of food industry, consumers organisations, et cetera to prepare and disseminate educational material and if necessary to urge the adoption of the Codex Alimentarius Commission's General Standard of Irradiated Foods and its Recommended Code of Practice for the Operation of Radiation Facilities used for the Treatment of Foods. It is further recommended that the steering group should operate through the central organisation representing food manufacturers, and/or producers. I find it impossible, in light of this and other evidence, to accept that the Government is not promoting food irradiation. It might be argued that individuals in the Atomic Energy Commission or CSIRO are promoting food irradiation, but such an argument would not stand any close examination. The Australian Government, through the Department of Foreign Affairs, gave $US260,000 towards phase II of the Asian Regional Co-operative Project on Food Irradiation, known as RPFI. That financial commitment, along with the salaries of the staff of the AAEC and CSIRO and the use of the Lucas Heights facilities, plus the fares and accommodation expenses of delegates attending various international gatherings and conferences on food irradiation, would be a significant amount of financial commitment. The recommendation adopted at the Lucas Heights workshop was clearly a promotion of food irradiation. Japan financed phase I of the Regional Project on Food Irradiation at a cost of $US240,000. However, I understand that Japan has now withdrawn from further projects. I will give a quick rundown of the international position on food irradiation. In the United Kingdom an inquiry was set up, known as the Burgen Committee, which was given three years to study and report. While its conclusions did not go against food irradiation, the body of the report raised many serious matters that have not been properly addressed to date. On 31 July 1986 the National Consumers Council of the United Kingdom urged the British Government to postpone plans to allow irradiation of food by up to three years, to allow adequate safety checks to be made. The annual congress of the Institution of Environmental Health Officers meeting in Scarborough in the United Kingdom in September 1986 refused to accept the United Kingdom Government's Advisory Committee's recommendation that food irradiation be allowed. Three hundred and six delegates from all over the United Kingdom attended that congress. The most telling attack on the proposals to allow food irradiation has come from the British Medical Association, which said on 6 March this year: Irradiation of foodstuffs could pose long term health hazards. It called on the Government to postpone for some years any plans to introduce this process. The importance of this stand taken by the British Medical Association cannot be underestimated. I should like to quote from the United Kingdom Times of 7 March 1987. The heading is `Doctors call for halt on irradiation of foodstuffs'. The article reads: The British Medical Association said yesterday that the irradiation of foodstuffs could pose long-term health hazards and called on the government to postpone ``for some years'' any plans to introduce the process. It went on: However, a report by the BMA's board of science says that current advice to the Government on the safety of the process ``may not sufficiently take account of, still less exclude, possible long-term medical effects''. The association endorsed the report yesterday and called for full-scale study of the risks and benefits of the process. ``Such a study is necessary before the process can be confidently accepted in this country'', the report said. The BMA was influenced in its report by scientific studies, one in humans and one in laboratory rats, which indicated that irradiation could cause potentially malignant changes in the blood cells. The report conflicts with the findings of the Advisory Committee on Irradiated and Novel Foods . . . set up by the Government, which said there was no reason not to proceed with plans to introduce food irradiation. . . . . Dr John Dawson, head of the BMA Professional Division, said yesterday: ``The potential benefits to the consumer seem quite small. Of much more concern to us are the potential risks and we feel further research is necessary. ``In effect this would mean shelving the introduction of the process for some years until the findings of such research can be evaluated.'' A report on the British Medical Association's board of science statement which was adopted by the Association was also covered in the Guardian on Saturday, 7 March 1987. The heading is `Food irradiation ``could put children at risk'' '. The report reads: Irradiation used to sterilise food might cause genetic mutations in children, would destroy some nutrients, and still expose consumers to the risk of food poisoning, the British Medical Association's board of science said yesterday. The article goes on to say: ``There are clear adverse effects to set against the benefits'', said Mr John Dawson, head of the BMA's science division. The report goes on in similar detail to the report in the Times. The European Parliament Committee on the Environment, Public Health and Consumer Protection, in a report on 15 October 1986, likewise condemned the rush into and promotion of food irradiation. I now understand that the full European Parliament just two weeks ago recommended that food irradiation not be adopted in Europe. Here in Australia only last week a former government analyst, Dr Frank Peters, is reported in the Canberra Times of 27 March 1987 as expressing grave concerns about food irradiation. I shall read part of the report. It states: Dr Peters criticised the Minister for Resources and Energy, Senator Evans, for describing people with concerns about food irradiation as ``Kryptonite warriors''. Senator Evans recently suggested that opposition to irradiation was as fanciful as Superman's susceptibility to the imaginary substance kryptonite. ``I'd rather be called a kryptonite warrior than an pre-thalydomide warrior,'' Dr Peters told the committee investigating irradiation today. Dr Peters was assistant director of the National Biological Standards Laboratory at the time of the Thalydomide pregnancy drug disaster in the 1960s, which resulted in major birth deformities. He said outside the inquiry that because of Thalydomide, there had been a general review of pharmaceutical products and food additives. Subsequently, many products were taken off the market. Dr Peters said, ``I cannot understand a person in Senator Evans' position making such a statement advocating a return to the pre-Thalydomide era.'' He wanted further research into the potential for chromosome-damaging and cancer-causing substances to be produced from the irradiation of certain foods. The evidence against the headlong rush into food irradiation is compelling but how much longer must we wait and how much more expenditure must be committed to its promotion before someone in this Government will say: `Stop! Enough is enough.'? On 19 November 1986, speaking in the adjournment debate, I raised a number of questions regarding Australia's promotion of food irradiation, its expenditure of $US260,000, its involvement in an organisation called the International Consultative Group on Food Irradiation, based in Vienna, and questioned Australia's involvement with a group called the task force which drew up a document 28 pages long called `Marketing and Communication Guidelines for Acceptance and Usage of Food Irradiation, Recommended Marketing Plan 1986-87'. On 8 January 1987, in a letter, the Australian Atomic Energy Commission responded to those matters I raised on 19 November 1986. I would like to quote from that letter, which I believe shows, firstly, that Australia has been promoting food irradiation; secondly, that a number of departments have been involved; and, thirdly, that departments are now ducking for cover since the spotlight has been put on them. That letter has very interesting information. It reads: There have been three ICGFI meetings. Mr W. J. Wright, then Counsellor (Atomic Energy), Australian Embassy, Vienna, attended the first meeting on 10-11 December 1984. Mr P. Bull, Counsellor (Atomic Energy) Vienna attended the second meeting on 21-22 October 1985. The third meeting on 21-23 October 1986 was attended by Mr P. Bull and Dr G. de Cean of the Commonwealth Department of Health, which now has carriage of ICGFI matters. The ICGFI has established a number of short-term task forces to examine a wide range of issues. Those which have had Australian members include: Trade Promotion (Mr B. Carone, General Manager, Amatil Ltd). Irradiation as a Quarantine Treatment (Mr M. Catley, Federal Department of Primary Industry, Mr N. Heather, Queensland Department of Primary Industries, Dr C. Rigney, Gosford Horticultural Post-Harvest Laboratory, NSW Department of Agriculture). Decontamination of Food by Irradiation (Dr J. Christian CSIRO). Marketing/Public Relations (Mr J. Samson, then of Ogivy and Mather Pty Ltd, an advertising and marketing agency). Mr Milton —Mr Deputy Speaker, the honourable member has made a number of points. I wonder whether the honourable member would be prepared to table the letter he has just quoted from. Mr Scott —I do not mind tabling it. Mr DEPUTY SPEAKER(Mr Ruddock) —Is leave granted? There being no objection, leave is granted. Mr SCOTT —Australia is a member of ICGFI. Australia is involved in the task force. The Department of Health official, Dr Gordon de Cean, attended the recent meeting of the ICGFI from 21 to 23 October 1986. I note that the Department of Health official attended an international meeting three months after the Minister had called for an inquiry into food irradiation. I also point out that of those who are listed as attending the special task force meetings, Mr Carone of Amatil and Dr C. Rigney both also attended the Lucas Heights workshop conference in New South Wales. To any reasonable mind it would be clear that the promotion of food irradiation has been and is on the agenda and is being financed by the taxpayers of Australia. Appropriation Bills deal with money allocations and expenditures. Australian financed a food irradiation project to the tune of $US260,000, plus the salaries of numerous assistants from the Australian Atomic Energy Commission, the Commonwealth Scientific and Industrial Research Organisation, the Department of Foreign Affairs and the Department of Primary Industry. It also financed international fares for travel for scientists and delegates to Vienna, Shangai and numerous countries throughout the world and the accommodation and expenses of those scientists and delegates. The Department of Health, through its many committees of the National Health and Medical Research Council, incurs the fees, fares and expenses of those committees in the promotion of food irradiation. The finance involved in this promotion of food irradiation could be better spent, firstly, on an environmental impact statement, as requested by me on 14 April 1986; secondly, on the development and/or manufacture of the specialist equipment necessary to deal with an accident in any of Australia's three irradiation plants instead of our having to depend on the availability of technicians from Canada and, thirdly, on developing uniform regulations for the safe transport and storage of radioactive substances in Australia. Mr McARTHUR(Corangamite)(5.22) —I would like to refer to the future of the Australian economy, to the May mini-Budget, to what the Hawke Government might do, and to what the Howard Government will do, about the long term problems facing the Australian economy. I would like to refer to some of the views of independent business groups as to how they see the economy and what their policies would be to solve our quite massive economic problems. The Australian Chamber of Commerce has put out a publication called `The Mandate to Govern' containing its views on the way it sees the economy moving in the next decade. I would like to quote what is a very good summary of the current position, as contained in its introduction. It states: A snapshot of the Economy. From 1982 to the latter half of 1986 the Australian Government has pursued economic strategies designed to maintain or increase economic growth. By 1986 the growth rate achieved in 1984 and 1985 had declined so far as to be negative in some quarters, although renewed growth was expected in 1987. Essentially, economic growth was sustained or augmented by borrowing by the private and public sectors, especially by borrowing from abroad: the combined consumption by public and private sectors has been greater than our national output. Specific features of recent economic policy and conditions have been: A quick spurt of growth in 1983-84 and 1984-85. Public sector outlays of over 43 per cent of GDP. Public Sector Borrowing Requirements averaging 7 per cent of GDP. Historically high Commonwealth Budget Deficits. A downturn in our terms of trade. Wage indexation to the CPI (Now abandoned?). A weakened currency (beginning before the severe downturn in our terms of trade). Increasingly heavy on-costs in a labour market already burdened by inflexible and out-dated work practices. A money supply often accommodating to excessive private and public demand. Inflation and interest rates very much higher than the average of our major trading partners. Continuing high taxation-increased by more than 11 per cent in the 1985-86 Budget. State governments increasing spending and borrowing faster than the Commonwealth. Generally poor private fixed investment. I support the remarks that the shadow Treasurer, the honourable member for Mackellar (Mr Carlton), made earlier in the debate about the myth of the $9.6 billion deficit in the 1982-83 Budget that the Treasurer (Mr Keating) has so often referred to. I draw the attention of the House to the quite massive accumulated deficits brought about by the Treasurer: In 1983-84, $7.9 billion; in 1984-85, $6.7 billion; in 1985-86, $5.7 billion; and in 1986-87 an estimated $3.5 billion. That is a total of $23.8 billion, which is near enough to $24 billion, of accumulated deficits during the term of the Hawke Labor Government. There is every chance that there will be a blow-out in the current deficit arrangements of another $0.5 billion because of the high cost of our debt commitments. I turn now to the present high interest rates which are affecting farmers, home owners and small and big businessmen alike. Individual entrepreneurs are quite amazed. They do not understand why interest rates are so high in Australia but they fully understand that they are going broke week by week and month by month as they pay these exorbitant rates. They cannot understand why interest rates in Australia are so high and are rising, whereas interest rates in other countries are low and are falling. To draw a comparison, at the time of the election in December 1984 the Bankcard interest rate was 18 per cent. In March 1987 it was 22 per cent-an increase of 4.5 per cent. The interest rate on savings bank loans, which affects every home owner, was 11.5 per cent in December 1984. It is now 15.5 per cent, an increase of 4 per cent. The prime interest rate on overdrafts was 13.5 per cent in December 1984. Now it is 18.5 per cent, an increase of 5 per cent. In the smaller overdraft area, affecting many of our small businessmen, there has been a movement from 14.5 per cent, which was high enough anyway, to 20.5 per cent-a dramatic increase of 6 per cent. These interest rates are at all time record high levels. Let us compare the interest rates in other countries. In the United States of America in December 1984 the interest rate was 11 per cent. In March 1987 it was down to 7.5 per cent, a reduction of 4.3 per cent. In Japan, our major trading partner, in December 1985 the interest rate was 5.5 per cent. In Australia we would be very happy to have that low rate of interest. But Japan has reduced its interest rate to 3.4 per cent. No wonder that trading nation is very competitive with us. Canada, one of our competitors in primary products, had an interest rate of 12.5 per cent in December 1985. It was 8.75 per cent in March 1987, a drop of 3.7 per cent. I repeat: In Australia the interest rate was 13.5 per cent in December 1984. It has now risen to 18.5 per cent. So farmers and small businessmen are gradually being strangled to death by the high interest rates caused by Government policy. I turn to the Confederation of Australian Industry and its view about how to deal with our economic problems. I quote the President of the CAI, Mr Brian Ettelson: Dealing with our economic problems is about this year's Budget. The time Australia once had on its side has now run out. We either confront our problems head on or, as one Federal Minister has put it, we end up with a `South American hyper-inflation depression disaster'. Mr Rocher —Who said that? Mr McARTHUR —The President of the CAI. I am not sure which Federal Minister made the comment, but I am sure that it is correct. The quotation continues: The May statement must savagely reduce spending and the Budget in total must reduce the fiscal pressure on productive activity. Expenditure cuts, tax cuts and a lower deficit can all be achieved together. This is what the CAI wants. Its President made that very clear. The CAI's detailed statement went on to list the Budget items where cuts could be made. It recommends that grants to the States should be cut, forcing the States to rein in their own expenditure and control costs, that Loan Council approval to borrow should be withdrawn from State instrumentalities, that there should be an attack on government duplication in a very serious way, that duplication of services between Federal departments and between the Federal Government and the States should be removed. For instance, the National Occupational Health and Safety Commission, which is duplicated in every State, is estimated to spend $17.8 million in the next year. What is achieved by that duplication in the area of health and safety? It recommends that persons on workers compensation should be required to undertake a daily program of rehabilitation, that the whole problem of workers compensation and on-costs should be addressed and that Medicare should be targeted to those who are in financial need and scaled down accordingly. All of us on this side of the House would appreciate the quite massive costs involved in Medicare. More importantly, the CAI said that there should be no new government initiatives or spending programs and unproductive job creation programs should be scaled down, or better still, abandoned. For instance, the community employment program should be scaled down or abandoned, saving the Government up to $1 billion over a three-year period. The CAI also said that the introduction of the Australia Card should be abandoned, thus saving the costs involved. All honourable members are aware that the card will cost $1 billion over a 10-year period. The CAI also suggested that there be an improvement in public sector efficiency. I now turn to the Economic Planning Advisory Council. On 27 March the Council endorsed a discussion paper issued by the Business Council of Australia. The Business Council made some very strong recommendations about Australia's economic position. It stated: Fiscal policy also has a key role to play in the required structural adjustment. Cutting back sharply in public sector spending is necessary to lift our national savings and investment performance in the medium term. It is only through improved investment that we can hope for a lasting correction to our external imbalance. Key objectives in the next few years must be to: halve our current account deficit; lift investment as a proposition of GDP; and stabilise and begin reducing our overseas debt as a proportion of GDP. The Economic Planning Advisory Council is an arm of the Government's policy development section. The paper talked about the public sector borrowing requirement and noted the escalation of the debt incurred in the area of government expenditure. In 1981-82, the public sector borrowing requirement represented 3.6 per cent of GDP; by 1982-83, it had escalated to 6.2 per cent of GDP and in 1985-86, it was nearly 5 per cent of GDP. There has been some reduction at the Federal level, but little at the State level. With this increase in the public sector borrowing requirement, there is a need for overseas resources and savings for deficit budgeting by the States and the Commonwealth. It is often overlooked by the Commonwealth and the political electorate in Australia that the States' big spending policies cause the Australian economy considerable problems. Again, the Business Council had this to say: At the 1986 Premiers' Conference the States agreed to a reduction in their ``global'' borrowing limits (what the States may borrow) from $7 billion to $6.3 billion. That reduction, in combination with the estimated reduction in the Commonwealth Budget deficit was, as noted earlier, expected by the Government to lead to a fall in the total PSBR of about 1.6 per cent of GDP in 1986-87. In fact, the States have brought down Budgets that not only fully utilise their global limits but also draw extensively on their liquid assets. Rather than falling, therefore, the States' deficits (what they actually borrow) are expected to rise in aggregate by around $2 billion in 1986-87, substantially offsetting the reduction in the Commonwealth deficit. As a result, the fall in the PSBR in 1986-87 will be marginal at best. In the Business Council's view, the States have shown a worrying disregard for Australia's present problems and their role in overcoming these problems. In 1982, in Victoria, which had had a prudent Liberal government for over 27 years, the public sector debt was about $15 billion. Under the Cain Administration, the figure had moved to about $35 billion in 1986. It is a little difficult to establish the clear figures in that State because of the creative accounting procedures of the Treasurer. No doubt, we can draw that comparison of the indebtedness of that State over that short period. In Victoria, there have been sales of liquid assets and the utilisation of cash reserves. Land sales are being conducted right now to bolster the State Budget. The trams and trains have been leased off to the extent of $350m, creating long term debts. The National Farmers Federation put a submission to the Prime Minister (Mr Hawke) on 9 December. We well remember that application by the President to the Prime Minister. The application was refused and the Prime Minister refused to take on board any comments by the National Farmers Federation. The farmers identify the economic problems as follows: Everyone agrees that the major economic difficulties confronting Australia are: an inflation rate that is far too high; a persistent and growing current account deficit; and a massive external debt and debt servicing burden. Everyone is aware of that. The farming community is very close to those three problems. The farmers suggest that the way in which the problems could be overcome is to: directly attack inflation by reducing cost pressures; directly attack unemployment by pricing would-be employees and firms back in business- that is, having a flexible wages policy, which the Opposition has advocated for some time- reinforce the demand-switching in benefits of the recent devaluations- hopefully, the J-curve effect will come into being sooner rather than later- powerfully work to correct the balance of payment problems by sustaining our international competitiveness; allow a marked relaxation of monetary policy, in the sense of reducing interest rates without risking a collapse in the value of the $A and a blow-out in credit expansion; and encourage private sector investment without the limiting impact of currently high interest rates. The Opposition would restore incentive to the system-that is, incentive to the marginal tax rate so that Australians would be encouraged to work harder. We would restore incentive to a flexible enterprise-based employer-employee relationship in the industrial relations area, based on profitability, productivity and performance. We would restore incentive to the Medicare system-that is, incentive to save some of the massive wastes in the system; incentive applied to individual Australians to look after themselves. Medicare costs about $9 billion and that is a great cost on the Australian taxpayer. We need to encourage incentive for governments, at the Federal, State and local level and to cut back on their expenditures so that we have some hope of reducing interest rates and inflation. The next Howard Government will have the political determination to achieve these objectives and restore some economic sanity to the Australian economy. Mr MOUNTFORD(Banks)(5.38) —Debate on Appropriation Bills is traditionally a time for the House to consider the economic performance of the government of the day. Today, in the debate on Appropriation Bill (No. 3) and cognate Bills I would like to look at this Government's economic policies against the background of our current difficulties, and see what progress has been made. The success or otherwise of a government's economic decision making can be analysed only in the light of the circumstances in which those decisions are made. It is all very well for superficial critics to look back to the post-World War II days and yearn for a return to assured growth and prosperity year in and year out. In that Indian summer during the 1950s and 1960s, when inflation was almost non-existent and unemployment practically unheard of, the conservative government of the day had no need, by and large, to consider an apportionment of scarce resources. The world economy on the rise provided all the growth needed. Yet in that time when so much could have been done, in those days when we should have been gearing up for the rigors of the future, we were led by the shortsighted and the weak. I will give just one example. After the war, Australia actually sold cars competitively overseas, even to Japan. But as time, and the ingenuity of our trading opponents wore on, our edge was cut back. The response of the Menzies Government was not to market more aggressively, to make a better product cheaper so that we could beat the competition toe to toe-no, its response was to turn the Department of Industry, Technology and Commerce into a safe refuge for the manufacturing industry. Black Jack McEwen must bear much of the blame for this stagnant policy. When the world became too hard, when competition made life too difficult, the government was always there to apply tariffs, thus protecting the local product before overseas expertise wiped it out. If the Menzies Administration had only pursued the aggressive marketing policies which this Government is now instituting, we would have a much larger manufacturing base to help sustain the losses we have suffered in primary industry exports. We would also not be needing to import as much. But this was not done, and while it appeared to all the world that our economy was performing nicely, we were in reality sowing the seeds of our own future downfall. We did not even have the comfort of a government which used the prosperity to fund social changes. In the general expectation of full employment and plenty of work for all, the plight of the needy in the community was insignificant enough to be ignored. Everyone could own their own home, take four weeks leave, with pay, and expect their children to grow up with the same advantages. Tragically, the return to social reform so desperately sought by Australians after 23 years of conservative stagnation, coincided almost to the year with the first oil price shocks and the world-wide recession. A Labor government with a clear mandate to bring the nation up to world standard had also to contend with economic problems which no Western government had successfully defeated. But if some Australians wrongly blamed the Whitlam Administration for our economic woes, they were put well and truly right by the mismanagement of the Fraser years. The time of the Fraser Government is a particularly fascinating period for students of the current political scene, for it is when the leaders of our colleagues opposite gained their economic skills. What a sorry record the record of that Government is. I need only quote the editorial from the Australian Financial Review of Monday, 30 March this year: As time goes on, the disastrous legacy of the Fraser Liberal Government becomes clearer . . . the need for structural changes in the economy as a whole was ignored as the Government promoted the idea of a resources boom to solve the country's problems. That had two very specific effects: it encouraged a disastrous wage breakout led by the metal unions which employers found impossible to resist, given the boosterism in Federal politics at the time, and it encouraged the States to undertake a massive infrastructure borrowing program, much of which was in foreign currency and unhedged, which the whole country is now paying for in its very large overseas debt burden. So that is the legacy of our predecessors. That is their claim to economic fame. Certainly times were tough for the Fraser-Howard Government, but no less tough than they are now. In fact, it was operating under much better terms of trade than we now face. If we were now operating on the terms of trade which applied at Christmas 1984, we would have a current account deficit of $3.6 billion, not $14 billion. Before that, in the last year of the Howard Treasurership our terms of trade measured against the 1979-80 year was 0.955. In the December quarter of last year this Government had to cope with terms of trade of only 0.803. No one with an ounce of knowledge of international economics would try to argue that any Federal government, Labor or Liberal, could change those terms of trade figures. But the fact remains that our opponents operated under difficult circumstances and failed abjectly. They had a policy of fighting inflation first, and bequeathed us a rate of 11.5 per cent. That was the best they could do when they targeted inflation as the key figure to reduce. Is it any wonder, then, that they bequeathed us over 10 per cent unemployment when we took office? Just to make the problem completely insurmountable, they gave us a Budget deficit of $10 billion, or 5 per cent of gross domestic product. Within three years, we had more than kept our promise to create half a million jobs; by 1984-85 we had an annual inflation rate below 5 per cent; and we have progressively reduced the Budget deficit in each Budget. The challenge that faces us now stems from the fact that the world has cut our income substantially. World commodity prices have fallen dramatically. It is a situation beyond the power of any government, and we must adjust our situation to new circumstances. Let me now outline the two responses to this dilemma which the non-Labor and Labor parties present. The conservatives, whether Liberal wets or dries, or even Queensland Nationals or national Nationals, are in broad agreement on how to restore normality-reduce government spending, reduce tax, and everything will be all right. That is the public statement; the good news, the politically salable solution. The rhetoric goes-and it is the same story for the Leader of the Opposition (Mr Howard), or for the Premier of Queensland-that if we reduce taxes and provide incentive, everyone will work harder, reap more reward personally and the whole economy will work its way out of its difficulties. But this is a false solution for many reasons. Firstly, it has failed elsewhere before now. It was this very tempting sounding policy which brought Reagan to power in the first place. This was the very policy which turned the United States from a creditor nation into the world's largest debtor, although Reagan's campaign managers were not so foolish as to label it as `incentivation'. Secondly, the hidden agenda behind this glossy picture is rather stark, for if government spending is to be reduced by the amounts which the Leader of the Opposition is proclaiming, the cuts have to occur somewhere. Courtesy of the honourable member for Maranoa (Mr Ian Cameron), we know that pensioners will have no joy out of conservative `incentivation'. He has unequivocally stated: If we can have less taxes there is no reason why we should be giving pensioners or anybody else in the community any more funds. Workers, too, will be pleasantly `incentivated' by an immediate year long wages freeze, making it all the more difficult for families to keep up with rising prices. This House has seen before today the leaked Liberal Party document which details where the axe will fall. I have no need to reiterate that now. The Opposition has not repudiated the document, it has not explained it, it has not said where they have disagreed with it. The only reaction of Opposition members has been to litter this chamber with the remnants of it. But make no mistake, the honourable member for Mackellar (Mr Carlton) will be back at the waste paper basket with his pot of glue and sticky tape if he ever comes to power, putting the document together, implementing its economic despair. To add insult to injury, the Opposition will `broaden the taxation base', a statement which can only mean some form of consumption tax. Each and every item of consumption will cost more. Let the tories ask their small business friends what they think of that. Let them ask the families who they pretend to protect. An excellent example of the coalition's attitude to letting the lower end of the economic scale bear the burden of restraint comes in its recently announced housing policy. Under constant pressure from the Government to tell us where the money is coming from for its policies, the honourable member for Deakin (Mr Beale) has boasted that $690m will be cut from the Commonwealth State Housing Agreement. His attitude is that public housing is now a State issue; the problem goes away by making it into someone else's problem. The problem disappears, along with the honourable member's potential future portfolio. If these attacks on average Australians were not enough, the real insult to the electorate comes in the flip side to the incentivation campaign. It is not all bad news-far from it. Millionaires will have their pensions restored; the rich will get their perks again; anyone with extensive capital will not be paying tax on it; businessmen will get their free lunches once more. In short, honest John Howard, the Leader of the Opposition, will become the Robin Hood of the rich. It makes no difference if one then goes to the Joh camp looking for some remedy. The favouritism, the inequity, is only more blatant. All the restraint is borne by middle and low income earners, while the rich are left to consume and enjoy as much as their grasping will allow. In short, it is a formula for electoral success, an appeal to the rich and powerful, while making a sham offer of membership into the order of the elite to the middle and lower classes. The alternative to the conservative fairy story is what we see before us from the Hawke Government. We make no promise that in one quick move we can make it all come good. The procedure will not be easy, and we must realise that a decline is inevitable in the standards we have come to expect. There will need to be continued restraint shown by all-not just workers or pensioners but all Australians. The rich must get used to the idea of paying for all their meals, including their lunches, and they must become accustomed to paying all their taxes. Such restraint will help reduce our imports. On the outgoing side we must work harder, and smarter, to increase the quality and quantity of our exports, especially our manufactured exports. This Government has initiated such policies since day one of its operation, and it is no exaggeration to say that the broad range of reform undertaken by this Government under Senator Button's Department is the envy of conservative leaders in the field. No conservative government has ever had the foresight or political will to break down protection and restructure industry in the way this Government has. So this is the choice which the people of Australia face-on one hand the Leader of the Opposition, who says that he will not lend his name to any promise which he cannot keep, and who is consistently unable to comment when he is asked where the money is coming from and; on the other, the Hawke Government, which pulls no punches, which has been honest with the people and which has presented them with a plan. It is a plan which calls for sacrifice from all, not just some. It is a long term plan, not a nine-day wonder. It is a plan which spares the needy from the worst excesses, while achieving its goals. If the Australian's newspoll of yesterday is any indication, it is a plan far more acceptable to the people of this country than anything our factionalised opponents have proposed. Mr COWAN(Lyne)(5.50) —I listened to the honourable member for Banks (Mr Mountford), who to some degree went into the historical reasons why he believes there are economic problems today within Australia. I do not dis- agree with many of the things he said but I think there would be an admission from both sides of the House that we have not at all times made the most of our advantages and so made this country a better land for everybody to live in. I want to speak in fairly broad terms about the economy and factors that have a vital effect upon the economy and try to point out some of the things that I think we should direct attention to and maybe some of the remedies that we ought to look at to overcome the problems facing us at the moment. One thing we have to appreciate is that Australia is a young country. It is almost 200 years since we were founded. In earlier days we were dependent upon agriculture and there was very little manufacturing. However, we grew very quickly. When we look back today over the 200 years, I guess there must be a certain amount of satisfaction with the development that has taken place. When I speak about development, I speak of the development of industry, people, roads, the modern communications that we enjoy in Australia today and the fact that we are looked upon by other countries as a very rich land which should be able to meet its responsibilities of feeding the world and sharing the natural resources that we are very fortunate to have. Over the past 15 to 20 years there has been a very serious decline. In the early 1970s most people were able to afford a home, own a motor vehicle and have a boat and trailer in their backyards. They were fairly well off, but since that period there has been a very substantial decline which should never have taken place under any circumstances. We have to look at Australia as a country of very soil rich that is capable of producing virtually any agricultural product that the climatic conditions will allow us to grow. We are a country with a tremendous amount of natural resources and we live in a world that needs natural resources. I agree with the honourable member for Banks that there was a resource boom. We went around the world and we tried to sell our iron ore, coal and other products taken out of the soil because people required those products. But when we look back, surely we must tell ourselves that we have declined because we have allowed overseas interests to come in and exploit our products for profit, when we should have been winning those resources from the soil ourselves and producing the steel and the other articles that were required by other countries. We should have built up trade, kept our costs low, employed people and brought productivity to the fore. These are the things that we overlooked. We were all responsible for that. We are a God-given country. We were given the natural resources that I am speaking about, but instead of taking advantage of them we were inclined to overtax ourselves, to cut our hours of work back and give ourselves industrial awards that no country like ours could ever afford to have. We were willing to hand these things out and now when we look back we ask why we did that, because we had an opportunity then to build this land, to sell the things that we had to trade with the rest of the world, to have full employment and to produce things that actually gave us a better standard of living. I went into a supermarket the other day-like the Minister for Science (Mr Barry Jones), who goes into supermarkets-just to see the products on the shelves that were made in Europe or somewhere else. It is scandalous to think that we have to buy jam that was made in Poland or Germany or some other country when we produce it here. I am speaking not only of jam but also of other foodstuffs that we buy from around the world. Yet we talk about the consumer price index going up. Of course the CPI will rise because of the import tax that has to be paid and the price we have to pay for overseas products. Mr Braithwaite —The J-curve is working. It is pushing up prices. Mr COWAN —That is right; the J-curve is forcing prices up. All of this is related to our failure to examine ourselves properly and to look to the things that we are responsible for here. Australia is an island continent. We have water all around us and all the fish resources that it is possible to find anywhere; yet we import fish. We import more processed fish than we sell. It is scandalous that other countries send mother ships out here thousands and thousands of kilometres away from home, processing their raw catch on board or taking it back home and processing there, and then selling it to us and competing with the Australian industry. What is wrong with this country? We are not taking advantage of the opportunities that we have. We sometimes wonder what the trouble has been. Certainly one problem has been the direction and policy of governments in years gone by. Another problem is those privileges that we were prepared to give ourselves. They have made us so uncompetitive on world markets. I do not think the average Australian wanted to sit back and work only 36 or 38 hours a week. I have an article from the Newcastle Herald detailing work practices at the Newcastle dockyard. Although this is basically a State matter, every member here should look at this and see all the work practices that are abided by. We talk about building submarines and ships for the Navy and for our trade fleet so that we can ply trade around the world, but we cannot build ships here because when one looks at-- Mr Braithwaite —Send them up to Queensland. They will build them there. Mr COWAN —That is right. Carrington Slipways Pty Ltd within my electorate is a very good firm. I am sure it can build ships, but look at the Newcastle dockyard. It is no wonder it has been closed down. What occurred there is found in many of the industrial agreements in Australia, particularly in the resources industry. I wonder where we have gone wrong in the past. Is it the pressure groups and little groups within the community that will not let us mine the areas that we ought to mine or that want to shut up the forests where we ought to win timber? I note that the Minister for Arts, Heritage and Environment (Mr Cohen) is at the table, as is the shadow Minister, the honourable member for Bradfield (Mr Connolly). I hope they both have enough common sense to realise our responsibilities and in the future adopt a realistic point of view. If we have timber, which is a renewable resource, we should allow people to cut it and manage the industry properly. There is also the effect of the unions over the years. I mentioned a while ago the restrictive work practices in awards and such matters. There has been strong pressure for militant unions within Australia. I look at the political parties on this side of the House and wonder why we have some forms of division amongst us. There is no obvious division within the Government at the moment. We know that there is division between the Left, the Right and the Centre, but the Prime Minister (Mr Hawke) has been very lucky. He has been able to keep this very quiet over the last year or so. The reason for that is that the Prime Minister was the President of the Australian Council of Trade Unions-the very organisation which was responsible for the problems on our industrial scene. This man is today the Prime Minister of this country. Where does his allegiance lie? Where must it lie? Mr Nehl —He is still in bed with the ACTU. Mr COWAN —As the honourable member for Cowper says, he is still in bed with the ACTU. Mr Cohen —What is wrong with that? Mr COWAN —The Minister asks what is wrong with that. There is nothing wrong with it as far as he is concerned because he has his prices and incomes accord. The Government and the ACTU have gone to bed together and they are a very happy team. But the problems on this side of the House have been brought about principally because there are strong elements in this nation today-in industry, in the family, in the churches, in the Returned Services League, in communities everywhere one looks-that realise that we are not doing well and that there must be an improvement. That is the reason for our little concerns, and why Sir Joh is threatening to come from the north. There are people within the Liberal Party who might not be pleased because they think they are right on certain things. This is understandable. People will desert the Government in these circumstances and support us on this side of the House. This is the important factor. I am pleased that the Prime Minister has announced that he will not be going to the people until the end of his term. I give him credit for that in principle because I think a government should serve its proper term. But the fact of the matter is that he will not go to the people now because he knows that they realise what is happening. We have our problems of putting our house in order but we must be accepted as an alternative, credible government. I believe that, as time permits, the two strong, old political parties on our side of the House will be recognised by the bulk of Australian people as the ones which will put their house in order and be an acceptable alternative government. We have to get back to 40 hour weeks; we have to do away with the 17 1/2 per cent holiday loading. Mr Cohen —I wish we would. Mr COWAN —The Minister need not be concerned. We will not go into the next election promising, as the Treasurer (Mr Keating) would like to say we will, that we increase spending by $16 billion. That is a lot of rot. Our shadow Treasurer and our Leader have never said that here. We will go into the next election saying that we will give incentive within our taxation system, as the honourable member for Dawson has been saying time and time again in this House. The people of this country know that we will not impose a wealth tax. That will be this Government's next measure. I am saying these things off the top of my head only because of what has been said by speakers before me. I would like to say more down to earth things about the economic situation that we are confronting in this country, but I am saying this simply because in recent months we have witnessed billions of dollars being traded with the media interests of this country. That will not produce one ounce of productivity for Australia. It will not grow more wheat or more corn or produce another railway engine. It will never do that. But that has happened and the Government has allowed it to occur. This is an important fact. The honourable member for Banks has supported this, as has the honourable member for Cowan (Ms Jakobsen). I have not seen anybody in the Australian Labor Party coming out and saying that this sort of thing is bad for Australia. Under socialism the rich grow richer and the poor grow poorer, and that is why we all have people in our electorates who are not able to rent or to build a house. The Australian people know this, because it is characteristic. The Minister knows it. He hears it within his own electorate. That is why honourable members opposite look worried at times. That is a drift that is occurring in this country. Let us provide that incentive. We do not need to have immigrants coming to this country, maybe without skills and maybe under a refugee scheme. They are prepared to buckle down and work and that is why they get work. I have great faith in the inheritance of every Australian. Members of younger generations are willing to get out and to do their 40 hours work-or 50 hours, if necessary-to get this country back on its feet. But they want smaller government. They want incentive in their taxation. They want reasonable industrial laws under which to work and operate. They want to get out and earn a living for themselves. I am sure they do not want to be employed in the Public Service, because that initiative that they inherited is still within them. It is being whittled away by this Government. I hope that it is never completely whittled away, because once we open up the floodgates, once we start gradually to legislate and give Australian people the incentive to do things, I am sure that we will see the results. Mr Braithwaite —Give them the opportunity; that is all. Mr COWAN —That is right. I spoke a while ago about the media. We can talk about the banks. I doubt whether the banks have ever made a greater profit than they are making at the moment. Last year $1.5 billion was made by the banks in this country, under a socialist government. Yet our farmers out in the field are being pushed off their farms. Mr Nehl —Disgraceful! Mr COWAN —It is a disgraceful situation. They are being pushed off their farms. Is it not time that there was sensible discussion between the farmers, industry, the banks and the Government? Is it not up to the Government to initiate it? Is it not time that these people were helped? I am sick and tired of hearing that the farmers should be self-supporting. Mr Deputy Speaker, they want to be and you and I would like to see that. But a farmer who toils in this country or any other country today is subject to the elements of nature. These elements affect his cropping, the treatment of his soil and, admittedly, his markets. But he has to grow a crop. If we push the farmer down, whether his business is wheat, beef, beef, dairying, fruit, vegetables or something else, it takes years before he is able to get back on his feet. He has to breed stock and grow crops. We have to understand that the bulk of this nation's exports, as I have said time and again, comes from the person who tills the soil, the person who works the ground-always reliable, the family farmer. I could go on to talk about the family, but I do not have the time. We could talk about families all night. They are the basis of this nation. The moral standards of this nation are slipping. I witnessed the advertisement on the air today concerning the acquired immune deficiency syndrome. If the Government wants Australians to learn the lesson about AIDS it had better make its stand much firmer than it is contemplating at the moment with its $3m AIDS program. I agree with the Reverend Fred Nile on this issue. If we show the children of today the things that the Government intends to show them and has been showing them on television they will want to try them out. That is human nature for sure. We have to be a little tougher than we are at the moment. Not only must we restore the economy but also we must improve our standards if we are to do the proper thing by the people we are in this House to represent. I would like to talk about many things. I never realised that Appropriation Bills could occasion so much discussion. I thought we were going to talk directly about interest rates and other related matters but I found out, Mr Deputy Speaker, when I was seated in the chair that you occupy today, while I have been in the House and while I have listened to the radio, that we are covering a wide field. We have been to South Africa, we have been to Lucas Heights-we have been everywhere. I do not know where we have not been. What I am speaking about is much more important than all of those things put together. Honourable members opposite may laugh, but they know jolly well that the people they represent are not being represented properly while they are talking about the fiddling things. This Government-and those on this side of the House-must be prepared to think of people and to consider our responsibility, first to our own people and secondly to the people of the world. We have a responsibility to feed and clothe them, because the good Lord has presented us with the natural resources to do this. Perhaps we should be like the Koreans and the Japanese. I heard a person say the other day: `Yes, we have got the resources'. They have not got the resources, but they have the fire in their bellies-that is the important fact. We have the natural resources, but we have not got the fire in our bellies. That is the summary of the situation as I see it. I believe that there is a better future for Australia if we are sensible. We all have great confidence in the young people in the community. Mr JENKINS(Scullin)(6.10) —Appropriation Bill (No. 3) 1986-87, Appropriation Bill (No. 4) 1986-87, and the Appropriation (Parliamentary Departments) Bill (No. 2) 1986-87 give us a chance to review the Government's performance in displaying compassion and in working towards bringing social justice to Australians in this time of difficult economic conditions. It also gives us an opportunity to consider the prospects, the many proposals and policy alternatives under consideration by the coalition parties. I was interested to hear the honourable member for Lyne (Mr Cowan) admit that the coalition parties are being given an opportunity to get their act in order, that they need to be seen as a united front and perhaps therefore as an alternative government. But the question one must ask is: What have they been doing for the last four years? It is an admission by the honourable member that the coalition parties have not displayed a constructive role as is their proper role as an Opposition. Let us see how they are going about, scratching around and trying to find policies. On Monday, 23 March we had revealed what was called the Liberal Party's secret agenda. It is not so secret any more because it has been given good media coverage. Let us look at some of the proposals under consideration. One is to cut pensions and tighten eligibility-not what one would assume to be a very compassionate way to look at the plight of the needy. Another suggestion is to abolish all employment programs, programs that have been quite successful in giving the long term unemployed skills which have enabled them more adequately to go back into the work force. Then we have the big items such as the proposal to abolish the fringe benefits tax and the capital gains tax. These measures will be directed towards assisting the friends of the coalition parties-the rich. It will put the tax load back on to the poor in our society. Another proposal is to increase charges for pharmaceutical benefits. What does it mean? Will the safety net provisions that were put in late last year by this Government continue? We do not know. The Opposition parties are silent on such issues. We see a proposal to cut out the participation and equity program, a very successful education program which has tried to combat the inequities in our education system. It has tried to reverse the figures which show that those schools in the higher socio-economic areas have better entrance rates into tertiary institutions. What do we see from the Liberal Party in this secret agenda? We see that it has turned its back on people in those conditions. We also see on the secret agenda a proposal to privatise certain public concerns. There is a suggestion that the coalition parties would look at, as privatisation targets, the Commonwealth Bank and Qantas Airways Ltd, Telecom Australia, and Medibank Private. We have had these threats from the Opposition for a number of years. In fact, there was a threat in September 1985 to put Telecom on the `Sale of the Century' list. We have to ask the dries in the Liberal Party whether they have consulted their colleagues in the National Party. The National Party is yet another little faction ridden group. Have they considered the opinions of the coalition? What would the National Party say about the fate of cross-subsidies which are so welcomed by rural subscribers to Telecom? Can they suggest that if Telecom were to be privatised those sorts of cross-subsidies would continue? I doubt very much whether that would be a prospect. We also have a number of faceless men in groups outside the main stream of the Liberal and National parties, those who have their close ties with the New Right. They have come up with suggestions about how the Australian economy should be run. The Business Council of Australia last month suggested cuts of about $4 billion. It suggested cuts in education of $290m, cuts in health of $805m, cuts in social security of $1.14 billion and cuts in housing of $120m. Cuts in these areas would certainly affect those in most need. We have no suggestions about how it would display the compassion that many back benchers of the Liberal and National parties claim that their parties have. People such as Ian McLachlan of the National Farmers Federation suggested expenditure cuts of $10 billion. That would not leave much for the Government to be involved in. It certainly would not be in the best interests of those most in need. I am sorry that the honourable member for Higgins (Mr Shipton) has left the chamber because I do not wish to be too painful when I also add John Elliott's proposals to the long list. Mr Gear —That is why he is not here. He has gone to see John. Mr JENKINS —He must be working on his numbers. Albeit for me to suggest that he get help with preselection matters, he will be doing his own thing. In an interview in the Age on 9 March John Elliott, when asked what steps are necessary, said: I think we've got to take five or $6 billion (out of the 1987 Budget). That is tough medicine. There is no suggestion that those on the opposite side of this House have considered how they would lessen the effect on the needy. Next I come to the proposal by the National Party-or should I more correctly say the Queensland National Party? Its proposal is to have a flat tax-a bonanza for the super rich. The Nationals of the extreme right have proposed a 25 per cent flat tax with marginally increased overall tax revenue. The burden would be dramatically shifted. Let us look at the top end of the scale. On 1984-85 figures those who earned $100,000 per annum or more numbered 5,893. They paid $612m in taxes. Under the 25 per cent flat tax proposal the level of taxation for those people would be reduced to $287m. Under the flat tax proposal it is the low and middle income earners who would have to pay. Those on incomes of up to $22,000-or $437 per week-would have to pay an additional $4.6 billion in taxes, an increase from 44 per cent to 61 per cent of the tax bill. In summary, about five million Australians, 76 per cent of all taxpayers, would have to pay an average increase of $18 per week under the 25 per cent flat tax-they are all in the lower scale of income. Today, we have the news on the front page of the Melbourne Herald that the former Secretary to the Treasury, a prominent member of the H. R. Nicholls Society, one John Stone, has joined the `Joh for PM' campaign. He is proposing to flesh out Sir Joh's single rate tax proposal. The article states: . . . Sir Joh's proposal for a single-rate system of personal income tax at a rate of 25 per cent would `provide a massive improvement in incentives to work, to save, and to create jobs, and disincentives to cheat on paying tax.' I do not know how he comes to that conclusion, but it is interesting to note the comments of that distinguished economist John Kenneth Galbraith when he recently visited Australia and stated his absolute opposition to a flat tax. He went on to make a statement that represents a comprehensive indictment of the economic blarney offered by those opposite. Galbraith had this to say: When you hear all these suggestions as something that are to stimulate the economy, provide incentives, or whenever you hear the word incentives, always sharpen your ears because you know that somebody is making an argument for more money for himself after taxes. Indeed, that is the problem. We have to look, with great caution, at some of the proposals that are being offered by the multitude of factions and different groups that are represented either here in this House or in outside bodies behind the two coalition parties. Let us briefly have a look at the achievements of this Government. I just want to dwell on a couple of areas. Since April 1983 this Government has assisted in the creation of 772,000 jobs. It has enabled a large number of Australians to get back into the work force and, importantly, it has enabled many females to re-enter the work force. Another area where we can look at this Government's achievements is the area of pensions. The standard pension has increased by more than 6 per cent in real terms compared with a real increase of only 1.5 per cent over the seven years of the previous Government. In March 1983 the pension was 22.7 per cent of average weekly earnings and by December 1986 it had increased to 24.1 per cent. That is not to say that our task is finished. We must continue to strive to improve that percentage, but we need to recognise that that must be done now in times of difficult economic circumstances. There have been achievements in welfare payments. Rent assistance has been increased by 50 per cent. The separate income test for rent assistance is to be abolished in July this year. That will give about 300,000 people up to $15 extra a week. As we all know, on 1 July 1987 the poverty trap reduction measures will be put into place. The free area of income will be increased from $30 to $40 for single people and from $50 to $70 for married couples, with an additional $6 to $12 per child. This is important because, while real pensions will have increased by approximately 6 per cent, the cut-off income for receipt of a pension will have been raised by more than 20 per cent in real terms. That is really important. All the Opposition does is to come up with incredible nonsense such as the so-called work for the dole scheme which was promoted by the Opposition during the matter of public importance debate today. This concept is rejected absolutely by the Government. The Opposition scheme, as far as we can tell, is something like a work for the dole lottery, a conscription scheme for work gangs. As the Minister for Social Security (Mr Howe) said during the matter of public importance debate, it is nothing more than a smoke-screen for an attack on the unemployed, an attempt to prey on perceived prejudice in the community, a substitute to cover the absence of policies. It is unfortunate that it does reflect the attack which the Opposition and coalition parties from time to time make on the unemployed and welfare beneficiaries. The Opposition parties are not gracious enough to recognise the improvements that have been made in the administration of welfare payments in an attempt to ensure that only those who are deserving of the payments are the ones who receive them. They are not gracious enough to acknowledge the good work that has been done by the social security review. There has been a genuine attempt to ensure that those in greatest need are the ones that are the targets for welfare payments. Good work has been done by the Government, but that is not to say that more work should not be done. There is a need to look at the distribution of wealth in Australia and a need to try to bring greater equity to Australia. I think that that is something that I touched on in my maiden speech some 12 months ago when speaking on Appropriation Bill (No. 3) and Appropriation Bill (No. 4) last year. I urged the Australian Labor Party to adopt a national social justice strategy. I was very pleased that at the Hobart conference such a strategy was adopted. I feel that by working within that strategy a great deal of good work will be done that will enable the objectives of such a strategy to be achieved. Hopefully, it will bring about a greater fairness in the distribution of our economic resources and there will be greater acceptance of the notion of the need for equal, effective and comprehensive civic, legal and industrial rights for people. There is an important need to ensure that Australians have fair and equal access to essential services such as health, education and housing. I am afraid that, on the evidence of leaked Opposition documents and the official policy documents that have been released, I do not think that we could ever see that from coalition parties. I instance the Opposition proposal to scrap the education participation and equity program. It would also scrap the Commonwealth-State Housing Agreement and things such as that. The social justice strategy should ensure that there is an opportunity for Australians to participate more fully in their personal development, social and community life and decision making that affects them. They are important aspects that I hope we will see more work towards. I look forward to a continuing political climate, in tandem with an improvement in economic performance, in which this Government continues to fight the policies of greed and to improve the plight of the needy. Mr ROCHER(Curtin)(6.27) —In the second reading speech of the Minister for Community Services and Minister Assisting the Treasurer (Mr Hurford) he advises us: These additional appropriations are required to meet commitments that have been approved by the Government since the Budget as well as requirements of an ongoing nature. The Minister argues that the key factors include cost and price increases since the 1986-87 Budget was brought down, such as an allowance of $35m for the effect of the first tier of the new so-called two-tiered wage fixation system. As the Government publications entitled `Forward Estimates of Budget Outlays' released late last year shows, 92.7 per cent of total outlays are formally or informally linked to wage and price movements. In this context we should go back and have a look at the unequivocal words in Budget Statement No. 2 of the 1986-87 Budget Papers, where it is stated: If we are to hold the competitive gains of the past 18 months, labour cost increases in Australia need to be kept broadly in line with those of our major trading partners. Contrast that with the perfectly ridiculous decision by the Australian Conciliation and Arbitration Commission to grant a $10 flat rise, plus a 4 per cent second tier ceiling. This judgment did not just destroy the Budget forecasts of 6.25 per cent for wages growth over 1986-87, but it may very well become the last nail in the coffin that is the economic irresponsibility of this Government. I defy anyone to assess our current economic position and then attempt to honestly justify additional wage imposts at this time. This has happened at a time when we have the biggest taxing and spending government in Australia's peacetime history. On top of that, in July last year the Australian dollar reached its lowest value ever. We are seeing, in both relative and absolute terms, the highest interest rates regime ever, with home loans at 15.5 per cent, Bankcard interest rates running at 22.5 per cent, the prime rate at 18.5 per cent and the small overdraft rate at something like 20.5 per cent. Added to that is the fact that total borrowings overseas are in excess of $100 billion for the first time and the net foreign debt is in the vicinity of $80 billion. This year we face a $14 billion current account deficit, which follows two previous years of current account deficits which were record breakers. That $14 billion deficit this year will exceed each of those years. In fact, our current account deficit, measured as a percentage of gross domestic product, in 1986 was a record at 5.9 per cent. The first Australian government ever to lose this country's AAA credit rating is in power at the moment. Even Gough Whitlam could not achieve that doubtful honour. Inflation is running at around 9.8 per cent and is the highest since the June quarter of 1983 and almost double the inflation rate at the time of the last election. Inflation is rising, while the Organisation for Economic Co-operation and Development countries have seen their interest rates falling. Our inflation rate, at 9.8 per cent, compares with 1.3 per cent in the United States of America, zero inflation in Japan and the OECD average of 2.2 per cent, or 1.7 per cent if we compare our rate with the rates of our major trading partners. It is the worst relative performance since the OECD was formed 26 years ago. In the area of economic growth, over the year to the September quarter of 1986, gross domestic product fell by 0.5 per cent. That has put the Budget forecast of 2.25 per cent growth in 1986-87 way out of kilter and we now have to scale back our predictions and thinking. With the collapse of the Australian dollar, we have to consider some other factors. When this Government came to office we had a trade weighted index of 81.7 and on 23 February this year 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 that are literally crucifying many Australians. This is only a partial catalogue of the economic chaos that this country has found itself in due to the gross ineptitude of this socialist Government. In this climate of chronic economic failure it would be amusing, if it were not so serious, to observe the Government squirming on the hook of its own incompetence. Day after day we see the Prime Minister (Mr Hawke) and his Treasurer (Mr Keating), in an abuse of Question Time which reduces that period to total irrelevance, telling us in unspecific terms how things are bound to get better. They work on the principle that if their actions drive us into the economic wilderness, if our well-being can be depressed deep enough and long enough, things are bound to get better. Of course they are, but it is unlikely to be under this Government. Given the catalogue of `worst ever' results and achievements, it is tempting to believe that life must surely get better even under this socialist Government. However, we must recall that we have been repeatedly assailed by increasingly strident and always pathetic assurances over the past two or three years that the economic performance is bound to improve. Instead, our figures get worse and our performance gets worse, but the claims are repeated. Dr Pangloss and Mr Micawber have absolutely nothing to teach this Prime Minister and this Treasurer. But who can have confidence in their assurances that everything will turn out for the best, or something like a J-curve will turn up? While sooner or later there must be some modest and favourable turnaround apparent in our economic performance, because it has soon to reach the absolute depths, there is absolutely no prospect of anything like a maximum recovery under this Government. Today we saw some of the more shallow of the economic journalists and writers and the Treasurer referring to the latest OECD report. They picked out the bits to suit themselves, and the economists of that club dare not criticise each other. The OECD surveys have been reduced and compromised to such an extent that they can no longer be thought of as a serious appraisal. Certainly their predictions are in no way to be taken seriously by anyone these days. The previous survey in 1985 by the OECD stated: The recent fall in the Australian dollar, if maintained, should lead to a positive contribution from the foreign balance, particularly in 1986, and to some narrowing in the current account deficit. That was in 1985. Granted, the report went on to warn of changes and dangers in connection with inflation and it discreetly and tenderly mentioned wage policy and how that could upset its predictions. But then we come to the OECD report produced today. Under the heading `Conclusions' the survey team now retreats. It now starts to qualify its fearless predictions in 1985, when it says: Since Australia was last examined by the EDR Committee in June 1985, the country's economic performance has deteriorated considerably. Contrary to expectations, imbalances that were emerging at that time have become distinctly worse. To a large extent, this was due to the unexpectedly large terms-of-trade loss and related pressures on the exchange rate. Some sort of forecasters they are! They say now that the changes were unexpected. We will see in two years time when they do the next exercise-if a coalition government has not been returned, as it most surely will-they will be saying: `Oh, gosh, we made another mistake'. The Treasurer will be saying: `Goodness gracious, wasn't that a good report from the OECD?'. We know that these reports are written and edited by the Treasurer's Department. This country needs a coalition government prepared to do simple arithmetic in public and to back it up with decisive structural reforms. In support of the Government's request to Parliament to approve the appropriation of an additional $419.5m the Minister argued that these so-called savings amounting to some $384m offset in considerable part the additional appropriations. We were told that after allowing for prospective savings the appropriations sought represent only a net increase of $35.5m in the expenditure to be financed from annual appropriations. I take it that we are expected by the Government to regard this sum as a relatively trifling amount and to raise no particular complaint against it. Notwithstanding what I take to be the Government's intention, I should point out that while $419.5m is sought for additional expenditure, the $384m claimed as savings is not what it might seem at first glance. I quote from the Department of Finance information paper `Statement of Savings Expected in Annual Appropriations', which says: The amounts shown in this paper are the amount by which, at 17 March, it was estimated that the appropriations made by Acts Nos 116, 117 and 118 of 1986 will be underspent at 30 June 1987. To clarify that, the paper of the Department of Finance notes: Unexpended appropriations at 30 June lapse in accordance with section 36 (1) of the Audit Act 1901. There are two important points to be made here. The first is that some of these expenditures may yet be made, albeit after 30 June. The so-called savings, we need to remember, are only estimates of underspending by the relevant Government instrumentalities. There can be few here who have not had an understandably outraged taxpayer draw their attention to some example of a departmental spending spree just prior to the end of the financial year. We have all had it. Secondly, expenditures not made in 1986-87 are really saved only if they are not made in subsequent years. Whatever the niceties of public sector accounting techniques may be, the practical effect on public finances remains the same if money is spent in 1987-88 rather than during 1986-87. The temptation to fiscal slackness in an election year could easily prove overwhelming in the face of the `never mind the Budget, win the election' faction which almost inevitably forms in government parties facing the polls. What is more, our experience with this Government's ordinary financial discipline is by no means reassuring: Witness the Budget deficit overruns in recent years. In 1986-87 alone we are facing a Budget deficit blowout of at least $600m to $700m. Admittedly, the Government might call on the Reserve Bank of Australia to declare a dividend as a result of that bank's punting in the exchange market, as it did last year, picking up $2 billion which saved the Government from even greater deficit spending than would have occurred otherwise. The Government has not budgeted for anything from the Reserve Bank this year but the Government lives in hope. Do we not all live in hope? Let us not forget that the Hawke Government is the biggest spending administration in Australia's peacetime history. The four Budgets brought down by the Treasurer have produced the four largest levels of Government spending relative to gross domestic product in this nation's peacetime history. In real terms, Government expenditure had increased at an annual rate of 3.9 per cent over the four years of this socialist Government. This figure compares most unfavourably with the figure of only 2.1 per cent for the seven years of the Fraser Government. As a share of GDP, the relevant figures average 29.9 per cent for the four years of this socialist Government as against 27 per cent for the seven Fraser years. The cumulative deficit in the four Hawke-Keating Government Budgets is in the order of $23.9 billion. That figure compares very poorly with $17.6 billion over the seven years of the Fraser Government. Whatever criticisms can be made of the Fraser years-I am as well acquainted with the actual record of that Government as any member in this chamber at the moment-the simple fact is that on this important test of economic management it performed far more creditably than its successor and predecessor alike. Establishing specific spending priorities within a coherent fiscal policy framework is always a difficult task. No one denies that simple fact. The reality of democratic politics is that those proposing significant reforms to the size and direction of government expenditure quickly encounter administrative, political and sectional interests willing to defend vigorously even the most blatant examples of misuse or misallocation of public money. It is in this area that my colleague Senator Michael Baume, as Chairman of the Waste Watch Committee, and the Committee, including my colleague the honourable member for Mayo (Mr Downer), have performed a very worthwhile task. That Committee has repeatedly shown that no matter how ridiculous the purpose; no matter how bizarre the recipient group; no matter how the grant is actually used; and no matter how blatant the political partisanship involved, there will be those willing to defend it to attempt to muddy the waters of public debate and to justify even the least credible of proposed appropriations. Whatever the easy options or the comfortable compromises of the past may have been, times have changed. In accordance with the wishes of my Whip, I reluctantly leave my remarks there. But I will say this: It starts to gall a bit when we are asked to curtail our speaking time on important economic measures such as these Appropriation Bills. Mr Gear —You have not done a bad job. Mr ROCHER —I have done a very good job and I have not finished, either, so do not get too toey. I might go the rest of my time. Mr Gear —You've got another two minutes. Mr ROCHER —The honourable member should relax. I have said it before and I will take the opportunity to repeat it: We are continually allowing the legislative process of true debate to be transferred from this chamber to our colleagues in the Senate. I say again-I will continue to repeat it-that while we curtail speaking times in this place to less than those provided for in the Standing Orders we will become a less effective chamber, and we will live to regret it. Mr GEAR(Canning)(6.46) —It would not surprise anybody in this chamber that when people from the Opposition speak on Appropriation Bills and have an opportunity to talk about their taxation policy we do not hear anything about it. Instead, as the honourable member for Curtin (Mr Rocher) showed, we get carping criticisms about what this Government supposedly is or is not doing. The honourable member brought up a couple of points I would like to take up. He talked about the amount of tax revenue this country spends as a percentage of gross domestic product. For the honourable member's illumination, I have the latest figures for the Organisation for Economic Co-operation and Development. The revenue statistics for the OECD countries show the amounts of tax revenue spent as a percentage of GDP. Of the 23 OECD countries, Australia comes in eighteenth. Mr Rocher —After Sweden. Mr GEAR —Sweden is first. It spends the highest percentage. Around 50 per cent of its GDP is spent by the Government. The country with the lowest figure is Turkey. If what the honourable member was saying was that the measure of economic well-being was the percentage of tax revenue spent by the government one would imagine that Turkey would be leading the economic charge, but that is not the case. I do not know what point the honourable member was trying to make but whatever it was it is not borne out by the statistics here: Australia is doing very much better than Turkey and so is Sweden. Therefore, these figures show that the percentage of tax revenue actually spent plays very little part in the economic well-being of a country. In the case of Sweden, one could point to the fact that its high taxing policies have actually produced an economy which is better suited to the economic conditions of today than are Australia's. The honourable member for Curtin also talked about the Waste Watch Committee. This bunch of mental midgets who go around perusing documents to find grants as low as $400 to criticise-they have done that-would be better off directed to coming up with a taxation policy. The Opposition does not have one. We do not know what the Opposition is going to do on tax; in fact, it does not know itself. The Opposition is mortified at the thought of telling us about a taxation policy. The Opposition has four members on the so-called Waste Watch Committee perusing documents to see not how this Government but agencies such as the Australia Council spend money. It is arms length funding; it is not done by the Government. They are the things Opposition members criticise. That is what they are doing. Instead of actually buckling down to the things that really matter such as coming up with a taxation policy they are off in a little dungeon somewhere looking over these documents trying to get a bit of publicity out of it. I have no doubt that it is a great publicity stunt. We had one last week. Those of us who took an interest noticed that the day the Waste Watch Committee announced its awards was the day the Australia Card Bill was introduced into this chamber for the second time. Two Waste Watch Committee members raced from the announcement of that award, where they criticised the grant of $11,000, I think, to this chamber to vote against a measure that would net $880m. Let us see where the real waste is. Let me just detail a few of the things that the members of the Waste Watch Committee have voted against. They have voted against the bottom of the harbour legislation that this Government introduced four times to try to get it through both Houses. It was rejected in the Senate four times. That legislation would have netted $600m. The Waste Watch Committee criticises grants of $400 but it is quite happy to vote against legislation which would net $600m. It voted against the cherry pickers superannuation schemes legislation. People with a social conscience should look at the ways employers manipulated those funds to rob employees of their just entitlements. That represented $25m we tried to get back. Again, it was voted against by members of the Waste Watch Committee. It voted against the fringe benefits tax and substantiation-worth $900m. People who take their lunches to work in brown paper bags were subsidising their more affluent fellow Australians. It voted against the denial of entertainment expenses, the old boozy lunches. That was worth $320m. It voted against the capital gains tax, worth $25m. It voted against negative gearing, worth $100m. It voted against the assets test. It would rather give pensions back to the millionaires. The assets test is worth $160m. As I have said, it voted against the Australia Card, worth $880m. The Waste Watch Committee voted against every one of those proposals. Yet it has the hide to put out Press releases criticising grants as low as $400. I leave it to you, Mr Deputy Speaker, to work out for yourself who are the real wasters on the parliamentary scene. Members of the Waste Watch Committee, who have rejected these proposals, which I calculated to be worth $3,010m, are the real wasters. They have voted against every meaningful measure this Government has tried to introduce. No doubt next week-or this week if it happens-when the Australia Card legislation is voted on in the Senate the other half of the Waste Watch Committee will vote against it there. Members of the Waste Watch Committee are, as I said, nothing more than mental midgets who peruse documents in the hope that some lazy journalists will publish the findings they come up with. Ms Jakobsen —No lazy journalist would. Mr GEAR —As my colleague says, no lazy journalist would-not here, certainly. I am talking about people like John Laws who will run this sort of drivel on their radio stations without checking the facts. The $400 grant the Waste Watch Committee criticised was for a peace march in Perth. I will demonstrate the duplicity of the Opposition. The Waste Watch Committee, which was lauded by the honourable member for Curtin and by other Opposition members as a committee that is doing something meaningful for the Opposition, criticised a $400 grant for a peace march in Perth. I notice that up in the gallery are some young people. The honourable member for Tangney (Mr Shack), in his very cynical document concerning how the Liberal Party should try to induce young people to vote for it, said that young people take a particular interest in peace issues and that, therefore, when one is talking to young people-as I am now-one should not criticise a $400 grant for a peace march. So the Liberal Party in one forum said that the $400 grant was a waste of money but in another said: `Do not let the young people find out about it because they will agree that the Government should give $400 to help organise the peace march'. The Liberal Party knows that young people take the issues of peace very seriously, as does this Government. What absolute duplicity on the part of the Liberal Party not to admit to young people that it criticised a $400 grant for a peace march. One cannot say anything more for the so-called Waste Watch Committee than that the honourable member for Tangney, at least, was perceptive enough to say that one should not mention some of the things the Committee criticised in front of young people. I go back to what I said. The Opposition does not have a taxation policy. Its members cannot debate anything to do with taxation because there are four or more different factions within the Opposition. There are the Nat Nats. There are the Queensland Nats. There are the wets, the dries, the damps and the squibs. All factions are covered on the other side of the House. They cannot get together. The wets and the dries are incompatible. The Nat Nats and the Queensland Nats cannot get together. They do not know where they are going on taxation. Yet they lock themselves up in a closet and peruse documents in the hope of getting some cheap publicity. Ms Jakobsen —And then they are leaked. Mr GEAR —As the honourable member says, then they are leaked. It is the in-fighting which produces this closet. Ms Jakobsen —It is a water closet. Mr GEAR —It is a water closet. We get leaks that the Opposition would not increase pensions. Let me consider some of the things the Opposition would do in regard to prices. It would abolish the Prices Surveillance Authority, the one effective mechanism we have for keeping a lid on prices, the watchdog on manufacturers and retailers. The Authority is doing a very effective job yet the Opposition would abolish it. But it would not only do that. According to the Leader of the Opposition (Mr Howard)-one has to take him at his word-the Opposition would introduce an 8 per cent consumption tax. An 8 per cent consumption tax would lift prices and inflation by about 8 per cent. But if that is not bad enough, having abolished the Prices Surveillance Authority and lifted prices by 8 per cent, the Opposition would freeze wages. So prices would go up by 8 per cent and a lid would be put on wages. We know from the leaked document which the honourable member for Cowan (Ms Jakobsen) talked about that the Opposition would stop pension increases. One of the things this Government has done has been to make sure that pensioners do not suffer because of the devaluation of the Australian dollar. We have given pensioners full consumer price index increases and maintained their purchasing power. As the previous speaker on this side of the House, the honourable member for Scullin (Mr Jenkins), has said, we have increased the real value of pensions by 6 per cent since we have been in office. What would the Liberal Party do? It would stop pension increases because it has to get that $16,000m from somewhere. So it would take it out on the pensioners. We would have an attack on the living standards of Australians. The Liberal Party stands for deceiving the young, putting the boot into the pensioners, keeping down the wages of the working people of Australia, abolishing the Prices Surveillance Authority and slapping on an 8 per cent consumption tax. They are the sorts of things the Opposition is not talking about. Honourable members opposite come up with a gobbledegook of statistics which they hope will somehow cloud the issues. I heard part of the speech by the honourable member for Mackellar (Mr Carlton) this morning. It was not a very good speech. He referred to the big blow-out in spending in 1982-83 which he put down to the fact that there was a recession at the time, as I remember it. What he did not say was that the former Government was trying to buy votes. It was the famous-or infamous, depending on how one looks at it-family Budget, the biggest blow-out of all time. There were big television and newspaper advertisements saying: `The Family Budget: Vote for Malcolm Fraser in 1983'. All I can say to the honourable member for Mackellar-the Whip is giving me the wind-up-is that the Opposition, when in government, did not fool the people back in 1982-83. It is not fooling the people now. As the Prime Minister (Mr Hawke) has said today, we are not going to take the Opposition to the polls now. But at the end of the year the Opposition will again not fool the people. It will get the hiding that it deserves. Motion (by Mr Humphreys) agreed to: That the question be now put. Question put: That the words proposed to be omitted (Mr Carlton's amendment) stand part of the question. The House divided. (Mr Deputy Speaker-Mr D. B. Cowan) Ayes . . . . . . . . . . . 77 Noes . . . . . . . . . . . 55 —— Majority . . . . . . . . . 22 —— Baldwin, P. J. Jenkins, H. A. Beazley, K. C. Jones, BarryBeddall, D. P. Kelly, R. J. Bilney, G. N. Kent. L. Blanchard, C. A. Keogh, L. J. Blewett, N. Kerin, J. C. Bowen, Lionel Klugman, R. E. Brown, John Lamb, A. H. Brown, Robert Langmore, J. V. Brumby, J. M. Lee, M. Campbell, G. Lindsay, E. J. Charles, D. E. McHugh, J. Charlesworth, R. I. McLeay, LeoChynoweth, R. L. Maher, M. J. Cleeland, P. R. Martin, S. P. Cohen, B. Mayer, H. Cross, M. D. Mildren, J. B. Cunningham, B. T. (Teller) Milton, P. Darling, E. E. Morris, AllanDubois, S. G. Morris, PeterDuffy, M. J. Mountford, J. G. Duncan, P. O'Keefe, N. P. Edwards, Ronald O'Neil, L. R. T. Fatin, W. F. Price, L. R. S. Fitzgibbon, E. J. Punch, G. F. Free, R. V. Saunderson, J. Gayler, J. Scholes, G. G. D. Gear, G. Scott, J. L. Gorman, R. N. J. Simmons, D. W. Grace, E. L. Snow, J. H. Griffiths, A. G. Staples, P. R. Hand, G. L. Theophanous, A. C. Holding, A. C. Tickner, R. E. Hollis, C. Uren, T. Howe, B. L. West, S. J. Humphreys, B. C. (Teller) Willis, R. Hurford, C. J. Wright, K. W. Jacobi, R. Young, M. J. Jakobsen, C. A. Adermann, A. E. Hodgman, W. M. Aldred, K. J. Hunt, R. J. D. Andrew, J. N. (Teller) Jull, D. F. Beale, J. H. Lloyd, B. Blunt, C. W. McArthur, F. S. Braithwaite, R. A. McGauran, P. J. Burr, M. A. McVeigh, D. T. Cadman, A. G. Macphee, I. M. Cameron, Donald Miles, C. G. Cameron, Ewen Millar, P. C. Cameron, Ian Nehl, G. B. Carlton, J. J. Peacock, A. S. Cobb, M. R. Porter, J. R. Coleman, W. P. Reith, P. K. Connolly, D. M. Robinson, IanConquest, B. J. Rocher, A. C. Dobie, J. D. M. Ruddock, P. M. Downer, A. J. G. Shack, P. D. Drummond, P. H. Sharp, J. Edwards, Harry Shipton, R. F. Fife, W. C. Sinclair, I. McC. Fisher, Peter Smith, W. Goodluck, B. J. Spender, J. M. Hall, Steele Tuckey, C. W. Halverson, R. G. Watson, D. J. H. Hawker, D. P. M. Webster, A. P. Hicks, N. J. (Teller) White, P. N. D. Hodges, J. C. Question so resolved in the affirmative. Amendment negatived. Original question resolved in the affirmative. Bill read a second time. Leave granted for third reading to be moved forthwith. Bill (on motion by Mr Hurford) read a third time. Consideration resumed from 25 March, on motion by Mr Hurford: That the Bill be now read a second time. Question resolved in the affirmative. Bill read a second time. The Bill. Mr PORTER(Barker)(7.09) —I address my comments to the appropriation under Appropriation Bill (No. 4) 1986-87 of an additional $13m of taxpayers' funds by way of compensation to pharmacists for the costs imposed on them by the Government as a result of its administrative incompetence under the pharmpay system. Under pharmpay, chemists submit pharmaceutical benefits scheme prescriptions to the Department of Health for payment of the appropriate subsidy. The Department established the pharmpay system for processing these claims. Pharmpay involves the reinterpretation of the prescription by a pharmpay clerk; the clerk then codes the prescription and manually enters it into a computer. The benefit is then determined and a cheque is issued to the chemist. In other words, the prescription is written by the doctor, read and filled by the chemist and then reread, coded and entered into a computer by a public servant. Instead of accepting the chemist's claim and applying a strict random audit process, the Government set about duplicating the work done by the chemist. The system was fully operational by late 1984 and by the beginning of 1985 delays in payments began to appear and a backlog of claims built up. In 1985-86 $150,300 was allocated for overtime to reduce the backlog of claims which had already built up in the short period that the system had been operational. In other words, it rapidly became obvious that the system, even though it employed over 800 data entry clerks, could not keep up with the rate at which chemists' claims were being lodged. As the processing of scripts fell behind payments to chemists began to be seriously delayed. This meant that although the chemist had filled the prescription and was out of pocket for the cost of the drug, nevertheless the Government's payment of the patient subsidy was not forthcoming. In order to overcome the problem the Government then started to make monthly payments to chemists based on the anticipated average volume of chemists' scripts rather than paying on the basis of actual prescriptions lodged. These average payments were issued on the understanding that at some time in the future the actual scripts would be processed and reconciling payments would eventually be made. However, last November the Attorney-General (Mr Lionel Bowen) notified the Department of Health that this method of payment was illegal, so two weeks ago the Government introduced legislation to amend the National Health Act to allow the Department to legally make payments to pharmacists based on estimates of the actual number of scripts filled. The important point to make is that soon after the introduction of this new system it was clear that unless significant administrative changes were made to improve the processing of prescriptions the system was bound to fail. The evidence clearly indicates that the Government failed to take the appropriate administrative action to improve the processing of these scripts. Now we are asked to appropriate $13m as compensation to the pharmacists for the costs they have had to bear as a result of this Government's gross administrative incompetence. Let me make it clear that I am not making this criticism with the benefit of hindsight. On 25 November 1985 I raised exactly the same concerns about the Government's administration of the pharmpay system as I have tonight. Let me quote from the speech I made on that day: This arrangement for the payment of pharmacists for PBS drugs is a bureaucratic nightmare, the current pharmpay scheme fails every test of efficiency and cost effectiveness which I can think of. I recommended then that a new system of payment be devised, being an integrated system whereby the information generated by pharmacists in the filling of prescriptions could be used for the payment of any government subsidy. The Government has subsequently picked up that recommendation, but two years later. That delay will cost the taxpayer dearly. On 29 March 1985 the Minister for Health (Dr Blewett) wrote to pharmacists acknowledging that his system was not working. He told the pharmacists: Payment will be on an average price basis calculated using your individual claims' profile adjusted as necessary to reflect the 1 December 1984 `Across-the-board' price increase. He concluded his letter to the pharmacists by saying: I regret any inconvenience which you have experienced caused by delays in payment during the past months. But, as I say, it is over two years since that letter was written and only now is the Government coming to grips with this disastrous administrative nightmare. The Minister has now written, almost two years later, advising pharmacists of the compensation arrangements the Government is now seeking to implement. He started off his letter by referring to his earlier correspondence regarding the failures of the Pharmpay system, and he said: As an interim measure, I advised you that my Department would make payments to you on an average price basis calculated on your individual claims profile. Note the Minister's words `as an interim measure'-two years, he says, is an interim period. Clearly it is not. It is clearly outrageous and all taxpayers are now being asked to pay for his incompetence. The Minister explains that if they were to proceed with the reprocessing of all advanced paid claims the length of time to complete the task would vary from State to State. In Queensland reprocessing, he claims, would be completed this year. In Western Australia it would be 1988 before the claims were processed and in New South Wales and Victoria it would not be before 1989. In other words, it would take another two years to process all the claims which have been building up under this Government's administration. Consideration interrupted. The CHAIRMAN —Order! It being 7.15 p.m., I shall report progress. Progress reported. Mr DEPUTY SPEAKER(Mr Cowan) — Order! It being 7.15 p.m., I propose the question: That the House do now adjourn. Mr Scholes-Mr Deputy Speaker, I require the question to be put forthwith. Question resolved in the negative. Consideration resumed. Mr PORTER(Barker) —I thank the House and the Government; I shall take only a couple of minutes. The Minister then said that instead of pro- cessing all those claims the Government is going to pay compensation made up in two parts. Firstly, he will have a guess at what the pharmacist is actually owed-that is, the amount the pharmacist has been underpaid under this averaging arrangement-and, secondly, compensation will be made for the costs incurred by the pharmacist because of the delay in payment. That, he says, will be 10c per prescription. We understand that there are some 60 million prescriptions outstanding and so we are looking at the payment of some $6m as Government compensation to chemists arising out of the incompetent administration of the pharmpay system. Of course the pharmacists are entitled to be paid for the losses they have incurred as a result of this Government's failure to pay its debts on time. For the last three years the Minister for Health has stumbled, fumbled and bluffed his way through the administration of pharmpay, spending some $26m a year for 850 data entry clerks to sit at hundreds of data entry terminals duplicating the job which has already been done by the pharmacists. They have been unable to keep up with the work load and now the Government is asking the Australian people to pay $6m to cover the cost of its incompetence. This is a grotesque waste of taxpayers' funds and is yet another example of this Government's administrative incompetence. Mr BEALE(Deakin)(7.17) —Tucked away on page 12 of Appropriation Bill (No. 4) is a line that reads: Payment of equity capital for the Snowy Mountains Engineering Corporation, $6m. For many of the last months of calendar year 1986 it was well known in engineering circles that the Snowy Mountains Engineering Corporation was experiencing a severe liquidity crisis. Despite that the Government chose to wait until after the Parliament had risen for the Christmas recess to provide the Corporation with the funds it needed desperately to continue its operations. It also chose to wait until after the Parliament had risen to release the Corporation's 1985-86 annual report. In February 1983 the Corporation's staff totalled 623, but it has now fallen to about 320 and is expected to fall further. This has badly affected the town of Cooma in the Federal seat of Eden-Monaro. The Minister for Housing and Construction (Mr West) has no idea what is going on in the Snowy Mountains Engineering Corporation. For example, he stated that he expected that the Corporation would break even during the 1985-86 financial year, instead of which its net loss was nearly $2 1/2m. The only way the Corporation makes any money is to sell houses to its employees. For several years now my colleague the honourable member for Denison (Mr Hodgman) and I have been warning that the Snowy Mountains Engineering Corporation is in need of restructuring. In a speech to this House on 1 May 1986, I said: This heralds a further loss for the current year, that is, the 1985-86 year, despite the assertion by the Minister for Housing and Construction that the Corporation would break even in that period. The Liberal and National parties' policy on housing and construction gives our blueprint for the future of the Snowy Mountains Engineering Corporation. We believe that the future of the Corporation and its employees can be enhanced only by its conversion to an efficient private consulting firm, and it is one of our objectives to ensure that the Corporation's people are involved in its ownership so its employment can be increased as it becomes a thriving commercial company. The next Liberal-National Party government will enter into detailed discussions with the Corporation's management and staff, giving them first option to purchase the Corporation. The objective is to have the Snowy Mountains Engineering Corporation employees own and run the Corporation as a private consulting company. In a sale of the Corporation the tenure, superannuation and other benefits of the staff would be protected. Any transfer would be made with as small a cash payment as appropriate and buildings might be leased to the new owners and sold at a later time. The completion of contracts in force at the time of transfer would be guaranteed. The taxpayer would not need to foot the bill, as he has done this year, to the tune of $6m, to prop up another bureaucratic edifice. This is our blueprint for the future of the Snowy Mountains Engineering Corporation and our vision for its employees as owners of a thriving, prosperous, competitive, commercial company. Bill agreed to. Bill reported without amendment; report adopted. Bill (on motion by Mr Scholes)-by leave-read a third time. Consideration resumed from 25 March, on motion by Mr Hurford: That the Bill be now read a second time. Question resolved in the affirmative. Bill read a second time. Leave granted for third reading to be moved forthwith. Bill (on motion by Mr Scholes) read a third time. Motion (by Mr Scholes) proposed: That the House do now adjourn. Mr DOBIE(Cook)(7.24) —I rise tonight on a matter of importance to millions of Australians-to anyone who is buying or hopes to buy a home; to anyone trying to find rental accommodation; to anyone seeking to invest in the property market; and to those thousands who rely on the real estate and housing construction industries for their livelihood. It is, of course, the state of the housing and construction and real estate sectors, and the Hawke socialist Government's significant role in the calamitous downturn in these areas. Appropriation (Parliamentary Departments) Bill Recently, one of my real estate agent constituents yet again pointed out the disastrous effects of this Government's policies on the real estate market. I say `yet again' because, in the past year, I have had many similar representations from people in the real estate and housing industries, and from ordinary people trying to buy or rent homes. Their message is the same and their condemnation of this Government damning. The real estate industry in New South Wales is now gearing up for a major campaign to highlight the Hawke Government's disastrous policies and how they have affected the industry. Central to this campaign is the condemnation of the capital gains tax and the abolition of negative gearing. These two anti-investment policy decisions have had a major effect on the real estate and housing industries although we cannot, of course, overlook the marked effect resulting from the Hawke socialist Government's high interest rate policy. My constituent gave me a copy of a position paper by the Real Estate Institute of New South Wales, entitled `Federal Government Discrimination against property owners-The Impact of Capital Gains Tax and the Abolition of Negative Gearing on Property Investment'. I would suggest that all members obtain a copy of this paper because it makes very interesting reading. The paper contains a survey conducted among real estate agents in some 30 local government areas across New South Wales with the highest tenancy concentrations. The survey found that in the period from September 1985 to January 1987, the total number of properties managed by the participating agents fell by an overall 8 per cent. The Real Estate Institute points out that with normal market conditions, agents would expect to increase their listings by 10 per cent to 15 per cent annually. When asked to nominate why this decrease in listings had occurred, 63 per cent of the respondents blamed the capital gains tax and the abolition of negative gearing, either on their own or in combination; 70 per cent of the agents said that there were fewer inquiries from investors now than pre-September 1985, and here, 76 per cent blamed this fall-off in inquiries on the combination of the capital gains tax and the abolition of negative gearing; and 16 per cent blamed high interest rates for the fall-off. The survey found that agents were quite evenly split over predictions as to how the market would be holding up in 12 months. One-third thought it would be better, one-third though it would be worse and one-third thought it would be the same. The Real Estate Institute received a wide range of responses when it asked the participating agents to nominate the single major factor which would determine the future of the property market. Interestingly, most of the agents referred to the important role the Federal Government played, either through policy decisions or a direct change in government. Only 20 per cent saw market related factors as being a major influence and 26 per cent of the respondents said a change of Federal Government was the single major factor determining the future of the market and that such a change in Canberra would result in an improvement in the market. The REI reached the following conclusion, and I quote: This survey has indicated very clearly that Government policies are perceived by those in the property industry as being a critical influence on the health of the industry. Great discontent with the current Federal Government's policies was strongly expressed. The introduction of a CGT, the abolition of Negative Gearing and the high interest rates were cited by nearly all participants as having a detrimental and direct impact on the property industry. The message was clearly portrayed that either those policies must change, or the Government must change-before the market will improve. Is it any wonder that the Real Estate Institute is mounting this campaign? I could go on and on and state what happened in 1986, but time has beaten me. The fact is that this Government, through its policies, has killed investment, killed jobs and for many young Australians killed the dream of owning their own homes. Mr LANGMORE(Fraser)(7.28) —The House of Representatives Standing Committee on Expenditure has an inquiry under way at present on the national infrastructure. One of the largest and most imaginative infrastructure proposals currently under examination is the Sydney-Melbourne very fast train project. A private joint venture group is investigating the feasibility of a very high speed rail link from Sydney, through Canberra, to Melbourne. The project would use a new standard gauge rail track aligned so as to enable speeds of up to 350 kilometres per hour. Travel times of one hour between Sydney and Canberra, and three hours between Sydney and Melbourne, are predicted. Passenger demand is estimated to be 5 million one way trip equivalents per year. This estimated usage rate is less per head of population in the area served than the rates achieved by equivalent trains in France and Japan. A pre-feasibility study by the joint venture estimates a capital cost of the project of $3.7 billion. A high proportion of this would be spent in Australia, generating an estimated 25,000 jobs during construction. If viable, the project could provide a cheap, safe, fast, energy-efficient link between Australia's two largest cities and the national capital. It would relieve pressure on the existing road, rail and air infrastructure in the Sydney-Melbourne corridor. The VFT proposal involves a huge investment to create an asset which will have a long life and great social and economic impact. It falls clearly in the same class as the Snowy Mountains scheme and the trans-continental railway. Like these other historical infrastructure projects, the VFT proposal requires a level of vision above the ordinary. Some of the defining characteristics of infrastructure-large scale and long life-call for vision, and it is clear that large projects will require it more. In an age increasingly concerned with quantification, and increasingly better equipped to obtain it, we must not forget the need for imagination, drive, boldness and innovation, the qualities we lump together in the elusive term `vision'. Earlier generations, less well equipped technically to evaluate and manage large projects, frequently made costly mistakes through overoptimism. The danger in our age is the opposite-that we will miss opportunities through evaluations that are too narrow and vision that it too limited. The challenge is to use the new techniques and technologies of evaluation and management without being blinkered by them. The distinguished American historian Arthur M. Schlesinger Jr argues that there is in American history a 30-year cycle of political eras of conservatism and liberalism in the non-partisan sense. He calls these periods of private interest and periods of public purpose. Schlesinger places the present age in a period of conservatism or pessimism but suggests that we are approaching a turning point towards a period of greater optimism. The VFT project may well be a harbinger of such a periodic change in Australia. The VFT proposal has both potential benefits and costs. On the benefit side, the project could create new markets and jobs and bring Sydney, Canberra and Melbourne much closer, both socially and economically. It could boost both exports and import substitution and relieve pressure for additional investment in the existing transport infrastructure. On the debit side, the project would absorb a very large amount of capital which might yield better returns in other areas. As well, it may reduce the returns available from the huge existing investment in transport infrastructure in the Sydney-Melbourne corridor and destroy or disrupt jobs in that sector. The VFT project highlights the interlocking relationship of much infrastructure. There is already a massive investment in transport infrastructure in the Sydney-Melbourne corridor. The Hume Highway, currently approaching the conclusion of a major and expensive upgrade, the existing rail links and a very large investment in aircraft and their support facilities would all be affected by a new high speed rail link. There is a clear need for co-ordination of investments as large as those needed in transport infrastructure, which have potential both to compete with and complement each other. I hope that within that context the Government will give the very fast train project a sympathetic hearing. Mr RUDDOCK(Dundas)(7.33) —I wish to talk in this adjournment debate about assistance to emergency services. It is perhaps not readily appreciated that in each of our States we have organisations known as State emergency services. Very often it is thought that because they are State emergency services they are organisations that we can leave safely in the hands of the States without acknowledging that we have some special responsibility in relation to their needs and particularly in relation to the work that they undertake. In fact, if we look in the Budget Papers at the assistance given to local government and particularly to emergency services, we find that the Natural Disasters Organisation, which the Commonwealth established in 1974, is responsible for co-ordinating physical assistance provided by the Commonwealth, including that provided by the defence forces, with the efforts made by State and Northern Territory emergency services and local and voluntary organisations in order that they they can cope with natural disasters and assist with civil defence. These organisations are very important groups operating in most of our electorates, and the Natural Disasters Organisation has the function of supervising the provision of special forms of assistance that the Commonwealth is able to offer. The Commonwealth assists in these areas with grants to meet the cost of salaries of an agreed number of State emergency services personnel, grants made on a dollar for dollar basis for the clearing of fire-breaks-that is not terribly prevalent in my electorate-and the provision of depots for emergency service units at a local level. It also provides assistance to officers to attend courses at the Australian Counter Disaster College at Mount Macedon, and capital equipment is provided to State organisations. In the year 1985-86 the total value of that equipment was $1.2m. For what amounts to $2.62m in 1984-85, $2.72m in 1985-86 and an estimated $3m this year, we obtain an extraordinarily valuable service. I raise this matter because in my electorate at the moment the Ryde State Emergency Service is undertaking the task of endeavouring to raise money-a quite large amount of money-to acquire a rescue vehicle. I will support that organisation as significantly as I can in its efforts to raise the funds, but I think it needs to be understood that in these very difficult times organisations are not able to get assistance from the Commonwealth or from the States and are having to go into the streets to raise money in order to carry out what is, in essence, a voluntary function. The State emergency organisation is a voluntary organisation. Its duty is to protect the public and their property. It represents a commitment by volunteers to aid other emergency services when they are needed. It has to provide manpower and equipment, very often from its own resources. It gets money to assist in providing uniforms, which invariably do not fit or are taken when people leave the organisation, so people even have to equip themselves with uniforms to work in it. The Ryde service is an important one. It covers the suburbs of Ryde, North Ryde, Gladesville, Eastwood, Meadowbank, Marsfield, Macquarie Park, Putney, Melrose Park, Denistone and Hunters Hill. It is also called upon to assist other organisations in Sydney and is available for emergency work anywhere in country New South Wales. The magnitude of the appeal that the organisation will have to undertake can be understood by the following costs: In order to buy a vehicle it will have to spend $55,000 on a chassis, $10,000 on a winch, $5,000 on a generator, $7,000 for bodywork and material, $2,000 for painting and sign-writing, $3,000 for communications equipment and $3,000 for contingencies-a total of $85,000. The organisation will need that vehicle to enable it to carry its rescue team and rescue equipment and to be an integral part of the total rescue operations mounted by State emergency service organisations generally. It is also needed to provide a mobile operations centre, a mobile communications centre and the transport of equipment and materials under the instruction of the police and the fire brigade. While officers of the State Emergency Service are trying to raise money to pay for a vehicle, they are not able to involve themselves in the important work for which they ought to be preparing; that is, the rescue of people and assisting with civil defence functions. At the moment, in order to raise money, they have to play a part in the organisation of functions, street parades and things of that nature. It is a very demanding exercise but one in which they deserve all our support. Mr DEPUTY SPEAKER(Mr Leo McLeay) —Order! The honourable member's time has expired. Mr ROBERT BROWN(Charlton)(7.38) —A couple of days ago I gave details of three abuses which had occurred in Queensland and were associated in some way with the Government of Queensland. The fourth abuse is the second one concerning Minister Hinze. Mr Russ Hinze had a financial interest in Maralinga Pty Ltd, the company operating a gravel pit on the Coomera River. The Albert Shire Council rezoned the land from rural to extractive. The rezoning was approved by the Minister. The Minister was none other than Mr Russ Hinze. In order to facilitate the removal of the sand and gravel, a new road was proposed which required the redirection of the Tamborine-Oxenford Road. In December 1983 the Main Roads Department approved the redirection of the Tamborine-Oxenford Road. The Department was responsible to none other than Russ Hinze. Hinze said that the new road gave better access to the locals. The fifth case involves two former Ministers. In 1980 two former National Party Ministers in Queensland, Mr Ron Camm and Mr Tom Newbery, paid $2,000 each to take out a State Government application for a mining lease. Mr Camm had been Mines Minister for a number of years. He retired in 1980 with a lump sum superannuation payment of over $300,000 and was appointed State Sugar Board Chairman on an annual salary of $40,000. Mr Newbery was tipped to become the Agent-General in London. On 15 November 1980 Mr Camm said he could see no conflict of interest. He said: `I haven't been Minister for Mines since 17 July'. The sixth case involves the Moscow Narodny Bank. The Moscow Narodny Bank was embarrassed by an indiscretion of Russ Hinze. The bank provided over $12m for a land development venture at Samford Valley on the outskirts of Brisbane in the late 1970s. It also lent $550,000 to a company owned by the family of Russ Hinze. As Minister for Local Government it was Hinze's job to obtain Cabinet endorsement of a council rezoning recommendation for the project to proceed. The question asked was: Why would Hinze borrow money from a bank which benefited from the rezoning of land over which he presided? When the issue was raised with Premier Joh with the suggestion that such a business transaction should have been cleared with him, he said: `We don't do that in our Party. We trust every Minister. I don't think any of ours will get caught'. The seventh case involves the Premier. In 1978 the Queensland Government considered the siting of a new power station. Sir Joh said that he would accept the recommendations of the State Electricity Commission on the matter. However, between the alternate sites of Millmerran and Tarong, the SEC recommended Millmerran. The Minister for Mines, Mr Ron Camm, said that the Tarong station would cost $260m more to build and would cost substantially more to operate-Sir Joh had the decision of the SEC overturned. The power station was built at Tarong which just happened to be in the electorate of Barambah, represented by Sir Joh. Queensland electricity prices today are among the highest in Australia. The eighth case involves Mr Robert Hope, the Managing Director of Prospect Marine, a company building a marina on Fisherman Island, Brisbane. In 1982 the Port of Brisbane Authority rejected a proposal by Prospect Marine to build a marina on the western side. The company accepted a proposal to build the marina on the eastern side, but withdrew the acceptance the following day, in March 1982. In June 1982 the Queensland Cabinet overruled the Authority and accepted the original proposal for a massive recreational development in what is essentially an industrial area. When the company pumps and fills the area it will be entitled to freehold-the only freehold on the island. The ninth case involves the Queensland Government. Duaringa is a small hamlet of 429 voters about 113 kilometres west of Rockhampton. About 1983, things started to change. A new school costing $131,000 was opened for the eight children who enrolled. A splendid architect designed police station was built to prevent a crime wave among the 429 voters, and unexpected assistance of $200,000 was received from Brisbane for the race track, the golf course, and the sports centre. Work was carried out on roads that had not seen a grader for seven years. A council road was transferred to the Department of Main Roads and almost $400,000 of a total allocation of $1.2m was made to it. A $4m bridge will span the Mackenzie River. On the other side of the river are 12,500 hectares of cattle country which the Bjelke-Petersen family acquired in August 1982. Duaringa is also to get a new $4m dam. When the former Leader of the Opposition in Queensland, Ed Casey, raised the issue Joh replied: The honourable member is at his lies again . . . every week he attacks my family and my son. It is completely untrue. It's got nothing to do with my son. I will resume the examples of abuses when I have the opportunity to do so. Mr WHITE(McPherson)(7.43) —On 23 March I received a letter from the Minister for Sport, Recreation and Tourism (Mr John Brown). It said: Dear Mr White, I am writing to you following an undertaken given in the House during debate. In reply to questions 1-5, obviously some form of communication had to take place regarding my wife's airline ticket. Although under the Guidelines my wife and children are entitled to first class travel around Australia when accompanying me, I decided that in order to save the Commonwealth the price of 3 first class tickets I would use 3 economy tickets. As a matter of fact I paid out of my own pocket the balance over and above the cost of 1 first class ticket. In replying to your final question I would like to point out that I am probably the most scrutinised, checked, prodded and examined Minister as far as travel expenses are concerned. As you are aware, my travel arrangements, and therefore the information you seek, has previously been made available under FOI, and in response to Questions on Notice by the Special Minister of State. Therefore this information is readily available from Hansard. Yours sincerely, JOHN BROWN That letter was written in answer to a letter that I wrote to the Minister on 24 February at his request. My letter states: You will recall during debate in the House on Monday night you offered to answer some questions which I wanted to put to you. It may be that you have publicly answered some or all of these question but, if you have, I have not seen the answers. For example, you have said that you have never ``oppressed' an airline employee but the question I asked is somewhat different. Mr DEPUTY SPEAKER(Mr Leo McLeay) -Order! I am not trying to stop the honourable member from proceeding-- Mr Spender —Of course not. Mr DEPUTY SPEAKER —The honourable member for North Sydney will cease interjecting. The honourable member for McPherson is aware of Madam Speaker's ruling that honourable members should not get involved in the private lives of other honourable members. I am sure that he is also aware of the fact that to criticise another honourable member one must do so by substantive motion. Having brought his attention to that, I will continue to hear him. Mr WHITE —I have studied standing orders 75 and 76. I have taken advice. I am merely reading into Hansard a letter I wrote to the Minister, and his reply. Mr DEPUTY SPEAKER —I point out to the honourable member that he cannot use a quotation to attack another member. I am just bringing that to his attention. I will hear him. Mr WHITE —My letter continues: In relation to the change of status of Mrs Brown's air ticket from Sydney to Adelaide in October, 1986, I ask: 1. Did the Minister or anyone else speak to an airline employee relating to this particular ticket? 2. Did the Minister or anyone else speak to an airline supervisor relating to this particular ticket? 3. If the Minister or anyone else did speak to an airline employee or a supervisor, was a change of ticket status asked for? 4. Was Mrs Brown's ticket changed in status? 5. If so, was part of the cost of Mrs Brown's ticket used to purchase or part purchase a ticket for your son? Mr DEPUTY SPEAKER —Order! If the honourable member wishes to go to the actions of a Minister and wishes to draw a suggestion in that regard I suggest that that needs to be done by substantive motion. Mr WHITE —I understand what you are saying, Mr Deputy Speaker, but I am making no allegations or drawing any suggestions. I am reading a letter which I wrote to the Minister at his request. He asked me in this House to write him a letter and I am reading the letter. My letter continues: Finally, I ask: Has there been any other occasion when an air ticket on a domestic or international flight issued to a member of the Minister's family, been changed in status? If so, what were these occasions? Your reply to these questions would be appreciated. Mr Deputy Speaker, I understand the rules to which you allude. I make no allegations. I have read a letter, which was written at the Minister's request and I have read his answer. The answer that he wrote to me does not answer the questions I put to him at his request. I simply say to the Minister that these questions will continue to be asked until he answers them. Mrs DARLING(Lilley)(7.48) —I am pretty angry at the way in which pensioners in Australia have been put into a state of fear by members of the Opposition time and time again for the purposes of party politics. This first came strongly to my attention before the 1984 election when in my electorate the assets test, which was being introduced by this Government to bring greater equity to pensioners, was misrepresented to the extent that hundreds of pensioners who were to retain their whole pension-and who now know that this is so-were convinced that they would lose some of their pension through the assets test. One result which really concerns me is that a group of pensioners, who were within the limits of the assets test, who could have retained the money they had in a bank and who could have retained a full pension, were led into thinking that they would lose their pensions if they kept the money. They withdrew the money from the bank. A group of pensioners, one of them from my electorate, put money into a scheme which turned out to be a bodgie scheme. It collapsed and they lost their money. I am greatly concerned about this and I am trying to assist these people. This is just another instance of the criminal manner in which our policies have been misrepresented. The Liberal Party secretariat has now drawn up a draft policy document, which was leaked, showing precisely what the Opposition members themselves would do were they in government. The draft called for savage cuts in the welfare area, including the scrapping of indexation of pensions-in effect, cutting pensions in real terms. The community employment program and other projects are also to be abolished. This Opposition, if in government, would lift the eligibility age for women getting the age pension to 65. That is how concerned these people are about the aged and disadvantaged in the community. The Liberal's draft policy recommended freezing pensions to save $1.3 billion. The Opposition would abolish the community employment program and Jobstart. The document says that it would cut the Medicare rebate from 85 per cent to 75 per cent. It will tighten up pensions and benefits for widows, supporting parents and unemployed 15 to 18-year-olds and it will abolish the Commonwealth Schools Commission, Department of Education and the participation and equity program. I believe people should be aware of that. The Hawke Government meanwhile has been working for greater equity for pensioners and people on low incomes. Assistance for pensioners renting privately has been increased by 50 per cent under the Hawke Government-$10 to $15 a week. The Government has introduced a carers' pension paid to a person providing constant care and attention for a severely handicapped or infirm relative. This will help people caring full time for an aged parent. The amount pensioners can receive without any loss of pension has been increased from $30 to $40 a week for single pensioners and from $50 to $70 a week for married couple pensioners. The change to the income test means that by July this year a single pensioner who rents will be able to receive a part pension until income from other sources reaches $295 a week, compared with $185 when Labor took office. Thus, while pensions have increased by 45 per cent-I repeat that, under this Government pensions have increased by 45 per cent-the cutoff income for receipt of a pension will have been raised by almost 60 per cent in addition to that other increase. These reforms will leave more money in the pockets of thousands of people on social security while providing an incentive for people to care for themselves either through part time work or investments. For example, a pensioner couple with $100 a week in private income will receive an increase in pension of $10 a week, plus a further $15 if renting privately. This is one of the many different moves which the Hawke Government has taken to improve conditions. Despite the budgetary restraints which we inherited, we had still moved to improve these conditions. It is the facts that tell-- Mr DEPUTY SPEAKER(Mr Leo McLeay) —Order! The honourable member's time has expired. Mr SLIPPER(Fisher)(7.53) —The National Party of Australia does not support apartheid, but is very strongly opposed to the violence which is taking place in South Africa today. That is why we are against the visit of Oliver Tambo to Australia as a guest of the Government. Presumably that means that the 16 or so days that he is spending in this country will be at the expense of the Australian taxpayer. I was heartened to hear the Prime Minister (Mr Hawke) in the House during Question Time mention that Chief Buthelezi is being considered to receive an invitation to this country. The African National Congress does not have the support of the majority of the black people in South Africa. The ANC is, by anyone's definition, a terrorist organisation. I would like to mention a few facts and then ask a few questions. I hope that the Minister for Foreign Affairs (Mr Hayden) will consider these questions and will reply to them in due course. Firstly, the ANC espouses and commits terrorism and violence against South African civilians, many of them black. ANC spokesman, Tim Ngubane, said of the terrible practice of necklacing when speaking at California State University on 10 October 1985: We want to make the death of a collaborator so grotesque that people will never think of it. Is South Africa to become another Cambodia ruled by the ANC in a form of Pol Pot-style of terrorism? Western intelligence organisations, including those from Britain and the United States of America, have found that the ANC leadership contains a majority-70 per cent-element of communists. Even as far back as 2 April 1935, Trotsky said: The Bolsheviks-Leninists put themselves in defence of the ANC-A victorious resolution is unthinkable without the awakening of the native masses. Is this not yet another indication that from as early as the 1930s the ANC has been led and supported by communism? Several papers written by Nelson Mandela, leader of the ANC, were handed to the court when he stood trial for sabotage in 1964. In his own handwriting, he states: Under Communist rule South Africa will become a land of milk and honey . . . In our land the struggle of the oppressed masses is led by the South African Communist Party. He further wrote: The transition from capitalism to socialism in the liberation of the working class cannot be affected by slow changes. One must therefore be a revolutionary and not a reformist. Another question: Is Nelson Mandela not still the guiding light of the ANC? Is this still the policy of the ANC? Nelson Mandela, the ANC leader who is serving a life sentence for sabotage, wrote articles such as `How to be a Good Communist', `Dialectic Materialism' and `Political Economy'. In `Political Economy' he said: We Communist Party members are the most advanced revolutionaries in the world. He is also reputed to be a good Western-style democrat by some sections of the Western media. What is the truth? Is the ANC not trying to be all things unto all men-communists and good liberal democrats at the same time? These are the matters which the Minister for Foreign Affairs should take into account when deciding whether people such as Oliver Tambo should be permitted to come to this country as the guest of the Australian taxpayer. Another matter I would like to mention is that certain open pronouncements by Tambo and his fellow ANC leaders and members seem, to say the least, very extreme. For example, Winnie Mandela said: With our boxes of matches and our necklaces we shall liberate this country. Perhaps the guest of the Australian taxpayer, Oliver Tambo, would care to explain how these ideas by Winnie Mandela and others can, in any way, be designed to fit in with the ANC's image it is trying to portray. The National Party and the Opposition is opposed to apartheid. We do not support apartheid, but we abhor violence. I believe that it is an affront to the Australian taxpayer, an affront to the ordinary decent citizen in this country, that the Minister for Foreign Affairs should bring someone of the ilk of Oliver Tambo to Australia. It is interesting that he is here for 16 days and that he is not visiting Queensland or Tasmania because the governments of those two States obviously will have nothing to do with him. I certainly hope the Prime Minister will invite Chief Buthelezi here so that the voice of moderate black opinion will be heard. The Chief is opposed to apartheid, but he is also opposed to violence. My understanding is that he is also strongly supportive of the principles of free enterprise. Mr DEPUTY SPEAKER(Mr Leo McLeay) —Order! The honourable member's time has expired. Question resolved in the affirmative. House adjourned at 7.58 p.m. The following notices were given: Mr Peter Morris to present a Bill for an Act to provide for the payment of grants in respect of certain ships. Mr Duffy to present a Bill for an Act to amend the law relating to communications. Mr West to move- That, in accordance with the provisions of the Public Works Committee Act 1969, the following proposed work be referred to the Parliamentary Standing Committee on Public Works for consideration and report: Upgrading of the Jindalee facilities at Alice Springs. Mr West to move- That, in accordance with the provisions of the Public Works Committee Act 1969, the following proposed work be referred to the Parliamentary Standing Committee on Public Works for consideration and report: Upgrading of acute ward accommodation, Repatriation General Hospital, Concord, New South Wales. Mr West to move- That, in accordance with the provisions of the Public Works Committee Act 1969, it is expedient to carry out the following proposed work which was referred to the Parliamentary Standing Committee on Public Works and on which the Committee has duly reported to Parliament: Development of new utility helicopter facilities at RAAF Base, Townsville. The following paper was deemed to have been presented on 1 April 1987: Australian Bureau of Statistics Act-Australian Bureau of Statistics-Proposal for collection of information-1987-No. 3-New topics to be included in the population survey. The following answers to questions were circulated: (Question No. 4781) Mr Porter asked the Minister for Health, upon notice, on 17 October 1986: (1) How many persons covered by Medicare were (a) pensioners and their dependants, (b) concessional health care card holders and their dependants, (c) non-levy paying Medicare card holders and (d) levy paying Medicare card holders in 1985. (2) What are the projected corresponding figures for these categories in 1986. (3) Is the proportion of the population represented by these categories remaining relatively constant from year to year. (4) In which categories has the proportion of the persons covered by Medicare increased since 1 July 1983 and what has been the increase in the number of persons in those categories. Dr Blewett —The answer to the honourable member's question is as follows: (1) to (4) Under Medicare, all Australians are entitled to protection against the costs of health care without discrimination on the basis of whether they hold entitlements to Social Security benefits. This is a basic principle of Medicare. Because of this, claims statistics do not include the classification of people into various Social Security entitlement categories or whether or not a Medicare levy is paid. However, the following figures have been supplied by the Department of Social Security on numbers of persons covered by various entitlement categories: June 1985 June 1986 Pensioners and Dependants: With PHB Card... 2,211,232 2,226,437 Without PHB Card... 340,561 356,137 Total... 2,551,793 2,582,574 Health Benefit and Health Care Cardholders and Dependants... 1,275,910* 1,271,275* The Department of Social Security has advised that it does not prepare projections of numbers of card holders. *Certain categories of Health Benefit and Health Care Cardholders and Dependants counted as at 17 May 1985 and 23 May 1986 respectively. (Question No. 4797) Mr Porter asked the Minister for Health, upon notice, on 17 October 1986: Are spouses and dependants of concessional or pensioner health card holders entitled to the same benefit as the card holder, regardless of income. Dr Blewett —The answer to the honourable member's question is as follows: Yes. Pensioner and concessional health cards are issued, subject to income and asset test assessment at the time of application and review by the Department of Social Security. The only exception to this is in the case of a blind person. Persons who are accepted as blind for the purposes of the Social Security Act are entitled to receive the relevant maximum rate of pension along with a Pensioner Health Benefits (PHB) card with entitlement to fringe benefits (including free pharmaceutical benefits) and additional pension for one child (where there is a qualifying child), irrespective of the level of their or their spouse's income or assets. On 1 July 1986 the definition of a dependant of a pensioner under the National Health Act was changed from ``wife of the pensioner'' to ``spouse of the pensioner'' to comply with the Sex Discrimination Act. Consequently the husband of a woman in receipt of a blind pension may now be eligible to receive free pharmaceutical benefits irrespective of income or assets. (Question No. 4798) Mr Porter asked the Minister for Health, upon notice, on 17 October 1986: What are the reasons for the $13m increase in health program grants under the Health Insurance Act indicated in the 1986-87 Budget. Dr Blewett —The answer to the honourable member's question is as follows: The increase of $12.766m in the allocation for health program grants in 1986/87 over actual expenditure in 1985/86 is due to: (a) $666 000 to cover the full year effect of salary and other cost increases as well as the increased costs generated by rising demand for services of the 13 organisations approved for funding prior to 1986/87; namely the eight State and Territory Family Planning Associations, the natural family planning services conducted under the auspices of the Australian Catholic Social Welfare Commission, the Haymarket Foundation, the Low Vision Clinics in Melbourne and Adelaide, and the Yallourn Medical and Hospital Society. (b) $1 000 000 for new and expanded family planning services directed primarily at disadvantaged and ``at risk'' groups. The family planning organisations named in (a) above will receive this money. (c) $500 000 for the first year of a two year evaluation of Nuclear Magnetic Resonance Imaging services (NMRI) to be conducted at Royal North Shore Hospital (Sydney), Royal Melbourne Hospital, Royal Adelaide Hospital, Princess Alexandra Hospital (Brisbane) and Sir Charles Gairdner Hospital (Perth). $500 000 will be provided in 1987/88. (d) $10 600 000 for special interim assistance for those religious, charitable or community hospitals which catered for a significant number of uninsured patients before the abolition of Commonwealth bed-day subsidies for private hospitals. It seems likely that less than $2 000 000 will in fact be required. To date $1 424 000 has been paid to ten hospitals with another two applications for assistance still under consideration. (Question No. 4799) Mr Porter asked the Minister for Health, upon notice, on 17 October 1986: What was the utilisation of medical services under Medicare in 1985-86, expressed as a percentage, by (a) pensioner card holders, (b) concessional health card holders and (c) others. Dr Blewett —The answer to the honourable member's question is as follows: Under Medicare, there is no discrimination in levels of benefits on the basis of whether the patient is entitled to a pensioner or concessional health card. Medicare systems do not record such entitlements, and statistics of Medicare claims paid cannot be compiled on the basis requested.